Reasonable satisfaction of consultation: the subjective jurisdictional fact in Tipakalippa v NOPSEMA; Santos
03.03.2023
On 2 December 2022, the Full Federal Court (Kenny, Mortimer and Lee JJ) unanimously dismissed an appeal brought by Santos NA Barossa Pty Ltd (Santos) against a decision of Bromberg J: Santos NA Barossa Pty Ltd v Tipakalippa. The decision at first instance set aside the decision of the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to accept Santos’ Environmental Plan (Drilling EP): Tipakalippa v NOPSEMA; Santos. On appeal, all judges held that the statutory requirement for Santos to consult with ‘a person or organisation whose functions, interests or activities may be affected by the activities to be carried out under the environment plan’ extended to the traditional owners of the Tiwi Islands. Santos and in turn NOPSEMA had failed to understand the correct meaning of the statutory language and the decision of the regulator was set aside.
This case note is set out as follows. First, I set out the background. Next, I step through the reasoning of the Court, at first instance and on appeal. There are two aspects to the Full Court’s reasoning which I highlight: first, the broad construction of the statutory term ‘interests’ in recognising the traditional owners’ cultural and spiritual connection to sea country as a relevant ‘interest’ without any ‘proprietary overlay’; and secondly, how a statutory obligation to consult may be discharged when interests are held communally (including analogies to the Native Title Act 1993 (Cth)). Finally, I conclude with a discussion on how the parties and, in turn, the Court approached the issue of whether NOPSEMA had lawfully reached a state of ‘reasonable satisfaction’: a subjective jurisdictional fact, or precondition, to its acceptance of the Drilling EP. I suggest that while the Full Court took an orthodox approach, the judgment at first instance illustrates the uncertainties which trouble this form of judicial review.
Background
The Barossa Field is a gas-condensate field in the Timor Sea over which Santos holds a ‘Petroleum Production Licence’. Under Santos’ Barossa Project, it intends to extract the gas-condensate through the creation of up to eight production wells, an export pipeline and other infrastructure. The project is scheduled to occur between 2022 and 2025. Santos intends initially to work in an area of the Barossa Field termed the ‘operational area’; this is located about 300km north of Darwin and 138km north of the Tiwi Islands.
NOPSEMA is a statutory authority established under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) which regulates offshore petroleum activities in Australia. Its decision-making processes are provided for in the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009 (Cth) (Regulations). The submission of an ‘environment plan’ by a titleholder (Santos) and its acceptance by NOPSEMA is a necessary step before any activity may commence (see regs 6, 7 and 9(1)). On 14 March 2022, a delegate of NOPSEMA accepted Santos’ Drilling EP.
Under reg 10(1)(a), NOPSEMA is required to accept the plan if ‘reasonably satisfied that the environment plan meets the criteria set out in regulation 10A’ (emphasis added). Regulation 10A provides, relevantly:
For regulation 10, the criteria for acceptance of an environment plan are that the plan:
…
(g) demonstrates that:
(i) the titleholder has carried out the consultations required by Division 2.2A; and
(ii) the measures (if any) that the titleholder has adopted, or proposes to adopt, because of the consultations are appropriate …
Division 2.2A comprises only reg 11A which provides, relevantly:
(1) In the course of preparing an environment plan … a titleholder must consult each of the following (a relevant person):
…
(d) a person or organisation whose functions, interests or activities may be affected by the activities to be carried out under the environment plan …
The applicant, Dennis Murphy Tipakalippa, is an elder, senior law man and traditional owner in the Munupi clan, one of eight clans of traditional owners on the Tiwi Islands. His application for judicial review was brought under the Administrative Decisions (Judicial Review) Act 1977 (Cth) on the basis that Santos had not demonstrated and NOPSEMA could not be ‘reasonably satisfied’ that the Div 2.2A consultation had occurred because the Drilling EP did not demonstrate that the traditional owners had been consulted (despite it referring to such cultural interests). The specific error alleged by Mr Tipakalippa took on various forms, described by Bromberg J as a ‘moving feast’ (at [174]). The nature of the interests asserted by Mr Tipakalippa (on behalf of himself, the Munupi clan and other traditional owners of the Tiwi Islands) was put by Bromberg J at [10] as ‘longstanding spiritual connections as well as traditional hunting and gathering activities in which they and their ancestors have engaged’ on ‘sea country’ which extended to and beyond Santos’ Operational Area. It is noted that, at least on appeal, Santos conceded that consultations with traditional owners had not occurred.
The reasoning of Bromberg J
His Honour focussed on the ‘statutory tasks’ that NOPSEMA was required to carry out in order to reach the state of reasonable satisfaction of consultation, being the precondition to its acceptance of the Drilling EP. Chief amongst these tasks was the ‘universe of relevant persons inquiry’ (at [82]): NOPSEMA was required to be satisfied from the Drilling EP that ‘each person that should have been identified as a relevant person was so identified’ (at [132]).
Mr Tipakalippa asserted that NOPSEMA could not have been reasonably satisfied that the Drilling EP demonstrated that the Div 2.2A consultations had been carried out. For Bromberg J, the substance of this ground was that the ‘universe of relevant persons inquiry’ had miscarried in two ways: first, Santos failed to demonstrate its methodology for identifying ‘relevant persons’; secondly, NOPSEMA failed to consider material in the Drilling EP about the traditional owners’ connection to sea country. Bromberg J upheld the ground on either basis. There was insufficient information provided in the Drilling EP for NOPSEMA to conduct the ‘universe of relevant persons inquiry’ (at [155]). Further or alternatively, NOPSEMA did not consider or engage with the sea country material, which was probative to this inquiry (at [212]-[213], and [257]). NOPSEMA had not reached its state of satisfaction lawfully and its decision to accept the Drilling EP was therefore invalid.
Mr Tipakalippa raised a second ground to impugn NOPSEMA’s decision: Santos had not in fact consulted with the traditional owners of the Tiwi Islands, a failure which breached reg 11A(1)(d). As such, NOPSEMA could not lawfully accept the Drilling EP where there had been objective non-compliance with the Regulations by Santos. Bromberg J rejected this ground as it subverted the statutory scheme (at [264]-[275]). The precondition to NOPSEMA’s acceptance of the Drilling EP was its reasonable satisfaction of the reg 10A criteria, not their fulfilment as an objective fact. ‘Non-compliance as an objective fact’ was ‘irrelevant’; and the Court was only able to assess the ‘lawfulness of NOPSEMA’s satisfaction’ (at [269]). This approach, while correct as a matter of law, led to an important omission in Bromberg J’s reasoning: his Honour declined to decide on the meaning of the terms ‘interests’ and ‘activities’ in reg 11A(1)(d). His Honour stated that this debate was of ‘little or no assistance’ and was not necessary for the resolution of the application for review (at [289]).
The reasoning of the Full Court
While upholding the primary judge’s orders, the Full Court’s reasoning was different. In argument, Santos conceded that the crux of the error contended for was that Bromberg J had erred in his approach (or lack thereof) to the construction of ‘functions, interests or activities’ (at [23]). The Full Court accepted this shift in focus, reasoning that if Santos had proceeded on an incorrect understanding of reg 11A(1)(d) and NOPSEMA had accepted this error, the regulator could not have lawfully formed the state of satisfaction: see [23]-[26] per Kenny and Mortimer JJ, and [115] per Lee J. This was how the Full Court came to focus on the meaning of ‘functions, interests and activities’ as the ‘real area of debate’ (at [23]-[24] per Kenny and Mortimer JJ).
Kenny and Mortimer JJ (at [51]-[55]) rejected Santos’ contention that ‘functions, interests or activities’ should be given a narrow construction. To the contrary, a broad construction was consistent with the objects of the Regulations (set out in reg 3) which referred to the ‘principles of ecologically sustainable development’ in s 3A of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (including ‘social and equitable considerations’ and ‘inter-generational equity’). Additionally, the definition of ‘environment’ in reg 4 included ‘people and communities’ as part of an ‘ecosystem’. Their Honours also rejected that the term ‘interests’ was confined to ‘legal interests’ which would exclude ‘the connection of traditional owners with sea country’ (at [62]). Their Honours drew on principles from cases on procedural fairness – such as Kioa v West and McHattan v Collector of Customs (1977) 18 ALR 154. The interests asserted by Mr Tipakalippa were ‘immediate and direct’ and ‘well known to Australian law’, even without any proprietary dimension (at [68]). Their Honours also rejected that the category of traditional owners was too vague and concluded that (at [80]):
… Mr Tipakalippa and the Munupi clan had interests within the meaning of reg 11A(1)(d) that required them to be consulted. Within this regulatory framework, ‘interests’ includes cultural and spiritual interests of the kind described in the sea country material in the Drilling EP and attachments.
A final argument raised by Santos to resist the broad interpretation of ‘interests’ was that this construction would make reg 11A(1) unworkable. The Court rejected this argument. Kenny and Mortimer JJ explained at [89] that reg 11A, ‘like most statutory consultation provisions, imposes an obligation that must be capable of practicable and reasonable discharge by the person upon whom it is imposed’. Their Honours stated that there is ‘a myriad of ways’ to contact traditional owner groups, such as local representative bodies (at [92]). Significantly, Kenny and Mortimer JJ drew an analogy to consultation processes under the Native Title Act to demonstrate that consultation where ‘interests are held communally’ is well contemplated in Australian law, but that ‘a different approach to consultation is likely to be required’ (at [95]).
Of particular interest was s 251B which defines the term ‘authorise’ in the sense of a decision outcome by a native title group. Their Honours referred, inter alia, to McGlade v South West Aboriginal Land & Sea Aboriginal Corporation (No 2) and concluded that the hallmarks of valid group consultation or decision-making were ‘reasonable opportunities and some degree of representativeness’ (at [103]).
The reasoning of Lee J broadly followed that of Kenny and Mortimer JJ. All judges emphasised that the onus lay on Santos to understand the content of its obligation to consult and that ‘[t]he nature of the interest will necessarily inform [its] appropriate discharge’ (at [153] per Lee J). The Court concluded that Santos had proceeded on an incorrect understanding of the construction of reg 11A and could not demonstrate that the prescribed consultations had been carried out. This error was inherited by NOPSEMA and meant that its ‘reasonable satisfaction’ of the criteria in reg 10A could not be formed according to law (at [111] per Kenny and Mortimer JJ; at [163] per Lee J). The appeal was dismissed.
Discussion
Tipakalippa’s case confirms that the ‘interests’ of Aboriginal and Torres Strait Islander Peoples in their land and waters, a timeless spiritual and cultural connection, are cognisable in Australian law even absent any formal legal (proprietary) rights. This will affect both the construction of statutory obligations to notify or consult affected parties, as well as the content of an implication of procedural fairness (averted to by the Full Court at [61]-[66] and [82]-[84]).
The decision will clearly impact companies involved in offshore mining activities around Australia. But ‘consultation’ does not only arise the environment/planning context. In industrial relations law, for example, there are consultation provisions in enterprise agreements (CFMEU v BHP Coal Pty Ltd) as well as in health and safety legislation (Work Health and Safety Act 2011 (NSW) s 47 and equivalent state statutes). Further, the Full Court’s analogy to the native title context is likely to be picked up in decisions where authorisation and consent of native title claimants/holders is challenged. In these contexts, ‘consultation’ must be carried out with a group, and the Full Court’s decision will provide guidance on this process.
My focus is on NOPSEMA’s reasonable satisfaction of consultation as a subjective jurisdictional fact. In EHF17 v Minister, Derrington J defined subjective jurisdictional fact as ‘the prescription of a state of mind as the pre-condition to the enlivening of power’ (at [55]). It is to be distinguished from a jurisdictional fact simpliciter, which is capable of objective determination (e.g. ‘if an application has been made’). His Honour noted that it is a distinct type of jurisdictional error to exercise a power in the absence of a jurisdictional fact (i.e. a precondition to the power’s exercise) (at [51]). In Ali v Minister, the Full Court stated at [42] that interposing subjective deliberation (e.g. satisfaction, opinion, belief) is a drafting technique which, to some extent, ‘shields’ the jurisdictional fact from curial review. In Tipakalippa’s case, reg 10 provides that NOPSEMA must be reasonably satisfied of the reg 10A criteria before it is bound to accept the Drilling EP. This is the subjective jurisdictional fact at play.
Despite some ‘shielding’, the executive’s (here, the NOPSEMA delegate’s) ability to reach these prerequisite states of mind is not at large. In Avon Downs Pty Ltd v Commissioner of Taxation (Cth), Dixon J set out a range of errors which could vitiate their purported formation: misconception of the question required by the statute or other error of law, consideration of an extraneous factor (or non-consideration of an essential factor) or the appearance of an unreasonable result. The reasoning of the Full Court in Tipakalippa’s case is an orthodox application of this principle. At [110], Kenny and Mortimer JJ stated: ‘the term “reasonably satisfied” in reg 10(1)(a) requires a state of satisfaction to be formed reasonably, rationally, and on a correct understanding of the law’. NOPSEMA inherited an incorrect understanding of reg 11A(1)(d) from Santos and therefore could not form the requisite state of satisfaction (see R v Connell; Ex parte Hetton Bellbird Collieries Ltd).
The decision at first instance exposes the uncertainties which trouble subjective jurisdictional fact review. In EHF17 v Minister, Derrington J examines how a jurisdictional state of mind may be vitiated by ‘irrationality, illogicality and illogical fact finding’ (at [76]ff). There is a live debate as to whether ‘irrationality’ of a subjective jurisdictional fact is merely a species of unreasonableness as a jurisdictional error. Since Minister v SZMDS (which focussed on the former) and Minister v Li (which focussed on the latter), decisions in the Federal Court have gone either way. Derrington J in EHF17 was of the strong view that these grounds are distinct. However, Bromberg J stated at [70] that to ‘invalidate a state of satisfaction … legal unreasonableness is an applicable form of error’ and that this was made ‘explicit’ in Minister v SZVFW. Respectfully, this is not explicit in SZVFW. Recent cases which highlight the uncertain state of the law include Djokovic v Minister at [29]-[35] and BFH16 v Minister at [28]-[30].
Without necessarily advocating for Derrington J’s view, better awareness of the potential distinction between unreasonableness and irrationality could have assisted the Court. The fact of non-compliance with Div 2.2A consultation – that Santos had breached reg 11A(1)(d) by failing to consult with traditional owners – was an uncertain element in the applicant’s case. As discussed, he advanced a separate ground of non-compliance which Bromberg J dismissed as misconceived. But further, Mr Tipakalippa argued for a ‘material mistake of fact’ that was ‘so fundamental as to vitiate’ NOPSEMA’s state of mind (at [182], [272]): i.e. Santos had breached reg 11A(1)(d) and NOPSEMA therefore could not be reasonably satisfied. In discussing the ‘shifting nature of Mr Tipakalippa’s case’, Bromberg J stated that it was ‘largely akin to a legal unreasonableness claim’ (at [176]-[178]). This is not the only way to articulate this argument. What the applicant could have argued, and Bromberg J could have considered, is that it was not open on the material in the Drilling EP for NOPSEMA to be satisfied that Santos had demonstrated that all relevant persons had been consulted, such that the regulator’s conclusion to the contrary must have been infected with irrationality (see at [183]).
However, the root of this irrationality was the debate as to whether traditional owners of the Tiwi Islands were within the scope of reg 11A(1)(d) in the first place. This was the focus of the Full Court’s approach. Nonetheless, Bromberg J’s reasoning is significant as it adds to an emerging line of authority that insufficient information or evidence is a valid basis on which a subjective state of mind can be impeached. This is the ‘methodological flaw’ considered by his Honour at [127], especially at [155]-[158]; see further EHF17 at [85] and One Key Workforce Pty Ltd v CFMEU.
To conclude, NOPSEMA’s state of mind could have been infected by any of the following: a misconstruction of the scope of ‘relevant person’ in reg 11A(1); irrationality or unreasonableness in reaching satisfaction of consultation (underpinned by factual non-compliance); insufficient material or failure to consider essential information (the grounds upheld by Bromberg J, neither of which rely on a construction of reg 11A(1)(d)).
In cases of academic interest, it is important not to lose sight of the reality of those affected: see Santos’ response to the decision and the latest developments at the time of writing.
Samuel Naylor is a solicitor at the Kimberley Land Council in Broome. He previously worked as a tipstaff at the Supreme Court of New South Wales.
Suggested citation: Samuel Naylor, ‘Reasonable satisfaction of consultation: the subjective jurisdictional fact in Tipakalippa v NOPSEMA; Santos’ on AUSPUBLAW (3 March 2023) <https://www.auspublaw.org/blog/2023/3/reasonable-satisfaction-of-consultation-the-subjective-jurisdictional-fact-in-tipakalippa-v-nopsema-santos/>