What did they say and when did they say it? 6 min read
With the consent of the parties, the Federal Court has quashed the decision of the then Prime Minister Scott Morrison to refuse to extend Asset Energy's petroleum exploration permit, as his decision could be apprehended to have been predetermination following his overt public stance against the project.
The decision is a reminder that the objective test for apprehended bias requires that government decisions must not only be impartial but must be seen to be impartial.
Key takeaways
- The timing of the public comments on the project by the Prime Minister, before he had time to deliberate on the application, were critical to the finding that a fair-minded observer would consider he was closed to persuasion.
- An analysis of the Prime Minister's subjective state of mind was not necessary for the court to consider whether a hypothetical observer would apprehend bias in the decision-making process.
- Where bias may be a factor in a governmental decision, those affected should seek information from the relevant decision maker on their decision-making process.
- The subject of much controversy, the Federal Court did not make any comment on the validity of the former Prime Minister's appointment as a Minister for multiple departments and, for the purposes of this decision, assumed the appointment was valid.
Who in your organisation needs to know about this?
The test for apprehended bias is an objective one which can be drawn, as in this case, from the circumstances. Those seeking decisions from government, especially those with controversial projects, should maintain an awareness of all public comments made by key decision makers about, or relevant to, their project.
Background
Asset Energy Pty Ltd (Asset Energy) is the operator of a joint venture with a petroleum exploration permit off the New South Wales coast between Wollongong and Newcastle. In 2020 it made an application to the joint authority of the Federal Government and New South Wales (Authority) to vary the terms of its permit, including to allow an extension of the term of the permit. Its application was refused by the relevant Minister.
'Its going to make me very happy. I think that's the right decision'
Scott Morrison, 4 March 2021
What was unusual about this matter was that the decision was made not by the Federal Minister of the Department of Industry, Science, Energy and Resources (DISER) but by the then Prime Minister. In a now well-known action, on 15 April 2021 Mr Morrison was appointed as a Minister of DISER. It was Mr Morrison who ultimately made the decision with respect to Asset Energy's application as he was one of the Federal Ministers responsible for administering the relevant Act.
Between 4 March and 16 December 2021, Mr Morrison made several public statements to the effect that he did not approve of the Asset Energy permit extension.
In mid December 2021, Mr Morrison notified DISER and his NSW counterpart that his preferred option was to refuse the application. On 16 December, Asset Energy was notified that it had 30 days to make a submission in respect of the decision. That same day Mr Morrison made public written and oral statements to the effect that the Asset Energy project would not go ahead.
'..I've made it absolutely crystal clear that's not something I support and you can expect my view on that to be rock solid'
Scott Morrison, 21 April 2021
On 15 February and 26 March 2022, Mr Morrison signed memoranda of options which confirmed his view was to refuse the application.
Asset Energy wrote to the Authority seeking more information about Mr Morrison's role in the decision-making process for its application and was informed that it was Mr Morrison who made the relevant decision on 26 March 2022.
In June 2022 Asset Energy made an application in the Federal Court under section 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) and section 39B of the Judiciary Act 1903 (Cth). Asset Energy claimed the process behind the Prime Minister's decision not to grant its application was in breach of the rules of natural justice.
Rather than pursue this matter to trial, it was accepted by the Government that the decision was 'infected' by apprehended bias. Although the parties submitted a Joint Memorandum to the court seeking orders be made by consent, his Honour Justice Jackson noted it was important that the court be satisfied of the legal basis of the orders as the court was performing a public function by quashing the Authority's decision, and particularly as the matter was of public interest.
'[the decision is a] sensible, practical, balanced decision taking into account all the factors that are necessary'
Scott Morrison, 16 December 2021
Principles of natural justice
The rules of natural justice (a term used interchangeably with 'procedural fairness') developed in the common law to ensure that decision-making processes of administrators and courts are fair.
The general principles of natural justice include that:
- the decision maker must give those affected by their decision an opportunity to present their case;
- the decision maker must not have actual or apprehended bias (Bias Rule); and
- the decision maker's decision must be based on evidence.
'[it was] important that I methodically worked through the proper process to make the ultimate decision'
Scott Morrison, 16 December 2021
At common law and under the ADJR Act, the test for the Bias Rule extends beyond whether there is actual bias to whether there is an appearance of bias. An appearance or apprehension of bias may occur if, in the circumstances, a fair-minded lay observer may reasonably apprehend that the decision maker may not bring an impartial mind to their decision. This represents the principles that justice must not only be done but must be seen to be done, and that a decision-making process must be fair and impartial.
The court is not required to inquire into the actual thoughts or views of the decision maker or to determine what factors actually determined the result of the decision-making process. An apprehension of bias may be found even where the court has determined that the decision maker brought, and believes that they brought, an unprejudiced mind to their determination.
However, an apprehension of bias is not a finding that a court will make lightly. There must be a matter (or cumulation of matters) which could cause the decision maker to make a decision based on aspects outside of its merits, and there must be a logical connection between that matter and the 'deviation' the centre of the claim.
In this case, the parties did not engage in an adversarial process to determine the facts of the case. The facts presented in the Joint Memorandum, including the various quotes by Mr Morrison to the media throughout 2021, were accepted by his Honour and formed part of his judgment.
Constitutional questions remain unanswered
The Federal Court made no finding on the validity of Mr Morrison's appointment, which is the subject of a report by the Hon Virginia Bell AC.
With the parties consenting to return the application to the Authority for a fresh decision, the question over the constitutionality of the appointment of Mr Morrison as Minister of DISER will not be considered in this matter.
Actions you can take now
- Consider making requests (including through Freedom of Information or compulsive legal processes) for information provided to, and produced by, decision makers in making their decision.
- Maintain an awareness of media reporting and public comments made by key decision makers in your area.