Tara Prospecting Ltd v Minister for Energy

• Jurisdiction: Ireland
• Judge: Mr. Justice Costello
• Judgment Date: 30 April 1993
• Neutral Citation: 1993 WJSC-HC 2705
• Docket Number: 12026P./1990
• Court: High Court
• Date: 30 April 1993

TARA PROSPECTING LTD v. MIN ENERGY

BETWEEN:

TARA PROSPECTING LTD. AND BURMIN EXPLORATION VENTURES LIMITED

Plaintiffs

and

THE MINISTER FOR ENERGY, IRELAND AND THE ATTORNEY GENERAL

Defendants

1993 WJSC-HC 2705

12026P./1990

THE HIGH COURT

Words & Phrases: legitimate expectation

CEF

Subject Headings:

LICENCE: grant

MINERALS: exploration

MINISTER OF STATE: powers

Citations:

MINERALS DEVELOPMENT ACT 1940 PART II

MINERALS DEVELOPMENT ACT 1940 S7

MINERALS DEVELOPMENT ACT 1940 SII

MINERALS DEVELOPMENT ACT 1940 S12

MINERALS DEVELOPMENT ACT 1940 S13

MINERALS DEVELOPMENT ACT 1940 S42

MINERALS DEVELOPMENT ACT 1940 S26

SCHMIDT V SECRETARY OF STATE FOR HOME AFFAIRS 1969 2 CH 149

R V LIVERPOOL CORPORATION 1972 2 QB 299

WESTMINSTER CO COUNCIL, IN RE 1986 AC 668

R V SECRETARY OF STATE FOR HEALTH 1992 1 AER 212

R V SECRETARY FOR THE HOME DEPARTMENT 1987 2 AER 518

AG FOR NEW SOUTH WALES V QUINN 1990 CLR 1

WEBB V IRELAND 1988 IR 353

AMALGAMATED PROPERTY CO V TEXAS BANK 1982 QB 84

WILEY V REVENUE COMMISSIONERS 1989 IR 350

DEVITT V MIN FOR EDUCATION 1989 ILRM 639

FAKIH & ORS V MIN FOR JUSTICE UNREP O'HANLON 6.3.92 1992/7/1998

HEMPENSTALL & ORS V MIN OF THE ENVIRONMENT COSTELLO UNREP 27.10.92

MINERALS DEVELOPMENT ACT 1940 S8

MINERALS DEVELOPMENT ACT 1940 S9

MINERALS DEVELOPMENT ACT 1940 PART IV

LOCAL GOVT (PLANNING & DEVELOPMENT) ACT 1963

1 Judgment of Mr. Justice Costello Delivered the 30 April 1993

Introduction

2 These proceedings relate to the renewal of exploration licenses which would have enabled the applicants to continue to explore for gold in Croagh Patrick, Westport, Co. Mayo. Initially Tara Prospecting Limited ("Tara") had applied for and obtained licenses in 1981 and again in 1984 which permitted it to explore for talc and magnetite at Croagh Patrick but it and Burmin Exploration Venture Ltd. ("Burmin") (the co-applicant herein) became interested in exploring for gold in the region and they entered into a joint venture for this purpose, with the knowledge and approval of the Department concerned with mineral development. Renewals of the exploration licenses from time to time were obtained and since about 1987 they were used for gold exploration exclusively. By 1988 Tara and Burmin were satisfied that the results obtained justified them in undertaking mining operations in a portion of the licensed area on the south side of Croagh Patrick. Both licenses had run out in the early part of 1990 but, for reasons to be explained later, the Minister decided in May 1990 to renew them but only on the basis that Croagh Patrick would be excluded. It is this decision which is attacked in these proceedings. It is claimed that it is invalid (a) as being ultra vires, (b) because it was made in breach of the rules of constitutional and natural justice and (c) as being contrary to the legitimate expectations which the Minister had caused the applicants to entertain in relation to the licenses.

3 Before outlining the facts of the case it will help an understanding of their relevance to the issues which fall for determination if I firstly outline the statutory provisions with which this case is concerned.

Minerals Development Act, 1940

4 The long title of the 1940 Act declares that the Act is one "to make further and better provision for the development and working of the mineral resources of the State". The applicants rely on the long title as part of their claim that the Minister's decision was ultra vires.

5 Part II deals inter alia with the grant by the Minister (under the Act, the Minister for Industry and Commerce, but now the Minister for Energy) of "prospecting licenses". Section 7 empowers the Minister, when of the opinion that there are minerals not being worked under any land, to grant to any person "such license (in this Act referred to as a prospecting license) in respect of such minerals as is authorised by this Part of the Act". Section 8 provides that every prospecting license shall be granted "upon such terms and conditions as the Minister thinks proper and specifies in such license" and the license operates to authorise the license to enter the land specified in the license and to -

"do all such things as the licensee considers necessary or desirable for the purpose of ascertaining the character, extent, or value of the minerals lying on or under such land, and in particular, but without prejudice to the generality of the foregoing power, for the purpose aforesaid to make borings, sink pits, remove water from old workings, and take and remove reasonable quantities of any such minerals for the purpose of analysis, test, trial or experiment".

6 Applications for prospecting licenses are to be made in accordance with regulations made by the Minister (Section 9).

7 Section II imposes specific restrictions on the licensee under a prospecting license - it declares that it shall not be lawful for any licensee to "sell, or otherwise dispose of any minerals" lying in or under the land in respect of which the license has been granted.

8 A power to revoke a license is conferred on the Minister by Section 12. This section allows the Minister at any time and in his absolute discretion to revoke a prospecting license.

9 During the currency of a prospecting license the Minister may "enter into an undertaking ... to the effect that if, at any time during the currency or on the expiration of such license, the Minister is satisfied that the prospecting ... has been successful and that the terms and conditions of such license have been observed and performed, the Minister will grant to such licensee a State mining lease under Part IV of the Act" (Section 13). This section assumes importance in this case because the applicants herein requested the Minister to give a Section 13 undertaking and he refused to do so.

10 Part IV of the Act deals with "State mining leases". Section 26 provides that -

"If in the opinion of the Minister, it is in the public interest that any State minerals should be granted by way of lease to any person, the Minister may demise such minerals to such persons by way of lease (in this Act referred to as a State mining lease) for such terms as the Minister shall think proper".

11 The section goes on to make provision for the terms to be contained in State mining leases and specifically requires that leases are to contain such covenants and conditions as the Minister shall consider "proper or desirable in the public interest".

12 I draw attention to two points about these sections. Firstly, it will be noted that the Minister has a very wide discretion under section 7 as to whether or not he will grant a prospecting license and an equally wide discretion under Section 26 as to whether or not he shall grant a State mining lease. Secondly, the applicant's case is that they had a legitimate expectation and thus an enforceable right to a renewal of their prospecting license under Section 7 - not an expectation of a grant of a State mining lease under Section 26.

The Facts

13 On the 18 May 1981 Tara applied to the Minister for a prospecting license under Section 8 of the Act in respect of an area known by reference number 2880 which included part of Croagh Patrick mountain. Their application indicated their interest in the investigation of talc and magnetite. The prescribed form of application stated that "licenses are issued initially for a two year period". A license under the section for a two year period from 26 February 1982 was duly granted. On the 6 March 1984 Tara applied for a prospecting license in respect of a further area known by reference number 2879 which also included part of Croagh Patrick and indicated their interest in the exploration of "general minerals with the emphasis on base metals" and a two year license was granted from the 16 October 1985. It is the renewal of the licenses relating to these two adjacent areas with which this case is concerned.

14 The two licenses were in the same form. They contained detailed terms. That which is of relevance for present purposes was a term which referred to the renewal of the license. They each provided that the Minister "may at his discretion ... grant a renewal of the license in respect of the whole of the licensed area or any particular part thereof for a further term of two years from the expiration of the term mentioned in sub-clause (i) hereof." Tara applied on the expiration of the term of each license and each was renewed initially for a two year period. The last renewal relating to the area number 2879 expired on the 15 October 1989 and that in respect of area number 2880 on the 25 February 1990. Each renewal involved Tara in complying with the requirements of "Form E2" which obliged them, inter alia, to give a detailed account to the Geological Survey of the work performed under the licenses.

15 Before renewing the license in respect of area number 2880 the Minister wrote on 25 May 1988 to Tara a letter on which the applicants rely in support of their legitimate expectation argument. Having referred to the fact that the Minister had considered the company's work performance in the licensed area and its programme for the 7th year and had decided to grant the renewal, the letter went on -

"It should be clearly understood that an application, if any, for a further extension will be carefully considered in the light of work performance during this period of extension, the extent and nature of further work necessary on the area and your future work commitments".

16 This letter had been preceded by an earlier letter of the 25 January which had stated that the Minister's licensing rules provided that six years is the normal maximum duration for a prospecting license and if Tara considered that a special case for renewal existed for a further period compliance with Form E6 was required, a Form which required, inter alia, a...