Tara Mines v Minister for Industry and Commerce

• Jurisdiction: Ireland
• Judgment Date: 04 February 1975
• Date: 04 February 1975
• Docket Number: [1974 No. 2730 P.]
• Court: Supreme Court

Tara Mines v. Minister for Industry and Commerce

Tara Exploration and Development Company Limited and Tara Mines Limited

Plaintiffs

and

The Minister for Industry and Commerce

Defendant

[1974 No. 2730 P.]

High Court

Supreme Court

Practice - Procedure - Question of law - Preliminary issue - Answer dependent upon ascertainment of matters of fact - Further proceedings not avoidable if question of law answered - Preliminary decision upon question of law not convenient - Rules of the Superior Courts, 1962 (S.I. No. 72), Or. 34, r. 2 - Minerals Development Act, 1940 (No. 31), ss. 13, 26.

In exercise of his powers under s. 13 of the Minerals Development Act, 1940, the defendant on the 1st April, 1971, gave to the plaintiffs an undertaking that he would grant to one or other of them a State mining lease on such terms and subject to such conditions and subsidiary agreements as the defendant might consider proper or desirable in the public interest. After negotiations lasting over three years, the position was that the defendant would not grant a State mining lease to the chosen company unless (inter alia) the latter agreed to pay to the State a certain rent and royalties, and agreed to the transfer to the State of 49% of the company's share capital or the payment to the State of a further sum to be equivalent to the income from such proportion of its share capital. The plaintiffs brought an action in the High Court in which they claimed a declaration that the defendant was not entitled to impose the said terms as a condition of the granting of a mining lease under the Act of 1940, and a declaration that the defendant was only empowered to grant such lease upon terms which were reasonable and customary in the mining industry. Before the trial the defendant applied under Order 34, r. 2, to the Court for a ruling that certain questions of law should be determined as preliminary issues before any evidence was given in the action in relation to any matters of fact. These questions were (inter alia) whether the defendant's discretion in the matter had been limited or curtailed either by the provisions of the Act of 1940 or by the terms of the undertaking, and whether the Act empowered the defendant to impose on a mining company, as a condition of the grant of a mining lease, a requirement that part of the share capital of the company be vested in the State. At the hearing of the application it was

Held by Kenny J., in dismissing the application, that the proposed questions could not be answered without reference to the relevant facts (still undetermined) such as the nature of the negotiations that preceded the defendant's undertaking; and that the Court could not dispose of the issues in the action by answering the proposed questions at an interlocutory stage of the action.

Windsor Refrigerator Co. Ltd. v. Branch Nominees Ltd. [1961] Ch. 375 considered.

McDonald v. Bord na gCon [1964] I.R. 350 distinguished.

On appeal by the defendant it was

Held by the Supreme Court (O'Higgins C.J., Walsh, Budd, Henchy and Griffin JJ.), in disallowing the appeal, that the procedure under Order 34, r. 2, should not be applied where the answer to the suggested question of law is dependent upon facts that have not been ascertained.

Motion on Notice

The defendant applied under Order 34, r. 2, for a direction that certain questions of law should be answered before any evidence was given in the action. The High Court and the Supreme Court dismissed the application for reasons similar to those which governed the decision of the Supreme Court in Kilty v. Hayden.1

The first plaintiff was a company incorporated under the laws of the Province of Ontario, Canada; the second plaintiff was incorporated in Ireland on the 31st December, 1970. and was a wholly-owned subsidiary of the first plaintiff.

On the 22nd September, 1970, the defendant granted to the first plaintiff a prospecting licence pursuant to s. 7, sub-s. 1, of the Minerals Development Act, 1940. The licence authorised the first plaintiff to enter on certain parts of the townlands of Whistletown and Knockumber, near Navan, in County Meath, and to investigate the character, extent and value of the minerals lying in or under those lands, which were State minerals. This prospecting licence was renewed in October, 1971, and in December, 1971, the first plaintiff assigned and transferred all its right, title, interest and benefit in the prospecting licence to the second plaintiff. The defendant renewed the prospecting licence in October, 1972, and in December, 1973.

On the 1st April, 1971, the defendant gave an undertaking (pursuant to s. 13 of the Act of 1940) to grant a State mining lease to either the first or the second plaintiff on such terms and subject to such covenants, conditions and subsidiary agreements that the defendant might consider proper or desirable in the public interest. The parties failed to agree upon the conditions upon which the mining lease would be granted and the plaintiffs claimed by plenary summons certain declarations settling the respective rights of the parties. At paragraph 14 of their statement of claim the plaintiffs pleaded that on the 8th July, 1974, the defendant indicated to the plaintiffs that he would offer them a State mining lease upon certain financial terms (specified in the paragraph) and insisted that the said terms were not open to negotiation. At paragraph 13 of his defence the defendant denied those allegations.

The defendant brought an interlocutory application pursuant to Order 34, r. 2, of the Rules of the Superior Courts, 1962, seeking a direction that certain questions of law should be answered before any evidence was adduced at the trial on matters of fact. The questions of law proposed by the defendant were:—

"1. Whether upon the true construction of the statutory undertaking dated 1st April, 1971 pleaded in paragraph 4 of the statement of claim the said undertaking was capable of imposing an obligation on the defendant to grant a State mining lease on any terms other than such as the defendant might consider proper or desirable in the public interest in the exercise of the defendant's statutory powers under the Minerals Development Act, 1940.

2. Whether it was competent for the defendant to create any restriction upon the future exercise of his powers under s. 26 of the Minerals Development Act, 1940, in relation to the terms of a State mining lease otherwise than by means of an undertaking granted under s. 13 of the said Act specifying the terms and conditions upon which such a State mining lease would be granted.

3. Whether it is intra vires the powers of the defendant under the Minerals Development Act, 1940, to require as a term or condition upon which the State mining lease claimed by the plaintiffs shall be granted or as a covenant, condition or subsidiary agreement to be contained in the said lease that an interest in the share capital of Tara Mines Limited be transferred to the State whether for payment or otherwise.

4. Whether it is intra vires the powers of the defendant under the said Act of 1940 to require as a term or condition upon which the State mining lease claimed by the plaintiffs shall be granted or as a covenant. condition or subsidiary agreement to be contained in the said lease

• (a) That a rent equal to such monies as would be represented by the defendant's interest in the profit of Tara Mines Limited whether distributed or not if he were the holder of 49% of the share capital of that company.

• (b) That the appointment of the auditors of Tara Mines Limited should require the consent of the defendant.

• (c) That the defendant should have the right to appoint three sevenths of the members of the Board of Tara Mines Limited.

• (d) That the State mining lease should contain suitable clauses of the kind which are normally found in commercial agreements to protect the interest of the person entitled to a minority share of the company's profits.

5. Whether on the true construction of the said statutory undertaking and of s. 26 of the Minerals Development Act, 1940, the defendant is bound to grant a State mining lease on such reasonable terms as are agreeable to the plaintiffs."

Section 7, sub-s. 1, of the Minerals Development Act, 1940, provides:—

"(1) Whenever it appears to the Minister that there are minerals on or under any land and that such minerals are not being worked or are not being worked efficiently, the Minister may . . . do, at his discretion, either of the following things, that is to say . . . (b) grant to any person, in accordance with this Part of this Act, such licence (in this Act referred to as a prospecting licence) in respect of such minerals as is authorised by this Part of this Act."

Section 13, sub-s. 1. of the Act provides:—

"(1) On the granting or at any time during the currency of a prospecting licence. the Minister may enter into an undertaking with the licensee under such licence to the effect that if, at any time during the currency or on the expiration of such licence, the Minister is satisfied that the prospecting carried on by such licensee has been successful and that the terms and conditions of such licence have been observed and performed, the Minister will grant to such licensee a State mining lease under Part IV of this Act to take effect from such date. either before or after the expiration of such licence, as may be specified in the State mining lease.

(2) Every such undertaking as is mentioned in the foregoing sub-section of...