Hello Peter: here's the Gerle story:
(and thanks to FrankV for onpassing)
Gerle's path to winning back NWT diamond claims
Gerle Gold Ltd GGL
Shares issued 22,411,858 Feb 26 close $0.45
Fri 26 Feb 99 Street Wire
Also SouthernEra Resources Limited (SUF)
Also Golden Rule Resources Ltd (GNU)
FEDERAL COURT RULES MINISTERIAL REVIEW FLAWED
by Stockwatch Business Reporter
The Federal Court of Canada has handed back the disputed MK and RIM diamond claims to Gerle Gold and SouthernEra, but president Ray Hrkac of Gerle-the company with the most to gain-says investors will have to wait to see whether challengers Golden Rule and Inukshuk Capital will request another ministerial review of the matter.
"I'm please we got this far and we won," he said on Friday following the Feb. 25 ruling.
"It's a vindication of the supervising mining recorder and of our case. Where it will finally end up, I don't know." Mr. Hrkac adds he has not yet discussed the ruling with his lawyers. In the decision, Mr. Justice John Evans ruled that an assistant deputy minister "erred in law by failing to provide adequate reasons for his decision"
of Nov. 20, 1997.
That ministerial review, conducted by James Moore, assistant deputy minister of the Department of Indian Affairs and Northern Development, granted the private Inukshuk Capital the MK-RIM diamond claims south of Mountain Province's AK block. In doing so, he overruled the supervising mining recorder for the region, Annette McRobert. Ms. McRobert decided on May 10, 1997 that the claims belonged to Gerle and SouthernEra. At the same time, she rejected an application for transfer of the claims from contract staker Boyd Warner to Inukshuk on behalf of Golden Rule Resources.
Golden Rule, in turn, is associated with Tyler Resources.
Ms. McRobert had marked in her notebook in April 1996 a comment from Mr. Boyd that he had staked the property on behalf of Tyler. Mr. Boyd later denied making the comment and made a statutory declaration to that effect; he even produced receipts indicating that his company, Bathurst Inlet Development (1984) Ltd., was paid by Golden Rule. Tyler's involvement is crucial to the case because federal mining law states that lapsed claims cannot be restaked by the previous owner or
associated companies or their agents for one year. Both Golden Rule and Tyler, however,share management; Glen Harper is president of both companies. Golden Rule and Tyler insist they are totally separate and distinct corporate entities.
The disputed land claim is around 100,000 acres and contains 12,500 acres known to Gerle as the LA 26-30 claims located just south of Mountain Province's 5034 kimberlite discovery.
According to Gerle's chronology of events, Golden Rule was the recorded holder of mineral claims KIM-1-48 and MIR 1-24 immediately prior to March 8, 1993. At that time, the claims were transferred to Tyler, which failed to work the claims. Accordingly, on Sept. 26, 1994, the KIM and MIR claims lapsed pursuant to Section 45 of the
regulations. On Oct. 24, 1994, mineral claims known as MK 1-15 and RIM
1-24 were recorded in Mr. Warner's name at the mining recorder's office. The disputed claims were located on part of the same ground occupied by the KIM and MIR claims. In early 1995, Gerle located claims LA 26-30, and some others, which also overlapped the disputed claims.
Gerle applied to the mining recorder to record the Gerle claims in March and May 1995, but was refused.
As a result, Gerle on June 21, 1995 filed a notice of protest alleging that the disputed claims had been previously located on behalf of Tyler in contravention of Section 49.
At around the same time Gerle was staking, SouthernEra also made some claims that, like Gerle's, overlapped the disputed territory. Its application also was refused and like Gerle it filed a notice of protest on June 21, 1995.
On May 10, 1997, Ms. McRobert ruled in favour of Gerle and SouthernEra. Gerle and SouthernEra challenged the subsequent Nov. 20, 1997 decision on the grounds of both procedural fairness and error of law. One of their points was a letter from Mr. Moore on Aug. 13, 1997. The applicants (Gerle and SouthernEra) believed this letter indicated that Mr. Moore had already made his decision-several months
before the official decision was made. At issue was Mr. Moore's statement that the documents comprise "all the information that I have relied upon to make my determination", even though Gerle and SouthernEra still wanted to respond to some testimony. Judge Evans
ruled the applicants did not convince him that Mr. Moore's comment
indicated prejudgment or that he had already made up his mind -- or that Mr. Moore was "disqualified by virtue of a reasonable apprehension of bias."
Judge Evans determined, however, that Mr. Moore was wrong to refuse the applicants' lawyers from cross-examining Mr. Warner on his statutory declaration. Gerle and SouthernEra wanted to test Mr. Warner's credibility, but were refused. In the judge's words, this was a "breach of the duty to fairness."
In his 47-page "reasons for order", Judge Evans gave weight to the argument that the assistant deputy minister failed to provide adequate reasons for his Nov. 20, 1997 decision.
The applicants had complained that Mr. Moore committed a legal error by failing to address the documentary evidence that they had submitted in order to establish that Tyler, not Golden Rule, was the beneficial owner of the MR-RIM claims. They argued the decision was made in a "perverse or capricious manner" and without regard to the
material before him when he inferred from the evidence that Mr. Warner
had contracted with Golden Rule to stake the claims and that it therefore held the beneficial interest.
Further, the applicants argued that Mr. Moore failed to explain "why one person's evidence was credible, while others' was not," the judge stated. Judge Evans ruled that while not every piece of evidence need be dealt with in an administrative tribunal, it was Mr. Moore's statutory duty to provide reasons based on findings of fact, "and to
indicate why the decision maker rejected the most important items of
evidence pertaining to the central facts in issue, including, where appropriate, findings of credibility." The judge said that apart from Mr. Warner's statutory declaration that he was staking the claims on behalf of Golden Rule, the only evidence supporting the assistant deputy minister's "crucial finding" of fact were "assertions by representatives of Golden Rule and Tyler, the interested parties." He added that he did not think Mr. Moore could be excused from his obligation to deal more explicitly with the conflicting evidence. While Judge Evans's ruling was welcome news for Gerle,investors appeared less than overwhelmed. The stock closed on Friday up five cents to 45 cents on 20,000 shares, while Golden Rule was also up, two cents, to 25 cents, on 7,000 shares.
The court ordered that Ms. McRobert's decision be restored, while the Nov. 20, 1997 ministerial review be set aside. Judge Evans noted that the Indian Affairs minister can order another review, but Mr. Moore may not conduct it.
© Copyright 1999 Canjex Publishing Ltd.
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