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Tap (New Zealand) Pty Limited v Attorney General of New Zealand in respect of the Minister of Energy and ors [2006] NZCA 357 (13 December 2006)

Last Updated: 20 December 2006

IN THE COURT OF APPEAL OF NEW ZEALAND

CA48/06

BETWEEN TAP (NEW ZEALAND) PTY LIMITED
Appellant

AND ATTORNEY-GENERAL OF NEW ZEALAND IN RESPECT OF THE MINISTER OF ENERGY
First Respondent

AND ORIGIN ENERGY RESOURCES NZ LIMITED
Second Respondent

AND AWE NEW ZEALAND PTY LIMITED
Third Respondent

Hearing: 14 November 2006

Court: William Young P, Robertson and Ellen France JJ

Counsel: T C Stephens and R D J Holden for Appellant
K L Clark and M L Campbell for First Respondent
M G Colson and B M Cash for Second Respondent

Judgment: 13 December 2006 at 2.15 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.

B Tap is to pay costs of $6,000 together with usual disbursements to each of the Attorney-General and Origin.

REASONS OF THE COURT
(Given by William Young P)

Introduction

[1] Tap (New Zealand) Pty Ltd and AWE New Zealand Pty Ltd hold a petroleum exploration permit for the Canterbury Basin. They sought permission to explore an area adjacent to their permitted area and made a "priority in time" application for a permit to the Minister. This application was received by the Minister at 11.30am on Tuesday 22 February 2005. Because AWE has not participated in this proceeding, it will be convenient to refer to the application as "Tap’s application". On Friday 25 February 2005, some details of the application were posted by Crown Minerals (a division of the Ministry of Economic Development) on its website and this came to the attention of Origin Energy Resources NZ Ltd on the morning of Monday 28 February 2005. Origin lodged a competing application after the close of business on 28 February. Under the relevant permitting regime, Tap’s application was required to be processed before Origin’s was considered unless Origin’s application was lodged within the same five working day period as Tap’s. The Minister concluded that Origin’s application had been lodged in the same five working day period. So both applications were considered together. As Origin’s application was better (when assessed against the criteria provided in the permitting regime), it was successful and Tap’s application was rejected.
[2] Tap sought judicial review of the Minister’s actions but its claim was dismissed on 14 February 2006 by Miller J. Tap now appeals to this Court.
[3] The appeal gives rise to three fundamental issues:

(a) Was Origin’s application properly treated as competing?
(b) Did the actions of the Ministry in placing details of Tap’s application on the website breach any principle of administrative law?
(c) If Tap is otherwise entitled to succeed, should relief be withheld on discretionary grounds?

[4] Before we address these issues it is necessary to discuss the permitting regime and then the factual background to the dispute.

The permitting regime

[5] Section 18 of the Crown Minerals Act 1991 provides for the Governor-General in Council to issue Minerals Programmes. The current Minerals Programme for Petroleum (MPP) was issued in December 2004 and came into effect on 1 January 2005. The MPP was adopted by the Minister of Energy (as required by s 5(a)), who also has the function of granting permits (s 5(b)).
[6] Sections 12 and 15(1)(c)(i) – (iii) of the Act provide:

12 Purpose of minerals programme
The purpose of a minerals programme is to establish policies, procedures, and provisions to be applied in respect of the management of any Crown owned mineral that is likely to be the subject of an application for a permit under this Part and, in particular, policies, procedures, and provisions which provide for--
(a) The efficient allocation of rights in respect of Crown owned minerals; and
(b) The obtaining by the Crown of a fair financial return from its minerals.
15 Contents of minerals programme
(1) Every draft minerals programme and every minerals programme shall include statements specifying--
...
(c) The policies and procedures to be applied in granting permits under this Part in respect of any mineral to which it applies, including--

(i) The basis, if any, on which non-exclusive permits will be granted; and
(ii) The basis, if any, on which a permit holder will not be entitled to a subsequent permit; and
(iii) The basis, if any, on which approval of work programmes and modified work programmes ... will be withheld ... .

[7] Section 22 of the Act requires the Minister to carry out his or her functions "[i]n a manner that is consistent with the policies, procedures, and provisions in any relevant minerals programme".
[8] The MPP was issued after extensive public consultation as provided for in ss 16 and 17 of the Act. Section 16 provides for public notice to be given of a draft Minerals Programme, including reasonable notice of its contents and how it may be inspected. Section 17 provides for public submissions to be received and considered.
[9] Under the Act and MPP, petroleum exploration permits are required and granted for the purpose of undertaking work to identify petroleum deposits and evaluating the feasibility of mining any discoveries made. Exploration activities include geological, geochemical and geophysical surveying, exploration and appraisal drilling and testing of petroleum discoveries.
[10] The MPP provides for a number of mechanisms for the allocation of permits. In the present case, the applications by Tap and Origin fell to be determined under the provisions of the MPP that deal with priority in time applications. Under those provisions, the application which has been received first is processed first and in that sense has priority in time over any subsequently received application unless that application is received within the same five working day period. This does not mean, however, that the first application will necessarily be accepted.
[11] Where there are competing applications, the work programmes are ranked according to their potential to make a petroleum discovery at the earliest time and their information gathering value. Committed work is generally favoured ahead of contingent work. Work programmes may be ranked on the basis of proposed expenditure and the Minister may consider the applicant’s expertise and history.
[12] The provisions of the current MPP as to competing priority in time applications marked a departure from the system which had existed with the earlier MPP which accorded absolute priority to the first application. It is clear that one of the reasons for moving to the new system was the potential for dispute as to timing if a number of applications were sent to Crown Minerals around the same time but by different mechanisms (eg hand delivery, fax or email). This problem had arisen when areas became available for permitting as old permits expired. The draft MPP (which was the subject of public consultation in 2004) provided for applications received within the same 48 hour period to be dealt with in competition. The expansion of that timeframe out to five working days went well beyond what was necessary to avoid disputes about time of receipt of effectively simultaneous applications but provided for an element of competition which is consistent with the provisions of the MPP when read as a whole.

The factual background

[13] The MPP came into effect on 1 January 2005. As already noted, prior to 1 January 2005, the priority accorded to the first in time application was paramount. There was thus no window of opportunity for competing applications to be made. Crown Minerals’ procedures involved posting onto its website details of applications made. This posting usually occurred on a Friday and covered any applications received in the preceding week. Such posting was of comparatively little practical significance save to indicate to the industry which areas were not available for application.
[14] The first priority in time application under the new MPP was made in early February 2005. This application was published on the website on the same day as it was received, which happened to be a Friday. Some inquiries were made of Crown Minerals about the possibility of lodging a competitive application, but this was not until the subsequent Friday, by which time it was practically too late for such an application to be prepared and lodged. The circumstances surrounding this application alerted officials in Crown Minerals to the likely significance of publication of applications on the website and thus the potential benefit of prompt publication of applications.
[15] Tap’s priority in time application was received at 11.30am on Tuesday 22 February 2005. The Ministry duly published information about Tap’s application on its website. What was published made clear that Tap and AWE had applied for a petroleum exploration permit on 22 February 2005 in relation to a defined area in the Canterbury basin. The details of the proposed work programme set out in the application were not published. The application was not posted until Friday, 25 February. That this occurred on a Friday was of course consistent with earlier practice but not with the evolving policy within the Ministry of publishing details of applications effectively as soon as they were received. The reasons for the delay may have been associated with some co-ordinate errors in the application but are not material for present purposes.
[16] On Monday 28 February 2005, Origin (which had already decided to make a priority in time application of its own over the relevant area) saw the details of the application on the Ministry’s website. Having approached the Ministry, Origin was told that its proposed application would be considered in competition with Tap’s if it was received by the close of business that day. The Crown Minerals staff who dealt with Origin were helpful and did make suggestions as to how the time requirements might be satisfied. But Origin’s application was not received by the Ministry until 5.25pm. As will become apparent, this meant that it was deemed to have been received at 7.30am the next day. The Ministry concluded that both applications were still required to be assessed in competition. Origin’s application covered a substantially larger area than Tap’s and offered commitments to acquire seismic data in the first year of the five-year work programme. Since Tap’s application only committed to the acquisition of seismic data in the second year of the work programme, Origin’s application was ranked by the Minister ahead of Tap’s and Origin was awarded the permit.
[17] Once Origin was aware of the details of Tap’s application as posted on the Crown Minerals website, its personnel were able to infer with (as it turned out) a high degree of accuracy the general scheme of the work programme which Tap had committed itself to. So it was not difficult for Origin to lodge an application with a higher level of commitment which was therefore likely to be assessed ahead of Tap’s. It is fair to say, however, that this was the result of Tap taking a deliberate risk when it lodged it application. A draft application which Tap prepared contained a far more exacting work programme than was provided in the application as lodged. In committing itself to what was described as a "minimalistic" work programme, Tap knew that it was taking the risk that a competing application with a more ambitious programme would be preferred to its application.
[18] The processes associated with the awarding of the permit became reasonably drawn out (in part for reasons associated with attempts made by Origin and Tap to settle their differences) and the decision to award the permit to Origin was not made until 20 June 2005. In early July 2005 Tap threatened judicial review proceedings and asked Origin to provide an undertaking not to take any action consequential upon the grant of the permit. Tap, through its solicitors, suggested that if an undertaking was not provided, Tap would seek an interim order under s 8 of the Judicature Amendment Act 1972. Origin declined to provide an undertaking. Tap did not issue judicial review proceedings until 27 July 2005 and did not seek interim relief.
[19] Had Tap obtained interim relief, this would necessarily have been subject to it providing an undertaking as to damages. The upshot was that the permit in question was formally issued to Origin on 22 August 2005. Since that date, Origin has incurred costs of approximately $2.3m fulfilling its first year work programme and related work associated with the permit. As well, Origin had now committed to work contemplated for year two in its work programme. It has also entered into preliminary arrangements for the undertaking of a further seismic survey. We record that we have admitted further evidence adduced by Origin as to events which have occurred since the judgment. However, in the end, this evidence (which is addressed to discretionary considerations only) has not been of decisive effect.

Was Origin’s application properly treated as competing?

[20] Tap’s argument is that the two applications were not been received within "a five working day period" and therefore they should not have been evaluated in competition with each other. This turns on the way in which the relevant provisions of the MPP are to be construed.
[21] These provisions are as follows:

5.1 PROCESSING OF PRIORITY IN TIME APPLICATIONS

5.1.1. Under this method of allocation, the application determined to have been received first over land that is available for allocation is processed first. The following procedures for receiving and processing Priority in Time applications are set out, including the receipt of applications, land available for allocation and applications received within the same five working day period.

...
RECEIPT OF APPLICATIONS

5.1.3. Permit applications (and applications to extend the area of granted permits) may be received on any business day by:

 Postal or courier delivery during the hours of business; or
 Hand-delivered during the hours of business; or
 Facsimile; or
 Electronically; or
 Other means as approved by the Secretary.

The date and time of every application will be recorded at the time of receipt. Hours of business are 7.30am to 4.30pm. The following days are not classified as business days: all Saturdays and Sundays; all statutory holidays; Wellington Anniversary Day; the period from 24 December until 2 January inclusive. Where an application is delivered or received by any method outside of the hours of business, its receipt will be recorded as 7.30am of the next business day.
5.1.4 When received, an application will be checked to ensure that the application details are in order. An application should be made in accordance with the appropriate regulations and must be accompanied by the prescribed fee. If the application requirements, as prescribed in the regulations, are not substantially complied with, then the applicant will promptly be advised that the application cannot be accepted.
...
APPLICATIONS RECEIVED WITHIN A FIVE WORKING DAY PERIOD
5.1.10. Where the Secretary receives two or more applications for prospecting, exploration or mining permits, or an application for extension of permit area in respect of all or part of the same land within a five day working period, the applications will be evaluated in competition. The Secretary will advise each applicant that their application has equal priority with one or more applications and invite the applicants, if they desire, to provide further information in support of the application within 20 working days of the date of receipt of the advice. The permit will be granted in respect of the application that the Minister considers has the best work programme, evaluated in accordance with the policies and procedures outlined in chapter 5 depending on whether the application is for a prospecting, exploration or mining permit or if the application is for an extension of area of a granted permit. The grant is also subject to the Minister being satisfied that the permit applicant will comply with the conditions of, and give proper effect to, any granted application determined in accordance with the appropriate procedures outlined in chapter 5.

[22] The parties agreed that Tap’s application was received at 11.30am on Tuesday 22 February 2005 and that, as Origin’s application was received at 5.30pm on Monday 28 February 2005, it was deemed to have been received at 7.30am the next business day, Tuesday 1 March.
[23] Tap argued that on the ordinary and natural meaning of "within a five day working period", the Origin application was too late. Tap’s application was made on the first day of the five day period. The fifth day of that period was Monday 28 February. Origin’s application was made on the sixth day (1 March) and was thus outside the relevant period.
[24] It is clear (and not disputed by Origin) that were it not for cl 5.1.3, the argument advanced by Tap must succeed. As a matter of ordinary English usage, where two events must occur within the same or a single five day period the first and last days must both be included in the calculation. The real issue on this aspect of the case turns on the impact of cl 5.1.3.
[25] Miller J dismissed Tap’s argument:

[33] ... The meaning of the phrase "within a five working day period" must be construed in context. Paragraph 5.1.3 does not require that the second application be received within five days from or after the first. It simply requires that they be received within a five-day period framed by the receipt of the two applications. Accordingly, "within" has its ordinary meaning of inside or not exceeding. ... [T]he Minerals Programme itself requires that fractions of a day be counted. If Mr Holden’s argument were correct, there would be no need to prescribe that an application received after close of business should be deemed to be received at 7.30am on the next day. "Day" accordingly refers to a 24-hour period rather than a calendar day. It follows that Origin’s application was within time, because it was received before 11.30am on 1 March.

[26] On Tap’s argument, the requirement for the Secretary specifically to record not only the day on which an application is received, but also the time of day, would become pointless. Mr Holden (who argued this part of the case for Tap) admitted as much in his submissions. In effect he invited us to construe this part of the MPP as redundant.
[27] Counsel for Tap developed his argument by reference to the drafting history of the MPP. In the draft MPP which was subject to public consultation, only a second application received within forty-eight hours of the first would be considered as competing. In that context, the time of receipt provisions in the draft corresponding to what is now cl 5.1.3 were obviously of significance as defining the commencement of the relevant forty-eight hour period. The argument on behalf of Tap was that the references to time of receipt in cl 5.1.3 were simply residual remnants of what had originally been proposed and could now, safely, be ignored.
[28] This argument, however, cuts both ways. It is perfectly clear that the precursor to cl 5.1.3 was intended to be of significance as defining the point in the day which marked the commencement of the time within which a competing application could be received. The fact that the language was persisted with in the final MPP suggests that it was intended to have the same function. Further, we note that the Secretary’s comments to the Minister associated with the change from forty-eight hours to five working days proceeded on the basis that parts of a day were material.
[29] We agree with Miller J on this aspect of the case and also with the reasons which he gave. We are not prepared to construe the relevant provisions of the MPP on the basis that some are redundant. The interpretation favoured by Miller J makes sense in the context of the MPP as a whole. The drafting history, if relevant, is at best (from the viewpoint of Tap) ambiguous.
[30] We are accordingly satisfied that the two applications were required to be dealt with in competition.

Did the actions of the Ministry in placing details of Tap’s application of the website breach any principle of administrative law?

Overview

[31] We address Tap’s challenges to the actions of the Ministry in placing details of Tap’s application on the website by reference to the following issues:

(a) Was publication of the application on the website consistent with the MPP?
(b) Did publication of the application breach Tap’s legitimate expectations?
(c) Was publication of the application unreasonable?

Was publication of the application on the website consistent with the MPP?

[32] Clause 5.1.7 of the MPP provides:

5.1.7. The Ministry maintains a register of all granted permits and existing privileges. This register also records applications and notes other land not available for permit application. All applications received are entered into this database and any overlaps with granted permits, existing privileges or unresolved permit applications are advised to the Secretary.

[33] Clause 5.1.7 should be read with s 91 of the Act which relevantly provides:

91 Secretary to keep registers
(1) The Secretary shall keep a register of permits in such form as the Secretary thinks fit in which there shall be entered brief particulars of all permits, including changes, transfers, and leases.
(2) There shall be open to public inspection at the office of the Secretary, during ordinary office hours, on the payment of such fee as may be prescribed by regulations--

(a) A copy of every permit granted under this Act and all changes thereto; and

(b) The register kept under subsection (1); and

(3) The Secretary shall keep such other registers as may be prescribed by regulations or as he or she considers necessary.

[34] The register kept under s 91 is open to public inspection but the only documents required to be maintained on that register are permits (including "changes, transfers, and leases"). There could be no just basis for anyone objecting to public access to such documents being available on the Ministry’s website. Prior to the MPP coming into effect, the Ministry also published details of applications on its website. Such a practice could perhaps be regarded as involving the keeping of "such other registers ... as he or she considers necessary". Under the pre-MPP regime the primary purpose of publicising the details of applications was to identify land which was no longer available (given the priority in time regime then in existence).
[35] It is helpful to analyse the three sentences of clause 5.1.7 against the background provided by s 91 and the Ministry’s pre-MPP practice.
[36] The first sentence of cl 5.1.7 is as follows:

The Ministry maintains a register of all granted permits and existing privileges.

This sentence relates to the s 91(1) register.

[37] The second sentence of cl 5.1.7 is:

This register also records applications and notes other land not available for permit application.

This statement reflects, at least broadly, the pre-MPP practice of the Ministry of notifying applications on its website. The problem thrown up by this case is that such notification now operates in a different permitting regime. Whereas notification of applications originally served to identify areas which were not available for exploration (because of the paramountcy accorded to the first applicant) such notification now provides a likely trigger for a second and competing application. Nonetheless, this sentence plainly contemplates that the existing practice is to continue.

[38] The third sentence of cl 5.1.7 is in these terms:

All applications received are entered into this database and any overlaps with granted permits, existing privileges or unresolved permit applications are advised to the Secretary.

The words "this database" must be a reference back to the register already referred to in the clause – being a register of all permits (as required by s 91(1)) and applications (in accordance with existing practice and as provided for by the second sentence of cl 5.1.7).

[39] Overall, the effect of cl 5.1.7 is clear. The practice of the Ministry in placing the details of applications on the Ministry’s website was to continue. It is true that this was to occur under a different permitting regime and that the implications of this change may not have been fully thought through. The possibility of detriment to a first applicant (as occurred to Tap in this case) would not appear to have been addressed. But to construe cl 5.1.7 in the manner contended for by Tap would require us to imply into it an exclusion to prevent publication of applications until the expiry of the relevant five working day period - an exclusion which is not consistent with the clear words of the clause. Further, its tendency to diminish the possibility of competition is inconsistent with what must have been the rationale for providing a five working day window of opportunity for competing applications.
[40] In those circumstances and construing cl 5.1.7 in accordance with the ordinary meaning of the language used and against the context of practice under the previous regime, we conclude that publication on 25 February 2005 of the core details of Tap’s application was consistent with the MPP.
[41] We note that counsel for Tap argued that it was not open to the Minister (when exercising permit granting functions) to rely on the statutory register provisions (which are the responsibility of the Secretary of Energy). We have difficulty following this argument. The Minister’s power of granting permits is capable of delegation, see s 6. In any event cl 5.1.7 is addressed to "the Ministry" which in context refers to its administrative staff who operate under the supervision of the Secretary. We see nothing objectionable in the MPP making provision for the way in which applications are processed and this including provision for publicity. If, as a result of such publicity a competing priority in time application is received, the Minister (or his or her delegate) is then required to address the applications in accordance with the MPP.
[42] We record that we have reservations whether it was in fact necessary for the MPP to provide for publication of details of applications; this given the statutory recognition of the ability to keep registers and the overlay of the Official Information Act 1982.

Did publication of the application breach Tap’s legitimate expectations?

[43] The conclusion just reached practically disposes of Tap’s complaint that its legitimate expectations were breached. Given that the MPP contemplated that its application would be part of a database or a register which in practice was searchable on the Ministry’s website there is no basis for Tap to maintain that it had a legitimate expectation that the details of its application would not be published on the website. However, in deference to counsel we address the specifics of Tap’s argument on this aspect of the case.
[44] As is apparent from what we have already said, the draft MPP provided for competitive assessment, albeit only where two applications were received within a forty-eight hour period. The Petroleum Exploration Association of New Zealand opposed the introduction of competitive assessment. The Secretary prepared a report on the consultation for the Minister and included in this report was his assertion that:

The Ministry does not and will not ‘solicit’ competition and further bids.

That statement was also included in the Minister’s report on the consultation process. This material was available to Tap. Whether it played any part in Tap’s decision-making as to the details of the work programme that was submitted is far from clear. We need not, however, go into the evidence on this because we are satisfied that Tap cannot sustainably claim that the notification of its application on the website and the subsequent telephone discussion with Origin amounted to a solicitation of competing bids.

[45] Miller J was not persuaded that what happened amounted to soliciting:

[47] The first question is whether what the Ministry did in this case amounts to soliciting. Mr Stephens referred to Sweeney v Astle [1923] NZLR 1198, in which the Court held that ‘solicit’ means "in its simplified form", ‘to ask’. But that case concerned the sale of liquor, and the Court reasoned that by advertising goods a businessman solicits custom. The term in ordinary use has connotations of impropriety or persistence. The New Shorter Oxford Dictionary includes in its definitions:

Ask earnestly or persistently for, that, to do ... incite or persuade (a person) to commit an illegal or insubordinate act ... entice or lead (a person) on by a specious representation or argument ... seek assiduously to obtain (business, a favour, etc).

[48] In this case the Ministry published brief details of the applicant and the area concerned on its website, as part of the register of applications that it maintains. It took no other steps to encourage competitive interest. When approached by Origin on 28 February, Crown Minerals advised that an application would be considered in competition if received by close of business on that day. In my view, these acts cannot be characterised as soliciting, notwithstanding that Crown Minerals’ purpose in registering the application immediately was to identify any competitive interest that might exist. There was no act of encouragement other than publishing the application as part of a public register that the Act permitted and the Minerals Programme expressly contemplated.

[46] Tap argued that "solicit" may mean "to call or ask for" and that this is effectively what the Ministry did in uploading the information about the application onto the website and in discussing the application and its implications in response to Origin’s telephone call on the morning of 28 February. On Tap’s argument, the Ministry sought out competition by publishing the fact and details of Tap’s application before the expiry of the five working day period and advising Origin to make its application before the expiry of the five working day period.
[47] We agree with the approach of Miller J. We would not regard the comment made by the Secretary to the Minister in relation to soliciting as tantamount to an undertaking to the industry as a whole that details of applications would not be posted on the Ministry’s website (at least until after the relevant five day period had expired). Nor could that comment be fairly treated as preventing Crown Minerals’ staff reacting in a helpful way to inquiries about the permit process (which is effectively all that happened between the Crown Minerals’ staff and Origin on 28 February). For reasons already indicated, we consider that the prior practice of the Ministry and the language of cl 5.1.7 should have put Tap on notice that its application would be (or might very well be) notified prior to the expiry of the relevant five working day period. In that context, it would have been entirely unreasonable of Tap to assume that a remark made by the Secretary to the Minister associated with the consultation process could override cl 5.1.7. In context, therefore, the Secretary’s remark must be treated as no more than an indication that the Ministry would not actively solicit competing bids. Accordingly, we see no inconsistency between what happened and any expectation which could legitimately be based on what the Secretary said.

Was publication of the application unreasonable?

[48] Tap contended that the policy adopted by the Ministry of notifying applications was unreasonable. Again, however, the argument is answered by our conclusions as to the true interpretation of cl 5.1.7. Nevertheless, and again out of deference to counsel, we discuss the arguments advanced.
[49] In contending that the process adopted by the Ministry was unreasonable, Tap relied on the following arguments:

(a) The decision to publish the fact and details of applications was made without explicit notification to the industry.
(b) This produced unfairness between applicants as a first-in-time applicant (such as Tap) might submit an application not knowing it would be evaluated in competition whereas the second-in-time applicant (such as Origin) would necessarily know this.
(c) The policy was implemented in an arbitrary and discriminatory way as the evidence shows that publication of the details of other priority in time applications was erratic, resulting in the treating of different applicants differently for no good reason.

[50] There is some force in Tap’s complaint. In the situation as it developed, Origin did have an advantage because it drew the inference that Tap would have put in a minimalist work programme. So we agree that it would have been better if the Ministry had been more explicit in its dealings with the industry as a whole (including Tap) as to its policy of notifying applications on the website. Had it been more explicit, Tap would (or may) have lodged a more competitive application. However, we do not see arguments along these lines as leading anywhere. Tap had in fact prepared an application with a more exacting work programme. When it substituted a minimalistic work programme, it consciously took the risk that a stronger application might be lodged in competition. It may be that the risk of a competing application being lodged was greater than it appreciated. But the fact remains that publication of the application was consistent with and contemplated by cl 5.1.7 of the MPP. It cannot therefore have been unreasonable for the Ministry to notify the application in accordance with the MPP. We do not think it was reasonable of Tap to assume (if it did assume) that its application would not be notified. Administrative infelicities on the part of the Ministry upstream of the lodging of the application by Tap could not prevent the Ministry complying with the MPP, let alone invalidate a permit granted to a third party.
[51] This last point, of course, begins to introduce issues of discretion to which it is now appropriate to turn.

If Tap is otherwise entitled to succeed, should relief be withheld on discretionary grounds?

Overview

[52] If Tap had persuaded us that it was otherwise entitled to relief, difficult issues of discretion would have arisen albeit that much would necessarily have turned on the particular argument with which Tap had succeeded.

If Tap’s arguments as to legitimate expectations and unreasonableness had succeeded

[53] If Tap had failed in its challenge to the conclusion that the Origin application was competing, we can see no legitimate basis upon which success on its other claims (legitimate expectations and unreasonableness) would have warranted an order setting aside the permit granted to Origin. It is important to recognise that the MPP required the applications to be assessed in competition. It is common ground that, assessed against the criteria provided for in the MPP, Origin’s application was superior. Under the MPP, there could therefore be only one answer once it is held that Origin’s application was truly competing. It would hardly seem right for us to set aside a permit which was required to be granted. Likewise there would not be much point in referring the matter back to the Minister since the MPP would still require the competition between the two applications to be resolved in favour of Origin.
[54] Tap relied on the power of the Court (under s 4(5) of the Judicature Amendment Act 1972) in review proceedings to refer the subject matter of review proceedings back to the original decisionmaker and in particular s 4(5B) which provides:

Where any matter is referred back to any person under subsection (5) of this section, that person should have jurisdiction to reconsider and determine the matter in accordance with the Court’s direction notwithstanding anything in any other enactment.

Tap’s argument was that we should direct that the Minister to reconsider the whole issue but on the basis that Origin’s application should be deemed not to be in competition.

[55] Section 4(5B) was helpfully discussed in Hauraki Catchment Board v Andrews [1987] 1 NZLR 445 (CA) and no doubt it is of potentially broad application. But on the assumption that the Minister was bound to grant a permit to Origin, we do not regard s 4(5B) as warranting a "reconsideration" of that decision on a false premise (namely that what was a competing application should be deemed not to be a competing application). What is proposed seems to go well beyond anything that could fairly be regarded as a "reconsideration". In any event, if s 4(5B) could literally be construed as permitting such a course, we would not be inclined to take it.

If Tap’s argument that Origin’s application was not competing had succeeded

[56] If Origin’s application ought not to have been considered as competing, there would have been a reasonable basis upon which Tap could have sought relief against Origin, namely that the Ministry ought never to have considered let alone granted Origin’s application. We are of the view, however, that discretionary considerations would nonetheless have prevailed against Tap. In saying this, we recognise that a defence based on discretionary considerations was not expressly pleaded. On the other hand the evidence adduced by the respondents did put the issue squarely on the table.
[57] There is evidence from the Ministry to the effect that Tap’s application would, in any event, have been rejected. Miller J did not really go into that issue. The assertions in this respect by the Ministry were largely conclusory but on the other hand, given the way the case developed, they were never really refuted. All we can fairly conclude is that it is not certain that Tap’s application would have succeeded. On this point we note that we were invited by Tap to review rulings made in the High Court as to confidentiality associated with an internal Origin email and to admit in evidence an unredacted version of that email. We inspected the email in unredacted form and are of the view that it did not materially advance this aspect of the case.
[58] Tap did not issue review proceedings as soon as the Minister indicated that the applications would be dealt with as competing. Indeed review proceedings were not issued until after the licence to Origin was formally granted (in August 2005). In addition, even when the proceedings were commenced, Tap did not seek interim relief. Had such relief been granted it would necessarily have been on the condition that Tap give an undertaking as to damages. Tap did not seek interim relief and did not give an undertaking as to damages. By issuing proceedings and not giving an undertaking, Tap essentially put the risk of the litigation onto Origin’s shoulders.
[59] As it turned out Origin has uplifted the permit and has carried out a substantial amount of work pursuant to it (spending some millions of dollars). If the permit was set aside that work, from the point of view of Origin, would have been wasted and yet it would accrue to Tap’s benefit (under the relevant disclosure regime).
[60] In that context we consider that discretionary relief in favour of Tap would not have been appropriate.

Result

[61] The appeal is dismissed.
[62] Tap is to pay costs of $6,000 together with usual disbursements to each of the Attorney-General and Origin.

Solicitors:
Simpson Grierson, Wellington for Appellant
Crown Law Office, Wellington for First Respondent
Bell Gully, Wellington for Second Respondent

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URL: http://www.nzlii.org/nz/cases/NZCA/2006/357.html

[1]	Tap (New Zealand) Pty Ltd and AWE New Zealand Pty Ltd hold a petroleum exploration permit for the Canterbury Basin. They sought permission to explore an area adjacent to their permitted area and made a "priority in time" application for a permit to the Minister. This application was received by the Minister at 11.30am on Tuesday 22 February 2005. Because AWE has not participated in this proceeding, it will be convenient to refer to the application as "Tap’s application". On Friday 25 February 2005, some details of the application were posted by Crown Minerals (a division of the Ministry of Economic Development) on its website and this came to the attention of Origin Energy Resources NZ Ltd on the morning of Monday 28 February 2005. Origin lodged a competing application after the close of business on 28 February. Under the relevant permitting regime, Tap’s application was required to be processed before Origin’s was considered unless Origin’s application was lodged within the same five working day period as Tap’s. The Minister concluded that Origin’s application had been lodged in the same five working day period. So both applications were considered together. As Origin’s application was better (when assessed against the criteria provided in the permitting regime), it was successful and Tap’s application was rejected.
[2]	Tap sought judicial review of the Minister’s actions but its claim was dismissed on 14 February 2006 by Miller J. Tap now appeals to this Court.
[3]	The appeal gives rise to three fundamental issues:

[5]	Section 18 of the Crown Minerals Act 1991 provides for the Governor-General in Council to issue Minerals Programmes. The current Minerals Programme for Petroleum (MPP) was issued in December 2004 and came into effect on 1 January 2005. The MPP was adopted by the Minister of Energy (as required by s 5(a)), who also has the function of granting permits (s 5(b)).
[6]	Sections 12 and 15(1)(c)(i) – (iii) of the Act provide:

[7]	Section 22 of the Act requires the Minister to carry out his or her functions "[i]n a manner that is consistent with the policies, procedures, and provisions in any relevant minerals programme".
[8]	The MPP was issued after extensive public consultation as provided for in ss 16 and 17 of the Act. Section 16 provides for public notice to be given of a draft Minerals Programme, including reasonable notice of its contents and how it may be inspected. Section 17 provides for public submissions to be received and considered.
[9]	Under the Act and MPP, petroleum exploration permits are required and granted for the purpose of undertaking work to identify petroleum deposits and evaluating the feasibility of mining any discoveries made. Exploration activities include geological, geochemical and geophysical surveying, exploration and appraisal drilling and testing of petroleum discoveries.
[10]	The MPP provides for a number of mechanisms for the allocation of permits. In the present case, the applications by Tap and Origin fell to be determined under the provisions of the MPP that deal with priority in time applications. Under those provisions, the application which has been received first is processed first and in that sense has priority in time over any subsequently received application unless that application is received within the same five working day period. This does not mean, however, that the first application will necessarily be accepted.
[11]	Where there are competing applications, the work programmes are ranked according to their potential to make a petroleum discovery at the earliest time and their information gathering value. Committed work is generally favoured ahead of contingent work. Work programmes may be ranked on the basis of proposed expenditure and the Minister may consider the applicant’s expertise and history.
[12]	The provisions of the current MPP as to competing priority in time applications marked a departure from the system which had existed with the earlier MPP which accorded absolute priority to the first application. It is clear that one of the reasons for moving to the new system was the potential for dispute as to timing if a number of applications were sent to Crown Minerals around the same time but by different mechanisms (eg hand delivery, fax or email). This problem had arisen when areas became available for permitting as old permits expired. The draft MPP (which was the subject of public consultation in 2004) provided for applications received within the same 48 hour period to be dealt with in competition. The expansion of that timeframe out to five working days went well beyond what was necessary to avoid disputes about time of receipt of effectively simultaneous applications but provided for an element of competition which is consistent with the provisions of the MPP when read as a whole.

[13]	The MPP came into effect on 1 January 2005. As already noted, prior to 1 January 2005, the priority accorded to the first in time application was paramount. There was thus no window of opportunity for competing applications to be made. Crown Minerals’ procedures involved posting onto its website details of applications made. This posting usually occurred on a Friday and covered any applications received in the preceding week. Such posting was of comparatively little practical significance save to indicate to the industry which areas were not available for application.
[14]	The first priority in time application under the new MPP was made in early February 2005. This application was published on the website on the same day as it was received, which happened to be a Friday. Some inquiries were made of Crown Minerals about the possibility of lodging a competitive application, but this was not until the subsequent Friday, by which time it was practically too late for such an application to be prepared and lodged. The circumstances surrounding this application alerted officials in Crown Minerals to the likely significance of publication of applications on the website and thus the potential benefit of prompt publication of applications.
[15]	Tap’s priority in time application was received at 11.30am on Tuesday 22 February 2005. The Ministry duly published information about Tap’s application on its website. What was published made clear that Tap and AWE had applied for a petroleum exploration permit on 22 February 2005 in relation to a defined area in the Canterbury basin. The details of the proposed work programme set out in the application were not published. The application was not posted until Friday, 25 February. That this occurred on a Friday was of course consistent with earlier practice but not with the evolving policy within the Ministry of publishing details of applications effectively as soon as they were received. The reasons for the delay may have been associated with some co-ordinate errors in the application but are not material for present purposes.
[16]	On Monday 28 February 2005, Origin (which had already decided to make a priority in time application of its own over the relevant area) saw the details of the application on the Ministry’s website. Having approached the Ministry, Origin was told that its proposed application would be considered in competition with Tap’s if it was received by the close of business that day. The Crown Minerals staff who dealt with Origin were helpful and did make suggestions as to how the time requirements might be satisfied. But Origin’s application was not received by the Ministry until 5.25pm. As will become apparent, this meant that it was deemed to have been received at 7.30am the next day. The Ministry concluded that both applications were still required to be assessed in competition. Origin’s application covered a substantially larger area than Tap’s and offered commitments to acquire seismic data in the first year of the five-year work programme. Since Tap’s application only committed to the acquisition of seismic data in the second year of the work programme, Origin’s application was ranked by the Minister ahead of Tap’s and Origin was awarded the permit.
[17]	Once Origin was aware of the details of Tap’s application as posted on the Crown Minerals website, its personnel were able to infer with (as it turned out) a high degree of accuracy the general scheme of the work programme which Tap had committed itself to. So it was not difficult for Origin to lodge an application with a higher level of commitment which was therefore likely to be assessed ahead of Tap’s. It is fair to say, however, that this was the result of Tap taking a deliberate risk when it lodged it application. A draft application which Tap prepared contained a far more exacting work programme than was provided in the application as lodged. In committing itself to what was described as a "minimalistic" work programme, Tap knew that it was taking the risk that a competing application with a more ambitious programme would be preferred to its application.
[18]	The processes associated with the awarding of the permit became reasonably drawn out (in part for reasons associated with attempts made by Origin and Tap to settle their differences) and the decision to award the permit to Origin was not made until 20 June 2005. In early July 2005 Tap threatened judicial review proceedings and asked Origin to provide an undertaking not to take any action consequential upon the grant of the permit. Tap, through its solicitors, suggested that if an undertaking was not provided, Tap would seek an interim order under s 8 of the Judicature Amendment Act 1972. Origin declined to provide an undertaking. Tap did not issue judicial review proceedings until 27 July 2005 and did not seek interim relief.
[19]	Had Tap obtained interim relief, this would necessarily have been subject to it providing an undertaking as to damages. The upshot was that the permit in question was formally issued to Origin on 22 August 2005. Since that date, Origin has incurred costs of approximately $2.3m fulfilling its first year work programme and related work associated with the permit. As well, Origin had now committed to work contemplated for year two in its work programme. It has also entered into preliminary arrangements for the undertaking of a further seismic survey. We record that we have admitted further evidence adduced by Origin as to events which have occurred since the judgment. However, in the end, this evidence (which is addressed to discretionary considerations only) has not been of decisive effect.

[20]	Tap’s argument is that the two applications were not been received within "a five working day period" and therefore they should not have been evaluated in competition with each other. This turns on the way in which the relevant provisions of the MPP are to be construed.
[21]	These provisions are as follows:

	Postal or courier delivery during the hours of business; or
	Hand-delivered during the hours of business; or
	Facsimile; or
	Electronically; or
	Other means as approved by the Secretary.

[22]	The parties agreed that Tap’s application was received at 11.30am on Tuesday 22 February 2005 and that, as Origin’s application was received at 5.30pm on Monday 28 February 2005, it was deemed to have been received at 7.30am the next business day, Tuesday 1 March.
[23]	Tap argued that on the ordinary and natural meaning of "within a five day working period", the Origin application was too late. Tap’s application was made on the first day of the five day period. The fifth day of that period was Monday 28 February. Origin’s application was made on the sixth day (1 March) and was thus outside the relevant period.
[24]	It is clear (and not disputed by Origin) that were it not for cl 5.1.3, the argument advanced by Tap must succeed. As a matter of ordinary English usage, where two events must occur within the same or a single five day period the first and last days must both be included in the calculation. The real issue on this aspect of the case turns on the impact of cl 5.1.3.
[25]	Miller J dismissed Tap’s argument:

[26]	On Tap’s argument, the requirement for the Secretary specifically to record not only the day on which an application is received, but also the time of day, would become pointless. Mr Holden (who argued this part of the case for Tap) admitted as much in his submissions. In effect he invited us to construe this part of the MPP as redundant.
[27]	Counsel for Tap developed his argument by reference to the drafting history of the MPP. In the draft MPP which was subject to public consultation, only a second application received within forty-eight hours of the first would be considered as competing. In that context, the time of receipt provisions in the draft corresponding to what is now cl 5.1.3 were obviously of significance as defining the commencement of the relevant forty-eight hour period. The argument on behalf of Tap was that the references to time of receipt in cl 5.1.3 were simply residual remnants of what had originally been proposed and could now, safely, be ignored.
[28]	This argument, however, cuts both ways. It is perfectly clear that the precursor to cl 5.1.3 was intended to be of significance as defining the point in the day which marked the commencement of the time within which a competing application could be received. The fact that the language was persisted with in the final MPP suggests that it was intended to have the same function. Further, we note that the Secretary’s comments to the Minister associated with the change from forty-eight hours to five working days proceeded on the basis that parts of a day were material.
[29]	We agree with Miller J on this aspect of the case and also with the reasons which he gave. We are not prepared to construe the relevant provisions of the MPP on the basis that some are redundant. The interpretation favoured by Miller J makes sense in the context of the MPP as a whole. The drafting history, if relevant, is at best (from the viewpoint of Tap) ambiguous.
[30]	We are accordingly satisfied that the two applications were required to be dealt with in competition.

[34]	The register kept under s 91 is open to public inspection but the only documents required to be maintained on that register are permits (including "changes, transfers, and leases"). There could be no just basis for anyone objecting to public access to such documents being available on the Ministry’s website. Prior to the MPP coming into effect, the Ministry also published details of applications on its website. Such a practice could perhaps be regarded as involving the keeping of "such other registers ... as he or she considers necessary". Under the pre-MPP regime the primary purpose of publicising the details of applications was to identify land which was no longer available (given the priority in time regime then in existence).
[35]	It is helpful to analyse the three sentences of clause 5.1.7 against the background provided by s 91 and the Ministry’s pre-MPP practice.
[36]	The first sentence of cl 5.1.7 is as follows:

[39]	Overall, the effect of cl 5.1.7 is clear. The practice of the Ministry in placing the details of applications on the Ministry’s website was to continue. It is true that this was to occur under a different permitting regime and that the implications of this change may not have been fully thought through. The possibility of detriment to a first applicant (as occurred to Tap in this case) would not appear to have been addressed. But to construe cl 5.1.7 in the manner contended for by Tap would require us to imply into it an exclusion to prevent publication of applications until the expiry of the relevant five working day period - an exclusion which is not consistent with the clear words of the clause. Further, its tendency to diminish the possibility of competition is inconsistent with what must have been the rationale for providing a five working day window of opportunity for competing applications.
[40]	In those circumstances and construing cl 5.1.7 in accordance with the ordinary meaning of the language used and against the context of practice under the previous regime, we conclude that publication on 25 February 2005 of the core details of Tap’s application was consistent with the MPP.
[41]	We note that counsel for Tap argued that it was not open to the Minister (when exercising permit granting functions) to rely on the statutory register provisions (which are the responsibility of the Secretary of Energy). We have difficulty following this argument. The Minister’s power of granting permits is capable of delegation, see s 6. In any event cl 5.1.7 is addressed to "the Ministry" which in context refers to its administrative staff who operate under the supervision of the Secretary. We see nothing objectionable in the MPP making provision for the way in which applications are processed and this including provision for publicity. If, as a result of such publicity a competing priority in time application is received, the Minister (or his or her delegate) is then required to address the applications in accordance with the MPP.
[42]	We record that we have reservations whether it was in fact necessary for the MPP to provide for publication of details of applications; this given the statutory recognition of the ability to keep registers and the overlay of the Official Information Act 1982.

[48]	Tap contended that the policy adopted by the Ministry of notifying applications was unreasonable. Again, however, the argument is answered by our conclusions as to the true interpretation of cl 5.1.7. Nevertheless, and again out of deference to counsel, we discuss the arguments advanced.
[49]	In contending that the process adopted by the Ministry was unreasonable, Tap relied on the following arguments:

[56]	If Origin’s application ought not to have been considered as competing, there would have been a reasonable basis upon which Tap could have sought relief against Origin, namely that the Ministry ought never to have considered let alone granted Origin’s application. We are of the view, however, that discretionary considerations would nonetheless have prevailed against Tap. In saying this, we recognise that a defence based on discretionary considerations was not expressly pleaded. On the other hand the evidence adduced by the respondents did put the issue squarely on the table.
[57]	There is evidence from the Ministry to the effect that Tap’s application would, in any event, have been rejected. Miller J did not really go into that issue. The assertions in this respect by the Ministry were largely conclusory but on the other hand, given the way the case developed, they were never really refuted. All we can fairly conclude is that it is not certain that Tap’s application would have succeeded. On this point we note that we were invited by Tap to review rulings made in the High Court as to confidentiality associated with an internal Origin email and to admit in evidence an unredacted version of that email. We inspected the email in unredacted form and are of the view that it did not materially advance this aspect of the case.
[58]	Tap did not issue review proceedings as soon as the Minister indicated that the applications would be dealt with as competing. Indeed review proceedings were not issued until after the licence to Origin was formally granted (in August 2005). In addition, even when the proceedings were commenced, Tap did not seek interim relief. Had such relief been granted it would necessarily have been on the condition that Tap give an undertaking as to damages. Tap did not seek interim relief and did not give an undertaking as to damages. By issuing proceedings and not giving an undertaking, Tap essentially put the risk of the litigation onto Origin’s shoulders.
[59]	As it turned out Origin has uplifted the permit and has carried out a substantial amount of work pursuant to it (spending some millions of dollars). If the permit was set aside that work, from the point of view of Origin, would have been wasted and yet it would accrue to Tap’s benefit (under the relevant disclosure regime).
[60]	In that context we consider that discretionary relief in favour of Tap would not have been appropriate.

[61]	The appeal is dismissed.
[62]	Tap is to pay costs of $6,000 together with usual disbursements to each of the Attorney-General and Origin.