Icon Energy Limited v Chief Executive, Department of Resources

In this case, the applicant sought a review of a decision by the delegate of the respondent to reject the applicant’s application for a renewal of an authority to prospect. Under s 842 Petroleum and Gas (Production and Safety) Act 2004, the respondent must review certain applications made under the Act to determine whether they comply, or substantially comply, with the requirements of the Act. The applicant contended that, in making its decision, the respondent’s delegate impermissibly reviewed the substance of the application when s 842 requires a review of the form of the application only. The Court accepted that submission, finding that the decision must be set aside.

Brown J

17 October 2023

The applicant, Icon Energy, was the holder of Authority to Prospect Permit No. 855 (“ATP 855”) which was to expire on 31 October 2022. [14]. On 3 and 4 October 2022, Icon applied to renew ATP 855 under the Petroleum and Gas (Production and Safety) Act 2004. [1], [17].

Under s 842 of the Act, a review of certain applications, including applications to renew an ATP, is undertaken by the respondent, the Chief Executive. [8]. That provision applies “to a purported application… not made under the requirements under [the] Act for making the application”. [8]. Section 842(2) requires the Chief Executive to refuse such an application, however, under s 842(3), the Chief Executive is given a discretion to allow the application if they are satisfied that the application “substantially complies” with the requirements under the Act. If the respondent determines that an application complies with the requirements under the Act, or they exercise their discretion under s 842(3), the application is determined by the Minister.

The Act provides various requirements for the making of an application to renew an ATP. [9]. One such requirement arises under s 82(e) by which the application must “address the capability criteria”. [9]. The capability criteria are defined under s 43, and include the applicant’s “financial and technical resources”. [10].

Icon’s application provided some details of its financial and technical resources. [17]. In particular, it noted that certain unnamed investors were in discussions with Icon and that Icon had signed a non-binding letter of intent to raise over $100 million. [17]. The cost of developing ATP 855 was estimated to be $34.75 million. [23]. The financial records provided by Icon as part of the application showed that Icon did not have $34.75 million on hand. [19].

Icon’s application was rejected by the delegate of the respondent on the basis that it did not address the capability criteria. The delegate noted that the application contained “insufficient information… to allow the Minister to form any opinion about Icon Energy’s capability to undertake the $34.75 million of proposed commitments”. [19]. In reaching that conclusion, the delegate noted that Icon provided no specific details about its potential investors, and that the application did not show that sufficient funds were “readily available”. [19].

Broadly, the applicant contended that the delegate had erroneously engaged in a substantive review of the application when their role was merely to determine whether the requirements under the Act were met. [3]. It was argued that this error manifested in three ways. First, the delegate misdirected themselves by asking whether the Minister could be satisfied that Icon had sufficient financial resources, rather than whether Icon’s application provided information directed at the financial resources it had available. [3(a)(iii)].

Second, the delegate misconstrued the requirement that the application “address” the capability criteria by assessing the quality of the information directed at addressing that criteria, rather than simply confirming that that information was present. [3(a)(i)]. Third, the delegate misconstrued the meaning of “capability” as to financial resources by construing it to mean that the funds required to carry out the relevant activities must be readily available. [3(a)(ii)].

As to the first, the court accepted the applicant’s contention that the delegate merely needed to determine that the application contained information directed at the relevant criteria. The language of s 842(1) did not, on its face, indicate any requirement that the decision maker should have regard to the sufficiency of the information provided in the application. [51].

As to the second, the court again accepted the applicant’s position. The requirement for an applicant to “address” the capability criteria merely required the application to respond to or deal with the capability criteria. [83]. As such, compliance with the requirement to “address” the capability criteria did not require the provision of information sufficient to satisfy the Minister of the applicant’s capability. [87].

As to the third, the court accepted that the meaning of financial resources under the Act were not limited to amounts “readily available” but could include future investment. [89].

On review of the delegate’s reasons, the court was satisfied that the delegate had applied the Act erroneously. [98]. The court determined that the errors were jurisdictional errors and that the decision should be set aside. [109]. The court proceeded to remake the decision of the delegate favourably to the applicant on the basis that the application had provided information addressing the capability criteria. [111].

L Inglis