Cadia Case Analysis

The Minister referred to the Case of Mines[1], claiming that the mine owned by Cadia was a “royal mine” containing gold that belonged to the Crown prerogative, and as a consequence the copper was also the property of the Crown. Cadia commenced proceedings against the State of New South Wales and the Minister claiming unjust enrichment and failure to comply with the statutory duty in s 284(2)(a) of the Mining Act 1992 (NSW) to pay to them seven-eighths of the royalties relating to copper. The Issues

An analysis of Cadia Holdings P/L v NSW[2] case reveals the issue whether copper when mixed with gold is considered privately owned or publicly owned mineral for the purposes of the Mining Act 1992 (NSW) and whether the Crown’s prerogative, established in the Case of the Mines[3] has survived in such a way that would attach it to the intermingled copper with gold being mined. The court has to decide the issue of whether the intermingled copper and gold was a ‘mine of copper’ or a ‘mine of gold’ or both and what characterisation can be given namely ‘privately owned minerals’ or ‘publicly owned minerals’.

The respective ownership of the parties to their legal rights to minerals of copper and gold The prerogative rights and ownership of gold and silver existed from the beginning and it is settled law that ownership was and still remains in the Crown. The ownership of gold and silver by the Crown was never taken away though there was a change in the policy to encourage mining activities by private owners on private lands. The ownership of the copper minerals was granted away by the Crown to private landowners by legislation.

The lands on which Cadia Holdings conducts its operations were held by Cadia Holdings and Newcrest under the provisions of the Real Property Act 1900 (NSW). However, the titles may be traced to Crown grants which were made between 1852 and 1859, before the introduction of the Torrens system in New South Wales. In 1868, a primary application was made to bring the lands subject to the grants under the Torrens system. [4] Therefore, gold did not pass by a Crown grant of the land.

If this were once debatable, all doubts were dispelled, in New South Wales when the position was expressly recognised by the legislature in the preamble to the Mining on Private Lands Act 1894 (NSW) that “certain other lands have from time to time been alienated without express reservation of any minerals which might afterwards be found therein, but having regard to the well-established laws of England whereby it has been held from time immemorial that the royal metal gold does not pass from the Crown unless by express conveyance in the grant of such lands. [5] Gradual developments of policy by the crown lead to a change in the legislation with intention to divest ownership of copper to private landowners.

Although no express reservation to the Crown of minerals appeared in the grants, it was established that this was not necessary to preserve the Crown’s rights in respect of the minerals and the right to gold did not pass by a Crown grant of the land. 6] Sir James Colville’s judgement expressed ‘that the prerogative right of the Crown to gold and silver found in mines will not pass under a grant of land from the Crown, unless by apt and precise words the intention of the Crown be expressed that it shall pass’. [7] In other words, the history of the title to the land did not affect the Crown’s prerogative right to gold and silver.

Under English law, the State (or Crown) was presumed ownership of all gold and silver in the ground no matter where it was found. That precedent was set back in 1568 when Thomas Percy, the 7th Earl of Northumberland, was taken to court by Elizabeth, the Queen of England. The Queen needed gold and silver to prepare for the long-expected conflict with Spain. A jury of Percy’s peers found that the gold on his land wasn’t really his.

In “The Case of Mines[8]”, the jury concluded, “that by the law of all mines of gold and silver within the realm, whether they be in the lands of the Queen, or of subjects, belong to the Queen by prerogative, with liberty to dig and carry away the ores thereof, and with other such incidents thereto as are necessary to be used for the getting of the ore. ”[9] Under pressured circumstances, it proves that whether it’s a monarch, a Parliament, or a Congress, the State is always in pursuit of money with which to make war. Not much has changed.

The obiter dicta statement made by Kay LJ in the case of Attorney-General v Morgan[10] where the value of gold and copper in a mine were nearly the same ‘benefit of the doubt should be given to the owner of the mine. ‘[11] If this contention is persuasive and accepted by the Court, then the outcome of the decision would have been different. The value of the gold extracted greatly exceeds the value of the copper despite the fact that the copper has a higher quantity. However, the Court has correctly applied the legislation, namely section 3 of the Royal Mines Act 1688 (Imp).

Section 3 has characterised copper as ‘privately owned minerals’ and not a royal mine despite the fact that gold may be extracted out of the copper ore. There was no mention of value or quantity of copper or gold. The strong presumption would be that it is a copper mine due to its substantial nature as a copper mine. This is the determinative test, rightly decided by the court. Legislations were passed by New South Wales to grant ownership of copper minerals to give effects to private landowners to mine in their land

It conforms to the policy intended by the Crown namely, to encourage private mining’s on land, the Mining on Private Lands 1893 and 1894 Acts were passed to allow private land owners to work on their mines for other minerals save for gold and silver or unless otherwise expressly prohibited. Though the 1893 and 1894 Acts were subsequently repealed, section 3 was not. This section showed the intention of the Crown to permit the mining of other minerals except gold and silver. The rights provided by the said Acts were effective in granting those mining rights at that time, though it was subsequently repealed.

Alternatively, the Mining Act 1992 (NSW) ‘abrogates any prerogative right to copper in the land. ‘[12] The Act binds the Crown, preventing the Crown to mine for a mineral without an authority and any prerogative right to enter land and extract gold. The respondent’s argument was based on The Case of Mines[13] as authority. For the proposition that mines which contain gold or silver even if intermingled, can be characterised as royal mines and as such belonged to the Crown by prerogative. If this argument is accepted than the consequence would be that the copper becomes the property of the Crown.

The respondent further argued that the rights of the Crown was unaffected and was preserved by s 379 of the Mining Act 1992 (NSW). My Submission I agree with the judgement in the case because it is a permitted right of the appellants as private landowners to mine for copper. The substantial nature of the copper as oppose to the gold extract (though opponent may argue that despite the small amount, it is still more valuable than the copper and that it should be characterised as a mine of gold) determines the main mining activity of the landowners. It is also sound law than to characterise it as both copper mine and gold ine, having regard to the fact that the ore cannot be separated with processing. Thus, the primary function and its legal property rights of the appellants to mine for copper should not be defeated at law. The decision preserves the rights of the landowners to mine on their lands for permitted minerals. If the decision was otherwise then it may discourage landowners to mine for the permitted minerals where there is a likelihood of the presence of mixture of gold ore. This would defeat the very intention to encourage landowners to mine on their own lands for permitted minerals.