Phosphate Resources Ltd v Minister for the Environment, Heritage and the Arts (No. 2)

• Jurisdiction: Australia Federal only
• Judgment Date: 13 October 2008
• Neutral Citation: [2008] FCA 1521
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Phosphate Resources Ltd v Minister for the Environment, Heritage and the Arts (No. 2) [2008] FCA 1521

ADMINISTRATIVE LAW – reliance by a Minister on Departmental advice and recommendations – whether a decision was required to be made by a Minister personally – Minister advised that a statutory requirement was not applicable – whether written reasons prepared later should be regarded as the real reasons for the decision at the time it was made – whether a presumption of regularity applies – whether the decision could or should be set aside in part – Minister wrongly advised – written reasons prepared later not the reasons present to the mind of the Minister when the decision was made – legal error established – no reason to withhold relief as a matter of discretion – decision set aside in its entirety.

WORDS AND PHRASES – ‘presumption of regularity’

Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5, 13, 16

Environment Protection and Biodiversity Conservation Act 1999 (Cth) ss 3A, 16, 17B, 18, 18A, 20, 20A, 23, 24A, 26, 27A, 67, 68, 75, 82, 87, 102, 103, 104, 105, 130, 131, 133, 136, 139, 140, 391, 515, 523, 524, 524A, 525, 527

Bushell v Environment Secretary [1981] AC 75

Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149

Kingham v Sutton [2002] FCAFC 107; 114 IR 137

Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24

Minister for Aboriginal and Torres Strait Island Affairs v State of Western Australian (1996) 67 FCR 40

Minister for Immigration and Ethnic Affairs v Taveli (1990) 23 FCR 162

Minister for Immigration and Multicultural Affairs v Singh (2000)98 FCR 469

Minister for Immigration and Multicultural Affairs v W157/00A (2002) 125 FCR 433

Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154

Navarrete v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1723

Nezovic v Minister for Immigration and Multicultural and Indigenous Affairs (No. 2) (2003) 133 FCR 190

Ray v Superannuation Complaints Tribunal (2004) 138 FCR 548

Sean Investments Pty Ltd v MacKeller (1981) 38 ALR 363

Tickner v Chapman (1995) 57 FCR 451

United Airlines v Secretary, Department of Transport and Communication (1990) 26 FCR 598

PHOSPHATE RESOURCES LIMITED v MINISTER FOR THE ENVIRONMENT, HERITAGE AND THE ARTS

WAD 135 OF 2007

BUCHANAN J

13 OCTOBER 2008

SYDNEY (PART-HEARD IN PERTH)

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 135 OF 2007

BETWEEN:	PHOSPHATE RESOURCES LIMITED Applicant
AND:	MINISTER FOR MINISTER FOR THE ENVIRONMENT, HERITAGE AND THE ARTS Respondent

JUDGE:	BUCHANAN J
DATE OF ORDER:	13 OCTOBER 2008
WHERE MADE:	SYDNEY (PART-HEARD IN PERTH)

THE COURT ORDERS THAT:

The decision of the Minister for the Environment and Water Resources, dated 27 April 2007, refusing approval to the applicant for expanded mining on Christmas Island, which was referred for consideration pursuant to s 68 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) on 1 November 2001 and identified as EPBC 2001/487, is set aside.

THE COURT DIRECTS THAT:

1. The applicant is to file any application for costs within 14 days, supported by a written submission.

2. The respondent is to file any written submission in opposition within a further 14 days.

3. The applicant may file a written submission in reply, if necessary, within a further 7 days.

4. The question of costs will be decided on the basis of the written submissions unless a party expressly seeks a further oral hearing.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 135 OF 2007

BETWEEN:	PHOSPHATE RESOURCES LIMITED Applicant
AND:	MINISTER FOR MINISTER FOR THE ENVIRONMENT, HERITAGE AND THE ARTS Respondent

JUDGE:	BUCHANAN J
DATE:	13 OCTOBER 2008
PLACE:	SYDNEY (PART-HEARD IN PERTH)

REASONS FOR JUDGMENT

BUCHANAN J:

PHOSPHATE MINING ON CHRISTMAS ISLAND

1 According to evidence given in the present case by Lai Ah Hong, the Managing Director of the applicant, Phosphate Resources Limited (‘PRL’), phosphate mining began on Christmas Island over 100 years ago, in the late 1890s. It was a business operation of the Clunies Ross and Murray families. In 1948 the British Phosphate Commissioners took over the management of mining on Christmas Island as agent for the Australian and New Zealand governments. In 1982 the Phosphate Mining Company of Christmas Island, wholly owned by the Australian government, took over the mining operations from the British Phosphate Commissioners. The mining operations were closed in 1987 and a liquidator was appointed but the local union, the Union of Christmas Island Workers, was instrumental in the re-establishment of mining operations in 1990.

2 PRL was incorporated, under the name of Phosphate Resources NL, on 12 June 1989. Its initial shareholders were members of the union. In a joint venture with one of its subsidiaries and Cluff Engineering, PRL acquired the assets of the previous operator. PRL subsequently bought out Cluff Engineering’s interest. PRL was granted a mining lease in 1998 for 21 years. Although the current mining lease therefore expires in 2019 PRL’s assessment is that ‘there are insufficient high grade phosphate resources in this lease to last for the balance of the term of the lease’.

THE APPLICATION FOR NEW MINING LEASES

3 PRL approached the Australian government about an extension to its mining operations early in the current lease term, in 2001. It proposed mining in nine additional areas on Christmas Island. Modifications were subsequently made to the proposal, particularly to avoid identified environmental effects, with the result that the area directly encompassed by the original additional mining proposal of 403.7 hectares was reduced to 256.3 hectares. PRL emphasised that an area of this size represented less than 2% of the Christmas Island land mass.

4 PRL estimated that approving its application would extend export operations, from a projected three to five years, to ten years. It said, in support of the proposal:

‘If the mining proposal does not proceed and the current mining operations are required to close within three to five years, there will be catastrophic effects on the economic and social environment of Christmas Island. There will also be significant impacts on the Australian economy.’

and:

‘The unemployment and subsequent population loss that will flow from the cessation of mining will make the maintenance of the metaphysical and built elements of Christmas Island’s cultural heritage untenable. As a result the unique cultural heritage of the Island will be seriously impacted. The loss of population is likely to lead to the collapse of the vibrant religious and cultural activity. Similarly depopulation will result in the loss of the inputs of CIPs employees into the social fabric and social cohesion of the Island.’

(CIP is Christmas Island Phosphates, the name under which PRL trades.)

5 The proposal required assessment against the requirements of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (‘the Act’), which obliged detailed attention to the environmental impact of the mining proposal. PRL contended in an environmental impact statement prepared for that purpose that ‘the impacts of the modified proposal are within the limits of environmental acceptability and will have a number of positive benefits for the whole environment of Christmas Island including both the natural and social and economic environment’. It said:

‘In the proponent’s view the proposal in its final form represents a balanced and justifiable outcome. The proposal is firmly based on the proponent’s extensive experience in its current mining and rehabilitation operations, a comprehensive research program and sound scientific principles. It offers a balance of beneficial socio-economic security for the Island’s unique community, benefits for the broader Australian economy and enhanced outcomes for the conservation of the Island’s biodiversity.’

6 A decision refusing approval was made on 27 April 2007 by Mr Turnbull, who was then Minister for the Environment and Water Resources and had portfolio responsibility for the administration of the Act. (Substitution of the Minister who now has portfolio responsibility for the administration occurred by consent for the purpose of the proceedings – s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘the ADJR Act’). The decision made on 27 April 2007 had significant consequences for businesses and people on Christmas Island.

7 The way in which the proposal was to be assessed, and the matters which the Minister was required to take into account, were directed by the Act. An assessment of, and a decision about, the application for extended mining operations on Christmas Island required judgments to be made about a range of factors, some of which needed to be balanced against others. One of the matters which the Minister was required to take into account concerned the environmental impact statement produced by PRL in accordance with guidelines provided by the Department. The environmental impact statement advanced a case, on balance, in support of the proposal, particularly having regard to its social and economic benefits; matters which the Minister was directed by the Act to consider.

8 The Minister refused approval in accordance with recommendations made to him in two departmental briefs and an assessment report which was required by the Act to be made by the Department and provided to him. The economic and social benefits of the proposal were there said to be outweighed by considerations concerning the environment and biodiversity.

THE CHALLENGE TO THE MINISTER’S DECISION

9 After the Minister...