Executive Summary: Key Legal and Evidentiary Issues

• Exploits Discovery Corp., Crest Resources Inc., and Nicholas Rodway successfully staked three mineral exploration licences (31452M, 31453M, and 31454M) via the MinLAP online system on October 20, 2020, but the Mineral Recorder later rejected their applications on the basis they were not completed in a manner satisfactory to him.
   
• Central to the dispute was whether section 21(1)(a) of the Mineral Act, R.S.N.L. 1990, c. M-12 — which requires an application to be "completed in a manner satisfactory to the recorder" — preserved the Recorder's discretion to reject applications even after an electronic confirmation of acceptance had been issued.
   
• At issue was whether the Recorder became functus officio upon the issuance of the automated acceptance letter, or whether his discretionary authority survived that confirmation.
   
• Evidence established that the Appellants used a script and pre-loaded shopping carts to expedite their applications, but that this method was not prohibited by the Terms of Use, the Mineral Act, or the Mineral Regulations; other applicants also used bots and scripts.
   
• The Mineral Rights Adjudication Board (MRAB) upheld the Recorder's rejection, finding his discretion under s. 21(1)(a) persisted post-acceptance, but the Supreme Court found this exercise of discretion unreasonable given the MRAB's own finding that the Appellants' method was permissible.
   
• Applicable standards of review were correctness for questions of law and reasonableness for findings of mixed fact and law, pursuant to Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65.

Facts of the case

This appeal arose from the rejection of three mineral exploration licence applications submitted by Exploits Discovery Corp., Crest Resources Inc., and Nicholas Rodway (collectively, the Appellants) to the Mineral Claims Recorder for Newfoundland and Labrador. On September 18, 2020, the Recorder published a notice listing 30 mineral licences that had reverted to the Crown, with lands reopening for staking at 9:00 a.m. on October 20, 2020 — the 32nd clear day after publication. A high-demand staking rush was widely anticipated, as mineral licences are issued on a first-come, first-served basis.

The Appellants had previously encountered difficulties during a staking rush in April 2020, when MinLAP — the Mineral Lands Administrative Portal, the province's exclusive online mineral licence staking program active since early 2020 — experienced system overloads. In anticipation of similar issues on October 20, 2020, the Appellants engaged a software engineer to develop a script to automate and expedite their application steps within the MinLAP process. The script allowed them to pre-load the targeted parcels of land into their digital shopping carts before 9:00 a.m. that morning. Records obtained by the province's Office of the Chief Information Officer (OCIO) showed that parcels 31453M and 31454M were placed in the cart at 8:50:55 a.m. and 8:50:20 a.m. respectively, and 31452M at 8:55:15 a.m. The Appellants paid for their three applications within under a minute, between 9:00:01 and 9:00:56 a.m., and on October 20, 2020, received confirmation letters automatically generated by MinLAP acknowledging that their applications appeared to be in order.

Following complaints from unsuccessful applicants — including Buchans Mineral Corporation, which requested an audit of the MinLAP system — the OCIO conducted an investigation with forensic advisors EWA Canada (Intertek). That investigation concluded that the MinLAP system was overloaded that morning, generating numerous "505 Gateway Timeout" errors, and that the Appellants had pre-loaded their shopping carts before the official 9:00 a.m. start time. On May 10, 2021, approximately six months after the staking event, the Recorder informed the Appellants that their applications were rejected on the basis that they had bypassed part of the established MinLAP submission process. The Recorder refunded their fees. The Appellants grieved the decision and the matter was heard by the Mineral Rights Adjudication Board (MRAB) on June 1 and 2, 2023, with the Board's decision released on August 21, 2023. The MRAB affirmed the Recorder's decision, and the Appellants appealed to the Supreme Court of Newfoundland and Labrador.

Policy and legislative provisions at issue

The appeal engaged several provisions of the Mineral Act, R.S.N.L. 1990, c. M-12, and the Mineral Regulations, 1996, NLR 114/96. Section 21(1) of the Act sets out the conditions under which a recorder shall not accept an application for a licence, including that: (a) it is completed in a manner satisfactory to the recorder; (c) the applicant has complied with all the provisions of the regulations respecting the security deposit and the procedures to be followed when submitting applications; and (h) the applicant has complied in all respects with the Act and the Regulations. Section 21(2) further provides that upon acceptance of a map-staked licence application, the recorder shall provide confirmation of acceptance to the applicant. Section 10(1) of the Regulations requires that an application for a map-staked licence be submitted electronically in the manner provided by the recorder, and s. 10(3) stipulates that an application is not accepted unless confirmation is transmitted electronically to the applicant.

The MRAB found that s. 21(1)(c) and s. 21(1)(h) were satisfied — the Appellants had complied with the procedural requirements of the Regulations and the Act in all respects — but that s. 21(1)(a) was not met. The Board interpreted s. 21(1)(a)'s requirement that an application be "completed in a manner satisfactory to the recorder" as preserving a broader, ongoing discretionary authority for the Recorder, one that was not extinguished by the issuance of the automated confirmation letter. The Appellants argued the opposite: that the 2020 Terms of Use did not address or restrict the use of scripts or pre-loading of carts, that no prohibition existed in the Act or Regulations, and that the Recorder's discretion was spent once acceptance was confirmed in compliance with the statutory requirements.

Reasoning and analysis

Justice Muzychka applied the standard of correctness to questions of law, including statutory interpretation, as directed by the appellate standard of review framework set out in Vavilov (2019 SCC 65) and Housen v. Nikolaisen ([2002] 2 S.C.R. 235), and reasonableness to findings of mixed fact and law. On the question of whether the Recorder retained discretion after the automated acceptance letter was issued, the Court upheld the MRAB's finding: the wording of s. 21(1)(a) expressly reserves the Recorder's satisfaction as a condition precedent to acceptance, and that language was not altered when the Act was substantially amended in 2008 to introduce the electronic staking process. Applying the presumption against tautology from Ruth Sullivan's Sullivan on the Construction of Statutes (6th ed, LexisNexis Canada, 2014), the Court found that s. 21(1)(a) would be rendered meaningless if the Recorder's discretion were extinguished by an automated computer confirmation. The Recorder was therefore not functus officio.

However, on the third issue — whether the Recorder exercised that retained discretion reasonably — the Court found in favour of the Appellants. The Recorder's decision was premised on the erroneous belief that the Appellants had skipped screens and manipulated HTML to preload their carts. The evidence established otherwise: the script followed all normal MinLAP steps without skipping any screen or manipulating any HTML code. The MRAB itself accepted that nothing in the Terms of Use, the Regulations, or the Act prohibited the Appellants from scripting the MinLAP staking steps or pre-loading their carts. The OCIO's report also acknowledged the use of form fillers, scripts, and macros by MinLAP users generally. The Board additionally found that pre-loading a shopping cart was an option readily available to all users, and that other applicants used bots and scripts on that same day without consequence. Having made those findings, the Board nonetheless upheld the Recorder's rejection by invoking the Act's objective of maintaining a level playing field — a conclusion the Court found internally inconsistent and lacking a rational chain of analysis as required by Vavilov.

Ruling and overall outcome

Justice Muzychka concluded that the Recorder exceeded his discretion in rejecting the Appellants' applications based on a presumed unfair advantage that the evidence did not support, and that the MRAB's decision affirming that rejection was unreasonable. The Appellants' appeal was allowed, the MRAB's decision was overturned, and the Mineral Recorder was ordered to issue the subject mineral licences to the Appellants. The Appellants were also awarded costs based on Column 3, Rule 57 of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D.