Metgasco Ltd v Minister for Resources & Energy

The decisions 4The decision impugned in the Summons was contained in a letter from Rachel Connell the Director of the Office of Coal Seam Gas dated 14 May 2014. The letter said this: PEL16 Rosella E01 Gas Exploration Well - Suspension of Activity Approval I refer to my approval of the construction of the Rosella EG1 gas exploration well in Petroleum Exploration Licence 16 (PEL 16) on 6 February 2014. Condition 8 of PEL 16 requires that: The licence holder must engage with the community in relation to the planning for and conduct of prospecting operations authorised under this exploration licence. The consultation must be undertaken in accordance with the Guideline for community consultation requirements for the exploration of coal and petroleum, including coal seam gas (NSW Trade & Investment, 2012) (the Guidelines) as amended or replaced from time to time. An annual report on Community Consultation must be submitted to the Department within 28 days following the grant anniversary date, together with evidence that consultation has been undertaken in accordance with the Guidelines. I also note that condition 1 of the activity approval requires that: The works must be carried out generally in accordance with the location(s) and methods contained in the Review of Environmental Factors, "Rosella E01 Conventional Gas Exploration Well, Bentley Road, Bentley, NSW" Rev C, (the REF) submitted by Metgasco Pty Ltd on 11 March 2013. The REF notes that community consultation will be undertaken in accordance with the Guidelines. I note that the Guidelines for community consultation requirements for the exploration of coal and petroleum, including coal seam gas (NSW Trade & Investment, 2012) require that a licence holder "must undertake genuine and effective consultation with the community". It has become evident to the Office of Coal Seam Gas that Metgasco is not complying with condition 8, by way of example I note: fundamental concerns expressed by members of the impacted community about the way in which Metgasco has characterised its exploration activities; and a meeting with landholders impacted by the proposed activity convened by the Land and Water Commissioner and held in Lismore on 13 May 2014. This letter informs you that no works are to be undertaken under the approval dated 6 February 2014 until Metgasco Ltd can demonstrate to our satisfaction that you have complied with condition 8 of PEL 16. I note that under section 22 of the Petroleum (Onshore) Act 1991, failure to comply with the conditions of PEL16, including condition 8, constitutes grounds for the cancellation of the title. We would be happy to meet to discuss actions that Metgasco can undertake to satisfy condition 8. 5On 26 June 2014 Ms Connell wrote again to the Plaintiff in these terms: PEL16 Rosella E01 Gas Exploration Well - Suspension of Activity Approval I refer to the decision on 14 May 2014 to suspend the works under the approval dated 6 February 2014.1 have reconsidered the 14 May 2014 decision and attach the outcome of the review and my reasons. I have decided to confirm the suspension of Metgasco's activities on the same terms as previously stated in my letter of 14 May 2014, i.e. no works are to be undertaken under the approval dated 6 February 2014 until Metgasco can demonstrate to the OCSG's satisfaction that it has complied with condition 8 of Schedule 2 of PEL16. Please note an executive summary of my reasons will be published on the Department's website shortly. 6The attached reasons consisted of 13 pages of text together with a large number of annexures. Both parties accept that the letter of 26 June 2014 constituted a further decision of the Minister's delegate. 7Prior to hearing this present Motion, on the same day I made orders for the further conduct of the matter which involved the filing and serving by the Plaintiff of an Amended Summons which it was said would challenge the further decision made on 26 June 2014. Those directions were also made because the Plaintiff sought that the matter be expedited. Having read the evidence in support of the application for expedition I made the directions contained in Short Minutes of Order which enabled the parties to approach the Listing Manger immediately for a hearing date not to be before 1 October 2014. The Short Minutes of Order also provided for the service of evidence and submissions. 8The present stage that the proceedings have reached is simply that the Summons has been filed. No response has yet been served by reason of the issue concerning the Notice to Produce and also, it would seem, by the desire of the Plaintiff to amend the Summons. 9The parties are agreed that paragraphs 1, 4, 6(a) and 6(b)(iv) of the Notice to Produce are not in dispute.

The Submissions 10As to the remaining paragraphs 2, 3, 5, 6, the Defendant submits that the Notice to Produce should be set aside because: (a)A Notice to Produce should not be used as a substitute for discovery, and a party needs the leave of the Court for discovery in proceedings governed by Part 59 UCPR; (b)Paragraph 23 of the Practice Note to the Administrative Law List provides that orders for discovery will only be made in exceptional cases and such orders will then generally be confined to particular issues; (c)The Notice to Produce is premature because of the admitted need by the Plaintiff to amend the Summons to challenge the second decision, and also by reason of the fact that no evidence has yet been filed and served. 11The Plaintiff, in its submissions, pointed out that the Defendant's solicitors said on 26 June 2014 that they expected to be in a position to provide a response that day with respect to paragraphs 1 and 4 of the Notice to Produce. Earlier some nine documents had been produced in answer to paragraph 1 of the Notice to Produce and one document in answer to paragraph 4. 12However, later on 26 June 2014 the Defendant's solicitors sent an email to the Plaintiff's solicitors which said: Over the months prior to making the 14 May 2014 decision, the delegate, Ms Rachel Connell, reviewed many hundreds of letters and emails from members of the community concerning your client's proposed operations. In many cases, Ms Connell was directly involved in drafting the responses. While Ms Connell was aware, in a global sense, of that correspondence, we are instructed that Ms Connell did not physically have copies of such correspondence before her at the time of her 14 May 2014 decision. We enclose, by way of example, five letters from members of the community and the responses to those letters. To provide copies of all the letters and emails and their responses would, in our client's view be oppressive. Otherwise, out client has no further documents to produce in response to paragraphs 1 or 4 of the Notice to Produce. 13The Plaintiff pointed to the reference to the delegate's involvement with the hundreds of letters and emails from members of the community expressing concern about the Plaintiff's operations. Those documents are said by the Plaintiff to be relevant but have not been produced in answer to paragraphs 1 and 4 or at all. The Plaintiff further submitted that the description of the volume of the correspondence and the provision of five examples indicate that the letters and emails and the responses thereto have been identified. Accordingly, it would not be oppressive for them to be produced and they are clearly relevant to the challenge made to the decision. 14In relation to its submission about prematurity, the Defendant submitted that the earlier decision has been entirely replaced by the later decision so that the Notice to Produce requiring documents that related to the first decision was futile or, at least, had been superseded by events. 15The Plaintiff pointed to the wording of the second decision where the delegate said: I have decided to confirm the suspension. [Emphasis added.] The Plaintiff submitted that the use of those words continued to make the first decision a relevant one for the purpose of producing documents. The Defendant submitted that it would not be argued that the first decision of the delegate revived in the event that the second decision was quashed. Consideration 16It seems to me that the Notice to Produce is premature. The Plaintiff accepts that the Summons needs to the amended so that the second decision will also be challenged. The precise response of the Defendant to that Amended Summons needs to be seen. Further, in circumstances where ordinarily discovery would not be ordered and by reason of the general principle that a Notice to Produce should not be used to obtain discovery, the Notice to Produce appears to me to be premature because until the evidence is served the full extent of what other documents might need to be before the Court will not be known. 17There is some force in the Plaintiff's submission that the first decision of the delegate remains a relevant one, and that the documents associated with that decision will be relevant to the issues to be determined. However, it is necessary to await the Defendant's response and evidence on which the Defendant relies before the Defendant should be required to produce documents not relied upon by the Defendant in defence of the Summons. 18The Plaintiff is concerned about its onus of proving the error in the decision making process without having the documents available. However, if the Defendant seeks only to justify the decision-making process by a confined or limited group of documents, it is difficult to see why the Plaintiff would fail by reason of not having documents that are said by the Defendant not to be relevant to justify the decision. That, however, is subject to the issue of whether the second decision necessarily involves a consideration of the first decision. I deal with that below. 19Given the argument that has taken place I consider that it would be unsatisfactory to set aside the Notice to Produce simply on the basis of its prematurity without providing any indication of whether, at a later time, the documents sought to be produced might be required. In other words, it would be unfortunate if the parties had to conduct the same arguments when the appropriate time has been reached to consider the Notice to Produce. Had I not considered that the Notice to Produce was premature, I would have reached the following conclusions. 20I do not consider that what is sought in the Notice to Produce complies with what may be sought under rule 21.10. That conclusion is reinforced by the prematurity of the Notice to Admit when the only document before the Court referred to in that rule is the Summons. Only two documents are referred to in the Summons, and one of those is the letter containing the decision of 14 May 2014. 21The Plaintiff submitted that if the Notice to Produce under that rule was inappropriate it would ask that the Notice be regarded as one for the purposes of rule 34.1. However that rule requires the identification of a "specified document". It is doubtful if what is required to be produced at least under paragraphs 3, 5 and 6 would fall within that description. 22There is the added difficulty that the Practice Note specifies exceptional circumstances before discovery would be ordered, even if that effectively took place by reason of a Notice to Produce. The question of what constitutes "exceptional circumstances" was discussed by Gzell J in Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue; Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2012] NSWSC 913. Gzell J quoted McDougall J in Leighton International v Hodges [2012] NSWSC 458 at [20] where he said: As a matter of language, something is exceptional if it is out of the ordinary, or unusual. To my mind, the exceptional circumstances referred to in paragraph 4 of the practice note must be circumstances that are not normal, or usual; they must be something out of the ordinary; they need not be unique; but however one characterises them they are not 'exceptional' at large, but 'exceptional' because they necessitate disclosure. 23Gzell J went on to say at [17]: I do not dissent from any of these observations but caution against setting the bar too high. As was said in Kelly (Edward), to be exceptional the circumstance need not be unique or unprecedented or very rare. What is needed is an appraisal of all the circumstances and the context in which the expression must be satisfied. Are there circumstances necessitating disclosure before evidence in the sense that the party's case cannot be put without the disclosure? Are those circumstances exceptional? 24If exceptional circumstances were required for permitting the Notice to Produce, they may be able to be shown in respect of paragraph 2 of the Notice to Produce if the Defendant's evidence did not identify, refer to or rely on those documents, since sub-para (a) and (b) of paragraph 2 of the Notice to Produce are said to form the basis for the delegate's decision of 14 May 2014. There will be some justification for requiring those documents to be produced even in the event that they were not put into evidence by the Defendant because, perhaps, the Defendant will submit that the decision of 14 May 2014 is no longer the relevant decision. The Plaintiff ought to be allowed to contend that that decision is effectively caught up in the decision of 26 June 2014. That would justify limited discovery being provided for that purpose. In the circumstances of the expedition granted in this case, it may be a sufficient justification to require the production of those documents by a Notice to Produce rather than under a formal process of discovery. 25The Defendant's solicitor has identified 1032 documents comprising approximately 50,155 pages which may be responsive to paragraphs 2, 3, 5 and 6 of the Notice to Produce. The Office of Coal Seam Gas has preliminarily assessed 732 of these documents as possibly relevant to each of those paragraphs. Whilst I accept that 531 of these appear to relate to paragraph 2 of the Notice to Produce, this number of documents in an administrative law matter might be thought to be verging on the oppressive. The width of categories 3, 5 and 6 needs to be reconsidered. 26On the other hand, given what the Defendant's solicitors said in the email of 26 June 2014 when read with the decision of 14 May 2014, if the first decision continues to be of relevance, so may all of the documents identified as being responsive to paragraph 2 of the Notice. 27In the light of my determination that the Notice to Produce is premature I consider that it would still be open to stand over the Notice to Produce and the Defendant' Motion to set it aside until such time as the amended pleadings are finalised and the evidence is complete. However, that is unlikely to be finalised in a way that would enable me to continue to hear the Notice of Motion on a part-heard basis. Further, the filing of amended pleadings and the serving of the evidence on both sides may well change the basis upon which documents need to be, or are, sought by the Notice to Produce. The better course, it seems to me, is to set aside the Notice to Produce but without precluding the Plaintiff from serving a further Notice to Produce if so advised at a later appropriate time. 28The Defendant has been successful on its Motion. The Plaintiff ought not to have pursued a defence of the Notice to Produce when it sought to amend its Summons to include the further decision, even if it was justified in doing so earlier. The Plaintiff should pay the costs of the Motion.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 July 2014