Peninsula Watchdog Group (Inc) v Minister of Energy CA200/94 [1996] NZCA 262; [1996] 2 NZLR 529; [1996] NZAR 396 (29 May 1996)

Last Updated: 12 February 2019

IN THE COURT OF APPEAL OF NEW ZEALAND CA 200/94

BETWEEN PENINSULA WATCHDOG GROUP (INC)

Appellant

AND THE MINISTER OF ENERGY

_{First Respondent}

_{AND HERITAGE MINING NO LIABILITY}

Second Respondent

AND TASMAN GOLD DEVELOPMENT LIMITED

_{Third Respondent}

Coram Richardson P McKay J Thomas J

Hearing 20 May 1996

Counsel R B Brabant and D Tegg for Appellant

M T Parker for First Respondent

J Long for Second and Third Respondents

_{Judgment 29 May 1996}

_{JUDGMENT OF THE COURT DELIVERED BY RICHARDSON P}

This appeal in judicial review proceedings instituted by Peninsula Watchdog Group (Inc) against the Minister of Energy and two mining companies, Heritage Mining No Liability and Tasman Gold Development Limited, concerns the purported exercise by the Minister's delegate of the power under s 109(2) of the now repealed

Mining Act 1971 to extend the period during which an application for a mining privilege may be dealt with.

Section 109 provides:

109. Applications to be disposed of within specified time -

(1) Subject to subsections (2) and (3) of this section, every application for a mining privilege shall be finally disposed of by being granted or refused within 12 months after the date on which the application was made.

(2) The Minister may extend the period during which an application for a mining privilege may be dealt with if he considers that an extension is justified because of special circumstances.

(3) If an objection is made to an application for a mining privilege, or if any objection on a question of law is made in respect of such an application, the period from the date of service of the notice of objection on the Secretary to the date on which the objection is determined, or the period from the date of filing the notice of objection to the date on which the objection is finally determined, as the case may be, shall not be included in the computation of any period of time for the purpose of subsection (1) of this section.

The Resource Management Act 1991 and the Crown Minerals Act 1991, which came into force on 1 October 1991, introduced a differently focussed regime for dealing with mining applications. But pursuant to s 112(1) of the latter statute the five applications in question in these proceedings were to continue to be dealt with in accordance with the 1971 Act.

The application history

As its name implies, Peninsula Watchdog Group is a public interest body concerned for the environmental, economic and social protection of the Coromandel Peninsula region. It wanted to know what applications for mining privileges in the region were still outstanding. By letter of 12 November 1992 it sought information

under the Official Information Act 1982 of the granting of any extension by the Minister of five specific applications, including the Minister's reasons for granting any such extension. On 26 November 1992 Mr P W Woodmass, the Executive Officer concerned, replied enclosing copies of the extensions of time which he had approved under delegated authority from the Minister. The extensions, all dated

25 November 1992, were obviously initiated following receipt of the letter of

12 November.

Two of the five applications for prospecting licences had been made by Heritage, one on 29 December 1986 (31-2071) and the other on 7 February 1989 (31-2569). Three had been made by Tasman: on 24 November 1989 (31-2640),

17 April 1991 (31-2713) and 30 May 1991 (31-2718). Two earlier extensions of

31-2071 had been granted by another officer, one from 19 February 1988 to

19 February 1989 granted on 8 July 1988, and the other from 19 February 1989 to

19 February 1990 granted on 13 January 1989. Three were granted by Mr Woodmass on 25 November 1992, from 19 February 1990 to 19 February 1991 (the third extension), from 19 February 1991 to 19 February 1992 (the fourth extension) and from 19 February 1992 to 19 February 1993 (the fifth extension).

31-2071, made on 29 December 1986, was the oldest application. When the three extensions were granted on 25 November 1992 the application was nearly

5 years past its initial expiry date and 2½ years past the existing extension dates. The other four applications followed a similar pattern with three extensions being granted to 31-2569 on 25 November 1992, two to 31-2640, one to 31 2713, and one to

31-2718.

The extensions of time were in standard form. In each case "the reason for delay" was stated. The reasons stated were as follows:

31-2071 (1) First extension

(2) Second extension

(3) Third extension

(4) Fourth extension

(5) Fifth extension

"2 months initial processing and to request required information.
2 months to receive information and to do the initial check.
1 month to request consents which were not required.
1 month to request reports/consents.
6 months awaiting reports. We are awaiting the MOT consent."

"Awaiting Minister of Conservation consent, requested 28/8/87."

"One further month to obtain Minister of Conservation consent.
Delays in obtaining TCDC report."

"Processing delays due to failure to obtain consent from TCDC."

"Further delays in obtaining consent from
_TCDC."

[MOT is short for Minister of Transport and TCDC for Thames Coromandel District

_Council.]

31-2569 (1) First extension

(2) Second extension

(3) Third extension

"It has taken 7 months to receive report of the Field Officer (Mining), Inspector of Mines, Hamilton."

"Processing delays due to uncertainty
of whether or not consent required from
TCDC. Currently awaiting the consent." "Awaiting consent of TCDC."

31-2640 (1) First extension

(2) Second extension

"6 months to obtain Minister of
Conservation consent. It was received on
12/9/90. Negotiations re amendments to consent have been on-going."

"Negotiations re amendments to Minister of Conservation's Consent. A replacement consent is being sought."

31-2713	(1) First extension	"There have been delays in obtaining
		the Minister of Conservation's consent
		which was requested on 10 September
		1992 and, as yet, (has) not been received."

31-2718	(1) First extension	"Delays in receiving the consent of the
		Minister of Conservation which was
		received by the Minister of Energy and
		dated 17 May 1992."

There was no correspondence relating to any of the extensions between the Ministry and Heritage or Tasman respectively, or any other government agency. It seems that the only inquiry from Heritage or Tasman in that regard was a letter from Heritage's solicitors to the Ministry of 16 January 1990 asking for confirmation that

31-2071, then under discussion with the Thames Coromandel District Council, "is still extant"; and that the response from the Ministry of 18 January 1990 was that the application would be held pending the outcome of Heritage's discussions with the Council on the matter.

According to their respective affidavits Heritage has spent some $200,000 in meeting the statutory requirements for processing their two applications and on the project itself since lodging the applications, and Tasman some $617,000 in respect of

31-2640, including preparing for a Planning Tribunal hearing which has been deferred pending a decision on the judicial review proceedings. Tasman has made further applications under the Crown Minerals Act which would gain priority and protect

Tasman in terms of its major investments in these projects if the extensions under s 109(2) are found to be invalid. Heritage did not make similar overlapping applications to protect its position in the event of a finding of invalidity and in respect of 31-2071 another company has an exploration permit application overlapping Heritage's application, which will gain priority if the Heritage application is found to be invalid.

The departmental practice

Mr Woodmass explained the departmental practice:

7. When considering whether or not to grant an extension, the procedure of Ministry staff was to examine the file to see whether there were substantial delays in processing which were not the result of the applicants' actions or in some circumstances, inaction. Delays in receiving the various reports and consents required by the Act eg of local authorities and the Minister in charge of administering the land, were treated by the Ministry as amounting to special circumstances justifying an extension. By way of contrast, if the Ministry had requested and not received from the applicant further information on its application, any resultant delay would not have justified an extension if no good reason for the non-provision was provided.

9. It was the official information request dated 12 November 1992 from Denis Tegg, solicitor for the applicant, Exhibit A to the Affidavit of Alastair James Pettit filed on behalf of the Applicant, which prompted the recommendations for and granting of these extensions. If however no such request had been made, the extensions of time would have been granted at some other stage in the ordinary course of the application being processed. For example, once the process reached the stage where the Minister considered that subject to the Act, it was likely that a mining privilege would be granted; and as a result of the applicants' notification of the application and proposed conditions objections were received; before the matter was heard by the Planning Tribunal, the file would always be checked to ensure that all the documentation was in order including the granting of appropriate extensions of time.

10. It was not unusual for the extension to be granted so late in the processing of applications because there were many applications that had reached different stages of processing at any one time. I estimate

that at the time I left the Ministry, there would have been in the region of 400 mining privilege applications being processed, along with a further 300 dealing applications.

18. The procedure I followed in granting these extensions was that I looked at what had happened with respect to the processing of the application since the application's receipt, in order to ascertain the main reasons for delay.

19. In the case of PLA 31 2071, the only application for which I did not grant all extensions, I only looked back to the point at which the extension immediately prior had been granted.

In 1989 Mr Woodmass had obtained legal advice from the legal section of the Ministry as to granting extensions of time retrospectively. The advice received was that the Minister could grant an extension of time during which an application could be dealt with after the initial period for dealing with the application had elapsed, subject to there being special circumstances and subject to any one extension being for a maximum of twelve months.

The proceedings

In December 1992, only a month after receiving advice from the Ministry as to the extensions granted in respect of the five applications, Peninsula brought proceedings for judicial review under the Judicature Amendment Act 1972. The grounds for relief as pleaded were that any extension had to be given before or on expiry of the twelve months period from the date on which the application was made; or alternatively, that an extension to be valid had to be given within a reasonable time after the expiry of the twelve months period, and none of the extensions was granted within a reasonable time; that any timely extension could only be justified because of special circumstances and there was no such circumstance; and that the Ministry's decision in granting special extensions was not one the Minister could have reached had he acted in accordance with the law, fairly and reasonably. Peninsula sought a

declaration that the purported extensions were invalid and that the applications for prospecting licences had lapsed.

The High Court decision

Robertson J rejected the first contention. He considered that on their face the words of s 109(2) were clear and unambiguous and that he should follow the reasoning to that effect of Hosking J in Humphrey v Hewitt [1914] NZGazLawRp 194; (1914) 17 GLR 197,200. He also considered it important that the obligation was on the Minister and, if the Minister had not acted, the applicant for a mining privilege would be denied any right and there was nothing anyone, not even a court, could do to ameliorate an injustice.

The Judge did not deal separately with the second point, the question of reasonable time. No doubt it was not advanced as a separate submission.

Special circumstances, he said, meant something out of the ordinary, or as Viscount Dilhorne described it in Crabtree v Hinchcliff (Inspector of Taxes) [1971] 3 All ER 967, 983, "circumstances which were exceptional, abnormal or unusual" but, something less than extraordinary or unique (citing Cortez Investments Ltd v Olphert & Collins [1984] 2 NZLR 434 per McMullin J). Here the delays had occurred essentially because the Minister had been awaiting full and complete responses from various bodies with whom he was consulting or from whom he was seeking input and response. Weighing the entire process, including the fact that the delays had occurred by reason of matters beyond the control of the applicants for prospecting licences, the Judge upheld the finding by the Minister of special circumstances.

Finally, Robertson J said that, had he found otherwise, he would in the exercise of the discretion have denied relief. The crucial consideration that led him to that view was that a forthcoming hearing before the Planning Tribunal would allow a proper assessment of competing demands and claims in terms of the 1971 Act.

The scheme of the legislation

Those entrusted by statute with powers must act within those powers. Discretion, although broadly expressed, is not absolute. It is to be exercised to promote the policy and objectives of the statute.

That requires consideration of the scheme and purpose of the legislation and of the function of s 109 in the statutory scheme. Before turning to s 109 itself it is important to consider the provisions introduced in 1981 leading to referral of applications to various bodies and agencies and the relationship of those provisions to s 109.

Sections 103A to 103D were introduced to allow the Minister to impose conditions for land protection purposes on the granting of mining privileges. Where the mining will disturb the surface of the land, s 103B requires the Minister to seek reports from the Commissioner of Crown Lands and catchment authorities. Section 103C provides for the territorial authority to be informed of the application for the mining privilege and to report to the Minister, having regard to the economic, social and environmental effects of the proposal.

Importantly, both provisions set time limits that are firmly under the control of the Minister. The agency or authority concerned is required to report to the Minister "within 40 working days of having received a copy of the application or within such

longer period as the Minister may in any case allow" and, if the report is not received within that time, "the Minister may proceed to establish the conditions to be attached to the grant of the mining privilege" (s 103B(3) and s 103C(4)).

Section 104 reflects similar policy concerns for the prompt consideration of applications for mining properties. Subsection (6) requires the Secretary of the Department "as soon as practicable after the proposed conditions to be attached to the grant of mining privilege have been established" to give notice to the applicant for the mining privilege and to the territorial authority; subs (7) requires public notice to be given within 15 days after receipt of the notice; and subs (9) requires exhibiting of the notice for not less than 40 working days in the offices of the territorial authority and Inspector of Mines. Objections to the application or proposed conditions must be made within 20 days after public notice has been given (s 126(1)). In such a case s 109(3) operates to stop the clock running under s 109(1). And s 130 bars the Minister from granting any application for a mining privilege before the time allowed for objections to the application has expired.

It is apparent from this analysis that the legislation is designed to ensure the prompt and programmed consideration and determination of applications for mining privileges. Against that background s 109 reflects the statutory policy that unless special circumstances arise every application for a mining privilege shall be finally disposed of by being granted or refused within 12 months after the date on which the application was made. As Somers J explained in West Coast Province Federated Farmers of New Zealand (Inc) v Birch and Kanieri Gold Digging Ltd (CA 25/82, judgment 18 September 1993) the purpose of s 109 is to prevent land being locked up by an application longer than is necessary to reach a conclusion about it and also to limit the time during which proprietary rights are threatened. To similar effect, Hosking J in Humphrey v Hewitt at p 100 said it was well known that advantage was constantly taken of the ease with which adjournments of applications were frequently

obtainable to lock up for an indefinite period areas of land, water and other subjects of mining privileges and that the predecessor of s 109 met the evil remaining to be remedied.

It is implicit in s 109(1) that the Minister will process every application for a mining privilege with due diligence and with the object of ensuring that all the statutory steps, apart from the objection process, the duration of which is outside departmental control, are completed and the application is finally disposed of within

12 months after the date on which the application was made. The time constraints applying to agencies and authorities under ss 103B and 103C are subject to the Minister's control and the sanction for failure on their part to meet the deadline is that the Minister may proceed to establish the conditions to be attached to the grant of the mining privilege without their input.

That is the statutory expectation. The Minister sets the timetable. The responsibility of the Minister is to arrange for the administration of the application processes so as to comply with s 109. Extension beyond the 12 months is the exception. It has to be justified because of special circumstances applying in the particular case. Ordinarily the Minister can be expected to ascertain ahead of the expiry of the 12 months period whether there will be difficulty in meeting the requirement of s 109(1) and, if so, whether there are special circumstances justifying an extension. However subs (2) does not in its terms require that any extension be granted before the time limit has lapsed. Given the statutory emphasis on the prompt disposal of the mining applications there is every reason to require that any such extension, if not made before the elapse of the 12 months, be made within a reasonable time thereafter. Timing is important under the Act. We consider it implicit in s 109(2), and in accordance with the statutory scheme, that the power to enlarge the time for finally disposing of an application must be exercised before the elapse of the 12 months, or within a reasonable time thereafter.

It is also implicit under s 109 that an extension is for a defined period and that the additional period has regard to the steps taken within the 12 months and the time reasonably required to meet the special circumstances justifying the extension. Thus in Humphrey v Hewitt Hosking J, reviewing an extension under a different section of the Mining Act 1908 for lodging plans on the ground of the delay of the chief surveyor in returning the plans approved, observed at p 199 that "the Warden would be entitled to assume the Chief Surveyor would do his duty in regular course and that therefore only a reasonable period of time would be occupied".

The subsection calls for consideration of "the period during which application for a mining privilege may be dealt with". The focus must be on what has already been done and what remains to be dealt with because of the special circumstances which have ensued. Given that in ordinary circumstances an application must be finally disposed of within 12 months, any extension under s 109(2) would ordinarily be for a much shorter period.

Finally, if because of special circumstances an extended time limit has not been met, a further extension could be granted (Acts Interpretation Act 1924, s 25(g)) on a new and appropriately limited time basis (see Falvey v Tregoweth (1897) 16 NZLR 340).

Conclusions

We turn to consider whether having regard to the statutory scheme and the policy underlying s 109 the purported extensions of time were proper exercises by the Minister of the power conferred by s 109(2). It is sufficient for present purposes to

concentrate on the extensions granted by Mr Woodmass as delegate of the Minister where his affidavit explains the process followed.

Clearly the practice of the Ministry and its operation in these instances did not conform with the requirements of the statute. First, consideration should have been given to the exercise of the power to enlarge time before the expiry of the 12 months or within a reasonable time thereafter. Prompted by the Official Information Act request on behalf of Peninsula, the extensions in question were all made on

25 November 1992. They purported to apply from 19 February 1990 (31-2071),

10 February 1990 (31-2569), 23 November 1990 (31-2640), 18 April 1992 (31-2713) and 31 May 1992 (31-2718). Had it not been for the request it seems, from para 9 of the Woodmass affidavit, that the files would not have been checked and necessary extensions granted until immediately before the matter was put to the Minister or the Planning Tribunal. Against a time limit under subs (1) of 12 months, we consider that none of the purported extensions was granted within the reasonable time requirements of s 109(2).

Second, as recorded by Mr Woodmass in para 7, and as reflected in the stated reasons for delay in each case, delays in receiving the various reports and consents required by the Act were treated by the Ministry as special considerations justifying an extension. It appears from the material in the case that in adopting and implementing that view the Minister's delegate did not consider the Minister's rights and responsibilities under ss 103B and 103C and the crucial importance under the legislation of timetabling the completion of the various statutory steps to meet the objective underlying s 109(1). In the context of s 109(2) "special" is a limiting adjective. A special consideration is one outside the common run of things, one which, as Robertson J accepted, is exceptional, abnormal, or unusual, but something less than extraordinary or unique. In the specific circumstances of a particular case an unexpected delay or difficulty affecting the ability of an agency or an authority to

respond within 40 days could perhaps constitute special circumstances. The Minister's delegate did not look for circumstances of that kind. Rather, he appears to have proceeded on the footing that any delays in receiving reports and consents were special circumstances justifying an extension.

Third, in each case the privilege was simply extended by another 12 months. It was not fixed by reference to the time still reasonably required to finally dispose of the application because of the special circumstances which had arisen.

Overall discretion

The remaining question is whether, notwithstanding the finding that the purported extensions were not a proper exercise of the Minister's powers under s 109(2), and could not be supported under the statute, this is a proper case for refusing the declarations sought. Mr Long for Heritage and Tasman submitted that the companies were entitled to assume that their applications would be processed by the Minister in accordance with the statutory requirements; that they would be significantly prejudiced by a declaration that their applications had lapsed; and that Peninsula and other objectors still had the opportunity to challenge the applications at a substantive level before the Planning Tribunal.

The time requirements under s 109 are imposed primarily in the public interest and to recognise the importance of limiting the time during which proprietary rights are threatened. All interested parties, not least applicants for mining privileges, should be alive to the time limits and to the need for timely performance by the Minister of the Minister's responsibilities under the legislation. This is not a case of technical failure. It is not possible to say that, had the Minister's delegate correctly directed himself to the legal requirements for a valid exercise of the power of

extension under s 109(2), the applications would have continued extant. There is no basis for allowing the decisions to stand and the applications to remain extant.

For the reasons given we allow the appeal, quash the orders made in the High Court, and grant the declarations sought, namely a declaration that the purported extensions of time given by Mr Woodmass as the Minister's delegate in respect of the five applications were invalid and a declaration that the five applications have lapsed. Peninsula is entitled to costs on the appeal and in the High Court. These costs payable by the Minister are fixed overall at $10,000 together with reasonable disbursements, including the costs of printing the case on appeal and the travel and any accommodation expenses of counsel, as fixed by the Registrars of the respective courts.

Solicitors

Tegg & Hunter, Thames, for Appellant

Crown Law Office, Wellington, for First Respondent

Russell McVeagh McKenzie Bartleet & Co, Auckland, for Second and Third

Respondents