The spectre of Forrest: haunting the mining sector post-COVID-19

By Jodi Reinmuth, Mark McAleer, Eve Lynch, Tristan Iredell , Gerard Woods

In brief 6 min read

In Forrest & Forrest Pty Ltd v Wilson (2017) 262 CLR 510 (Forrest), the High Court held that where a statute providing for the disposition of interests in the resources of a State 'prescribes a mode of exercise of the statutory power', that mode must be strictly followed. A grant will be ineffective if the regime is not complied with (Forrest Approach).

The Forrest Approach has resulted in a lack of certainty of tenure in the WA mining industry in relation to mining leases applied for after 10 February 2006.

Tenement holders and applicants are reminded to comply strictly with all preconditions to the grant of tenements because of:

  • the continuing absence of any WA or federal legislation to address the issues raised in the Forrest Approach; and
  • the recent trend in third parties and courts raising the Forrest Approach to challenge or examine the validity of tenements and applications in other contexts.

Mining leases and even other tenements (and their applications) may be at risk of invalidity resulting from non-compliance with all preconditions that are not limited to the failure to lodge a mineralisation report.

Forrest: a brief summary

We have previously reported on Forrest. In 2011, Yarri Mining Pty Ltd and Onslow Resources Ltd applied to have their mining exploration licences converted into mining leases. Section 74(1)(ca)(ii) of the Mining Act 1978 (WA) stated that 'an application for a mining lease shall be accompanied by a mining proposal' or 'a mineralisation report'. A mineralisation report was provided four months later. The Mining Warden recommended the mining leases be granted. The Minister subsequently granted the mining leases.

The High Court interpreted 'accompanying' in that statutory context to mean lodging the mineralisation report contemporaneously with a mining lease application, but noted that a mining proposal may be lodged within 14 days after the application. The non-compliance was 'fatal to the validity' of the mining leases because there was a failure to comply with the statutory conditions regulating the grant of mining leases. The Warden's report was quashed, and the mining leases were invalidated.

Implications for the WA mining industry

The Forrest Approach was in contrast to the way in which the regime was implemented by the Department of Mines and Petroleum (now, the Department of Mines, Industry Regulation and Safety), which allowed supporting documents to be filed after application lodgement.

The section 74(1)(ca) requirement commenced on 10 February 2006. Therefore, any mining leases applied for after 10 February 2006 which were not accompanied by the supporting documents within the mandated time period may be at risk of invalidity. Subsequently, Forrest created uncertainty for both existing applicants and mining lease holders, where lease applications were processed in good faith.

Mining Amendment (Procedures and Validation) Bill 2018 (WA)

Forrest was swiftly followed by the WA Government's promise to amend the Mining Act. On 28 November 2018, the Mining Amendment (Procedures and Validation) Bill 2018 (WA) (Validation Bill) was introduced with the purpose of restoring 'the status quo' to confirm the validity of all previously-granted mining tenements, and to confirm that contemporaneous lodgement of supporting documents (such as mineralisation reports) are not required to accompany mining lease applications.

Unfortunately, the Validation Bill has stalled only partway through the legislative process. The Validation Bill did not complete the Second Reading stage of the Legislative Assembly, and was removed from the business of Parliament in late 2019. The WA Government's view is that there is a risk that the introduction of amendments to the Mining Act retrospectively validating tenements could be a 'future act' under the Native Title Act 1993 (Cth) (NTA) (even though the future act process had been complied with for the grant of those tenements), in which case compliance with the NTA future act provisions would be required. To remove the risk of the Bill being invalid under the NTA, the WA Government has asked the Federal Government to enact complementary amendments to the NTA before the WA Government passes the Validation Bill.

The Native Title Legislation Amendment Bill 2019 (NT Bill) was reintroduced to the Federal Parliament on 17 October 2019. However, the amendments proposed in the NT Bill do not include amendments that resolve any 'future act' implications that would arise from the Validation Bill being legislated. The NT Bill has been referred to the Legal and Constitutional Affairs Legislation Committee for inquiry and a report, which is currently due on 19 August 2020.

Forrest Approach

The potential reach of the application of the Forrest Approach remains unclear.

The continuing absence of WA and federal legislative intervention to mitigate the Forrest Approach has left fertile ground for parties to deploy the Forrest Approach to challenge the validity of mining tenements and applications in other contexts. In Quarry Park Pty Ltd v K Plus S Salt Australia Pty Ltd [2020] WAMW 5, a tenement holder argued that an application for a miscellaneous licence was invalid because the application failed to disclose the purpose for which the licence was sought and was not accompanied by a map. Although the Warden held that the Forrest Approach did not extend to miscellaneous licences, the case is but one demonstration that parties may continue to raise the Forrest Approach in diverse contexts.

The Forrest Approach has also been considered by courts in the construction of other aspects of the Mining Act and other statutes. In Anglogold Ashanti Australia Ltd v Monument Exploration Pty Ltd [2019] WAMW 13, the Warden considered the application of the Forrest Approach and held that certain applications by Monument Exploration for prospecting licences were invalid because the statutory regime required that the time of marking out be accurately reflected.

In Yanunijarra Aboriginal Corporation RNTBC v State of Western Australia [2020] FCAFC 64, the Federal Court considered that the Forrest Approach was relevant in the native title context under consideration. The court said that the status of an applicant as 'a native title party' is an essential prerequisite under the NTA for the invoking of the Tribunal’s jurisdiction. The court further stated at [91]:

The provisions in Div 3 of Pt 2 of the [NTA] may not be directly concerned with 'the disposition of the interests in the resources of a State' (Forrest …), but they are concerned with a closely related subject matter. In our view, the rationale to which the majority referred in Forrest…is also apposite in the present context.

Key takeaways 

In the absence of any forthcoming legislative intervention, the Forrest Approach continues to lead to uncertainty in the resources sector in WA. The Forrest Approach does not mean that non-compliance with any provision in legislation governing the granting of a mining lease spells invalidity for the grant. However, the minimisation of risk is best achieved by taking a cautious approach by strictly complying with tenement application requirements and seeking legal advice, which is a continuation of the caution that tenement applicants have applied since the imposition of the Forrest Approach.