Fox Coal Pty Ltd & Anor v Minister for Resources

This case concerned an application for judicial review of a decision by the Minister for Resources to reject an application for a mineral development licence on public interest grounds pursuant to s 186(1)(b) of the Mineral Resources Act 1989. The central question to the application was: what did an assessment by the Minister of the “public interest” under s 1869(2) of the Mineral Resources Act require? The Minister’s decision expressly stated that the Minister did not consider all of the criteria under ss 183 and 186 of the MRA but simply relied on adverse community sentiment around the area to which the development licence would relate. The Court held that to have regard to public interest requires an evaluative balancing approach which the Minister failed to undertake. On that basis the decision was set aside.

Hindman J

29 September 2023

On 2 October 2019, Fox Coal Pty Ltd (“Fox Coal”) applied for a mineral development licence (“MDL”) pursuant to the Mineral Resources Act 1989 (“the Act”). [1]. An MDL, would allow for a detailed investigation of minerals in the area to which the MDL relates. [6]. In 2021, the Department of Resources produced a briefing note for the Minister in relation to Fox Coal’s application. [68]. On the basis of that note, the Minister produced a preliminary view document which was provided to Fox Coal. [68]–[70]. The preliminary view indicated that, having regard to various impacts that would be occasioned by the grant of the MDL the potential negative impacts outweighed the foreshadowed benefit. [69].

Fox Coal responded to the preliminary view by way of a submission in December 2021. The Department produced an assessment of the Fox Coal’s submission, which Fox Coal responded to in a supplementary submission. [71]. The Department’s assessment of Fox Coal’s submissions maintained that it was open to the Minister to refuse the application on public interest grounds.

The Minister ultimately refused the application in April 2022. [1]. The refusal was made pursuant to s 186(1)(b) of the Act which, read with s 186(2) allows the Minister to refuse an application for an MDL “if the Minister considers the grant is not in the public interest”. [12]. The requirements under the Act, include various procedural requirements for the making of an application as set out under s 183. [1], [9]. The Minister’s decision stated, “I have not considered all of the criteria under sections 183 and 186” of the Act, because even if they were satisfied, the application would be refused on public interest grounds. [15]. The Minister’s decision also noted that Fox Coal had not “adequately address[ed] my concerns relating to the significant concerns raised by the community in the Bundaberg region”. [15].

The applicant contended that the decision should be set aside for three main reasons. [3]. First, the Minister fell into legal error by failing to undertake an evaluative process in considering whether the grant of the MDL was in the public interest. Instead, the Minster substituted community sentiment for public interest. Second, the Minister took account of irrelevant considerations by taking into account community sentiment without first verifying whether that sentiment had a reasonable basis. Third, the decision was legally unreasonable.

As to the first, the Court held that an assessment of the public interest under s 186(2) of the MRA is a two-step process: first, the Minister must identify factors relevant to the assessment of public interest having regard to the scope and purpose of the Act; second, the Minister must weigh up those identified factors to determine where the public interest lies. [47]. Of course, the discretion given to the Minister is very wide, but if the Minister does not undertake steps to evaluate the public interest, then an error of law will occur. [48].

Here, on the face of the decision, there could be no confidence that the Minister turned his mind to identifying the factors that might bear on the public interest. [53]. Instead, the Minister merely identified adverse community sentiment and found that Fox Coal had not proposed measures to mitigate the community concern. [54]–[56]. Her Honour found that, read as a whole, the Minister’s reasons demonstrated that the Minister did not carry out the necessary evaluative process. [63]. Notably, the Department had carried out a detailed assessment that would constitute the kind of evaluative process that the Minister ought to have carried out. Even if the Court could have regard to that material, it would not alter the fact that the Minister’s reasons do not demonstrate an undertaking of an evaluative process. [77]–[79]. On that basis, the Minster’s decision fell into error and was set aside. The Court considered the remainder of Fox Coal’s arguments in obiter.

As to the second ground, the Court held that it was not an error of law to rely on community sentiment without first verifying whether that sentiment had a proper basis. Her Honour noted that the existence of community sentiment, regardless of whether it had a proper basis, is a matter that can rationally bear on an assessment of the public interest. [84].

As to the third ground, the applicant contended that if the community sentiment was irrational, the Minister’s decision in relying on the community sentiment must also be irrational. Based on the finding that the Minister was entitled to take the community sentiment into account, without assessing the basis for it, her Honour also held that the decision was not legally unreasonable. [99]–[100].

L Inglis