Australia Pacific LNG Pty Limited v The Treasurer, Minister for Aboriginal and Torres Strait Islander Partnerships and Minister for Sport

The case of Australia Pacific LNG Pty Limited v The Treasurer, Minister for Aboriginal and Torres Strait Islander Partnerships and Minister for Sport involved an application for judicial review of a decision made by the Treasurer of Queensland in relation to a petroleum royalty. The applicants, Australia Pacific LNG Pty Limited, sought to challenge the Treasurer’s decision on multiple grounds, including misapplication of the statutory test, unlawful imposition of tax, unreasonableness, taking into account irrelevant considerations, failing to take into account relevant considerations, uncertainty, and procedural unfairness. The applicants sought various remedies, including a declaration that the decision was invalid and of no effect, an order quashing or setting aside the decision, and a referral of the matter back to the Treasurer for reconsideration.

The court examined the various grounds of review raised by the applicants. Firstly, the court considered whether the Treasurer misapplied the statutory test under s 148(1)(a) of the Petroleum and Gas (Production and Safety) Regulation 2004 (Qld) by wholly accepting the advice of an expert who supported the adoption of the Adopted Netback Method over the Residual Price Method. Secondly, the court assessed whether the decision imposed a duty of excise or a tax on the production and sale of liquefied natural gas (LNG). Thirdly, the court looked at whether the decision was made outside the bounds of legal reasonableness, considering the scope, purpose, and objects of the statutory source of the power. Fourthly, the court examined whether the Treasurer took into account irrelevant considerations, such as the estimated revenue return to the State of the Adopted Netback Method and comments from an unrelated petroleum company. Fifthly, the court assessed whether the Treasurer failed to take into account relevant considerations, such as a report produced by QTC to calculate the appropriate rate of return for petroleum royalty and comparable LNG projects in Queensland. Sixthly, the court examined whether the decision was vitiated by failure to achieve the requisite degree of certainty. Lastly, the court considered whether the procedure adopted by the Treasurer was consistent with procedural fairness, particularly in failing to provide the applicants with an opportunity to respond to further expert evidence, the final form of the proposed formula, and other material.

After examining the evidence and arguments presented, the court concluded that the Treasurer’s decision was invalid and of no effect. The court found that the decision was made in error, taking into account irrelevant considerations and failing to take into account relevant considerations. The court set aside the decision and referred the matter back to the Treasurer for further consideration and determination according to law. The court also ordered that the matter be referred back to the Treasurer for reconsideration, taking into account the relevant matters identified in the applicants' submissions and any other material that should have been considered. The parties were to be heard on the question of costs.