Canadian Mining Journal

News

LEGAL: The need to defend Canadian mineral tenure from foreign court orders

ONTARIO – Our readers are certainly familiar with the old song lyric, "My ex got the gold and I got the shaft," or thereabouts. Divorce can be complicated, and as Norton Rose Fulbright pointed out in a recent bulletin it can lead to...



ONTARIO – Our readers are certainly familiar with the old song lyric, “My ex got the gold and I got the shaft,” or thereabouts. Divorce can be complicated, and as Norton Rose Fulbright pointed out in a recent bulletin it can lead to cross-border legal woes for prospectors and explorers.

Norton Rose cites the case of a mineral exploration company who was stripped of its claims when Ontario mining officials enforced foreign orders to turn over ownership despite the company having recorded its legal interest.

The problem arose after Temex Resources was granted an option to purchase 12 unpatented claims in northeastern Ontario. Payments of cash and shares were to be made to the optioners, a husband and wife team of prospectors. The wife sued for divorce in Nevada where she was a resident, and the local court ordered half the mining claims to be hers under terms of the divorce. The ex-wife’s Nevada lawyer then asked the Ontario mining recorder to make the ownership transfer, which was done.

Temex learned about the transfer in a letter from the Nevada lawyer. Thus began Temex’s long haul through the courts to have the transfer reversed, which it was eventually.

Norton Rose said mining companies must be diligent in recording their interests in mining claims, and if a situation arises that needs remedy in the courts, they should defend their rights.

“Statutory tribunals should observe procedural fairness with respect to all parties, and may only recognize foreign orders if such is expressly granted in their enabling statute, or is a necessary implication to carry out the objects of such legislation,” concluded the firm.

The Norton Rose Fulbright bulletin may be read by clicking here or contact the authors, Erik Penz and Michael Sabusco