Supreme Court clarifies process for ATP renewal applications under the P&G Act

Key insights

• When considering whether to accept a renewal application under the P&G Act, the Supreme Court in Icon Energy Limited v Chief Executive, Department of Resources [2023] QSC 227 clarified that the Department of Resources is not to assess the quality of information provided by the applicant, merely whether the information addresses statutory criteria. The assessment of the information is left to the Minister in deciding whether to grant the renewal.
• Further, the Court indicated that to satisfy capability as to financial resources requirements, information provided need not be limited to "funds readily available" and can encompass broader types of financial information.

JR challenge to decision not to accept renewal application

Icon Energy Limited v Chief Executive, Department of Resources [2023] QSC 227 concerned an application by Icon Energy Limited to set aside a decision of a delegate of the Department of Resources to refuse to accept an application for renewal of an authority to prospect (ATP) permit under the Petroleum and Gas (Production and Safety) Act 2004 (Qld) (P&G Act).

Icon, together with its joint venture partners, had spent approximately $165 million pursuant to an ATP permit. Icon applied for a renewal of the ATP, supported by various documents, including a Financial Capability Statement. A delegate of the Chief Executive, Department of Resources, refused to accept the application for renewal.

The primary issue before the Court was whether the decision-maker erred in law in refusing to accept the application under section 842 of the P&G Act by misconstruing:

• the meaning of “address” in section 82(1)(e) of the P&G Act in determining that the application did not “address the capability criteria” in proceeding on the basis that it involved an assessment of the quality of the information as to financial resources to carry out authorised activities;
• the meaning of “capability” as to financial resources by proceeding on the basis that all the funds required to carry out the authorised activities for the authority be “readily available”, when there was no such requirement in the P&G Act; and
• the question to which he had to direct himself in determining whether the requirement under section 82(1)(e) of the P&G Act had been met, which required the decision-maker to inquire whether information had been provided which was directed to the financial resources available to Icon to carry out authorised activities, not whether the Minister could be satisfied that Icon had sufficient financial resources.

Decision set aside

To determine whether the decision-maker had erred, the Court considered the nature of the decision-making under section 842 of the Act and the meaning of the words used in section 82(1)(e). The Court was satisfied that Icon's proposed construction accorded with the purpose of section 842 that would best achieve the objective of the Act to create an effective and efficient regulatory system for carrying out petroleum activities.

In considering whether the requirement under section 82(1)(e) has been addressed, the Chief Executive is not required to evaluate the quality of the information. Instead, they must determine whether information has been provided addressing those criteria. The assessment of the information is left to the Minister in deciding whether to grant the renewal.

Further, the Court clarified that capability as to financial resources is not limited to funds readily available to the applicant. Financial capability could be evidenced by historical information as to past performance as well as future fundraising agreements (even if conditional).

The Court found in favour of Icon’s application to set aside the decision. Her Honour found that both errors of law were jurisdictional errors which had a material effect on the original decision. Her Honour found that Icon’s application did address the capability criteria as required by the P&G Act.

Authors: Libby McKillop, Counsel; and Lydia O'Neill, Paralegal.