DEFECTS IN MARKING OUT IN APPLICATIONS FOR MINING …

230 Articles (2000) 19 AMPLJ

DEFECTS IN MARKING OUT IN APPLICATIONS FOR MINING TITLES: ACOMPARISON OF THE REQUISITE LEVELS OF COMPLIANCE UNDER THEGENERAL LAW AND THE MINERAL RESOURCESACT 1989 (QLD)

Trent Glover*

The marking out ofboundaries is a commonplace prerequisite for the granting ofa mining tenement.It is necessary to determine to what degree or extent such requirements have to be complied with inorder to obtain a valid tenement. In some jurisdictions, the statutory regimes which regulate miningprovide little or no guidance as to what level ofcompliance is required Therefore, the courts havehad to determine whether the requisite compliance is strict, or merely substantial. In Queenslandhowever, s 392 of the Mineral Resources Act 1989 (Qld) provides that substantial compliance withstatutory requirements can be sufficient. This section has the potential to affect significantly what isrequired under marking out provisions. While giving guidance as to the level of compliance, thedifficulty with s 392 lies in determining what constitutes substantial compliance. This is left to theresponsible officer; although any determination is subject to judicial review. In either case, thematter is one ofstatutory interpretation albeit in an alteredform under s 392.

I. INTRODUCTION

Modem mining titles are a by-product of the gold rush that engulfed the eastern colonies during the midnineteenth century.l The response to this 'gold fever' was to 'sanction and regulate the rush'2 byproclamation of a licensing system for gold mining. The effect of this system was to establish a regimerequiring compliance with a statutory procedure for the valid creation of mining tenements.

In the various jurisdictions today, a great number of procedures and formalities are required to becomplied with when applying for mining tenements. The marking out of boundaries3 is a commonplaceprocedural requirement.4 In Para Wirra Gold Mines NIL v Hill,S Piper J, when noting the importance ofthe effect of marking pegs, said:

"Plainly the purpose of pegging with inscribed pegs is to show persons who, after the pegging, comein sight of the comers of the claim that the area is a claim, where its boundaries are, the number of the

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Final year law student, James Cook University, Townsville. The author wishes to thank Graham Nicholson ofJames Cook University for his helpful comments, and Professor Michael Crommelin of Melbourne Universitywho reviewed an earlier draft of this article.M Crommelin, "Mining and Petroleum Titles," (1988) 62 ALl 863, 865; G Blainey, The Rush that Never Ended,(2nd ed, 1969), 20. See also C W O'Hare, "A History of Mining Law in Australia," (1971) 45 ALl 281; M AHunt "Government Policy and Legislation Regarding Mineral and Petroleum Resources," (1988) 62 ALl 841,842.J R Forbes & A G Lange, Australian Mining and Petroleum Laws, (1988), 2.Eg, before application for grant of a mining claim: s 56 Mineral Resources Act 1989 (Qld); before application forgrant ofa mining lease: s 240.The origin of this requirement, at least in Australia, was the introduction of the miner's right after the "EurekaStockade" in 1854. It has been stated that the 'holder of a miner's right (obtainable upon payment of a modestfee) was entitled to enter and take possession of unoccupied Crown land by "pegging it" ... and to mine for goldon it": Hunt, op cit n 1,850. See also O'Hare, op cit n 1,286-7,293.[1934] SASR 394.

(2000) 19 AMPLJ Defects in Marking Out in Applicationsfor Mining Titles (Queensland) 231

owner's miner's right, and the date ofpegging".6

Marking out is also important in determining the priority of applications competing for the same ground.Priority is 'accorded to the first in time to lay claim to the ground; in the case of a title requiring pegging,by the fIrst applicant who completes the pegging in accordance with the legislation.'7

It therefore becomes necessary to determine to what degree or extent these legislative requirements haveto be complied in order to obtain a valid tenement. Consider, for example, s 57 of the Mineral ResourcesAct 1989 (Qld) which prescribes the manner of marking out land proposed to be the subject of a miningclaim. A round post of not less than 10 cm in diameter or a square post of not less than 10 cm in widthstanding at least 1 m above the surface and sunk not less than 50 cm in the ground shall be placed onevery comer of the land applied for. s The part of each post above the ground shall be painted white.9

These two subsections (along with seven others) are conditions precedent to the making of an applicationfor a mining claim. 10 What then, is the effect of having 8 em-wide white posts marking out land, or whatof the validity of a claim marked out with 10 em-wide yellow posts?

In Queensland, the answers to such questions are relatively straightforward. Section 392 of the MineralResources Act provides that where an act has not been done in the prescribed way, but the responsibleofficer11 is satisfied that there has been 'substantial compliance' with the prescribed way, the act shall bedeemed to have been done in the prescribed way. 12 The effect of this section is not to treat as invalid anyapplications, which do not strictly comply with provisions of the Act. Therefore, in answer to the twoquestions posed above, it would appear that these may be treated as substantial compliance for thepurposes of an application for a mining claim if the other conditions have been complied with. It is,however, left to the decision maker's discretion whether there has been substantial compliance or not. 13

This discretion is not absolute and is subject to administrative law principles. 14

In some other jurisdictions, the statutory regimes which regulate mining provide no guidance as to whatlevel of compliance is required with such provisions for an application to be valid. 15 The determination ofthe extent of compliance has been left to the common law. The question is a matter of statutoryinterpretation. If compliance with the statute is a prerequisite to the exercise of the power to grant, then

6 Ibid 403.7 Hunt, op cit n 1, 851.8 Section 57(1).9 Section 57(2).10 Section 56(1).11 That is, the Governor in Council, the Minister, the chief executive, a warden or mining registrar as the case may

be.12 See further Pt III below. And see also s 164A Mining Act 1980 (NT), which contains a similar provision: "The

grant ... shall not be impeached by reason or on account of an informality or irregularity in the application or inany proceedings previous to the grant or renewal of the application for the ... tenement"; Queensland Mines vNorthern Land Council (1990) 100 FLR 331, 335; cf s 382 Mining Act 1992 (NSW) and ss 105, 105A MiningAct 1978 (WA). See also M Hunt Australian Mining and Petroleum Law, (1997),284,305-6. See n 68 below.

13 Section 392(1).14 See Pt 111 below. See also J M Evans, de Smith's Judicial Review ofAdministrative Action, (4th ed, 1980), 322;

M Allars, Administrative Law: Cases and Commentary, (1997), at 459. It is well-established that the decisions ofa mining warden are justiciable: Sinclair v Mining Warden at Maryborough (1975) 132 CLR 473,481.

15 But see s 382 Mining Act 1992 (NSW) and ss 105, 105A Mining Act 1978 (WA).


the effect of non-compliance is fatal to the grant. 16 In Hunter Resources Ltd v Melville,17 the issue wasperceived as whether a test of substantial or strict compliance was appropriate in relation to compliancewith the marking out regulations under the Mining Act 1978 (WA). A majority of the High Court decidedthat on the true construction of the provisions in question the doctrine of substantial compliance had noapplication. 18

This paper will examine the distinction between the two positions - that of strict compliance and that ofsubstantial compliance - as they exist in Australian law. First, the degree of compliance required toestablish valid mining tenements in those jurisdictions which have no statutory direction on this issue willbe considered. Secondly, s 392 of the Mineral Resources Act 1989 (Qld), and the extent to which it altersthe common law position with respect to the granting of mining titles in that State, will be examined. Acomparison between the doctrines of strict compliance and substantial compliance will then be made inorder to determine the relative strengths and weaknesses of the two positions. Finally, a suggestedconstruction of s 392 will be offered.

II. STRICT COMPLIANCE UNDER THE GENERAL LAW

Technical breaches of marking out requirements

It has been remarked that not infrequently the marking out of land involves some non-compliance inrespect of the prescribed requirements. 19 In Anisimoffv Fraser (No 2),2° Jacobs J, in the South AustralianSupreme Court, recognised the dangers of not fully, or 'strictly', complying with a statutory requirement:

" I suppose one could say that with only 29 centimetres involved, the breach is bordering on themerely technical. I prefer not to because it seems to me that the 50 metre requirement is very basic inthe first place, and if one says an additional 20 centimetres is merely technical, where does it end?" 21

This passage reveals that if technical breaches of conditions precedent to the valid application for miningtenements are ignored, then the matter is complicated by an additional factor; namely, how great adivergence from the statutory requirement is allowed to be a technical breach? Instead, the courts havepreferred to adopt a statutory interpretation test to determine the level of compliance required. It has beensuggested that the use of the term 'strict compliance' is misleading, as the courts have simply insisted on'compliance' with the legislative requirements for marking OUt.22 Nevertheless, for present purposes thatterminology will be maintained.

16 Crommelin, op cit n 1, at 867.17 (1988) 164 CLR 234.18 A N Siopis, "Recent Cases - Their Practical Significance: Hunter Resources Ltd v Melville," [1988] AMPLA

Yearbook 189, 191.19 Hunter Resources Ltd v Melville (1988) 164 CLR 234, at 244 per Mason CJ and Gaudron J commenting on a

point made by Rowland J in the case when before the Full Court of the Supreme Court of Western Australia; R vLane; ex parte Pard Holdings Pty Ltd (1990) 2 WAR 486, 495.

20 (1983) 33 SASR 458.21 Ibid 462, quoting the decision of the Warden at first instance who was applying the reasoning from the earlier

decision of Pacimex (Operations) Pty Ltd v Australian (Nephrite) Jade Mines Pty Ltd (1974) 7 SASR 401.22 M W Hunt & M A Lewis, Mining Law in Western Australia, (2nd ed, 1993), 167; I-Iunt, op cit n 22, 337-8.


The common law test for determining what level of compliance is required

The leading case on the test for determining whether 'strict compliance' with statutory procedure isrequired is Hunter Resources Ltd v Melville,23 the facts of which are relatively straightforward. Therespondent, Melville, applied for a prospecting licence under s 40(1) of the Mining Act 1978 (WA).Hunter Resources Ltd objected to Melville's application on the basis that 'he had failed to space pegswithin the allowable distances'.24 Regulation 59 of the Mining Regulations 1990 (WA) set out arequirement that pegs be placed "at intervals not exceeding 300 meters along each of the boundary lines".It was established that there were three intervals in excess of this permitted maximum along two ofMelville's boundary lines: "one was on the northern boundary, being 302 metres; others were on thesouthern boundary, being 301 metres and 303 metres".25 The application for a licence was refused at firstinstance by Warden Reynolds SM. The Warden held that on the true construction of the Act strictcompliance with its terms of marking out was necessary and that in the absence thereof he had nodiscretion to overlook any non-compliance. Since Melville had placed pegs at distances in excess of theprescribed maximum distances he had not complied with the regulations.26 Another consideration in thisdetermination was s 105A of the Act which required priority to be given to an applicant who had markedout the relevant land 'in the prescribed manner' .27 By incorporating the doctrine of substantial complianceinto the marking out regulations, the application of s 105A would be made very difficult.28 The Full Courtof the Supreme Court of Western Australia held that the Warden had made an error of law by insistingupon a test of strict compliance with the regulations, whereupon Hunter Resources Ltd appealed to theHigh Court.

All five Justices of the High Court approached the issue in the same way, although differing as to theresult.29 Wilson, Dawson and Toohey JJ upheld the appeal, while Mason CJ and Gaudron J dismissed it.Justice Dawson, with whom Wilson J generally agreed, dealt with the matter simply:

" ... this is a case, in my view, in which substantial compliance with the relevant statutory requirementwas not possible. Either there was compliance or there was not. The requirement was that pegs orcairns be fixed along the boundary lines of the mining tenements at intervals not exceeding 300metres. Either the intervals exceeded 300 metres or they did not. I am unable to understand how itcan be said that to exceed the maximum limit was substantially to comply with it. Any number ofvariations in the distances between pegs up to 300 metres was permissible, but a distance of morethan 300 metres was not a compliance at all, let alone substantial compliance, with a provision whichforbids intervals of more than 300 metres in length."30

23 (1988) 164 CLR 234.24 Ibid at 238; Siopis, op cit n 18, 189.25 (1988) 164 CLR 234, 239; Siopis, op cit n 18, 189; Crommelin, op cit n 1, 868.26 Siopis, op cit n 18, 190.27 Section 105A(4)(b)(i). See also s 105 which provides:

(1) Before an application for a mining tenement other than an exploration licence or a retention licence is made,the land in relation to which the mining tenement is sought shall be marked out in the prescribe manner inthe prescribed shape...

28 Siopis, op cit n 18, 190.29 Crommelin, op cit n 1, 868. The minority judges agreed with the majority that the test to be applied was one of

statutory interpretation.30 (1988) 164 CLR 234, at 249. See also Dominion Gold Operations Pty Ltd v Sabminco NL, unreported,


For it to be determined that strict compliance is required however, the statutory provisions must beconstrued as mandatory. Dawson J applied the test in Clayton v Heffron31 from which a relevantconsideration is whether holding a provision to be mandatory would 'work inconvenience or worse on asection of the public'.32 Although this test was formulated in a different context, his Honour had littledifficulty in concluding that little, if any, inconvenience would result from insistence upon a strictcompliance with marking out procedures.33

Toohey J considered it unnecessary to have regard to distinctions between mandatory or directoryprovisions or of strict or substantial compliance.34 Rather, his Honour took the view that "the words justmean what they say".35 The requirement was not one calling for the use of expensive or sophisticatedequipment, and could be met by pacing and making sure that the pegs were within the permitteddistances.36 When viewed in this light, non-compliance with the condition precedent resulted was fatal tothe validity of the grant.

The joint minority judgment of Mason CJ and Gaudron J did not explicitly adopt the term 'substantialcompliance'. Their Honours stated that neither a failure to comply with the marking requirements nor afinding by the Warden to that effect is a pre-condition to the power of the Warden to grant a prospectinglicence. To hold precise compliance a condition precedent to the grant of a licence would, in theiropinion, give an advantage over other persons to the grant of a licence to large companies which have theresources and equipment to ensure strict and absolute compliance with the conditions.37 The jointjudgment went further than this and stated that in the absence of a completing claim substantialcompliance, even with the mandatory language of the section, could be sufficient.38

In the result, the High Court affirmed the principle that compliance with marking out provisions was apre-condition to the grant of a prospecting licence.39 Any departure from these requirements was fatal tothe grant.

Other cases

This issue of statutory interpretation is by no means straightforward. In R v Lane; ex parte Pard HoldingsPty Ltd,40 the Full Court of the Supreme Court of Western Australia refused to hold that an error in thecompass description of the boundaries of a mining tenement in its papers constituted a failure to complywith the marking out provisions in the Mining Act 1978 (WA) and Regulations. The Court was not faced

Meekatharra Warden's Court, 24 March 1988, noted (1988) 7 AMPLA Bulletin 88, where a corner post whichprojected 2 cm less than the one metre required by s 59(1) Mining Regulations 1981 (WA) was held to beinadequate.

31 (1960) 105 CLR 214.32 Ibid 247.33 (1988) 164 CLR 234, 252.34 Ibid 257-8.35 Ibid 256.36 Ibid.37 Ibid 244. See Pt IV. below.38 Ibid. See also Queensland Decor Aggregrates PIL v Cadman, (unreported, White J, Qld SC, 4 August 1997, (No

1972 of 1997».39 Siopis, op cit n 18, 194.40 (1990)2 WAR 486.


with a strict compliance provision and therefore distinguished Hunter Resources Ltd v Melville. 41 Whatwas in issue was the requisite degree of compliance. With regard to that situation, Ipp J noted the seriousconsequences which would follow if absolute accuracy were required.42 His Honour held that the absenceof words denoting that absolute accuracy was required, was, in effect, an indication to the contrary.43Therefore, the section need not be complied with strictly to enable the valid grant of a title.

The judgment of Ipp J indicates that there is more to the statutory interpretation question than simplywhether the provision is mandatory or directory.44 It is a matter of construing the relevant provisions byhaving reference to 'the scope and purpose of the Act. '45 In other words, the issue is one of legislativeintention as to the degree of compliance required.46

The Case of Kenda v Andrea,47 was based on an application for forfeiture of a precious stones claim on thegrounds that there was failure to comply with statutory requirements in marking out the land in question.48

The High Court considered the Mining Act 1930 (SA). Regulation 37(2) of the Mining Regulations 1946(SA) provided that a 'precious stones claim shall be a square area, the side of which shall not exceed 150feet'. The appellant, Kenda, claimed that Andrea's precious stones claim at Coober Pedy 'was notsubstantially a square,49 and therefore, failed to comply with the statutory requirements. 50 As in the Lanecase,51 there was no requisite level of compliance provided in the legislation.52

The claim was dismissed by the Mining Warden, Mitchell J in the South Australian Supreme Court, andthe Full Court.53 The High Court held that, as a matter of construction of the statute, there had been nofailure to comply.54 Both Barwick CJ,55 and Windeyer J, recognised that the conditions under which aclaim is pegged in a mining field, may make it impracticable to set the pegs so as to form a perfectsquare.56

The case of Bromley v Muswellbrook Coal Company Pty Ltef7 concerned a failure to obtain a permit to

41 The provision in question did not set out what the "description should contain or what accuracy it shoulddisplay": (1990) 2 WAR 486,495.

42 See also Para Wirra Gold Mines NIL v Hill [1934] SASR 394, discussed in Pt IV below.43 (1990) 2 WAR 486, at 495. Compare the judgment of Wallace J, who preferred to consider the fact that no one

could have been misled by the description since the map attached contained no misdescription, 490.44 As Dawson J had in Hunter Resources v Melville (1988) 164 CLR 234, 248, but cf 241 per Mason CJ and

Gaudron J, and 256 per Toohey J.45 Hunter Resources v Melville (1988) 164 CLR 234,241 per Mason CJ and Gaudron J.46 (1990) 2 WAR 486,495.47 (1966) 115 CLR 519.48 Crommelin, op cit n 1, 865.49 (1966) 115 CLR 519, 523.50 By s 36(1) Mining Act 1930 (SA), which provided that 'Every claim shall be liable to forfeiture upon non

compliance by the owner with the prescribed conditions... '. Here the condition which it was argued was notcomplied with was reg 37(2).

51 (1990) 2 WAR 486. See n 40 above and accompanying text.52 In other words, there was no 'substantial compliance' provision.53 (1966) 115 CLR 519, 521.54 Crommelin, op cit n 1, 865.55 With whom McTiernan, Taylor and Kitto JJ agreed.56 (1966) 115 CLR 519, 524, 526.57 (1973) 129 CLR 342.


mark out private land to be the subject of a mining lease pursuant to the Mining Act 1906 (NSW). Section70B of the Act made the marking out of boundaries a preliminary condition to the making of anapplication.58 Additionally, s 48A provided that the Mining Warden could issue permits to an intendingapplication to enter upon land for the purpose of marking out the areas of the claim. The applicant did notobtain a permit before entering private land and marking out a claim. The question to be determined bythe High Court was whether a person who had marked out land without a s 48A permit could be granted alease 'as a person who has "in the prescribed manner, marked out the boundaries of the land desired to beleased". '59 The Court, constituted by four Justices, unanimously held that the Act required such a permitto be obtained.

Mason J, with whom Barwick CJ and Stephen J agreed, stated that the issue of a permit formed part of theprocedure to be followed by an intending applicant for a mining lease.6o As a permit had not beenobtained the applicant had not marked out the land applied for in accordance with the provisions of theAct. His Honour noted that while such provisions should be "construed liberally,"61 this could not be usedto overcome the absence of marking out of the kind contemplated by the Mining Act.62

Summary of the general law position

In those jurisdictions not having legislative guidance as to the required level of compliance with statutoryprocedures for marking out, the question is always a matter of statutory interpretation.63 If the provisionsare directory, rather than mandatory, then substantial compliance may be held to be sufficient observanceof the statutory requirement. Even if the procedural requirement is mandatory in the sense that anapplicant needs to comply to obtain a valid tenement, there may still be a question of whether thatmandatory provision requires strict compliance or some lesser standard.

The problem with the mandatory/directory classification, as Dawson J recognised, was that there may be"some requirements with which there cannot be substantial compliance - either they are complied with ornot - which have nevertheless been regarded as directory only".64 Therefore it becomes a question ofwhat consequences, if any, were intended to flow from the failure to comply with a statutory requitement.Ifpublic inconvenience were to result from a failure to comply, then the provision in question can be seenas imposing a mandatory requirement in which case strict compliance with the provision would berequired.65 Most importantly regard must be had, as mentioned above,66 to the intention of the legislaturein enacting the provisions.67

58 Ibid 351.59 Ibid 345.60 Ibid 351.61 This was using the words of Dixon CJ, Kitto, Taylor and Menzies JJ in Associated Minerals Pty Ltd v NSW

Rutile Mining Co Pty Ltd (1961) 35 ALJR 296,297.62 (1973) 129 CLR 342, 352.63 Hunter Resources Ltd v Melville (1988) 164 CLR 234, 241 (per Mason CJ and Gaudron J), 245 (per Wilson J),

248 (per Dawson J), 256 (per Toohey J); Bromley v Muswellbrook Coal CO Pty Ltd (1973) 129 CLR 342, 350(per Mason J). See also Crommelin, op cit n 1, 868-9.

64 Ibid 248-9.65 Ibid 251-2. See the text accompanying n 32 above.66 See n 46, above and the accompanying text.67 Hunter Resources v Melville (1988) 164 CLR 234, 241; R v Lane; ex parte Pard Holdings Pty Ltd (1990) 2


III. SUBSTANTIAL COMPLIANCE UNDER S 392

Section 392 of the Mineral Resources Act 1989 (Qld) (as amended by Act 7/1999, sch 3) provides that:

" Where this Act provides that in respect of any matter, the Governor in Council, the Minister, thechief executive, the tribunal or a mining registrar may act if anything has been done in the prescribedway, but that thing has not been done in the prescribed way, the Governor in Council, the Minister,the chief executive, the tribunal, or as the case may be, a mining registrar who is satisfied that therehas been substantial compliance with the prescribed manner and form in respect of that thing mayrecord that fact in writing and may so act and the thing shall be deemed to have been done in theprescribed way."68

This section is designed to overcome the 'strict legalism' approach to the determination of compliancewith marking-out procedures adopted by the High Court in Hunter Resources Ltd v Melville. 69

While the section does contain a discretion, it is important to note that this discretion is not absolute andgeneral principles of administrative law are applicable thereto.70 This stems from the fact that there aretwo aspects to challenge a determination purportedly made under s 392. First, whether there has in factbeen substantial compliance with the provisions of the Mineral Resources Act. Secondly, whether theresponsible officer was satisfied and could be satisfied that there was substantial compliance.71 Thisrequires the officer to put their mind to the question of whether there was substantial compliance and torecord that decision in writing.72 The officer must act in conformity with the express words of the statuteand additionally, in conformity with administrative law principles.73

WAR 486, at 495; Associated Minerals Pty Ltd v NSW Rutile Mining Co Pty Ltd (1962) 35 ALJR 296, 297;Bromley v Mussellbrook Coal Company Pty Ltd (1973) 129 CLR 342,351.

68 Although the subject of this paper is restricted to application for grants, it should be noted that s 392 is notrestricted to failings before the grant of a mining tenement. This is unlike the position at common law and theNorthern Territory's substantial compliance provision, s164A of the Mining Act 1980 (NT), which provides:"(1) Notwithstanding any other provision of this Act, the Minister may grant an exploration licence, exploration

retention licence or mining tenement, and a mining register may grant an extractive mineral permit,notwithstanding that the applicant for the licence, tenement or permit may not have complied in all respectswith the provisions of this Act or the Regulations.

(2) Except in the case of fraud, the grant renewal of an exploration licence, exploration retention licence ormining tenement shall not be impeached by reason or on account of an informality or irregularity in theapplication or in any proceedings previous to the grant or renewal of the application for the licence ortenement."

See nn 97-99 below and accompanying text. See also Queensland Mines Ltd v Northern Land Council (1990)100 FLR 331, at 335; cf s 382 Mining Act 1992 (NSW), ss 105, 105A Mining Act 1978 (WA)

69 J R Forbes, "Defective Marking - Out Defeats Lease Application" (1196) 15 AMPLA Bull 122.70 See above n 14.71 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 229.72 Note that s 164A of the Mining Act 1980 (NT) does not contain a similar requirement. This makes that section

substantially different from s 392 of the Queensland legislation.73 Evans, op cit n 14, 323. Such grounds for challenging the validity of an exercise of a statutory discretion include

unreasonableness, abuse of power, and failure to take into account relevant considerations and taking intoaccount irrelevant considerations.

238

Cases on statutory substantial compliance

Articles (2000) 19 AMPLJ

A forerunner to s 392 of the Mineral Resources Act was s 27 of the Mining Act 1906-1952 (NSW), whichmade provision for variations between a description of the marked out land and the land actually markedout.74 This section was utilised by the High Court in Murphy v Ramsay,75 in rather complicated factualcircumstances, where the second respondent, Mineral Deposits Pty Ltd, had failed to comply with thestatutory requirements for marking out. Barwick CJ76 noted that s 27 expressly provided that a valid leasemay be granted upon an application therefore, notwithstanding that the description in the application didnot strictly comply with the land as marked OUt.77 In his opinion, the failure to comply with the markingout provisions fell fairly within this section, and hence, a valid lease could be granted. This was so evenwhere the applicant had "failed in respects that at best were marginal accurately to described that land."78This may be viewed as a broader test than that of s 392.

In Associated Minerals Pty Ltd v NSW Rutile Mining Company Pty Ltd,79 two applications for dredgingleases under the Mining Act 1906-52 (NSW), were made outside the time limit as specified in the Act.Nevertheless, the Governor in Council granted both leases. In a joint judgment, Dixon CJ, Kitto, Taylorand Menzies JJ noted that in the absence of 'some special provision' it could be assumed that anapplication outside the time limit could not be granted.80 However, the Act did contain such a specialprovision, in s 99(3), which provided that the Governor may grant a lease notwithstanding that 'the personapplying for the same may not in every respect have complied with the regulations.' The Court wasconcerned with what that section meant by 'its reference to a person not having complied with theregulations. '81 Their Honours held that such an 'enabling provision' should, in accordance with 'commonsense and sound principles', be construed liberally.82 Having this construction in mind, the Court by amajority83 held that both leases were validly granted.

It is submitted that s 392 of the Minerals Resources Act is similar to s 99(3) of the Mining Act 1906-52(NSW) in that s 392 merely contains the words 'substantial compliance' instead of 'not in every respect

74 This section has since been repealed and such provision is no longer contained in the current statutory miningregime in New South Wales. It is useful to consider s 305 of the Mining Act 1992 (NSW) which provides:"( I) An Application or Tender under this Act must be in or to the effect of the approved form.(IA) If an approved form requires the form to be completed in a specific manner, or requires specified

information to be included in, attached to or furnished with the form, the form is not duly completedunless it is completed in that manner and unless it included, or has attached to it or furnished with it,that information."

This section, it appears, imports the principle from Hunter Resources Ltd v Melville (1988) 164CLR 234, in thatit requires strict compliance with the provisions in the Act.

75 (1964) III CLR 344.76 With whom McTiernan, Kitto, Taylor and Owen JJ agreed.77 (1964) III CLR 344,350.78 Ibid 349.79 (1962) 35 ALJR 296.80 Ibid 297.81 Ibid.82 Ibid.83 Windeyer J dissented, but upon different grounds.


have complied.' This being the case, s 392 should itself be construed liberally in accordance withcommon sense and sound principles.84

In Wall v Mining Warden at Emerald,85 s 392 was used to overcome a failure to comply with a rule aboutthe painting of survey postS.86 Demack J held that this was an irregularity which could be waived as'substantial compliance' with the section had occurred.8

?

Another Queensland case where the issue of substantial compliance was raised is Queensland DecorAggregates PIL v Cadman.88 The relevant facts are as follows. The respondent Cadman obtained aprospecting permit in order to peg a mining lease.89 He then proceeded to mark out the area of the lease.This was done without giving the landowner seven days notice.90 There was a misdescription of the landwith the result that the pegged area did not perfectly correspond with the area applied for. The appellantcompany, Queensland Decor, objected to the granting of the mining lease and the Wardens Court wasconvened to hear the application and objection. The Warden recommended to the Minister that the leasebe granted. Queensland Decor made extensive submissions to the Minister who returned the matter to theWardens Court for reconsideration. The Warden then reported and made recommendations to theMinister pursuant to ss 269 and 272 of the Mineral Resources Act. The ultimate recommendation was thata 21 year mining lease be granted to Cadman over the entire area.

The Minister attempted to act on the Warden's recommendations when Queensland Decor commencedlegal proceedings alleging that the grant would be invalid because of non-compliance with the MineralResource Act on two grounds. The fIrst was that Cadman had entered land to mark out the lease areawithout giving the landowner the requisite notice of entry. Secondly, it was alleged that the marking outof the land was not correct for the purpose of ss 240 and 241 of the Act as the wrong land had beenmarked OUt.91 Queensland Decor further sought an injunction restraining the Minister from recording hissatisfaction that there had been substantial compliance with the provisions of the Act.92

On the first point, White J held that the landowner's endorsement on the prior prospecting permitindicated the owner's acceptance of a shorter time than seven days. Accordingly, there was compliancewith the Act.

84 Such an interpretation has be applied to s 393 (neglect of the Mining Registrar) in Queensland Decor AggregatesPIL v Cadman, White J, Supreme Court of Queensland, unreported, 4 August 1997 (No 1972 of 1994).

85 Unreported, Demack J, Qld SC Rockhampton, 2 May 1997; See also J R Forbes, "Objections to Application forMining Leases in Queensland" (1997) 16 AMPLA 141.

86 "the part of each post above the surface shall be painted white": s 241 (2).87 J R Forbes op cit n 85, 144.88 White J, Supreme Court of Queensland, unreported 4 August 1997 (No 1972 of 1994), although this case did not

specifically turn upon s 392.89 Indeed this was a special condition imposed upon the permit.90 As required by s 32 of the Mining Resources Act.91 This in fact had been caused by an error of the Mining Registrar in recording the details of the lease application.

A hearing before a Mining Warden was called by the Minister, and from there recommendation were made to theMinister.

92 The case was additionally complicated by the fact that the Mining Registrar failed in the performance of hisduties. However, this point is not relevant for the present purposes.


On the second point Her Honour held that the Minister's direction to the Mining Warden to considermatters relating to mineralisation and development of the land meant that he had determined that theCadman's interests had complied with the necessary provisions of the Act. Additionally, there was no'manifest error' of law or fact made by the Warden which would have made his recommendation 'soflawed' that the Minister could not have regard to it. Therefore, the Minister could validly determine inwriting that there had been substantial compliance with the Act.

Clearly there are still limits to the scope of s 392. A recent example of a case where 'substantialcompliance' under s 392 was inapplicable was Re Brown's Application.93 A field officer's inspectionrevealed that the marking-out provisions of the Mineral Resources Act had not been complied with in theapplication for a gold and sapphire mining lease at Emerald.94 It was discovered that one post wasmissing, and that there were no markings on the three posts which did exist. In addition, Brown had notattached a copy of his certificate of application to the datum post.95 The warden reported to the Ministerthat these failures in marking-out constituted a good reason for refusal of the application. Further he wasof the opinion there was no question of substantial compliance which would operate to 'justify avalidation of the application under s392' .96

Failings before grant

Although the subject of this paper is restricted to applications for grants, it should be noted that s 392 isnot restricted to failings before the grant of a mining tenement.97 This is unlike the position at commonlaw98 which is limited to whatever interpretation is given to a particular section. In most cases, thequestion of the requisite level of compliance only arises in cases where there has been failure to complywith a condition precedent to the grant.99 Section 392 is wider in application in that after the grant of amining title failure to comply strictly with some condition of the grant will not necessarily result in loss ofthe title.

IV. A COMPARISON OF THE TWO APPROACHES

Difficulties with the statutory requirement of 'substantial compliance'No general principle emerges from the judgments in Hunter Resources Ltd v Melville as to preference for'strict compliance' over 'substantial compliance'. What was required in that case was compliance withstatutory provisions. As Crommelin suggests, the consequences of non-compliance fell to be determined

93 Unreported, Mining Warden's Court, Brisbane, 25 March 1996 (Lease Appln 70138). Noted in (1996) 15AMPLA Bull 122.

94 The section in question was s 241 of the Mineral Resources Act 1989 (QLD) which provides that a marker postshall be placed at every corner of the proposed lease, and that every such post shall be "durably marked" with thename of the Applicant and the date on which the marking-out occurred.

95 As required by s 252(7).96 Forbes op cit n 69, 122.97 Cf s 164A Mining Act 1980 (NT).98 And also s 164A Mining Act 1980 (NT).99 For examples see Hunter Resources Ltd v Melville (1988) 164 CLR 234; Anisimo.fJv Fraser (No 2) (1983) 33

SASR 458; R v Lane; ex parte Pard Holdings Pty Ltd (1990) 2 WAR 486; Kendra v Andrea (1966) 115 CLR519.


by statutory construction. lOo The degree of compliance will be determined in a particular matter by theterms of the legislation, and by having regard to the consequences of non-compliance. 101

This was a point in Kenda v Andrea, 102 where Windeyer J notedl03 the dangers faced by accepting theproposition that the claim was 'substantially a square or approximately a square' .104 His Honour said:

" ... by merely looking at [the claim] in a plan I do not feel that I can say that it would not, as pegged,appear on the ground to be square, or nearly enough to be a square, to satisfy the requirements of themining law; for I do not know what is 'substantially' a square, because for one thing, I do not knowwhat angle greater or less than ninety degrees is substantially a right angle. Would a deviation ofanything up to forty-four degrees be allowable? If not, what deviation would be? I just do not know.And I do not know what claims are in practice regarded as a sufficient approximation to squares.,,105

This passage illustrates an inherent difficulty with the 'substantial compliance' provisions: l06 what exactlyis meant by the term 'substantial'?107

Consider for example, the courts developing an extremely liberal construction of s 392 with the result thatthe marking out of boundaries became 'idle and farcical.,108 This would indeed defeat the very purposethat pegging and marking out serves, that of identifying to the world the boundaries of the claim. 109 It iseasy to see that such a construction would be to the detriment of applicants who expend time andresources in the exploration of a potential mining tenement when in fact a claim may have already beenmade for that land. The marking out, whilst existing, 110 may not identify with accuracy the complete areaof the claim. However any objection to the first claim based on non-fulfilment of the marking outrequirements would ultimately fail due to statutory substantial compliance being achieved.

A stricter approach was adopted in Tarak Pty Ltd (Applicant) and Initiating Explosives Systems Pty Ltd(Objector), III where it was stated:

100 Crommelin, op cit n 1, 868-9.101 As noted above, in some cases a liberal interpretation may be adopted: Associated Minerals Pty Ltd v NSW

Rutile Co Pty Ltd (1962) 35 ALJR 396,297 (applied in Bromley v Muswellbrook Coal Company Pty Ltd (1973)129 CLR 342). In other cases, more "strict" compliance may be necessary (of course always having regard tothe consequences of the particular non-compliance).

102 (1966) 115 CLR 519.103 As Barwick CJ apparently had, 524.104 (1966) 115 CLR 519,526.105 Ibid. By his reference to "in practice", Windeyer J appears to be alluding to using industry standards and

benchmarks in determining what is acceptable deviation from the requirements of the mining statutes. See alsoAustralian Energy Ltd v Lennard Oil NL [1986] 2 Qd R 216, considered below at n 125.

106 Section 392 Mineral Resources Act 1989 (QLD), s 164A Mining Act 1980 (NT); cf s 382 Mining Act 1992(NSW), s 105 Mining Act 1978 (WA).

107 Under strict compliance provisions, both applicants and administrators have perfect knowledge of what isrequired. Although the matter is far from clear in provisions which adopt neither strict nor substantialcompliance as sufficient. Statutory interpretation is thus an important consideration.

108 To use the words of Piper J in Para Wirra Gold Mines PIL v Hill [1934] SASR 394,403-4.109 See above nn 6 and 7.110 In order to satisfy the liberal interpretation of s 392.111 Unreported, Warden's Court, Brisbane, 7 November 1995.


"For substantial compliance to be found there must be some compliance which goes beyond meretoken compliance. Each case must be decided on its own merits, and each case will tum on its ownfacts. While a 'degree of compliance' may [suffice in] other maters I am not of the opinion that adegree of compliance can apply to a specific statutory provision."11,2

Such a statement itself then begs the question, what constitutes 'mere token compliance' and 'a degree ofcompliance'? This also illustrates another potential difficulty with s 392, that is, different decision makerswill have different views as to exactly what constitutes 'substantial compliance' with the marking outprocedures. Il3 It should be noted that s 392 applies to decisions of the Governor-in-Council, the Minister,the Chief Executive, the Warden or Mining Registrar as the case may be. In such circumstances, the widerange of factual situations and possible decisions resulting therefrom makes the formulation of a generalprinciple difficult. 114

The Problems with Administrative Discretions in the Acquisition of Mining Tenements

Whilst possessory acquisition of title has always been a 'basic tenet' of mining law, 115 it has been notedthat "we are moving more and more towards creation and administration of entitlements to mine by theexercise of ministerial and departmental discretions". 116 A complete analysis of the problems with thesediscretions is beyond the context of this paper, and is given more complete treatment elsewhere.117

However, as s 392 confers just such a discretion, it is important to highlight the arguments against the"apparent government policy to retain as much arbitrary discretion as possible."II8 In the context ofmining law, there is arguably a place for Ministerial discretion, as "the issues involved in mining requireflexible responses.' 119 At the same time, however, it has been stated that "no statute which expands theright of any Minister must be allowed to go unremarked."I20

Section 392 confers a discretion on administrators which could have far-reaching implications inapplications where there has been less than absolute compliance with the statutory requirements forpegging the boundaries of the application. When considering the discretionary power given to theWestern Australian Minister for Mines under the Mining Act 1978 (WA), Franklyn stated:

112 See further Mining and Petroleum Legislation Service, Vol 4, (LBC, 1997), § 300.3921.10.113 Albeit these views do not amount to a complete discretion: see footnote 14 and accompanying text.114 Especially when it is considered that appeals may be made from decisions of the mining registrar to the

Warden's Court in determination of grants for mining claims: s 116 Mineral Resources Act 1989 (QLD).115 Hunt, op cit n 1, 851116 J W K Young, "Problems in the Creation, Transfer and Registration of Legal and Equitable Interests in Mining

and Petroleum Concessions in Queensland," (1982) 4 AMPLJ 543, 551.117 See eg E M Franklyn, "Comment on the Mining Act 1978 of Western Australia," (1979) 2 AMPLJ 24; Hunt, op

cit n 1, 859; M A Hunt, "Policy Objectives of Mining Legislation - Commentary," [1987] AMPLA Yearbook 85,86; Young, op cit n 116, 551; J Kelly, "Security of Title - Commentary," [1990] AMPLA Yearbook 314, 319;M Crommelin, "Mineral Exploration in Australia and Western Canada," (1974) 9 VBe L Rev 38,47.

118 Hunt, op cit n 1,859.119 I D Alfredson, "Policy Objectives of Mining Legislation and the Queensland Review," [1987] AMPLA Yearbook

54,83.120 Franklyn, op cit n 117, 24.

(2000) 19 AMPLJ Defects in Marking Out in Applications for Mining Titles (Queensland) 243

"We must rest assured that any incumbent of the ministerial office for the time being will administerand use his discretion wisely and well, but the fact that the discretion conferred is virtually unfetteredmakes it impossible without statutory amendment to apply adequate safeguards for protection againsta less wise and capable administrator of the decision."121

Of course, any decision purportedly made under s 392 can be reviewed judicially under the principles ofadministrative law. Further, it is submitted that this discretion is designed to protect and safeguard theinterest of miners who have, albeit inadvertently, not complied absolutely with the marking outrequirements. The discretion is designed to avoid the harsh application of the common law 'strictcompliance' approach adopted by the majority in Hunter Resources. 122 It is submitted that its properexercise will achieve this result. Whether the exercise of the discretion is proper will in tum depend onthe construction given to s 392 as fonnulated by decision-makers.

v. A SUGGESTED CONSTRUCTION OF SUBSTANTIAL COMPLIANCE

Despite the obvious difficulty with the fonnulation of a principle of construction for s 392,123 a suggestedapproach will nevertheless be offered here. Indeed, an important foundation for an administrator or courtapplying s 392 will be a consideration of industry practice and understanding. 124 In Australian Energy Ltdv Lennard Oil NL,125 the Queensland Full Court held that it was acceptable for a trial judge to receiveevidence of the meaning of certain expressions when they had 'well understood meanings in theindustry' .126

Having regard to relevant industry practice, it is suggested that what is 'substantial' needs then to bedetermine on a case-by-case basis. 127 The decision maker must, having regard to all the relevantcircumstances of the case,128 detennine whether the applicant has sufficiently identified the area of landover which the application is being made. 129 It is submitted that by adopting the test formulated by JusticeIpp in the Lane case,130 the danger of conflicting views and interpretations of what constitutes substantialcompliance under s 392 will be minimised. 131

In Lane,132 Ipp J stated that: 'the boundaries should be described with sufficient detail and accuracy toenable a reader, by making reasonable use of the form 20 notice as a whole, and the map affixed to the

121 Ibid.122 (1988) 164 CLR 234.123 See above n 114.124 See above n 100.125 [1986] 2 Qd R 216.126 Ibid 224. See above n 105.127 See Tarak Pty Ltd (Applicant) and Initiating Explosive Systems Pty Ltd (Objector), Warden's Court, Brisbane,

unreported 7 November 1995.128 Indeed, having regard to administrative law principles, that is, without regard to any irrelevant considerations or

any improper purpose; see Pt III. above.129 R V Lane; ex parte Pard Holdings Pty Ltd (1990) 2 WAR 486,496; Murphy v Ramsay (1964) 111 CLR 344,

350.130 See n 40-46, and the accompanying text.131 The term "minimised" is used as there is always the possibility of divergent views as it may be the case that no

two factual situations are exactly alike.132 (1990) 2 WAR 486. For the facts see Pt II. above.


datum post, to determine where those boundaries lie."133 Some years earlier similar reasoning was appliedin Para Wirra Gold Mines NIL v Hill. 134 Piper J felt that reason and justice demanded that the court notapply a strictly literal approach to the requirement of re-pegging a claim after expiration of the limit of aminer's right, as to do so would lead to the use of idle and farcical forms of pegging. 135 It was enough thatthe pegs were placed in exactly the same spot with an inscription bearing the date of the new applicationfor the purpose of informing the public. 136

On the basis of these cases then, an applicant for a mining title under the Mineral Resources Act will havesubstantially complied with the marking out provisions contained therein if that marking out sufficientlyidentifies to a reasonable person137 the area of land included in the application. Such an approach willensure that pegging and marking out does not become idle or farcical. At the same time this approach willprotect the purpose of s 392, that of not defeating mining claims based on informality. Such an approachis perhaps best illustrated by an example. Consider an application for a mining claim under Pt 4 of theMineral Resources Act. 138 If the posts were only 8 em-wide and were painted yellow,139 then it wouldnevertheless appear to the reasonable person that the requirements of marking out had been compliedwith. However, if one of the posts has not been selected as a datum post,140 or if a number of pegs weremissing, then a reasonable person would not be able to discern the boundaries of the claim with anyaccuracy. Hence reliance on s 392 would not relieve against the non-compliance.

The merits of the case

Indeed an important consideration which no doubt should be applied in all cases is to look at the merits ofthe case. This includes determining what the marking out provision requires, the particular noncompliance in the circumstances of the case, and whether there is any sanction for the lack of compliance.An example of where the merits of the case were taken into account is Kendra v Andrea. 141 As statedabove,142 the High Court was considering a statutory provision which required that a pegged mining claimmust form substantially a square. 143 Windeyer J recognised that 'the conditions under which a claim ispegged in a mine field ... may make it impracticable the setting of pegs to form a perfect square.' 144 His

133 Ibid 496-7.134 [1934] SASR 394.135 Ibid 403-4. Given liberal interpretation of such provisions (Associated Minerals Pty Ltd v NSW Rutile Co Pty

Ltd (1961-2) 35 ALJR 296), this may be an implied application of the maxim de minimus non curat lex. In otherwords, the courts will not concern themselves with trivial deviations from a statutory requirement as long asthere is no 'manifest error': Queensland Decor Aggregates PIL v Cadman.

136 There was no substantial compliance clause in the legislation in that case.137 In the industry perhaps: Kenda v Andrea (1966) 115 CLR 519, 526; Queensland Decor Aggregates Pty Ltd v

Cadman; Australian Oil Ltd v Lennard Oil NL [1986] 2 Qd R 216.138 Section 57 outlines that manner of marking out the land proposed to be the subject of a mining claim: See nn 8

10 and the accompanying text.139 As opposed to the requirements of 10cm wide posts which are painted white: s 57. These examples were given

in Pt I above.140 Section 57(4). A datum post is the peg at which a surveyor commences the surveying of the land intended to

comprise the mining claim application. Without marking one post as a datum post, the land cannot be surveyed.141 (1966) 115 CLR 519.142 At n 47 et seq.143 Reg 24 Mining Regulations (SA).144 (1966) 115 CLR 519,526.


Honour recognised that the claim should, as far as possible, 'form a pattern of approximately equalsquares' .145 It is submitted that the approach taken by Windeyer J is analogous to that suggested above.The ultimate question is whether, on the merits of the case, the applicant has identified the boundaries ofthe claim sufficiently to the world at large. 146

Of course, it is not expected that miners be qualified surveyors and it is reasonable to expect them to use a'simple tape and compass' when marking out land. 147 Requiring strict compliance with the marking outprovisions of the Mineral Resources Act would result in the frustration of one of the Act's objects.Section 392 therefore provides an administrative discretion to validate acts which have not whollycomplied with acts as prescribed in the marking out provisions.

In Hunter Resources v Melville, Mason CJ and Gaudron J considered that to make precise compliance acondition precedent to the grant of a mining title would give an advantage over other persons to largemining companies which have "the equipment, the resources and the staff to ensure such compliance."148It should be noted that the Mineral Resources Act was designed so as to protect, so far as possible, theinterest and livelihoods of small miners. 149 Having regard to this legislative intention then, it is apparentthat s 392 provides protection to small miners150 where they have failed to comply "in a trivial respect onlywith the prescribed requirements.,,151

VI. CONCLUSION

Section 392 can be viewed as an alteration of the common law test applied when determining the level ofcompliance required to be exercised when marking out land for a mining tenement application. In thejurisdictions where it is left up to the general law to determine the level of compliance required, the courtslook to whether the statutory provisions in respect to marking out are directory or mandatory, and thedegree of compliance required. Thus, it is a question of statutory interpretation on two bases. There mustbe determinations as to whether a provision is mandatory or directory and also to the level of compliancerequired in a particular matter. In much the same way, in Queensland and the Northern Territory, thelevel of compliance with marking out procedures is determined again by looking to the statutory regimesregulating mining. However, in these jurisdictions, it is to particular sections of the mining Acts,152 whichprovide that the level of compliance required is 'substantial', as opposed to 'strict' or 'absolute' .

This imports an administrative discretion into the process of acquisition of a mining tenement in caseswhere compliance has not been strict. With regard to the possibility of divergent approaches being taken

145 Ibid.146 The test is that stated at n 133 et seq: whether a reasonable person, faced with the non-compliance, could

sufficiently identify the boundaries of the claim.147 Anisimoffv Fraser (No 2) (1983) 33 SASR 458, at 462. See also s 62 Mineral Resources Act 1989 (Qld).148 (1988) 164 CLR 234,244.149 See the second reading speech and the subsequent debate of the Mineral Resources Bill in the Queensland

Parliamentary Debates, vol 313, 1387-8.150 Although the section is not restricted in application to small miners or to tenements which are generally regarded

as being for the smaller miner: the prospecting permit (Mineral Resources Act 1989 (Qld) Pt 3) and the miningclaim (Mineral Resources Act 1989 (Qld) Pt 4), it is suggested that more frequently a failure to comply willresult from small mining applications rather than those of larger companies.

151 (1988) 164 CLR 234,244; (1990) 2 WAR 486,495.152 Section 392 (Qld), s 164A (NT); cfs 382 Mining Act 1992 (NSW), ss 105, 105A Mining Act 1978 (WA).


by decision-makers as to what conduct is 'substantial', it is suggested that the approach described above153

be adopted. If a reasonable person can, by examination of the datum post, pegs and application forms,identify the land included in the applicant's claim, then 'substantial compliance' with the relevantprovisions has occurred. This imports an objective test into s 392, and may help to achieve, as much aspossible, uniformity in decisions involving the section. This objectivity recognises the importance of thetechnical nature of mining applications. 154

As the Mineral Resources Act itself is only ten years old it may be some time before a body of case lawdevelops on the test to determine what constitutes substantial compliance under s 392. Nevertheless, thesection will without doubt be one to which resort may be had as "the marking out of land not infrequentlyinvolves non-compliance in some respects with the prescribed requirements.,,155

153 See n 123 et seq and accompanying text.154 Australian Energy Ltd v Lennard Oil NL [1986] 2 Qd R 216,224-5.155 Hunter Resources v Melville(1988) 164 CLR 234,244.

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