Young Mining Co Pty Ltd v Minister for Industry, Resources and Energy NSW [2016] NSWSC 1193 (23 August 2016)

Last Updated: 29 August 2016

Supreme Court New South Wales

Case Name:	Young Mining Co Pty Ltd v Minister for Industry, Resources and Energy NSW
Medium Neutral Citation:	[2016] NSWSC 1193
Hearing Date(s):	23 August 2016
Decision Date:	23 August 2016
Jurisdiction:	Equity - Duty List
Before:	Stevenson J
Decision:	Application and proceedings dismissed
Catchwords:	ADMINISTRATIVE LAW – jurisdictional error –– where Minister has extended the time for provision of security under a mining lease on numerous occasions – where plaintiff given notice of consequences of not providing the security – where Minister had given plaintiff an opportunity to be heard and considered plaintiff’s position before causing notice suspending mining activity to be issued – whether decision of Minister to not allow plaintiff further time to provide security so unreasonable as to bespeak jurisdictional error – whether decision amounts to Wednesbury unreasonableness
Legislation Cited:	Mining Act 1992 (NSW)
Cases Cited:	Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332
Category:	Principal judgment
Parties:	Young Mining Co Pty Limited (Plaintiff) Minister for Industry, Resources and Energy NSW (Defendant)
Representation:	Counsel: P J McEwen SC with A Pearman (Plaintiff) J Emmett with L Robb Vujcic (Defendant) Solicitors: Mahony Law (Plaintiff) Crown Solicitors (Defendant)
File Number(s):	SC 2016/250383

EX TEMPORE JUDGMENT (REVISED)

1. The plaintiff, Young Mining Co Pty Limited, holds Consolidated Mining Lease 15 in respect of the Thuddungra magnesite mine near Young.
2. It is a term of that mining lease that Young lodge with the Minister for Industry Resources and Energy NSW, a security deposit.
3. The Minister sought a security deposit in the amount of which was, by 22 November 2013, determined to be $1,040,000. There is no dispute that it was open to the Minister to make a determination that the security deposit be in that amount.
4. Young has not provided a security deposit in that amount.
5. For that reason, on 8 June 2016 the Minister, by his delegate, issued a direction under s 240AA of the Mining Act 1992 (NSW) directing Young to suspend all mining operations, with effect from 18 July 2016.
6. The Minister stated that the suspension would remain in force until withdrawn by written notice of the Secretary of the relevant Department. It is common ground that it was, and is, the Minister's intention to revoke that suspension if and when security is provided.
7. On 15 July 2016 the Minister acceded to Young's request to extend the time for the provision of the security until 18 August 2016. As I have said, the security has not been provided.
8. On 19 August 2016, Young commenced proceedings in the Land and Environment Court seeking an order that the 8 June 2016 suspension notice itself be suspended until 12 September 2016. On that day, Moore J ordered that the 8 June 2016 suspension notice be varied so that the date of the suspension be extended to 4pm today.
9. A dispute arose between the parties as to whether or not his Honour had jurisdiction to make that order, or any like order. To obviate the need to resolve that matter, earlier today Moore J transferred the proceedings to this Court. There is no dispute that this Court has jurisdiction to deal with the matter in accordance with conventional administrative law principles.
10. The matter has been debated before me today upon the basis that the only relevant reason that this Court would intervene is if Young could show jurisdictional error on the part of the Minister.
11. Mr McEwen SC, who appears with Ms Pearman for Young, made clear that the sole basis upon which Young contended that jurisdictional error has occurred is what Mr McEwen described as "Wednesbury unreasonableness" on the part of the Minister.
12. That aspect of law has most recently been explained by the High Court in Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332. It is not necessary for today's purposes for me to examine in detail what their Honours said in that judgment as the basis on which Mr McEwen put his case today, was that the Minister's decision to not extend the time under the suspension notice beyond 18 August 2016 was so unreasonable that no reasonable Minister could have come to that conclusion.
13. I am, however, reminded of Gageler J's remarks in Li at [113] that the test is a stringent one, that "[j]udicial determination of Wednesbury unreasonableness in Australia has in practice been rare", and that nothing in the Court's reasons "should be taken as encouragement to greater frequency" of applications for relief on this basis.
14. Mr McEwen submitted that the reason why I should conclude that the Minister has acted in a relevantly unreasonable way was that, having shown "great elasticity" up until now, it would relevantly be unreasonable for the Minister to not allow an extension beyond 18 August 2016 because now only "procedural matters" remain to be complied with by Young before it would be in a position to provide the required security.
15. The matter has a long history.
16. I have mentioned that on 22 November 2013 the Minister determined that the total amount of the security was to be $1,040,000. Since then there has been extensive correspondence between the parties with the Minister granting numerous extensions of the time within which Young could provide the security, together with regular warnings as to what the consequences would be if the security was not provided.
17. For example:
    • (a) on 31 August 2015 the Department of Industry, Resources and Energy NSW (on behalf of the Minister) directed Young to lodge the increased security within 42 days;
    • (b) on 18 December 2015 the Department directed Young to lodge the increased security by 29 January 2016 and warned that if Young did not comply with that direction the mining lease might be cancelled;
    • (c) on 11 March 2016 the Department informed Young that failure to lodge the security by 21 March 2016 would be taken into account when considering final enforcement;
    • (d) on 24 March 2016 the Department gave notice of the Minister’s intention to issue a suspension notice; and
    • (e) the Department gave Young an opportunity to be heard about this proposal and made representations on 4 April, 12 April, 2 May, 6 May, 3 June and 6 June 2016. The Departmental Secretary’s delegate considered each of those representations before causing the suspension notice to be issued.
18. The current position is that, having attempted to obtain security from various Australian banking institutions, Young is endeavouring to obtain appropriate security from the Union Bank of India. That bank today provided Young's legal advisers with a proposed form of "General Security Agreement". The Minister has seen a form of that document in draft earlier today and has, in principle, approved its contents.
19. However, as Mr Emmett (who appeared with Ms Robb Vujcic for the Minister) pointed out, the agreement is subject to a number of “requisitions”. One of those requisitions is that "[t]he financial records and books of the company will be inspected and must prove satisfactory and establish that the company is free of debt, that all levies on shareholders have been made and paid and that there is no action, suit or proceeding by or against the company."
20. It is evident from the form of the document that the "company" means not just Young but also two other companies described as "grantors" in the document, namely Orind Australia Pty Ltd and Causmag Ore Company Pty Ltd.
21. There is little evidence before me as to those companies' financial position, save that Mr Jhunjhunwala has stated in one of his affidavits that Young and Causmag, "have very little funds in reserve."
22. I do not think I can draw any conclusion as to whether the Union Bank will be satisfied, on inspection of the financial records and books of Young and the other companies, in terms of the requisition.
23. The agreement is also subject to the Union Bank getting advice from its legal department in India as to whether the approval of the Reserve Bank of India is required, not to the security itself, but security to be offered to the Union Bank for that security. That emerges from a letter that the Union Bank's local solicitor, Mr Sharma, today sent to Young's solicitor.
24. Young's solicitor, Mr Mahony swore an affidavit during the course of argument before me in which he deposed to a conversation he had at 1.30 this afternoon with Mr Sharma, in which Mr Sharma is quoted as saying that he did not think it would “take more than about a week" for the matter to settle. However, the fact remains that in his letter, Mr Sharma said the matter is subject to the Union Banks' legal department in India expressing an opinion.
25. Mr Mahony has stated in correspondence that his instructions from Young are that Young's Indian solicitors have said no Reserve Bank approval is required.
26. I am not able to reach any conclusion about if and when Young will be in a position to satisfy the Union Bank as to its requirements or as to when security will be available. I see substance in Mr Emmett's submission that "another week won't do it".
27. I see these matters as being directly relevant to the question of whether it is relevantly unreasonable for the Minister to not grant whatever further extensions of time as might be needed to enable Young to do whatever will be required to satisfy the Union Bank that it should grant the security required.
28. In those circumstances I am not able to conclude there is a serious question to be tried that it is unreasonable for the Minister to not further extend the time for provision of the security, let alone to conclude that the Minister's decision not to do so is so unreasonable that no reasonable Minister could reach it.
29. In those circumstances it is not necessary for me to consider discretionary matters relevant to the balance of convenience.
30. The plaintiff's application today for interlocutory relief is refused with costs.
31. It is agreed that I should also order that the proceedings be dismissed with costs. I so order.

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Amendments

29 August 2016 - Coversheet - amendment to catchwords.

Par 12 - typographical error in case name corrected.