Apache Northwest Pty Ltd v Agostini
[2009] WASC 225
•14 AUGUST 2009
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: APACHE NORTHWEST PTY LTD -v- AGOSTINI [2009] WASC 225
CORAM: BEECH J
HEARD: 30 JULY 2009
DELIVERED : 14 AUGUST 2009
FILE NO/S: CIV 2154 of 2009
BETWEEN: APACHE NORTHWEST PTY LTD (ABN 58 009 140 854)
APACHE ENERGY LTD (ABN 39 009 301 964)
PlaintiffsAND
DAVID AGOSTINI
KYM BILLS
First DefendantsSTATE OF WESTERN AUSTRALIA
Second DefendantMINISTER FOR MINES AND PETROLEUM FOR WESTERN AUSTRALIA
Third Defendant
Catchwords:
Administrative law - Natural justice - Procedural fairness - Minister announced non-statutory investigation - Whether preparation of report and provision to Minister attracted duty of procedural fairness - Whether publication of report would attract duty of procedural fairness - Whether a report may affect plaintiffs' reputation - Whether effect on reputation attracts duty of procedural fairness in context of exercise of non-statutory public power - Whether duty breached by failure to give opportunity to comment on adverse contents of report
Legislation:
Nil
Result:
Application for declarations and injunctions dismissed
Category: A
Representation:
Counsel:
Plaintiffs: Mr A Robertson SC & Mr B D Luscombe
First Defendants : Mr R M Mitchell SC & Ms L J Dias
Second Defendant : Mr R M Mitchell SC & Ms L J Dias
Third Defendant : Mr R M Mitchell SC & Ms L J Dias
Solicitors:
Plaintiffs: Mallesons Stephen Jaques
First Defendants : State Solicitor for Western Australia
Second Defendant : State Solicitor for Western Australia
Third Defendant : State Solicitor for Western Australia
Case(s) referred to in judgment(s):
Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564
Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596
Applicant VEAL of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88
Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576
Cornwall v Rowan [2004] SASC 384; (2004) 90 SASR 269
Council of Civil Service Unions v Minister for the Civil Service [1985] 1 AC 374
Darkinjung Local Aboriginal Land Council v Minister for Aboriginal Affairs [2006] NSWLEC 291; (2006) 147 LGERA 348
Farah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
Hall v University of NSW [2003] NSWSC 669
Johns v Australian Securities Commission [1993] HCA 56; (1993) 178 CLR 408
Kelson v Forward (1995) 60 FCR 39
Kioa v West [1985] HCA 81; (1985) 159 CLR 550
Mahon v Air New Zealand [1984] AC 808
Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR
Minister for Arts, Heritage & Environment v Peko Wallsend (1987) 15 FCR 274
Muin v Refugee Review Tribunal [2002] HCA 30; (2002) 190 ALR 601
National Companies and Securities Commission v News Corporation Ltd [1984] HCA 29; (1984) 156 CLR 296
Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22; (2001) 206 CLR 57
Re Minister for Resources; Ex parte Cazaly Iron Pty Ltd [2007] WASCA 175; (2007) 34 WAR 403
South Australia v O'Shea [1987] HCA 39; (1987) 163 CLR 378
SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152
Testro Brothers Pty Ltd v Tait [1963] HCA 29; (1963) 109 CLR 353
The State of Victoria v The Master Builders' Association of Victoria [1995] 2 VR 121
Trindall v Minister for Aboriginal Affairs [2004] NSWLEC 121
Vanmeld Pty Ltd v Fairfield City Council [1999] NSWCA 6; (1999) 46 NSWLR 78
BEECH J:
Introduction
The plaintiffs (the Apache companies) seek declarations and injunctions restraining the first defendants and the second defendant (the State) from providing a report described as the Varanus Island Final Investigation Report (the Investigation Report) to the third defendant (the Minister). The Apache companies claim that in the preparation and finalisation of the Investigation Report, the first defendants and the State breached a duty to afford procedural fairness to them. Alternatively, the Apache companies seek an injunction restraining the Minister from publishing the Investigation Report or its contents.
The main issues are:
1.whether the preparation and provision to the Minister of the Investigation Report attracted a duty of procedural fairness; and
2.if so, whether the first defendants breached the duty of procedural fairness in the way claimed by the Apache companies.
For the reasons that follow, I would determine both these issues adversely to the Apache companies.
The facts
With one exception, the facts are not in dispute. The whole of the evidence was constituted by an agreed bundle of documents (exhibit 1), which included two affidavits. The exception relates to what inferences are to be drawn as to the intention of the Minister regarding publication of the Investigation Report.
The Apache companies hold numerous interests in and around the north‑west of Western Australia, including interests, production licences and retention leases in oil and gas fields, and pipeline licences and exploration permits.
Through the Department of Mines and Petroleum (the Department) the State:
(a)facilitates exploration, development and production of petroleum resources and other energy sources, including those in the adjacent offshore areas of Western Australia;
(b)administers and controls petroleum exploration and production in accordance with various Acts, including the Petroleum Pipelines Act 1969 (WA) (the Act);
(c)makes areas available for exploration and makes recommendations on the grant, renewal or cancellation of permits and licences;
(d)evaluates all technical matters relating to drilling, formation evaluation, reservoir engineering and production in accordance with good oilfield practice;
(e)advises on exploration evaluation and assesses all permit and work applications; and
(f)is responsible for regulating the safety and integrity of the gas processing facilities on Varanus Island under the Act.
The Minister is the Minister for Mines and Petroleum administering the Department. The Minister has broad discretions in relation to the grant of various interests under relevant legislation including:
(a)new petroleum titles and the renewal of existing petroleum titles in his capacity as joint authority and designated authority; and
(b)pipeline licences, production licences, retention leases, exploration permits and access authorities.
Apache Energy Ltd is the operator of the gas processing facilities on Varanus Island. Apache Northwest Pty Ltd is one of the licensees of the pipeline from those facilities.
On 3 June 2008 there was an explosion at the gas processing facilities on Varanus Island. The explosion caused the facilities to close down.
On 9 July 2008 the Minister announced an investigation into the Varanus Island incident by the State through the Department. The terms of reference required a report be provided to the director of the Department. The investigation was to address:
(a)the pertinent sequence of events at Varanus Island during the incident;
(b)the likely cause(s) of the Varanus Island incident;
(c)any acts and omissions by the operator, Apache Energy Ltd, of the Varanus Island facility, or its contractors, leading up to and during the Varanus Island incident that may have contributed to the cause of the Varanus Island incident; and
(d)the identification of any potential for injury to persons arising directly from the fire and explosion(s) at the time of the Varanus Island incident.
Mr Shayne Sherman was the general manager of the Investigation Services Unit at the Department of Industry and Resources. He was involved in the initial investigation into the Varanus Island incident. He made a number of verbal requests to interview various Apache personnel. The Apache companies declined to permit those interviews. In August 2008 Mr Sherman set out questions in writing to various officers and employees of the Apache companies. The Apache companies did not arrange for the persons to whom the questions were addressed to answer the written questions. On 8 September 2008 Apache Northwest provided a corporate response to questions posed to Mr Ivor Alexander, the production manager.
On 7 October 2008 the State produced and presented to the Minister a report into the Varanus Island incident entitled 'Final Report of the findings of the investigation into the pipe rupture and fire incident on 3 June 2008 at the facilities operated by Apache Energy Ltd on Varanus Island'. I will refer to this report as the October Report.
The substance of the October Report included the following.
The immediate cause of the incident was the rupture of the 12‑inch sales gas pipeline at the north-northeast beach crossing, and the gas released from the ruptured pipeline ignited very soon after the rupture. The rupture was due to thinning of the pipe due to corrosion. The pipe was being operated at normal pressure. One rupture and ignition led to a further rupture and the process continued from there.
The October Report came to the following conclusions about the main causal factors.
8.2 Main Causal Factors
The main causal factors of the incident were:
1.Ineffective anti-corrosion coating at the beach crossing section of the Apache 12" sales gas pipeline, due to damage and/or dis-bondment from the pipeline.
2.Ineffective cathodic protection of the wet/dry transition zone of the beach crossing section of the Apache 12" sales gas pipeline on Varanus Island.
This is because:
(a)Sufficiently negative cathodic protection potentials required to provide effective cathodic protection in sandy environment were not available from the existing offshore bracelet anodes,
(b)No onshore anodes were installed on the onshore/beach section of the pipeline.
3.Ineffective inspection and monitoring by Apache of the beach crossing and shallow water section of the Apache 12" sales gas pipeline on Varanus island.
This is because:
(a)The external corrosion problem was not detected and addressed at this location, although the available evidence indicates that the corrosion progressively affected the pipe over a period of 15 years or more until the pipeline failed.
(b)The technique used to take cathodic protection readings to monitor the operation of pipeline protection was inappropriate for the environment in which the readings were taken as it did not allow for the effect of changing resistivity in the wet and dry sandy environment. The limited cathodic potential measurements taken suggested to Apache personnel that the pipeline was adequately protected, which was not the case.
(c)Although the Apache 12" sales gas pipeline was built in 1992, there is a lack of historical documentary inspection data related to the Varanus Island onshore section of the 12" sales gas pipeline, with evidence limited to:
•One ultra shallow water and onshore pipeline inspection undertaken in 2004. This inspection covered the onshore beach section of the pipeline but did not comment on the buried sections of pipeline.
•One documented general pipeline inspection undertaken in 2007. This inspection covered the onshore beach section of the pipeline but did not comment on the buried section of pipeline.
(d)The Apache inspection regime did not specifically address the transition section between the subsea and shore crossing sections of the pipeline, by for example undertaking inspections at both HAT and LAT to ensure full inspection coverage in this area.
Earlier in the October Report impediments to the investigation were identified.
6.3 Impediments to the Investigation
Early in the investigation, the investigation team identified the need to interview key Apache personnel about, for example, matters pertaining to the pipeline inspection, monitoring, maintenance, and repair regime.
Requests for interview were declined by Apache.
Apache subsequently agreed to respond to written question sets developed and submitted by the investigation team to the individual concerned. Apache then advised the DoIR investigator that no responses to written questions would be provided within the investigation time scale. Consequently, the investigators were unable to question the Apache personnel listed below who were considered to have knowledge of matters pertaining to the incident, and potentially able to provide verification of the investigators' understanding of the events leading to the incident:
•Production Manager
•Senior Integrity Engineer (current and previous occupier of the position)
•Corrosion Technician
•Person in Charge of Harriet A platform
It is noted that the investigation team was provided with a document entitled 'Corporate Response by Apache Northwest Pty Ltd to the Questions posed by the DoIR for the Production Manager, Ivor Alexander' on 8 September 2008; over 7 weeks after these written questions were issued to Apache.
Delays were also experienced in accessing the reports arising from the examination and testing of the pipeline samples removed from the incident site. The initial indication was that all non-destructive and destructive tests arranged through Apache would be completed within eight weeks from the date of the incident. The non-destructive test results were provided to the investigators 11 weeks after the incident. The destructive testing phase, and some elements of the non destructive testing that would involve physically altering the pipe samples, have not yet been carried out. At the time of writing, it is estimated that reports on these aspects of the testing will not be available until mid November 2008.
These matters directly impacted on the ability of the investigation team to develop its findings within the agreed time period and resulted in aspects of some lines of the investigation not being fully settled. However, it is considered that resolution of these matters is unlikely to significantly change the nature of the findings of the investigation.
The October Report stated that Apache Northwest and its co‑licensees may have committed offences under the Act and its regulations, and that some findings of the investigation may also constitute non‑compliance with pipeline licence conditions.
On 9 January 2009 the Commonwealth and West Australian governments jointly announced the appointment of the first defendants to conduct an independent inquiry into the occupational health and safety and integrity regulation for upstream petroleum operations with a focus on the incident at the facilities at Varanus Island. This inquiry is referred to as the offshore petroleum regulatory inquiry or the joint inquiry. (That inquiry is not the subject of this action).
On 8 April 2009 the Apache companies commenced proceedings against the first defendants in the Western Australian registry of the Federal Court of Australia. The proceedings sought to compel the first defendants to afford the Apache companies procedural fairness by providing the Apache companies a reasonable opportunity to review and comment on the joint inquiry report prior to the submission of that report to the Minister and others.
On 8 April 2009 an interim injunction was granted restraining the first defendants from submitting their draft report.
On 9 April 2009, the parties reached an agreement that the Apache companies were to be afforded an opportunity to comment upon those parts of the joint inquiry report which concerned the Apache companies.
On 8 May 2009 the Minister announced by Ministerial media statement that the Department would carry out the final stage of investigations into the Varanus Island incident and that the first defendants, inspectors appointed under the Act, would coordinate this investigation. The statement referred to the fact that the October Report had been publicly released in October 2008. The scope of the final stage of the investigation would include:
(1)the pertinent sequence of events on Varanus Island during the Varanus Island incident;
(2)the likely cause(s) of the Varanus Island incident; and
(3)any actions and omissions by the operator at the Varanus Island facility, or its contractors, leading up to and during the Varanus Island incident that may have contributed to those events.
It is the report of this investigation which is the subject of this action.
The Apache companies emphasise that the third point makes it clear that the subject matter of the investigation specifically focused on the conduct of the Apache companies.
The media statement said that the report was expected to be delivered to the Minister by early June 2009.
The inspectors have, from May 2009, issued various notices to Apache Northwest requiring it to produce documents under s 63 of the Act for the purposes of assisting the first defendants to prepare the investigation report. Apache Northwest has responded to the s 63 notices through its solicitors. The Apache companies' solicitors raised various arguments in relation to the s 63 notices, and reserved their rights in respect of many of the notices. A number of documents were produced.
It is not necessary to recount all of the detail of these exchanges.
By letter of 18 May 2009 Mr Kym Bills, one of the inspectors, gave a notice under s 63 of the Act requiring production of Apache Northwest's Confidential Response to the draft Report of the Offshore Petroleum Regulatory Inquiry. The Apache companies' solicitors responded saying that the Apache companies were bound by an undertaking given to the Offshore Petroleum Regulatory Inquiry not to disclose the draft report to any third party. Solicitors for the panel conducting the inquiry wrote on 21 May 2009 advising that the inquiry did not consider that its consent was required but, to the extent that it was, the panel conducting the inquiry released the Apache companies from the undertaking.
On 22 May 2009, McKerracher J delivered reasons in the Federal Court proceedings. His Honour held that disclosure of documents to the panel conducting the Offshore Petroleum Regulatory Inquiry was not for the purposes of the Act. That day, the Apache companies' solicitors wrote to the first defendants inviting them, in light of McKerracher J's decision, to withdraw the s 63 notice relating to the Apache companies' Confidential Response to the draft Report of the Offshore Petroleum Regulatory Inquiry. The solicitors for the first defendants wrote in response to that letter on 28 May 2009. This letter stated that it was understood that the Confidential Response the subject of the s 63 notice set out the Apache companies' views in relation to the incident. It was said to be surprising that the Apache companies did not wish that material to be available for the investigation. Nevertheless, in light of the Apache companies' objection, the letter stated that Mr Bills did not require the Apache companies to produce the document at this stage if it does not wish those views to be available to the investigation.
On 3 June 2009, Mr Bills issued another notice under s 63 of the Act requiring production of Apache Northwest's documents in relation to its comprehensive root cause investigation into the Varanus Island incident. There was a detailed exchange of correspondence in relation to this class of documents. In summary, production was resisted by the Apache companies on grounds that there were no such documents in their control but if and to the extent that there were, those were subject to legal professional privilege. Senior counsel for the defendants accepted that, in this action, the court must proceed on the assumption that the Apache companies were entitled to resist production on those grounds.
During May 2009 the solicitors for the parties corresponded concerning the question of procedural fairness in relation to the Investigation Report.
By letter of 13 May 2009 the Apache companies' solicitors contended that the Investigation Report was such as to enliven an obligation to afford natural justice and procedural fairness to the Apache companies. The letter sought confirmation that the first defendants would afford the Apache companies procedural fairness in the preparation of the Investigation Report.
That contention was denied in the defendants' solicitors' letter of 15 May 2009. However, the letter said, 'the State assumes that the inspectors will conduct the investigation fairly and will seek such information from your clients as they see appropriate for that purpose'.
By letter of 18 May 2009 the Apache companies' solicitors reiterated their contention that the inspectors were obliged to afford them procedural fairness in the preparation of the Investigation Report. The letter sought an undertaking that procedural fairness would be afforded, failing which the Apache companies threatened to seek an order in the Federal Court proceedings.
By letter of 19 May 2009 the defendants' solicitors contended that any question of procedural fairness was not part of the matter in the Federal Court proceedings. The letter stated that the Apache companies had not indicated the steps which they contended should be taken, but had not been taken, by the inspectors. The letter said that the State and the Department would consider whether or not to provide a draft copy of the Investigation Report once the draft had been prepared and considered by the Department.
By letter of 20 May 2009 the Apache companies' solicitors set out their contention that, in light of the terms of reference of the Investigation Report, procedural fairness would require that:
(a)the draft of the Investigation Report be provided to the Apache companies before the draft is provided to the Minister;
(b)the Apache companies be afforded a reasonable opportunity to review and comment on the report; and
(c)those comments be taken into account prior to the final Investigation Report being delivered to the Minister.
By letter of 20 May 2009 the solicitors for the defendants said that:
(a)the State maintains the position that there is no obligation to afford procedural fairness to any party in the provision of the Investigation Report by the inspectors to the Minister;
(b)however, that was not to deny that it may be desirable for the State or the first defendants to choose to seek the Apache companies' comments on a draft report before it is finalised and submitted to the Minister;
(c)until there is a draft report, the State is not in a position to decide whether that report is appropriately provided to the Apache companies for comment before it is provided to the Minister;
(d)the State is prepared to undertake to give the Apache companies five working days' notice of any intention to submit any report of the investigation to the Minister without first seeking comment from the Apache companies; and
(e)the State is interested in hearing and understanding the Apache companies' views on the matters the subject of the investigation. To that end, the State invited the Apache companies to make relevant officers and employees available for interview and to make available to the State any of its own finalised analysis of the causes of the Varanus Island incident.
By letter of 21 May 2009 the Apache companies' solicitors accepted the undertaking offered in the defendants' solicitors' letter of 20 May 2009. The Apache companies did not take up the invitation referred to in par (e) above.
On 27 May 2009 Mr Bill Tinapple, the Executive Director of the Petroleum and Environment division at the Department, issued a prosecution notice to Apache Northwest alleging an offence under s 38(b) of the Act. That section provides that the licensee of a pipeline shall maintain the pipeline in good condition and repair. The prosecution notice alleged that Apache Northwest (and its co‑licensees) failed to maintain the pipeline in good condition and repair in that 'the 12‑inch sales gas pipeline was corroded from a nominal wall thickness of 11.1 mm down to a wall thickness of 3 ‑ 4 mm in the area of the pipeline rupture which occurred at the pipeline beach crossing at Varanus Island on 3 June 2008'.
On 18 June 2009 the defendants' solicitors wrote to the Apache companies' solicitors. The letter stated that:
(a)the Apache companies had not taken the opportunity to participate in the continued investigation in a constructive manner;
(b)in view of this and in view of the Minister's desire to see the Investigation Report as soon as possible, the Department does not propose to provide the Apache companies with an advance copy of the Investigation Report prior to it being delivered to the Minister;
(c)the Minister has said that he intends, once he receives the Investigation Report and subject to his being satisfied that the contents of the Investigation Report do not make it inappropriate for him to do so, to provide the Apache companies with a copy of the Investigation Report and an opportunity to provide comment or submissions in relation to any matters in the Investigation Report; and
(d)the Department intends to provide the first defendants' Investigation Report to the Minister on 26 June 2009.
On 18 June 2009 the first defendants delivered their completed Investigation Report to Mr Tinapple. The first defendants consider that as they have delivered the final Investigation Report they have no further action to take in relation to it.
On 19 June 2009, the Apache companies' solicitors responded to the letter of 18 June 2009. The Apache companies' solicitors' letter of 19 June 2009:
(a)stated that the Apache companies do not accept that they have not taken the opportunity to participate in the investigation in a constructive manner;
(b)set out various steps said to have been taken regarding s 63 notices in support of that contention;
(c)in light of what was said in the defendants' solicitors' letter of 20 May 2009, suggested that it was assumed that the final Investigation Report was now in existence and contained findings or other material adverse to the Apache companies' interests; and
(d)referred to the view of McKerracher J in the Federal Court proceedings that, on an interlocutory basis, the Apache companies should be afforded procedural fairness.
The letter requested that the State reconsider its decision not to provide the Apache companies with a copy of the final Investigation Report prior to it being delivered to the Minister. The letter stated that legal proceedings would be commenced unless a satisfactory response was received by 5.00 pm on 22 June 2009.
The Apache companies filed an application for an interlocutory injunction on 23 June 2009.
As at 24 June 2009 Mr Tinapple's intention was to deliver the Investigation Report to the Minister as soon as possible.
On 25 June 2009, at the hearing of the application for an interlocutory injunction, the first defendants and the State undertook that they would not provide the Investigation Report to the Minister prior to 31 July 2009. The action was listed for trial on 29 July 2009.
At the trial, the defendants' undertaking was continued pending my decision on the action.
The pleadings and the issues
Many of the facts I have set out are pleaded in the statement of claim and admitted in the defence.
In par 12 of the statement of claim the Apache companies allege that they have interests founding a duty on the part of the first defendants and the State to afford to the Apache companies a reasonable opportunity to be heard in relation to the Investigation Report before those defendants complete the Investigation Report or provide it to the Minister. Particulars are given of the Apache companies' interests as follows:
(a)The acts or omissions of the [Apache companies] are the subject of the Investigation Report.
(b)The interests of the [Apache companies] include their commercial interests referred to in paragraph 5 above and their reputations.
(c)The [Minister] is the Minister administering the DMP.
(d)The [Minister] has broad discretions in his capacity as Joint Authority and Designated Authority under the relevant legislation to:
(i)grant (or refuse to grant) an exploration permit;
(ii)grant (or refuse to grant) a production licence;
(iii)delay granting a production licence;
(iv)impose (or vary) conditions on a production licence; and
(v)make directions to, amongst others, the registered holder of a Commonwealth petroleum title.
(e)The [Apache companies] regularly make applications to the [Minister] regarding new or existing interests.
(f)[sic]
(g)Past performance may be taken into account when the Joint Authority considers whether a bid for an exploration permit is deserving of a grant pursuant to the relevant legislation - Guidance Notes For Applicants 2009 issued by the Department of Resources, Energy and Tourism, section 2.
(h)The [Apache companies] are likely to suffer substantial commercial damage if the [Minister] in exercising his powers and functions is influenced or affected by the contents of the Investigation Report. The commercial damage may include denial of applications for permits or licences, revocation of existing permits or licences, or the imposition of more onerous conditions or requirements for existing permits or licences.
(i)Apache Northwest is one of the accused specified in the prosecution notice pleaded more fully in paragraphs 14 and 15 below.
In summary, the interests are said to be:
1.the Apache companies' reputation;
2.the prospect of commercial damage if the Minister were to be influenced in the exercise of his powers and functions in relation to licences, tenements and other, held or potentially to be applied for by the Apache companies; and
3.the fact that Apache Northwest is one of the accused in the prosecution referred to earlier in these reasons.
The defendants admit that the Apache companies have these interests but deny that any duty of procedural fairness arises.
The Apache companies plead, and the defendants admit, that from 13 May 2009 the Apache companies requested the first defendants and the State to accord to the Apache companies procedural fairness and natural justice and, in particular, to provide them with the Investigation Report to review and comment upon before it was completed by the first defendants and the State and before it was provided to the Minister. The particulars to that plea refer to correspondence between the solicitors in May and June 2009 summarised in [32], [34], [36], [38] and [42] of these reasons.
The defendants plead that the first defendants and the State afforded the Apache companies a reasonable opportunity to be heard in relation to the Investigation Report before its completion but the Apache companies did not take up that opportunity.
It is an admitted fact that the Investigation Report 'contains findings or other materials which adversely affect the [Apache companies'] interests or are capable of adversely affecting the [Apache companies'] interests' identified in the particulars under par 12 of the statement of claim. Those aspects of the Investigation Report are referred to in the statement of claim as the Adverse Contents.
It is also an admitted fact that in formulating and including the Adverse Contents in the Investigation Report the first defendants relied on materials obtained from parties other than the Apache companies.
The defendants admit that the first defendants and the State did not provide the Apache companies with a copy of the Investigation Report or disclose any of its contents to the Apache companies, prior to its completion. The defendants also admit that the State has refused to provide the Apache companies with a copy of the Investigation Report or to disclose any of its contents to the Apache companies prior to providing it to the Minister.
On the first day of the trial, the Apache companies foreshadowed an application to amend the statement of claim. On 30 July 2009, the second day of the trial, without opposition from the defendants, I granted leave to the Apache companies to amend the statement of claim to add allegations to the following effect:
(a)as at 8 May 2009, when the Minister made the announcement, the Minister intended to release to the public the Investigation Report after it had been provided to him;
(b)once the Investigation Report is provided to him, subject to being satisfied that the publication would not involve a contempt of court in light of the pending criminal proceedings, the Minister intends to release it or disclose its contents, including the Adverse Contents, to the public without first giving the Apache companies a reasonable opportunity to be heard in relation to the Adverse Contents of the Investigation Report;
(c)once the Investigation Report is provided to him, the Minister intends to provide it or disclose its contents, including the Adverse Contents, to other officers of the State without first giving the Apache companies a reasonable opportunity to be heard in relation to the Adverse Contents of the Investigation Report; and
(d)once the Investigation Report is provided to him, the Minister intends to provide or disclose its contents, including the Adverse Contents, to Cabinet colleagues without first giving the Apache companies a reasonable opportunity to be heard in relation to the Adverse Contents of the Investigation Report.
The defendants deny these allegations and say that the Minister at all times intended and intends to decide what action to take in relation to the Investigation Report once it is provided to him and he is appraised of its contents.
Also on 30 July 2009, the Minister undertook that 'he will not give a copy of the Investigation Report to any member of the public without first affording to the [Apache companies] a reasonable opportunity to be heard in relation to the Adverse Contents of the Investigation Report (if they have not already been afforded that opportunity).'
In proffering the undertaking, senior counsel for the defendants made a number of points:
1.the undertaking was not a concession that the rules of procedural fairness necessarily require that step to be taken;
2.the offering of the undertaking should not be taken as an indication that the Minister in fact intends or intended to give the Investigation Report to any member of the public;
3.the reference to members of the public indicates that the undertaking does not extend to public officers such as officers of the Department or Cabinet colleagues;
4.the existence of the limitation in point 3 above should not be seen as carrying any implication that the Minister intends to give the Investigation Report to public officers without first affording the Apache companies a reasonable opportunity to be heard; and
5.the undertaking is not intended to affect the capacity of the Minister to table the Investigation Report in Parliament. In that regard senior counsel referred to the fact that, as was common ground, any injunctive relief against the Minister would necessarily be crafted so as not to affect the freedom of the Minister to table the Investigation Report in Parliament. (The tabling of a report in Parliament is part of the proceedings in Parliament protected by Article 9 of the Bill of Rights 1689: Cornwall v Rowan [2004] SASC 384; (2004) 90 SASR 269 [224]. Article 9 applies in WA by s 1 of the Parliamentary Privileges Act 1891 (WA).)
6.the words in brackets in the undertaking are intended only to exclude the situation where the Apache companies succeed in their primary claim for a right to be heard before the completion of the Investigation Report and its provision to the Minister.
Subject to those limitations, senior counsel said that the substance of the undertaking was intended to be to the same effect as was reflected in the final form of the relief against the Minister sought in par D of the prayer for relief in the statement of claim. In other words, the Minister undertook not to publish to members of the public, as distinct from public officers and Cabinet colleagues, the Adverse Contents of the Investigation Report until the Apache companies had been afforded a reasonable opportunity to be heard in relation to those Adverse Contents.
The major issues may be summarised as follows:
1.whether a duty of procedural fairness arose, requiring the first defendants and the State to provide the Apache companies with an opportunity to be heard in relation to the Adverse Contents of the Investigation Report before providing the completed Investigation Report to the Minister; and
2.if a duty arose, whether the first defendants and the State breached that duty of procedural fairness by failing to give the Apache companies an opportunity to make submissions in relation to the Adverse Contents of the Investigation Report before completing the Investigation Report and providing it to the Minister.
For reasons which will emerge, consideration of the first major issue involves a number of sub‑issues, including:
(a)the significance, if any, of the fact that the preparation of the report was not (except perhaps to a limited extent) performed pursuant to a statutory power;
(b)the legal and practical consequences of the Investigation Report and the Adverse Contents;
(c)in particular, the potential significance of the Adverse Contents in the Investigation Report for the possible exercise by the Minister of statutory powers reposed in him under the mining and petroleum legislation; and
(d)whether a duty of procedural fairness would be imposed upon the Minister if, after receiving the Investigation Report, he intended to publish it.
The State submitted that, in light of the undertaking offered by the Minister, it was unnecessary to determine the 'more difficult' question arising in the last of these sub‑issues. As will appear, I do not accept that proposition.
The parties' submissions
Prior to the hearing the parties provided detailed written submissions. At the hearing senior counsel for both parties made careful and detailed submissions involving close attention to passages in a great many of the decided cases. I have been considerably assisted by those submissions. I will refer to particular aspects of the submissions later in these reasons. At this stage, I propose only to outline the broad contentions put by each party.
The Apache companies submitted that the following factors, in combination, gave rise to an obligation to afford procedural fairness:
(a)the formal and public establishment of the investigation;
(b)the expertise of the investigation officers;
(c)the technical and factual nature of the material the subject of the investigation - the investigation involves extensive examination of the facts, has available to it a power to require the production of relevant documents, and finds the facts;
(d)the relative lack of technical expertise on the part of the Minister;
(e)the subject matter of the investigation, being the Apache companies as individual entities and their acts and omissions;
(f)the evaluative nature of the questions to be determined by the investigation, with the terms of reference requiring the drawing of conclusions, not merely the assembly of facts;
(g)the impact or potential impact on the Apache companies' interests, especially their commercial reputation;
(h)the position of the Minister, exercising the powers and having the role referred to in [7], vis‑a‑vis the Apache companies;
(i)that the investigation was not established as an adjunct to the exercise of the particular statutory power or powers;
(j)the effect on the reputation of the Apache companies - because the interests at risk are largely reputational, the effect on the Apache companies' reputation cannot be reversed by a later decision to afford procedural fairness in the context of the proposed exercise of a specific statutory power;
(k)that the investigation is not a two-stage inquiry, as the first defendants, experts in the field, have completed their work;
(l)that the investigation was not a preliminary inquiry or an inquiry into whether or not to have a further inquiry. The operative event concerning the Apache companies' reputation is the Investigation Report being provided to the Minister. Further, any entitlement asserted by the defendants to distribute the report to others underscores rather than cures the risks to the Apache companies' reputation;
(m)that no later opportunity to be heard would be adequate for reasons which include the risk that the Adverse Contents of the Investigation Report might have a subconscious effect on decisions later to be taken by the Minister.
The Apache companies contend that the failure of the first defendants to permit the Apache companies to be heard in relation to the Adverse Contents was a breach of the requirements of procedural fairness in that such an opportunity is a 'bedrock' element of procedural fairness.
The defendants submitted that:
(1)no obligation of procedural fairness arises taking account of the following matters:
(a)no statutory or public power is being exercised in the preparation and provision of the Investigation Report to the Minister;
(b)the provision of the Investigation Report to the Minister does not have any direct and immediate consequence on the rights of the Apache companies;
(c)in particular, the rules of procedural fairness would oblige the Minister to give the Apache companies an opportunity to respond to the Adverse Contents before the Minister took any action to refuse to grant, refuse to renew, cancel, suspend, amend the conditions of or otherwise affect the Apache companies' licences on the basis of the Adverse Contents or whenever the Adverse Contents were relevant and significant to such a decision.
(2)even if the rules of procedural fairness did apply, those rules do not require the steps alleged by the Apache companies, namely giving them the opportunity to make submissions in relation to the Adverse Contents of the Investigation Report before the Investigation Report was completed and provided to the Minister.
I turn to the first major issue.
Did a duty of procedural fairness arise in relation to the preparation and provision to the Minister of the Investigation Report?
In my opinion, no duty of procedural fairness arose in relation to the preparation of the Investigation Report and its provision to the Minister. Broadly, my reasons for that opinion are:
(1)no right or interest of the Apache companies is sufficiently directly affected by the preparation and provision to the Minister of the Investigation Report, given the conclusions in sub-pars (2), (3) and (4) below;
(2)the provision of the Investigation Report to the Minister, without publication by the Minister, does not sufficiently affect the reputation of the Apache companies to attract an obligation of procedural fairness;
(3)any proposed general publication of the Investigation Report by the Minister would attract an obligation of procedural fairness;
(4)the provision of the Investigation Report to the Minister would not sufficiently affect the Apache companies' oil and gas interests, licences, leases and permits, or any application for further interests of that kind, to attract a duty of procedural fairness. That is because, before the Minister could take account of any of the Adverse Contents in relation to any interest or proposed interest of the Apache companies, the Minister would be obliged to afford them procedural fairness in relation to the Adverse Contents.
I now explain my reasons for those conclusions.
The starting point is the rights and interests of the Apache companies. It is the potential for a decision to affect rights, interests and legitimate expectations that attracts the requirement of procedural fairness: Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22; (2001) 206 CLR 57 [31].
The interests that the Apache companies contend support the existence of a duty of procedural fairness are set out in the particulars under par 12 of the statement of claim; see [49].
In summary, the Apache companies rely upon the following interests:
(a)their reputation;
(b)the prospect of commercial damage if the Minister were to be influenced in the exercise of his powers and functions in relation to the Apache companies' oil and gas interests and in any future applications for further interests;
(c)the fact that Apache Northwest is one of the accused in the prosecution referred to in [39] of these reasons.
I will deal with each of these interests in turn. The question is: in the circumstances, does the interest attract a duty of procedural fairness?
Reputation
Discussion of whether a duty of procedural fairness (or natural justice) arises often commences with the decision of the High Court in Kioa v West [1985] HCA 81; (1985) 159 CLR 550. In that case, in a passage that has been cited many times, Mason J said:
… there is a common law duty to act fairly, in a sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention (584).
Mason J said that it was necessary, before a duty of procedural fairness would arise, that the rights, interests and expectations of the individual citizen were affected in a direct and immediate way (584). The effect on a person must be as an individual, rather than as a member of the public or a class of the public, for a duty of procedural fairness to arise.
It is clear from Mason J's discussion, at (584) and following, that a duty of procedural fairness can arise in relation to administrative decisions whether made under statute or otherwise. Brennan J, on the other hand, analysed procedural fairness as arising from the proper construction of the statute and as relating only to the exercise of statutory powers.
I will say more later in these reasons about the application of the doctrine of procedural fairness to the exercise of non-statutory powers.
In Kioa v West Mason J referred to a party's legitimate expectations, as well as rights and interests. The Apache companies did not seek to invoke the notion of legitimate expectation. Consequently, there is no need to deal with any question as to the content or utility of that concept in determining whether a duty of procedural fairness arises (as to which see Re Minister for Resources; Ex parte Cazaly Iron Pty Ltd [2007] WASCA 175; (2007) 34 WAR 403 [269] ‑ [271]).
Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 concerned the conduct of a coronial inquest under a statutory power. The Coroner was conducting an inquest into the deaths of two boys. The parents of those boys were represented at the inquest by counsel who were permitted to examine and cross-examine witnesses. At the conclusion of the evidence counsel for the parents of one of the boys informed the Coroner that he wished to make a closing address covering the whole of the evidence. The Coroner declined to permit any closing addresses by counsel for the parents. The High Court held that the parents had a common law right to be heard in opposition to any potential adverse finding in relation to themselves or their son but did not have a right to make submissions on the general subject matter of the inquest.
Mason CJ, Deane and McHugh JJ said as follows:
It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment (598).
Their Honours also quoted with approval the passage from the decision of Mason J in Kioa v West which I have set out above. They held that the interests which the parents represented included the protection of the reputation of their deceased son and that interest gave rise to a common law right to be heard in opposition to any potential adverse finding in relation to themselves or their deceased son (599).
In considering whether the Coroners Act excluded the rules of natural justice, Mason CJ, Deane and McHugh JJ explained the development of the law respecting the scope of the rules of natural justice: it was not until relatively recently that the common law rules of natural justice were held to apply to public inquiries whose findings of their own force could not affect a person's legal rights or obligations. In that regard their Honours expressed the view that the majority decision in Testro Brothers Pty Ltd v Tait [1963] HCA 29; (1963) 109 CLR 353 would not prevail, referring to Mahon v Air New Zealand [1984] AC 808, 820 and National Companies and Securities Commission v News Corporation Ltd [1984] HCA 29; (1984) 156 CLR 296, 315 ‑ 316, 325 ‑ 326.
Brennan J observed that personal reputation is established as an interest which should not be damaged by an official finding after a statutory inquiry, unless the person whose reputation is likely to be affected has had a full and fair opportunity to show why the finding should not be made (608). In its context, I understand his Honour to be referring to a statutory inquiry the results of which are to be published.
In Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564, the Criminal Justice Commission prepared a report. The report was tabled in Parliament. By its governing statute, the Commission was required to furnish its report to the chairman of the Parliamentary Criminal Justice Committee, the Speaker of the Legislative Assembly and the relevant Minister. Any such report was granted the immunities and privileges of a report tabled in and printed by order of the Legislative Assembly. The Commission delivered a report which included references to the appellant, Mr Ainsworth, and his group of companies. They had not been given any opportunity to be heard on the matters about them in the report. The High Court held that the Commission was required to comply with the rules of procedural fairness in preparing the report and that the Commission had failed to comply with those requirements.
Mason CJ, Dawson, Toohey and Gaudron JJ said as follows:
It is now clear that a duty of procedural fairness arises, if at all, because the power involved is one which may 'destroy, defeat or prejudice a person's rights, interests or legitimate expectations'. Thus, what is decisive is the nature of the power, not the character of the proceeding which attends its exercise …
[A]s the law has progressed …, the only question which now arises is whether the report adversely affected a legal right or interest, including an interest falling within the category of legitimate expectation, such that the Commission was required to proceed in a manner that was fair to the appellants (576, 577). (footnotes omitted)
Their Honours held that the plaintiff's reputation was an interest attracting the protection of the laws of natural justice (577 ‑ 578). They said as follows:
It has long been accepted that reputation is an interest attracting the protection of the rules of natural justice.
…
…Brennan J said in Annetts that:
'Personal reputation has now been established as an interest which should not be damaged by an official finding after a statutory inquiry unless the person whose reputation is likely to be affected has had a full and fair opportunity to show why the finding should not be made.'
The same is true of business or commercial reputation. And it matters not that, instead of an express finding, there is, as here, an adverse recommendation based on the reports of other bodies or authorities. That being so, the appellants were entitled to procedural fairness (578). (footnotes omitted)
The principles stated in Ainsworth about the protection of reputation were applied by McHugh J in Johns v Australian Securities Commission [1993] HCA 56; (1993) 178 CLR 408, 470 ‑ 471. In that case, a statutory power was being exercised.
The above cases all concerned an exercise of statutory power which had the consequence of publishing widely a report or material adverse to a person's reputation. In that context, these decisions authoritatively establish that a person's reputation is an interest that attracts a duty of procedural fairness.
The defendants submitted that that principle only applied to an exercise of statutory power. The same principle did not apply to conduct not involving the exercise of a statutory power.
To consider that submission I turn to some of the cases concerning whether and in what circumstances an exercise of non‑statutory public power may attract a duty of procedural fairness.
Senior counsel for the defendants submitted that it was not necessary to give attention to the issue of whether a duty of procedural fairness in the exercise of a statutory power arises under the common law or under the statute on its proper construction. The weight of authority appears to favour the common law view. In Vanmeld Pty Ltd v Fairfield City Council [1999] NSWCA 6; (1999) 46 NSWLR 78, 91 ‑ 92, Spigelman CJ said:
The obligation to afford procedural fairness is a doctrine of the common law which attaches to the exercise of public power, subject to any statutory modification of the common law in that regard: see Kioa v West (1985) 159 CLR 550 at 576, 581, 632; Annetts v McCann (1990) 170 CLR 596 at 598; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 574 ‑ 575; Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 57; Victoria v Master Builders Association (Vic) [1995] 2 VR 112 at 138 ‑ 139, 148, 157 ‑ 160; Bayne, 'The Common Law Basis of Judicial Review' (1993) 87 ALJ 781. The view that the duty to accord procedural fairness is only an issue of statutory interpretation, consistently taken by Sir Gerard Brennan, has not prevailed: see Kioa v West (at 609 ‑ 616); FAI Insurance Ltd v Winneke (1982) 151 CLR 342 at 407 ‑ 413; Ainsworth (at 584 ‑ 585).
See also Minister for Local Government v South Sydney City Council [2002] NSWCA 288; (2002) 55 NSWLR 381 [6] ‑ [15]. In that case, Spigelman CJ said that the common law basis for the duty to accord procedural fairness is reflected in the cases which extend the duty to the exercise of prerogative powers (referring to some cases to which I will shortly come).
The parties were agreed in their submissions that some but not all exercises of non-statutory public power might attract a duty of procedural fairness. Beyond that, however, there was little apparent agreement in the parties' submissions on this topic.
I begin with the most recent of the cases to which I was referred: Cornwall v Rowan [2004] SASC 384; (2004) 90 SASR 269. As senior counsel for the defendants acknowledged, this case stands as a formidable obstacle to the State's contention that reputation is not an interest attracting the requirements of procedural fairness in the context of the exercise of a non‑statutory power.
The Hon Dr Cornwall MLC was the Minister for Community Welfare. Dr Cornwall announced a review of the management and administration of women's shelters and appointed a review committee. The trial judge found that the Minister directed the review committee to include allegations which the Minister knew to be unsubstantiated. It was found that the Minister intended those allegations to be included because the real reason for depriving a particular women's shelter of funding was thought to be not publicly palatable. (See [237] ‑ [238].) Thus the purpose of including the material was so that it would be in the report when it was published.
One of the claims made against Dr Cornwall was the tort of misfeasance in a public office. One of the elements of that tort is that the public official do an unlawful or invalid act. In that context, the Full Court gave consideration to whether the decision to include the unsubstantiated allegations in the report was invalid on the ground that it was done without affording procedural fairness.
The case involved non‑statutory power. The institution of the review and the direction as to what should and should not be included in the report was not done by Dr Cornwall under statute [245].
Their Honours referred to the passages in Kioa v West (584) to which I have referred. They then referred to Ainsworth, observing that although in that case the report had been produced pursuant to a statutory power 'that was not the relevant determinant as to whether procedural fairness should have been applied' [248]. After citing other passages from Ainsworth, their Honours concluded as follows:
In those circumstances, the finding is inevitable that there was an obligation at common law on both the Review Committee and Dr Cornwall to afford procedural fairness to those whose reputations might be affected by the inclusion of the unsubstantiated allegations in the report. As will be seen, Ms Rowan’s reputation was seriously affected by the allegations. She was not afforded procedural fairness before their publication. Therefore, to the extent that it is necessary to find illegality or invalidity in Dr Cornwall’s actions, the necessary illegality is established in his directing the publication of the unsubstantiated allegations without affording procedural fairness to Ms Rowan [250].
Senior counsel for the Apache companies submitted that in Cornwall v Rowan the court held that the decision to include the allegations in the report attracted a requirement of procedural fairness independently of and without regard to any question of publication of the report. That is not how I understand the decision. Their Honours were dealing with a claim of misfeasance in a public office by Dr Cornwall. As I have said, it was found that Dr Cornwall had directed the review committee to include the unsubstantiated allegations so that, when the report was published, it would provide what was thought to be a politically palatable excuse for ceasing funding to the women's refuge in question. Moreover, in [250] the court refers to the absence of procedural fairness before publication and concluded that the relevant illegal or invalid conduct on the part of Dr Cornwall was to be found in 'his directing the publication of the unsubstantiated allegations without affording procedural fairness' (emphasis added).
In my opinion, the decision of the Full Court in Cornwall v Rowan is authority for the proposition that a person's reputation is an interest attracting the requirements of procedural fairness in the context of an exercise of public power that is not statutory. I should not depart from the decision of the South Australian Full Court on a question of common law unless I were convinced that the decision was plainly wrong: Farah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 [135]. I am not so convinced. To the contrary, I respectfully agree. Moreover, in my view the proposition is also supported by The State of Victoria v The Master Builders' Association of Victoria [1995] 2 VR 121, to which I now turn.
In Master Builders the Victorian Court of Appeal found that a right to procedural fairness arose in relation to a non-statutory exercise of public power by the State, essentially in order to protect the plaintiffs' interests in their business reputation.
The Victorian Government established a non-statutory taskforce to deal with collusive tendering and other corrupt practices in the building industry. The taskforce sent to Victorian Government departments and agencies and to all municipal councils a 'black list' naming building contractors who, in the taskforce's assessment, had not responded satisfactorily to a letter sent by the taskforce and who, as a result, were not to be allowed to tender for or to be awarded government building contracts. The court held that the fact that the taskforce did not act pursuant to statute did not itself exclude the availability of judicial review, including on grounds of lack of procedural fairness. So long as the taskforce's acts were done in the exercise of a public duty and affected rights, interests or legitimate expectations of building contractors, its acts were amenable to judicial review. The court held that that taskforce was exercising power in the performance of a public duty and that its conduct in publishing a black list affected the rights and interests of building contractors in that it damaged their business reputation.
Tadgell J said that a government's decision, for its own internal purposes, to determine on what conditions it would contract would not be judicially reviewable. However, the compilation and promulgation of the black list was of a different character (137). His Honour said that Ainsworth's case is authority that commercial reputation is an interest attracting the protection of the rules of natural justice against its being unwarrantably harmed by executive decision (140). Eames J also referred to Ainsworth in support of the same conclusion (167 ‑ 168).
Ormiston J agreed with Tadgell J and Eames J. In particular, he agreed that the preparation of and internal giving effect to a black list did not attract a requirement of procedural fairness, but that the publication of the black list to other government departments and agencies and to local government authorities affected the reputation in a way that attracted the requirements of procedural fairness. His Honour referred to the statement in Ainsworth that reputation is an interest attracting the protection of the rules of natural justice (151).
As senior counsel for the defendants acknowledged, the Master Builders case also stands as a substantial obstacle to the State's contention that reputation is not a sufficient interest to attract natural justice in the context of a non‑statutory exercise of power.
In Minister for Arts, Heritage & Environment v Peko Wallsend (1987) 15 FCR 274 the Full Federal Court held that some non-statutory powers, including prerogative powers, were amenable to judicial review, including on the grounds of absence of procedural fairness. However, the decision sought to be reviewed in that case was a decision of Cabinet to nominate particular property for inclusion on the World Heritage list. That was found to be a subject matter beyond review by the court.
Wilcox J (with whom Bowen CJ and Sheppard J agreed) considered the decision of the House of Lords in Council of Civil Service Unions v Minister for the Civil Service [1985] 1 AC 374. He concluded that in order to attract a requirement of procedural fairness it is not enough that the decision in question be one which is likely to influence or 'create a climate conducive to' a subsequent decision affecting the rights, obligations or legitimate expectations of a person. Rather, the decision must itself have that effect (303 and 306). I will return to this proposition when I consider the effect of the Adverse Contents of the Investigation Report on any subsequent decision by the Minister about the oil and gas interests or potential interests of the Apache companies.
In my view, if the non-statutory conduct is said to affect a person's reputation, there will be a direct and immediate effect on reputation if the conduct itself involves broad publication of a report or material adverse to the person concerned. That was the case in the Master Builders case and also in Cornwall v Rowan.
In my opinion, in this case the preparation of the Investigation Report involved an exercise of public power, or was done in the exercise of a public duty, in the sense used in the cases (see, for example, Master Builders (137 ‑ 138) and (163 ‑ 164)). The defendants submit that any private citizen could choose to do an investigation into an event and produce a report about it. That may be so, but that in itself does not mean there was no exercise of public power. See Ainsworth (586), referring to a statutory power, but analogous reasoning applies. The first defendants were to coordinate the investigation and prepare a report for the Minister. They were inspectors under s 63 of the Petroleum Pipelines Act. The terms of the Ministerial media statement announcing the investigation made it clear that the investigation concerned matters of significant public interest (compare Master Builders (137, 163 ‑ 164)).
One of the specific subjects of the investigation was the acts and omissions of the Apache companies leading up to and during the incident, and whether those acts or omissions may have contributed to the explosion. Publication of the Investigation Report including the Adverse Contents is liable to affect the interests of the Apache companies in that it is liable to adversely affect their reputation. For the reasons given, reputation is a sufficient interest to attract the requirements of procedural fairness. Accordingly, in my opinion, any decision to publish generally the Investigation Report would attract a duty of procedural fairness.
The Apache companies submitted that their interest in their reputation attracted the requirements of procedural fairness in relation to the preparation of the report and its provision to the Minister (apart from any question of its publication). For the reasons that follow, I do not accept that submission. To my mind, a person's reputation is about his or her standing generally, not in the eyes of one specific individual. I think that is the sense in which reputation is referred to in the cases. In all the cases I have discussed so far in these reasons, at least as I understand them, the relevant report or other material was published widely, not merely to a particular individual.
The Apache companies invite the inference that as at 8 May 2009, when the Minister announced the investigation, he intended to release the Investigation Report to the public once it was provided to him. The Apache companies point to the fact that the investigation was the subject of a Ministerial media statement, and to the terms of that statement. The media statement referred to the fact that the October Report was publicly released by the Minister.
The media statement did not say anything about what the Minister proposed to do with the Investigation Report when received.
I am not satisfied that I should draw the inference invited by the Apache companies.
To my mind, the most (from the Apache companies' perspective) that can be inferred is that the Minister intended that the Investigation Report would be published after he received it, unless in light of the circumstances at the time of its receipt and in light of its contents that was thought by the Minister to be inappropriate.
This intention on the part of the Minister does not, in my opinion, sustain the imposition of a duty of procedural fairness at the point of preparation and presentation to the Minister, as distinct from publication. Rather, what is required is that procedural fairness to the Apache companies be afforded before the report is published. The interest that attracts the imposition of the duty is the Apache companies' reputation. On my analysis, that reputation is in jeopardy at the point of publication, not at the earlier point of provision to the Minister. One way of discharging the duty of procedural fairness might be to take steps in the course of the preparation of the report. But that would not be the only way of affording procedural fairness.
The Apache companies submit that there is a fundamental difference between an opportunity to make submissions before adverse conclusions are drawn in a report and the opportunity to seek to rebut such conclusions after the report has been finalised. In my view, to the extent that that is so, it will be a matter to be taken into account in determining whether the duty to afford procedural fairness before publication has been satisfied; it does not justify the imposition of a duty of procedural fairness at the point of preparation of the Investigation Report and its provision to the Minister. To my mind, it cannot be said in advance that there will be no real opportunity for effective rebuttal of the completed Investigation Report.
The Apache companies submit that the Minister does not have the technical expertise to adequately understand and consider any submissions from the Apache companies in response to the Adverse Contents of the Investigation Report. In considering the Apache companies' response to the Adverse Contents, the Minister will have available the technical expertise of the Department and any external consultant engaged by the Department. In my opinion, the reasoning in the preceding paragraph applies in answer to this submission.
In support of the Apache companies' submission that the risk to their reputation in the preparation and presentation of the report to the Minister attracts the requirements of procedural fairness, senior counsel relied upon the decision of Finn J in Kelson v Forward (1995) 60 FCR 39. That case involved an application for an order of review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act). The Minister for the public service requested that a statutory agency (the MPRA) investigate workplace harassment at the Australian War Memorial (the AWM). The legislation provided that where the MPRA was requested to conduct an inquiry, it must provide a report to the Minister.
In Kelson v Forward the question arose whether the making by MPRA and communication to the Minister of the report was a decision to which the ADJR Act applied. Finn J held that it was. He said that the nature of the Minister's request was at least to establish the possible existence of workplace harassment at the AWM. He concluded that if workplace harassment was found, and if identifiable individuals were found to be its perpetrators and were reported upon, that without more would constitute a reviewable decision, irrespective of whether the Minister considered it necessary or desirable to initiate consequential steps against those individuals (or otherwise) and irrespective of whether the MPRA recommended consequential measures in its report. Finn J gave the following reasons for that conclusion:
First, the legislative scheme of the Act to which s 56 belongs does not itself create a larger decision making process in which it locates a s 56 report as merely a part or step.
Secondly, the actual terms of the Minister's request and the context of its making do not suggest in any way that the findings made in relation to the subject matter to be inquired into, were to be treated as other than substantive determinations.
There is, in other words, nothing in the legislative scheme or in the actual request made that compels the conclusion that to treat the Report as a discrete decision would itself result in 'a fragmentation' of such process of administrative decision-making as may have been envisaged for the matter to which the request related: cf Bond's case at 337 per Mason CJ. The Report can properly be said to stand alone as a separate and discrete decision. That subsequent decisions may be taken in consequence of it, does not rob it of this character.
Thirdly, and I here am in complete agreement with the applicant's submission, the Report has operative effect in that 'of itself' ‑ cf the comments of Mason CJ on these words in Bond at 338 ‑ it can have an effect on interests of the applicants that are protected by the law. This effect alone would not result in the Report being a reviewable decision: cf the personal findings against Mr Bond in Bond's case. It is the combination of the qualities of finality and of substantive determination which is necessary to produce that result: see Edelsten at 66.
Fourthly, notwithstanding that the Report has been kept confidential to date, the 'risk to reputation' ‑ cf Ainsworth v Criminal Justice Commission at 585 per Brennan J - it poses, begins at the moment the Report is submitted to the Minister. This is because the reputation at risk is in part at least that of the public sector manager, while the recipient of the Report is a person who can properly be taken to have a direct interest in ascertaining the accuracy or otherwise of that reputation. He is the Minister Assisting the Prime Minister for Public Service Matters.
Finally, even if the Report is kept relatively confidential ‑ and the Minister apparently is under no formal obligation so to keep it ‑ it may nonetheless constitute a factor in subsequent decisions taken in relation either to the applicants individually or to the AWM by those who have been made privy to its contents. Such subsequent decisions need not necessarily be linked explicitly to the Report in the sense of being based upon, or of growing out of, it. It thus has the independent capacity to be the instrument of silent and/or collateral injurious affection to the applicants. That it possesses this quality when considered in the light of the matters to which I have already referred serves to reinforce the conclusion that it satisfies the Bond test (62).
Senior counsel for the Apache companies submitted that these reasons were applicable by analogy to the present case. I accept that these passages provide some support for the Apache companies' submission and are capable of being applied by analogy. However, I note that his Honour did distinguish between the reputation (generally) of a person and the individual view taken by the Minister. In any event, Finn J's analysis was directed to the question of whether there was a reviewable decision for the purposes of the ADJR Act. In that context, the question of whether the report was a separate and discrete decision, and not part of a larger decision making process, has an obvious primary significance. That consideration is central to whether the making of the report had the quality of finality required of a reviewable decision. For the following reasons, I do not think that the question of whether the report was a separate and discrete decision has the same central significance in the present context (although it is relevant).
The Apache companies' submissions emphasised that the preparation of the Investigation Report was a separate process in itself, and was not expressed in the Ministerial announcement as a step towards the exercise of some statutory or other process. Senior counsel also referred to the conclusion in Ainsworth (578 ‑ 579) that the preparation and submission of the report by the Commission was a discrete statutory process, separate from any hearings held by the Parliamentary Committee.
In the present context, as in Ainsworth, whether a decision is a separate process in itself, or is a step in a broader process, is relevant to whether the requirements of procedural fairness can be said to have been satisfied on the grounds that 'the decision‑making process, viewed in its entirety, entails procedural fairness' (South Australia v O'Shea [1987] HCA 39; (1987) 163 CLR 378, 389). But to the extent that that question is resolved favourably to the Apache companies ‑ that the Investigation Report is a separate process in itself ‑ attention returns to the question of the effects of that separate decision. Does it affect a right or interest of the Apache companies? I am not persuaded that the provision of the Investigation Report to the Minister without further publication affects the reputation of the Apache companies in a way that attracts the requirements of procedural fairness. I will come later to the question of the effect on the oil and gas interests of the Apache companies.
The decision of McClellan CJ in Trindall v Minister for Aboriginal Affairs [2004] NSWLEC 121 seems to me to support the conclusions to which I have come. In that case the Minister for Aboriginal Affairs appointed a person to investigate an Aboriginal land council under a statutory power (s 216 of the Aboriginal Land Rights Act 1984 (NSW)). The statute provided for an investigator to report to the Minister. The statute (s 223) also empowered the Minister to appoint an administrator to a land council. Section 223(3) provided that the Minister's power to appoint an administrator arose only after considering a report that disclosed grounds to justify the making of such appointment, being a report of the auditor‑general or a report of an investigator. The Aboriginal land council asked to be able to review a draft report and comment on it but that request was not met. The investigator's report was provided to the Minister for Aboriginal Affairs, who tabled it in Parliament. A copy was provided to the council seeking a response to the issues raised in the report. Subsequently, the Minister appointed an administrator.
McClellan CJ rejected the applicants' contention that the person doing the investigation was under a duty to accord procedural fairness to them during the investigation 'because of the significance of the adverse findings he was proposing to make against certain applicants and the significant consequences for the Council and the applicants of an adverse report, including harm to their personal reputations' [109]. That contention has some parallels with the arguments of the Apache companies in this case.
His Honour noted that in Ainsworth the High Court had 'confirmed that the reputation of a person is an interest capable of attracting the protection of the law during the conduct of an inquiry' [110].
His Honour emphasised that the report was required to go only to the Minister for Aboriginal Affairs and that publication of the report was not required by the statute. Accordingly, on receiving the report the Minister for Aboriginal Affairs could have chosen to do nothing more with it. If the Minister determined that the report might be the vehicle for the appointment of an administrator, then at that point the Minister embarked on a course which could have led to a decision affecting the rights of the council [118] ‑ [119].
It is clear from McClellan CJ's reference to Ainsworth and from this reasoning that McClellan CJ did not consider that publication to the Minister of an adverse report relevantly affected the applicants' reputation in a way that attracted a duty of procedural fairness.
His Honour dealt with the significance of the tabling of the report as follows:
The essential complaint in the present case is that the Minister published the report by tabling it in the Parliament before any person had been given the opportunity to respond to it. This was, of course, an action the Minister took when exercising his responsibilities as a Minister of the Crown, but was not a step required by the legislation. The situation is quite different to the position of a report from the ICAC or another similar body, where a report may be required to be laid before the Parliament (see s 74 of Independent Commission Against Corruption Act 1988 (NSW)). The fact that the Minister elected to take this step in the present case does not, in my opinion, have the effect that the investigator was required to provide procedural fairness [122].
Any report provided to a Minister might be tabled by the Minister in Parliament. I agree with McClellan CJ that that fact does not mean that the preparation and provision to a Minister of a report containing statements adverse to a person attracts a duty of procedural fairness to that person on the grounds of the adverse effect on that person's reputation if the report were published in Parliament.
In Darkinjung Local Aboriginal Land Council v Minister for Aboriginal Affairs [2006] NSWLEC 291; (2006) 147 LGERA 348 the same question arose as in Trindall (apart from the tabling of the report, which had not occurred in Darkinjung). Preston CJ followed Trindall and expressed agreement [41] with McClellan CJ's analysis.
I turn to the question of the effect of the preparation and provision to the Minister of the Investigation Report upon the Apache companies' licences and other oil and gas interests, and potential interests arising from further applications.
The oil and gas interests of the Apache companies
I accept the defendants' submission that before the Minister took any action to refuse to grant or renew, or to cancel or suspend or amend the conditions of the Apache companies' licences or other interests, or otherwise adversely deal with any potential interests, on the basis of information contained in the Investigation Report, he would be required to give the Apache companies an opportunity to respond to that material to the extent that they had not already had that opportunity. When deciding an application or making any decision under the relevant legislation the Minister must, before exercising power, give an affected person an opportunity to respond to information which is 'credible, relevant and significant' to the decision: Kioa v West (629); Applicant VEAL of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88 [16] ‑ [17].
In Kioa v West Brennan J said:
Nevertheless in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made. It is not sufficient for the repository of the power to endeavour to shut information of that kind out of his mind and to reach a decision without reference to it. Information of that kind creates a real risk of prejudice, albeit subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision an opportunity to deal with the information. He will be neither consoled nor assured to be told that the prejudicial information was left out of account (629).
In Applicant VEAL, the High Court explained that what is credible, relevant and significant is not to be determined by reference to reasons for decision given by the decision maker. Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ said as follows:
It follows that what is 'credible, relevant and significant' information must be determined by a decision-maker before the final decision is reached. That determination will affect whether the decision-maker must give an opportunity to the person affected to deal with the information. And that is why Brennan J prefaced his statement about a person being given an opportunity to deal with adverse information that is credible, relevant and significant, by pointing out that there may be information, apparently adverse to the interests of a person, which can and should be put aside from consideration by the decision-maker as not credible, not relevant, or of little or no significance to the decision to be made. 'Credible, relevant and significant' must therefore be understood as referring to information that cannot be dismissed from further consideration by the decision-maker before making the decision. And the decision-maker cannot dismiss information from further consideration unless the information is evidently not credible, not relevant, or of little or no significance to the decision that is to be made. References to information that is 'credible, relevant and significant' are not to be understood as depending upon whatever characterisation of the information the decision-maker may later have chosen to apply to the information when expressing reasons for the decision that has been reached.
It follows that the Tribunal's statement, that it gave no weight in reaching its decision to the letter or its contents, does not demonstrate that there was no obligation to reveal the information to the appellant and to give him an opportunity to respond to it before the Tribunal concluded its review. Deciding that it could reach its conclusion on other bases did not discharge the Tribunal's obligation to give the appellant procedural fairness.
Subconscious effect?
Is it nonetheless relevant to ask whether the letter had or might have had some subconscious effect on the Tribunal in this case? Again, what Brennan J said about subconscious effect and prejudice must be read in its context. It was said in explanation of why it is that fairness requires that the person whose interests are likely to be affected by a decision should be given an opportunity to deal with the adverse information. As has later been rightly said, 'the necessity to disclose such material in order to accord procedural fairness is not based on answering a causal question as to whether the material did in fact play a part in influencing the decision'. It follows that asking whether, despite what was said in its reasons, the Tribunal may have been subconsciously affected by the information distracts attention from the relevant inquiry. The relevant inquiry is: what procedures should have been followed? The relevant inquiry is neither what decision should the decision-maker have made, nor what reasons did the decision-maker give for the conclusion reached [17] ‑ [19]. (footnotes omitted)
The Apache companies rely upon these passages as demonstrating that the law recognises the risks of information creating a subconscious prejudice. That, the submission continues, establishes the prejudice to the Apache companies arising from the receipt by the Minister of the Investigation Report containing the Adverse Contents. In support of that submission the Apache companies also refer to the final point made by Finn J in Kelson v Forward (62) set out in [122] of these reasons.
In Kioa v West Brennan J recognised the risk of subconscious prejudice in the mind of a decision‑maker. However, as was explained by the High Court in Applicant VEAL, that was in the context of determining what material the decision‑maker must disclose to the person affected. The risk of subconscious prejudice is one of the reasons why all material that is credible, relevant and significant must be disclosed regardless of whether, in the end, the decision‑maker took it into account in reaching its decision. Thus the law's response to the risk of subconscious prejudice is to require the decision‑maker to afford to the affected person an opportunity to respond to the adverse material, regardless of whether it is ultimately said by the decision‑maker to have played a part in the decision. It is a different thing to say, as the Apache companies submit, that the risk of subconscious prejudice justifies the conclusion that the prejudice to a party's interests is sufficient to attract a duty of procedural fairness. In the present context, I am not persuaded of that proposition.
I accept the defendants' submission that the dictum of Wilcox J in Minister for Arts, Heritage and Environment v Peko-Wallsend (303, 306) is apt in the present context. The question is whether the decision or conduct sought to be reviewed affects a person's rights or interests. It is not enough that it may be said that it 'creates a climate conducive to a subsequent decision adverse to the interests or expectations of some person'.
For these reasons, the Apache companies' oil and gas interests (and potential interests) do not sustain the attraction of a duty of procedural fairness.
Apache Northwest's interest as an accused
The only other interest of the Apache companies identified in the particulars of par 12 of the statement of claim is that Apache Northwest is an accused in the prosecution referred to in [39]. No submissions were addressed to how that fact might attract a duty of procedural fairness in the circumstances of the case. I am satisfied that it did not.
Conclusions on duty question
For the reasons given, I conclude that the preparation and provision to the Minister of the Investigation Report (including the Adverse Contents) does not attract a duty of procedural fairness unless and until the Minister:
(a)proposes to publish the report; or
(b)proposes to make a decision affecting the Apache companies' oil and gas interests (or potential interests) where the Adverse Contents are relevant and significant.
That conclusion is sufficient to require the dismissal of the Apache companies' primary claim for declarations and the injunction against the State (prayer for relief pars A ‑ C).
I turn to the question of breach. I address that question for two reasons: first, in case I am wrong in my conclusions on the duty question; and, secondly, to consider the Apache companies' alternative claim for an injunction against the Minister (prayer for relief par D).
Was there a breach of a duty of procedural fairness?
The starting point is that the content of a duty of procedural fairness, and whether procedural fairness was afforded in a given case, depends upon all of the circumstances of the particular case. The question is whether, in those circumstances, there has been practical injustice. Martin CJ explained the position in Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149 [3] ‑ [4] as follows:
It is well established that the precise content of the requirements of procedural fairness in any particular case will depend critically upon the statutory framework within which the relevant power falls to be exercised, and the facts and circumstances of the particular case ‑ see SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152. Because of the large variety of statutory frameworks in which the obligation to provide procedural fairness arises, and the infinite variety of factual circumstances in which the determination of the precise content of the requirements of procedural fairness might arise, it is impossible to lay down a universally valid test or norm which can be applied to determine whether procedural fairness has been provided in each and every case ‑ see Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475, at 503 ‑ 504, (cited with approval in SZBEL).
A court required to determine whether a decision maker has departed from the requirements of procedural fairness must therefore analyse all facts and circumstances relevant to the purported exercise of the power, viewed in the context of the statutory framework conferring the relevant power, for the purposes of ascertaining whether there has been practical injustice in the particular case - Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 at [37].
The issues under examination in the first defendants' investigation and the resultant Investigation Report were identified in the Ministerial media statement of 8 May 2009, read against the background of the October Report.
In correspondence in May 2009, the Apache companies contended that procedural fairness required that the draft of any report be provided to them before being provided to the Minister, and that they be afforded a reasonable opportunity to review and comment on the draft report. They did not demand or request to be given any material or information before the investigators had reached the stage of preparing the draft Investigation Report.
In the statement of claim the Apache companies claim something less than what they demanded in May 2009. The Apache companies claim to be entitled to a reasonable opportunity to be heard in relation to the Adverse Contents, before the first defendants complete the Investigation Report or provide it to the Minister. The Adverse Contents are those parts of the Investigation Report that contain findings or material which adversely affect the Apache companies' interests or are capable of adversely affecting their interests.
The demand in May 2009 was for the Apache companies to be given the whole of the draft Investigation Report, whereas the pleaded complaint is the failure of the first defendants and the State to disclose (and allow the opportunity to make submissions on) the Adverse Contents. Moreover, senior counsel for the Apache companies made it clear that there were different ways of discharging the alleged obligation to disclose the Adverse Contents. The provision of excerpts of the report might be one way of discharging the obligation, but was not the only way. For example, disclosure of the substance of the Adverse Contents might be an alternative way of discharging the obligation. In my view, nothing turns on the difference between what was demanded in May and what is now claimed. In other words, I proceed on the basis, favourable to the Apache companies, that their solicitors' letter of 20 May 2009 had requested an opportunity to comment on the Adverse Contents, not the whole of the Investigation Report or the draft.
It is an admitted fact that in formulating and in including the Adverse Contents in the Investigation Report, the first defendants relied on materials obtained from parties other than the Apache companies. However, the Apache companies do not plead a failure by the first defendants to disclose materials obtained from third parties as constituting a breach of a duty of procedural fairness or at all. I will return to this point.
The Apache companies submitted that an opportunity to be heard in relation to the Adverse Contents is a 'bedrock' component of the content of procedural fairness. I do not accept that submission. In my opinion, for the reasons that follow, the essential elements of procedural fairness will generally include adequate notice of the relevant issues and being sufficiently informed of the nature and content of adverse material, and will not generally extend to an opportunity to be heard in relation to adverse conclusions. Whether an opportunity to be heard must be given in relation to adverse conclusions will depend upon all the circumstances of the case.
In Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576, 591 ‑ 592, the Full Court of the Federal Court said:
Where the exercise of statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question.
This statement of principle in Alphaone has been applied in many cases.
In SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 [30] ‑ [32] the High Court said that caution was needed in applying the principles stated in that passage. It is wrong to assume that the question of what was required by procedural fairness involves a choice between a dichotomy of two categories (conclusions not obviously open on the known materials; and mental processes of decision‑making). Those two categories do not necessarily cover the universe of possibilities. Moreover, such an approach may distract attention from the fundamental principle. The fundamental principle is that an opportunity to be heard 'ordinarily requires the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material.'
In Minister for Local Government v South Sydney City Council [254] ‑ [261], Mason P (Ipp AJA agreeing) said, in effect, that generally procedural fairness does not require a decision‑maker to disclose in advance its proposed adverse conclusions. Whether that is required will depend upon all the circumstances of the case. Among the relevant circumstances are the nature of the investigation, the specificity and importance of the adverse conclusion, the nature of the interest affected and the likelihood of it being anticipated as a matter that needed to be addressed. See also Hall v University of NSW [2003] NSWSC 669 [204] (a case factually far removed from the present case).
Hayne J has said that in National Companies and Securities Commission v News and in Mahon the decision‑makers were obliged to disclose proposed adverse findings to affected parties for comment 'because [in those cases] the issue emerges with sufficient definition only at the stage where the body forms a tentative view that the adverse finding may be made': Muin v Refugee Review Tribunal [2002] HCA 30; (2002) 190 ALR 601 [265].
Aronson M, Dyer B and Groves M, Judicial Review of Administrative Action (4th ed, 2009) express the view that procedural fairness does not normally require decision‑makers to disclose proposed conclusions [8.255]. That can be explained as a consequence of the fact that procedural fairness generally seeks to allow participation before conclusions are reached [8.260]. The authors argue that when a decision‑maker is obliged to disclose proposed adverse findings to affected parties for comment, this will generally be for the reason explained by Hayne J in Muin [8.265].
In Annetts v McCann the High Court held that procedural fairness required that the Coroner not make any finding adverse to the interests of the parents without first giving them the opportunity to make submissions against the making of such findings (600 ‑ 603). That reflects what natural justice required in the circumstances of the case. It does not mean that procedural fairness will always, or even generally, require that a party be given an opportunity to make submissions against the making of proposed adverse findings. Whether that will be required will depend upon all the circumstances of the case.
The Apache companies also relied upon National Companies and Securities Commission v News. I do not think that the decision assists their argument. As I read the relevant passages (315 ‑ 316, 325 ‑ 326), the court was addressing what was sufficient, not what was necessary, in order to discharge a duty of procedural fairness. It is not in doubt that one way of discharging an obligation of procedural fairness may be by the giving of notice of proposed adverse conclusions and inviting submissions to the contrary from affected parties. Often it may be a convenient way. The question is whether it is necessary. Further and in any event, to the extent that the court in National Companies and Securities Commission v News addressed what was necessary, I refer to the observations of Hayne J in Muin [265].
Senior counsel for the Apache companies accepted that there were many cases to the effect that a party is not entitled to the thought processes or potential conclusions of a decision‑maker who is subject to procedural fairness. However, he submitted that those cases could be distinguished on grounds of timing (ts 49 ‑ 53, 82). In those cases 'difficult issues' of this kind arose while a tribunal was in the course of considering its findings, whereas the position was said to be different here. That is because, the submission continued, it is now known that there is a concluded report and that that report contains the Adverse Contents.
I do not accept that these cases and the principles that they state can be distinguished in this way. In most if not all of the cases, by the time the case was heard, the decision‑maker had made a decision for known reasons. The complaint was then made that procedural fairness had not been afforded in that, at some point before the final conclusions were reached, the proposed adverse conclusions should have been disclosed and an opportunity to comment given.
Next, the Apache companies submit that cases such as Alphaone are concerned only with a situation where the affected party had had an opportunity to deal with the primary evidence and facts, but then complained that he had not had an opportunity to deal with an adverse conclusion drawn from that primary material by the decision‑maker (ts 53 ‑ 54) . While Alphaone can be understood factually as involving that category of situation, I do not accept that the principles stated in it, and in like cases (including SZBEL), are confined to such situations. To the contrary, these cases elucidate the essential content of a duty of procedural fairness. The essential content is an opportunity to ascertain the issues and to be informed about adverse material.
Senior counsel for the Apache companies submitted that the right to know the issues had, in effect, been superseded in that the issues had already crystallised into the Adverse Contents (ts 82, 196). The submission was put this way:
In an ideal world no doubt on our case the first defendants would have said at some point 'Look these are the issues that might adversely affect you. What have you got to say about them' but time has passed, that didn't happen so the way in which the plaintiffs' procedural rights can be vindicated at this point is to be given the opportunity to comment on the Adverse Contents which, as their very nature … would have crystallised what would otherwise be seen as the issues which might adversely impact on the plaintiffs' interests (ts 82 ‑ 83).
I do not accept that submission. In my opinion, whether the relevant issues were sufficiently identified by the Ministerial media statement, read against the background of the October Report, cannot be determined until the contents of the Investigation Report are known. That the Investigation Report contains the 'Adverse Contents' (as that is defined) is not sufficient to sustain a conclusion on the question. When the detail of the Adverse Contents in the Investigation Report is examined, it may or may not prove to be the case that the relevant issues were sufficiently identified in the Ministerial media statement and the October Report. If they were, the right to know the issues did not 'crystallise' into a right to be heard in relation to the Adverse Contents. Even if they were not sufficiently identified, it would be the failure to give an opportunity to ascertain the issues which would be the ground of complaint. That would not necessarily translate into a right to be heard in relation to (all of) the Adverse Contents.
In my opinion, whether there was a breach of a duty of procedural fairness by a failure to disclose and allow comment on the Adverse Contents can be determined only when the contents of the Investigation Report are known. I am not persuaded, on the evidence before me, that the failure to disclose, and to permit submissions on, the Adverse Contents amounted to a breach of the requirements of procedural fairness.
That is the only breach pleaded by the Apache companies.
During oral submissions, senior counsel for the Apache companies referred, on a number of occasions, to certain matters not having been pleaded by the defendants. For example, senior counsel submitted that the defendants had not pleaded that the critical issues had been identified and the material relied on disclosed (ts 51). On my analysis, the important question is what is pleaded by the Apache companies. The Apache companies did not plead that the issues had been insufficiently identified, or that third party materials were not disclosed when they should have been. It is for the Apache companies to plead and prove the facts giving rise to and constituting a breach of the requirements of procedural fairness.
As I have said, the Apache companies did not plead a breach of the requirements of procedural fairness in relation to a failure to disclose adverse third party information. On the face of it, given the principles I have outlined above, any third party information that was relevant, significant and credible would need to have been disclosed in order to afford procedural fairness to the Apache companies. For example, the results of destructive or non‑destructive testing (referred to in the Ministerial media statement of 8 May 2009) if in fact obtained by the first defendants, would seem to be in this category. There is no evidence of any request by the Apache companies for information of this kind. Nor is there any evidence that the first defendants disclosed material of this kind. It is an admitted fact that the first defendants relied on third party materials in formulating and including the Adverse Contents. This would appear to give rise to a potential complaint, on the part of the Apache companies, that relevant third party adverse material had not been disclosed. However, that is not the case pleaded by the Apache companies. Senior counsel for the defendants said that if any such case had been pleaded, the relevant information would have needed to have been identified, and questions would have arisen as to whether the third party adverse material was already known to the Apache companies, whether they would have anticipated that the material might be relied upon, and whether the first defendants were required to disclose that material.
Because no such case was pleaded by the Apache companies, I do not come to any final conclusions about those matters. In any event, a conclusion that procedural fairness in this case required the disclosure of specific third party information would not necessarily translate into an entitlement, on the part of the Apache companies, to what they have claimed: to be appraised of, and have an opportunity to comment on, the Adverse Contents.
For these reasons, I conclude that the Apache companies have not established a breach of any duty of procedural fairness.
Conclusions
My conclusions on the major issues may be summarised as follows:
(1)There was no duty of procedural fairness on the first defendants or the State in the preparation and provision to the Minister of the Investigation Report. That is because that conduct, in itself, does not sufficiently affect any rights or interests of the Apache companies.
(2)Any decision by the Minister to publish the Investigation Report would attract a duty of procedural fairness to the Apache companies.
(3)Any decision by the Minister in relation to any oil and gas interests or potential interests of the Apache companies to which the Adverse Contents of the Investigation Report are relevant would attract a duty of procedural fairness.
(4)The Apache companies have not established the pleaded breach of the requirements of procedural fairness, namely, that they were not given an opportunity to comment on the Adverse Contents of the Investigation Report.
Conclusions (1) and (4) lead to the refusal of the Apache companies' primary claims for the declarations and injunctions in pars A, B and C of the prayer for relief. Conclusion (4) leads to a refusal of the injunction against the Minister sought in prayer par D.
I will hear from the parties as to the precise form of orders and as to costs.
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