FEDERAL COURT OF AUSTRALIA
Sino Iron Pty Ltd v Secretary of the Department of Infrastructure and Transport [2014] FCAFC 103
| IN THE FEDERAL COURT OF AUSTRALIA | |
| BUCHANAN, PAGONE AND PERRY JJ | |
| DATE OF ORDER: | |
| WHERE MADE: |
THE COURT ORDERS THAT:
2. The orders made by Rares J on 5 February 2014 be set aside and in lieu thereof it be ordered that the decision of the delegate of the first respondent made on 31 January 2013 to designate the second respondent as port operator of the Port of Cape Preston be set aside.
3. The second respondent pay the appellants’ costs of the appeal.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
| NEW SOUTH WALES DISTRICT REGISTRY | |
| GENERAL DIVISION | NSD 219 of 2014 |
| ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA |
| BETWEEN: | SINO IRON PTY LTD (ACN 058 429 708) First Appellant KOREAN STEEL PTY LTD (ACN 058 429 600) Second Appellant CITIC PACIFIC MINING MANAGEMENT PTY LTD (ACN 119 578 371) Third Appellant CAPE PRESTON PORT COMPANY PTY LTD (ACN 147 842 153) Fourth Appellant |
| AND: | SECRETARY OF THE DEPARTMENT OF INFRASTRUCTURE AND TRANSPORT First Respondent MINERALOGY PTY LTD (ACN 010 582 680) Second Respondent |
| JUDGES: | BUCHANAN, PAGONE AND PERRY JJ |
| DATE: | 20 August 2014 |
| PLACE: | SYDNEY |
REASONS FOR JUDGMENT
BUCHANAN J:
1 The appellants (“the Citic parties”) have appealed against a judgment of a judge of this Court (Sino Iron Pty Ltd v Secretary of the Department of Infrastructure and Transport [2014] FCA 28) which dismissed an application for judicial review of a decision by a delegate of the first respondent. The decision designated the second respondent (“Mineralogy”) as “port operator” of the Port of Cape Preston in Western Australia for the purpose of the Maritime Transport and Offshore Facilities Security Act 2003 (Cth) (“MTOFSA”).
2 On 31 January 2013, on the same day that he designated Mineralogy as the port operator under MTOFSA, the delegate made a declaration that the Port of Cape Preston was a “security regulated port” under MTOFSA. No challenge has been made to that decision. The area of the port was the area designated for the port under the Shipping and Pilotage Act 1967 (WA) s 10 and the Shipping and Pilotage (Ports and Harbours) Regulations 1966 (WA) reg 5A and Sch 1A, to which I shall refer further in due course.
3 I have had the benefit of reading in draft form the reasons for judgment of Pagone J. I agree with his Honour’s analysis of the reliance by the Citic parties on the requirements of s 14(2)(a) and (b) of MTOFSA, to which further reference is made below. However, I have come to a different view from his Honour (and the primary judge) about the requirements of s 14(2)(c) of MTOFSA.
4 That has made it necessary for me to give separate attention to the question of whether relief should be granted to the Citic parties on the appeal, in light of that different view. I have concluded that the Citic parties have made out a case for relief with the result that the appeal should be upheld and the delegate’s decision should be set aside.
MTOFSA and Maritime Security Plans
5 MTOFSA established an Australia-wide scheme for enhanced security arrangements in security regulated ports. Section 3(1) of MTOFSA provides:
3 Purpose of this Act
(1) The purpose of this Act is to safeguard against unlawful interference with maritime transport or offshore facilities.
…
6 MTOFSA requires the development of “maritime security plans” (“MSPs”) by various persons designated in specific capacities under MTOFSA. A person who is a “maritime industry participant” under MTOFSA is required to have a “maritime security plan” (“MSP”). For present purposes it is relevant to note that a “port operator” and a “port facility operator” are two such maritime industry participants (ss 10, 42). At the Port of Cape Preston, the central conflict in the present proceedings is whether Mineralogy should have been designated port operator, but it was common ground that one of the Citic parties (the fourth appellant) would be appropriately designated as a port facility operator, and the only such port facility operator for the time being. I shall refer to the various roles of the Citic parties and their relationships, shortly.
7 Under MTOFSA, the MSP prepared by a relevant maritime industry participant deals with the area or function relevant to their own responsibilities. Section 47(1) of MTOFSA provides:
47 Content of maritime security plans
(1) A maritime security plan for a maritime industry participant must:
(a) include a security assessment for:
(i) the participant’s operation; or
(ii) if the participant has more than one maritime security plan—the operations or locations covered by the plan; and
(b) set out the security activities or measures to be undertaken or implemented by the participant under the plan for maritime security levels 1, 2 and 3; and
(c) designate, by name or by reference to a position, all security officers responsible for implementing and maintaining the plan; and
(d) make provision for the use of declarations of security; and
(e) demonstrate that the implementation of the plan will make an appropriate contribution towards the achievement of the maritime security outcomes.
Note: The maritime security outcomes are set out in subsection 3(4).
…
8 Thus, a port operator must have a MSP for the area of the port. Similarly, a “port facility operator” must have a MSP for the particular “port facility”, each of which terms is defined by s 10 as follows:
port facility means an area of land or water, or land and water, within a security regulated port (including any buildings, installations or equipment in or on the area) used either wholly or partly in connection with the loading or unloading of security regulated ships.
port facility operator means a person who operates a port facility.
9 Potential overlap in MSPs is addressed by s 45 which (relevantly here) provides:
45 Complying with maritime security plans of other participants
(1) A maritime industry participant must not engage in conduct that hinders or obstructs compliance with the maritime security plan of another maritime industry participant.
…
(3) If:
(a) a maritime security plan (the covering plan) for a maritime industry participant covers the activities of another maritime industry participant; and
(b) the other participant:
(i) is required to have a maritime security plan; and
(ii) has been given the relevant parts of the covering plan; and
(iii) has agreed in writing to those activities being covered by the covering plan;
the other maritime industry participant must take all reasonable steps to comply with the covering plan.
…
(Emphasis in original.)
10 In that context, it is convenient to deal at the outset with one general issue which was at the forefront of the case for the Citic parties.
11 At the time of the delegate’s decision only draft MSPs had been provided – a “covering plan” by Mineralogy for the port as a whole and a port facilities plan by the Citic parties. The draft port MSP stated:
2.1 PORT OPERATIONS
…
Port Operations will be managed by Mineralogy with [the third appellant] undertaking import and export operations as the first port user.
12 The draft port MSP then nominated the fourth appellant as a proposed port facility operator and stated:
2.4 PORT SERVICE PROVIDERS
[The fourth appellant is] providing, either in their own right or under contract arrangements during the construction phase: pilotage; towage; line handling operations; and pilot transfer operations. These activities will continue under the [fourth appellant’s] Port Facility Security Plan (PFSP).
13 However, the Citic parties, at the time of the delegate’s decision, had expressly refrained from agreeing to the draft MSP provided to them and the delegate by Mineralogy.
14 That circumstance, and the limited means under MTOFSA for addressing conflict, disharmony or disagreement between or amongst maritime industry participants with individual MSPs, provided one element in the argument of the appellants that Mineralogy should not be designated as port operator.
15 Section 51 of MTOFSA allows the first respondent a discretionary power to refuse a plan which does not “adequately address” the necessary issues. Section 189 gives the first respondent a power to make enforcement orders in the event of contraventions of MTOFSA. At the relevant time no MSP had been approved and in my view it may not simply be assumed that any approved plans would conflict in their terms or procedures or that an approved plan would lack effectiveness simply because of commercial conflict or a lack of willingness to co-operate.
16 In my respectful view, the issues in the present case may not be approached on the basis that it was reasonably open to the Citic parties to fail to co-operate with Mineralogy in any way relevant to the operation of MTOFSA, whatever their commercial differences might be, or that lack of co-operation by the Citic parties would render Mineralogy unfit or unable to be designated as the port operator. I agree with what Pagone J has written on this issue and agree with him that the primary judge did not make an error in relation to it.
The respective roles of Mineralogy and the Citic parties
17 The first and second appellants (“Sino Iron” and “Korean Steel”) are parties, with Mineralogy, to agreements with the State of Western Australia (the “Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement” made on 5 December 2001 and a “Variation Agreement” made on 14 November 2008) each of which was ratified by the Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Act 2002 (WA) and appear as schedules to that Act (together called “the Iron Ore Agreement”).
18 The Iron Ore Agreement recorded that Mineralogy held mining tenements in the Pilbara region in Western Australia and had granted rights to other parties. Recitals (c) and (d) recorded:
W H E R E A S:
…
(c) [Mineralogy] by itself or in conjunction with one or more of the Co-Proponents wishes to develop projects incorporating –
(i) the mining and concentration of iron ore in Area A (as hereinafter defined);
(ii) the processing of that iron ore predominantly as magnetite in Area A or elsewhere in the Pilbara region principally for the production and sale of high grade pellets, direct reduced iron and/or hot briquetted iron or steel;
(iii) the transport of magnetite concentrates and processed iron ore within the Pilbara region;
(iv) the establishment of new port facilities in the Pilbara region; and
(v) the shipping of processed iron ore through such port facilities;
(d) The State, for the purpose of promoting employment opportunity and industrial development in Western Australia, has agreed to assist the establishment of the proposed projects upon and subject to the terms of this Agreement.
19 So far as the development of a port at Cape Preston was concerned, the Iron Ore Agreement contemplated that future “third party” use of port functions would be accommodated.
20 In a “Project Management Agreement” made between Citic Pacific Limited (a company incorporated in Hong Kong which is the ultimate owner of Sino Iron and Korean Steel) with Sino Iron on the one hand and the third appellant (“CP Mining Management”) on the other hand, it was agreed that CP Mining Management would manage all activities relating to the Sino Iron Ore Project for Sino Iron.
21 A “Service Level Agreement” made on 1 September 2011 between CP Mining Management and the fourth appellant (“Cape Preston Port Company”) recited:
Recitals
A CITIC Pacific has built a port facility at Cape Preston, Western Australia (the Port), to process and export iron ore mined by [CP Mining Management] on behalf of Sino Iron Pty Ltd (Sino Iron) and Korean Steel Pty Ltd (Korean Steel) (each of which is a subsidiary of CITIC Pacific).
B The tenure from which the Port is constructed, as well as the tenure on which the mine is located, is held by Mineralogy Pty Ltd (Mineralogy). Mineralogy has provided [CP Mining Management], Sino Iron and Korean Steel with rights of access and use of its tenure for the purposes of the iron ore project. [CP Mining Management] exercises these rights on behalf of Sino Iron and Korean Steel.
C [CP Mining Management] has engaged [Cape Preston Port Company] to manage both land and marine based assets at the Port, on the terms set out in this Agreement.
22 Thus, it may be seen that in relation to the Sino Iron Ore Project and the development of the port at Cape Preston, the infrastructure necessary for the project, including port infrastructure, had been constructed on behalf of Sino Iron and Korean Steel, mining operations were to be managed by CP Mining Management and Cape Preston Port Company was to manage both land and marine based assets at the Port itself.
23 Those practical circumstances were recognised by Mineralogy’s draft MSP which it provided to the delegate, with Mineralogy proposing that its capacity would be “Port Operator and Landlord” while CP Mining Management would undertake “import and export operations as the first port user” and Cape Preston Port Company would be the port facilities operator under its own MSP.
The developing dispute
24 The primary judge recorded that in 2010 Mineralogy commissioned a port security risk assessment which was provided in early 2011. The Citic parties co-operated and were consulted. The risk assessment assumed (without objection at that stage) that Mineralogy would be designated port operator and a Citic party would be port facility operator. On that basis, during 2011 and 2012 Mineralogy developed its draft MSP in consultation with the Citic parties and the harbourmaster.
25 Unchallenged evidence for Mineralogy before the primary judge was to the effect that before the designation of Mineralogy as port operator by the delegate on 31 January 2013 no representative of any of the Citic parties had suggested that Mineralogy should not be port operator.
26 Nevertheless, it was apparent that a dispute was developing between the Citic parties and Mineralogy, which extended to the question of respective roles and functions under MTOFSA, and that the delegate (as an officer of the Secretary’s department) was informed about it.
27 On 29 November 2012 Mr Brian Rankin, an officer of the Secretary’s department who had been present at meetings with Mineralogy, the Citic parties and the Department, sent an email to the delegate (also an officer in the Department) and others drawing attention to the developing conflict. The email said (in part):
Subject: Conflict/tensions between Mineralogy Pty Ltd and Citic Pacific Mining Management Pty Ltd at the ‘to be security regulated’ port of Cape Preston, Western Australia [SEC=UNCLASSIFIED]
We have a situation where the Western Australia Department of Transport (WA DoT) have gazetted a new Port of Cape Preston as a State Government port and declared that Mr David Harrod, Marine Safety General Manger, at WA DoT, is the Harbour Master for the Port.
At the time of their gazettal of the port, WA DoT did not prescribe who the port operator was or should be; and does not intend to do so – given, their opinion, that the requirements of MTOFSA/MTOFSR in relation to Port Operators are ‘under Commonwealth legislative obligations/requirements’.
The port was/is being developed to service magnetite mining operations and their export in accordance with a WA State Government, Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002, as amended in 2008.
…
Over time, with pre-submission MSP guidance/liaison from TSO Perth, both parties have been developing MSPs’ and that path has been fraught with various difficulties for TSO Perth as the parties have, amongst other matters, been reluctant to acknowledge each other and their respective roles in a security regulated port within their plans.
Nonetheless TSO Perth continued to persevere, to date, in providing ‘neutral’ guidance/liaison to both parties based on their obligations/requirements under MTOFSA/MTOFSR; and the situation appeared to be partially improving with TSO Perth guidance/liaison.
TSO Perth managed to bring the then Mineralogy Pty Limited, Port Captain (who was responsible for the development of their MSP) and the then Citic Pacific security consultant (who was similarly responsible for the development of their MSP) together at TSO Perth; and later through a number of telephone ‘hook ups’.
As a consequence of those interactions the development of the plans appeared to be progressing reasonably well and were being ‘harmonised’ to meet MTOFSA/MTOFSR legislative obligations/requirements.
Recently, for whatever reasons, the services of both of the previously mentioned persons have recently been dispensed with by both organisations.
Mineralogy’s latest draft plan (MSP), has recently been submitted to TSO Perth, again for informal pre-submission guidance/liaison. That MSP has been amended from what we were previously aware of (under their previous Port Captain); and requires some additional work to ensure that it meets requirements/is compliant.
A draft Port Facility Operator MSP provided to TSO Perth, by Citic Pacific today, for informal pre-submission guidance/liaison – needs, on a 1st pass scan, major work as there is no recognition of Mineralogy’s role in the port operations as the Port Operator.
That is in stark contrast to the contents of a previous ‘work in progress’ plan by Citic Pacific – acknowledging Mineralogy, as the Port Operator, which was being satisfactorily ‘harmonised’ with Mineralogy’s plan to meet the requirements of MTOFSA/MTOFSR.
…
(Bold emphasis added.)
28 A later email from Mr Rankin to the delegate on 9 January 2013 said (in part):
…
In short – we have a situation with a new soon to be security regulated port of Cape Preston (south of Karratha, in the North West of Western Australia) whereby the Maritime Industry Participants (MIPs) involved namely Mineralogy Pty Ltd (as Port Operator) and Citic-Pacific Mining Management Pty Limited (as a Port Facility Operator) appear to have had a number of disputes, some of which has resulted in Mineralogy taking legal action against Citic-Pacific.
The background (history) to the new port operations are that the Queensland entrepreneur, Mr Clive Palmer, the founder of Mineralogy Pty Ltd, has the ownership/rights to a magnetite deposit near the new port. Some years ago Mineralogy sold or leased the mining rights of the magnetite deposits to Citic-Pacific, who were to export the product.
The port of Cape Preston was declared under WA State legislation and commercial agreements were entered into that Mineralogy would be the Port Operator and Citic-Pacific would be the Port Facility Operator exporting the magnetite product by barges to anchorage loading areas within the port. The infrastructure was then developed and the port is currently progressing towards a ‘first security regulated vessel arriving to take the export product around April 2013’.
Overtime this office has been providing guidance and liaison, impartially to both MIPs and the following email trail is partly indicative of that.
Unfortunately relations between the MIPs have seriously deteriorated to the extent that a recent draft MSP from Citic-Pacific didn’t, in any way, acknowledge Mineralogy’s role as the Port Operator and the following email trail indicates that Citic-Pacific have not agreed to security functions to be undertaken at the port. On the other hand, Mineralogy’s proposed MSP is close to a stage where it can be formally submitted and they will ‘push’ for same to be approved at the earliest opportunity, notwithstanding Citic-Pacific’s stance.
…
(Emphasis added.)
29 The suggestion in the above extract that CP Mining Management would be port facility operator is erroneous on the evidence in the present case. The port facility operator was to be Cape Preston Port Company.
30 Matters had not improved when, on 17 January 2013, Mineralogy submitted its draft MSP for approval.
31 As earlier indicated, on 31 January 2013 the delegate declared the Port of Cape Preston (as declared under State legislation) to be a security regulated port and designated Mineralogy as port operator of that security regulated port under MTOFSA. He did not then approve the draft MSP for the port submitted by Mineralogy.
The challenge to the delegate’s decision
32 The basic proposition of the Citic parties is that Mineralogy lacks the ability to be an effective port operator and should not have been so designated. There are subsidiary procedural arguments which arise from the requirements upon the delegate stated by s 14(2) of MTOFSA. Section 14 of MTOFSA states:
14 Port operators
(1) The Secretary may, by notice published in the Gazette, designate a person as the port operator for a security regulated port.
(2) In designating a person as a port operator, the Secretary must take into account:
(a) the ability of the person to undertake the functions of a port operator; and
(b) the physical and operational features of the port; and
(c) the views of the person, or persons, responsible for managing the operations of the port.
(Emphasis in original.)
33 First, the Citic parties deny that Mineralogy has the ability to be a port operator, particularly in light of the commercial conflict with the Citic parties.
34 Secondly, the Citic parties argue that the delegate failed to take account of the physical and geographical features of the port. To an extent, this overlaps with the first argument because the Mineralogy tenement is not co-extensive with the port area and the Citic parties challenge Mineralogy’s ability to monitor and control what happens beyond its own tenement.
35 Thirdly, the Citic parties argue that the delegate was obliged to take account of their views (or at least the views of Cape Preston Port Company) and did not do so, so that the decision of the delegate should be set aside for that reason at least.
36 There is a further argument also. It is that the Citic parties were entitled to procedural fairness at common law, requiring that they be heard even if there was no statutory obligation on the delegate to do so.
37 I shall deal with each of those contentions, but only briefly with the operation of s 14(2)(a) and (b) in light of my agreement with Pagone J about those matters.
Section 14(2)(a) and (b)
38 A plan of the “Sino Iron Project” prepared by Citic Pacific Mining shows that both the project area and an adjoining tenement extend seaward from the coast to points well short of the port limits. Thus, the declared port limits extend well beyond any area which is part of either the project or the adjoining tenement. The port also extends to the landward side of the coastline (which is shown at mean sea level) to include areas up to high water mark on both the project and the adjoining tenement. The port therefore includes an area in the intertidal zone.
39 It was submitted that Mineralogy did not have the “ability” to control areas of the port (both to seaward of mean sea level and in the intertidal zone) which overlay the area of the adjoining tenement, and therefore lacked the ability to control the whole of the port area. Similarly, it was submitted that the fact that the port area extended to seaward well beyond the project area also meant that Mineralogy lacked the ability to control those areas.
40 In my view, neither aspect of this submission should be accepted.
41 The requirement in s 14(2)(a) of MTOFSA concerns the ability to be a port operator in the context of the overall statutory scheme. Section 3 of MTOFSA states its purpose, and the means to achieve the purpose, as follows:
3 Purpose of this Act
(1) The purpose of this Act is to safeguard against unlawful interference with maritime transport or offshore facilities.
(2) To achieve this purpose, this Act establishes a regulatory framework centred around the development of security plans for ships, other maritime transport operations and offshore facilities.
(3) The implementation of a security plan should make an appropriate contribution to the achievement of the maritime security outcomes.
…
42 Section 8 of MTOFSA states:
8 Operation of State and Territory laws
This Act is not intended to exclude or limit the operation of a law of a State or Territory to the extent that the law is capable of operating concurrently with this Act.
43 Maritime industry participants (which includes a port operator – here Mineralogy – and a port facility operator – here Cape Preston Port Company) are required to have a maritime security plan (s 42) which must be approved (s 51). It is an offence to operate without one (s 43), or to fail to comply with it (s 44). Failure to comply with an applicable maritime security plan of another maritime industry participant is not an offence but may be subject to an enforcement order or injunction (s 45(4)). But those obligations exist with respect to security control measures, not general operational matters.
44 Operational matters are another issue. For example, a harbourmaster appointed under s 4 of the Shipping and Pilotage Act 1967 (WA) for a port declared under s 10 of that Act has the powers stated in reg 19 of the Shipping and Pilotage (Ports and Harbours) Regulations 1966 (WA), including:
19. Harbour masters’ powers
(1) The master of any vessel shall obey all lawful orders of the harbour master, and generally follow such directions as the weather, the crowded conditions of the port or other circumstances may render necessary or expedient, in the judgment of the harbour master, for the safety and interest of the whole shipping.
(2) The harbour master of any port has the entire control of the anchoring, mooring, berthing and movement of all vessels within the port, and shall appoint the place where any vessel is to anchor, moor or lie in the port and the berth that any vessel is to occupy.
…
45 A present (or future) inability on the part of Mineralogy to direct shipping movements in the whole port area, or to control general activities on so much of the adjoining tenement as is within the declared port area, does not in my view signify a lack of ability to be a port operator within the meaning of s 14(2)(a) or (b) of MTOFSA. In my view, it was not an error, either, for the primary judge to remark that if designated the port operator Mineralogy could expect statutory and administrative support to assist compliance with its approved MSP.
Section 14(2)(c)
46 It is with respect to the construction and application of s 14(2)(c) of MTOFSA that I depart company from Pagone J (and the primary judge) and a fuller explanation is therefore required.
47 The delegate observed that the Port of Cape Preston is not operated by a port authority established under the Port Authorities Act 1999 (WA) and that a number of ports in Western Australia are “operated” by various companies.
48 The Port Authorities Act provided (at the time of the delegate’s decision) by s 4:
4. Port authorities, establishment, nature and trading names of
(1) The port authorities named in Schedule 1 are established for the ports named in that Schedule.
…
Schedule 1 — Ports and port authorities
[s. 4]
| Name of Port | Name of Port Authority | |
| 1 | Port of Albany | Albany Port Authority |
| 2 | Port of Broome | Broome Port Authority |
| 3 | Port of Bunbury | Bunbury Port Authority |
| 4 | Port of Dampier | Dampier Port Authority |
| 5 | Port of Esperance | Esperance Port Authority |
| 6 | Port of Fremantle | Fremantle Port Authority |
| 7 | Port of Geraldton | Geraldton Port Authority |
| 8 | Port of Port Hedland | Port Hedland Port Authority |
49 The functions of a port authority were, at that time, stated by s 30 as follows:
30. Functions
(1) The functions of a port authority are —
(a) to facilitate trade within and through the port and plan for future growth and development of the port; and
(b) to undertake or arrange for activities that will encourage and facilitate the development of trade and commerce generally for the economic benefit of the State through the use of the port and related facilities; and
(c) to control business and other activities in the port or in connection with the operation of the port; and
(d) to be responsible for the safe and efficient operation of the port; and
(e) to be responsible for the maintenance and preservation of vested property and other property held by it; and
(f) to protect the environment of the port and minimise the impact of port activities on that environment.
(2) It is also a function of a port authority —
(a) to do things that its board determines to be conducive or incidental to the performance of a function referred to in subsection (1); or
(aa) to use or exploit its fixed assets for profit so long as the proper performance of its functions under subsection (1) is not affected; or
(b) to do things that it is authorised to do by any other written law.
(3) A port authority may perform any of its functions in the State or elsewhere.
50 In the case of a port whose operations were under the control of a port authority in Western Australia, therefore, there is no doubt that the views of that port authority would need to be sought under s 14(2)(c). What then of the Port of Cape Preston?
51 At the time of the delegate’s decision, shipping had not yet commenced but there were obviously commercial arrangements involved in the establishment of the port functions and planning for their use. All those commercial activities were under the immediate control of the Citic parties. It is apparent that the delegate saw no statutory need to directly seek the views of the Citic parties, although he did not say why those views would not need to be taken into account under s 14(2)(c) of MTOFSA.
52 Rather, the delegate reasoned as follows:
DECISION PURSUANT TO SECTION 14 MARITIME TRANSPORT AND OFFSHORE FACILITIES SECURITY ACT 2003 (MTOFSA)
…
REASONS FOR DECISION AND FINDINGS ON MATERIAL QUESTIONS OF FACT
…
13. Mineralogy holds leases that encompass land and water within the boundary of the security regulated port (as approved by the delegate on 31 January 2013). These leases were issued by then WA Department of Mines and Petroleum. These leases cover the area where the berth facilities are located and are covered by the draft MSP. Accordingly, I concluded that the views articulated in Mineralogy’s draft MSP were the view of a person responsible for managing the operations of the port.
14. While Cape Preston is not managed by a port authority, the WA DoT is responsible for appointing a Harbour Master to control movement of vessels in the port. Captain David Heppingstone had been appointed by the WA Government as the Harbour Master for the Port of Cape Preston. Captain Heppingstone chaired the Cape Preston Marine Safety Committee until September 2012 (when he resigned from DoT) and was replaced by David Harrod, GM, Marine Safety (WA DoT) as chair of the Meeting. The views expressed by WA DoT officials at these meetings were supportive of the arrangements as set out in the draft MSP, I therefore concluded that these were representative of the views of the owner of the port.
…
53 The fact that Mineralogy was the head lessee (i.e. the landlord) did not suffice in my view for it to be accepted by the delegate that Mineralogy was the person (or a person) responsible for managing the operations of the port.
54 In its draft maritime security plan, upon which Mineralogy relied in its application to be designated port operator, the following assertions were made:
1.1 AUTHORITY
The Port of Cape Preston is a Western Australian State Government port established by Mineralogy Pty Ltd pursuant to the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 as amended in 2008 and stewardship on the State Government’s behalf is held by the WA Department of Transport (WA DoT) and under the Western Australia Shipping and Pilotage Act 1967 the Minister appoints the Harbour Master. Mineralogy Pty Ltd has leases, issued by the Department of Mines and Petroleum, over some areas in the southern part of the port, known within Mineralogy as Port Palmer. The Western Australia Shipping and Pilotage Act 1967 has been amended to enable commercial lessees at WA DoT ports to become responsible for their operations and legislation in the form of the amended Shipping and Pilotage Regulations has been promulgated to that effect. As a consequence the WA DoT is no longer regarded as the Port Operator of WA DoT ports under the Maritime Transport and Offshore Facilities Security Act 2003 and the associated Maritime Transport and Offshore Facilities Security Regulations 2003.
and:
2.1 PORT OPERATIONS
…
Port Operations will be managed by Mineralogy with [CP Mining Management] undertaking import and export operations as the first port user.
and:
2.1 PORT OPERATIONS
…
[CP Mining Management] is the initial project co-proponent to have purchased mining rights from Mineralogy (proponent) under the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 as amended in 2008, and has obtained Government approval for the exportation of iron ore concentrate.
With further projects being planned to commence and the existing project looking to expand, it is expected that several mines operated by a range of different companies will be constructed and commissioned. Exports from the port are anticipated, over time, to be in excess of 120Mtpa of magnetite concentrate and pellets.
Imports will consist of construction equipment and goods required for continued operations at the various Mineralogy tenements. Exports of non-iron ore goods will also occur, but will primarily consist of empty containers and equipment being sent elsewhere for refurbishment.
In the next development stage, currently anticipated for Q4 2012 or Q1 2013, a deep water trestle jetty, capable of accommodating Capesized vessels will commence to be constructed to facilitate the direct loading of cargo into the ships for export. This Plan will then be amended as and when required to meet the changed circumstances.
and:
2.1 PORT OPERATIONS
…
The operations that are covered in this plan are:
a) all maritime related activities facilitated by Mineralogy Pty Ltd in its capacity as Port Operator and Landlord,
b) its tenants in their capacity of operating port terminals/facilities and
c) various MIPs within the security regulated Port of Cape Preston.
55 I see little, if any, support for the assertions made in the first of these passages, insofar as it is intended to assert that Mineralogy had been recognised legislatively, or by regulations, as responsible for port operations. However, it is unnecessary to be diverted by that assertion. The question for present attention is not whether Mineralogy’s views required reception under s 14(2)(c). Nor is it whether the views of the WA DoT should have been received (as “owner”). The issue is whether the Citic parties should have been heard.
56 The primary judge resolved this question against the Citic parties because his Honour concluded that the State (of Western Australia) and the harbourmaster were the persons responsible for managing the operations of the port, and their views had been taken into account. His Honour did not conclude that Mineralogy had that role. Thus, his Honour said (at [84]-[86]):
84 I reject the Citic parties’ argument that their views had to be sought under s 14(2)(c). In my opinion, the expression “responsible for managing the operation of a port” in s 14(2)(c) refers to the person or persons with the overall responsibility for managing the operations of the port, and not to persons with functions that affect or are relevant to the operation of parts of the port. If every person who had responsibility for managing any infrastructure or operational matters in various parts of a port were caught by s 14(2)(c), a very wide net would be cast. The expression in s 14(2)(c) should not be read to extend to persons who do not have broad overall management responsibility for the operations of the port.
85 The Citic parties were not persons responsible for managing the operations of the Port. Rather, they were persons responsible for managing some operations in certain areas of the Port. They were not able to point to any agreement or source of rights that gave them power to manage the operations of the Port. Such rights as they had derived from their agreements with Mineralogy and nothing in those, to which they referred in argument, conferred such a right. The agreement between Citic and CPPC was a private arrangement between those two corporations, amongst the Citic parties themselves, that could not, and did not, confer any status as to the public role of managing the operations of the Port. That agreement did not affect Mineralogy’s position as the Citic parties’ effective landlord. The Citic parties would be the first users of the Port, would have a role as a, or the only, port facility operator and would conduct the transhipping and export operations. However, those were private activities that did not amount to a responsibility for managing the operations of the Port. That was the role of the harbourmaster and the State, to whose views the delegate did have regard.
86 I reject the Secretary’s arguments that the delegate made a jurisdictional error in designating Mineralogy as port operator and his suggestion of an “operational lacuna”. As I have explained those arguments misconceived the proper construction of s 14(2)(a) and (b). The delegate explained, in his reasons that the Port was not managed by a State port authority, but the State had appointed a harbourmaster and was supportive of the arrangements set out in Mineralogy’s draft plan at [11]-[14]. The delegate referred to a similar arrangement that operated in eight other Western Australian ports that operated for the export of resources. The Secretary did not explain why his delegate, in following an established operational precedent under the Act, made a jurisdictional error. Here, the delegate acted on the bases he disclosed in his reasons. The State was supportive of Mineralogy’s draft plan, having had detailed involvement in its formulation. Both the Secretary, through the Department, and the State had worked with the port operators in the other eight major resource ports in the State. The delegate explained why, in the established context of apparently successfully operating resource ports, he considered that designation of Mineralogy, for the Port, was appropriate. In doing so, he had regard to the views of the State, and the harbourmaster as the person who was responsible under the Shipping and Pilotage Act for managing the operation of the port for the purposes of s 14(2) and, in particular s 14(2)(c).
57 The harbourmaster at the Port of Cape Preston was, to a significant extent, a person responsible for managing the operations of the port within the meaning of s 14(2)(c). In view of the fact that no separate port authority had been established for the Port of Cape Preston it may also be accepted that the State of Western Australia had reserved such authority. It is noteworthy that eight port authorities had then been established by the Port Authorities Act with another 12 ports (including the Port of Cape Preston) “declared” as ports under Sch 1A of the Shipping and Pilotage (Ports and Harbours) Regulations 1966 (WA) and s 10 of the Shipping and Pilotage Act 1967 (WA). The latter declarations do not have the effect of passing commercial control of the ports to the harbourmaster. As the delegate pointed out, operational (and commercial) control of some of those declared ports had remained with resource companies.
58 It therefore becomes important in the present case to examine whether Mineralogy had operational control of the port (subject to direction by the harbourmaster) or whether such control was, in the circumstances of the present case, the responsibility (at least in part) of the Citic parties.
59 Clause 21 of the Iron Ore Agreement provided:
Port facilities
21. (1) [Mineralogy] shall develop port facilities for the Projects in accordance with approved proposals and shall construct a wharf and carry out all necessary dredging of approach channels, swinging basins and berth at the wharf and provide all necessary buoys, beacons, markers, navigational aids, lighting equipment and services and facilities required in connection therewith.
(2) All shiploading and shipping facilities shall be subject to and shall be constructed, operated and maintained in accordance with relevant legislation.
Use of shipping facilities
(3) [Mineralogy] and the Project Proponents shall subject to and in accordance with by-laws (which shall include provision for reasonable charges) from time to time to be made and altered as provided in subclause (4) and subject thereto, or if no such by-laws are made or in force then upon reasonable terms and at reasonable charges (having regard to the cost thereof to [Mineralogy] or the Project Proponents as the case may be) allow the State and third parties to use any wharf and port installations wharf machinery and equipment and wharf and port services and facilities constructed or provided by [Mineralogy] and the Project Proponents or either of them PROVIDED THAT such use shall not unduly prejudice or interfere with [Mineralogy’s] or the Project Proponents’ operations hereunder and that the mechanics of such use shall be subject to the prior approval of [Mineralogy] or the Project Proponents as the case may require.
By-laws
(4) The Minister may upon recommendation by [Mineralogy] or Project Proponents make alter and repeal by-laws for the purpose of enabling [Mineralogy] and the Project Proponents to fulfil their obligations under subclause (3) upon terms and subject to conditions (including terms and conditions as to user charging and limitation of the liability of [Mineralogy] or the Project Proponents) as set out in such by-laws consistent with the provisions hereof. Should the Minister at any time consider that any by-law made hereunder has as a result of altered circumstances become unreasonable or inapplicable then [Mineralogy] or Project Proponents as the case may require shall recommend such alteration or repeal thereof as the Minister may reasonably require or (in the event of there being any dispute as to the reasonableness of such requirement) as may be decided by arbitration hereunder.
60 The variation agreement in 2008 (contained in Schedule 2 of the Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Act 2002 (WA) referred to, and recognised, the Sino Iron Project in which Sino Iron is a Co-Proponent. It also made some amendments to cl 21 which are not directly relevant except that they (like cl 21(3) and (4)) recognise the role of the “Project Proponents” in possible use and control of port facilities.
61 The primary judge recorded significant events leading to the development of port facilities (at [26]-[28]) as follows:
Background
26 Each of Sino Iron and Korean Steel entered into separate mining right/lease agreements with Mineralogy in March 2006, that were subsequently amended in 2008, under which they were to conduct a mining project in a defined area within the tenements held by Mineralogy. Each of Sino Iron and Korean Steel acknowledged that:
• Mineralogy could grant mining rights over other parts of its tenements within the mining area and that the only manner in which all holders of mining rights derived from Mineralogy could effectively and efficiently exercise those rights was on a co-ordinated basis through the development of a single open cut mine within the mine area or as Mineralogy and those right holders might otherwise agree (cl 3.6);
• it would be required to co-ordinate the exercise of its rights with the exercise by all other mining right holders of their respective rights (cl 3.6); and
• it would not act, or contemplate any act, that would adversely affect the interest of Mineralogy in the project area or in any property, licence or title to which Mineralogy was the beneficial owner (cl 27(b)).
27 Under an agreement made on 22 February 2007 by some of the Citic parties, Citic had responsibility for preparing a mine plan conducting feasibility studies, constructing and operating mining processing, transport and port infrastructure. Citic agreed that it would act on Sino Iron’s behalf in negotiations with the port manager for preparing a timetable and specific arrangements as required for the shipment of products.
28 On 1 September 2011, Citic entered into a service level agreement with CPPC to manage both land and marine based assets at the Port. The recitals to that agreement acknowledged that Citic had built the port facility at the Port to process and export iron ore mined by it on behalf of Sino Iron and Korean Steel, each of which was a subsidiary of Citic. Under the service level agreement, CPPC agreed with Citic that it would provide port, terminal and marine services, including cargo handling and transfer operations, barge and transhipment operations and relevantly port security. CPPC also agreed to develop, implement and maintain a security plan to comply with the obligations under the Act.
62 Under the Project Management Agreement made on 22 February 2007, CP Mining Management was given, and accepted, responsibility for a range of matters, including:
Article 1 – Contents of Services
…
d) prepare a proposal for the infrastructure and production facilities of the Sino Iron Ore Project (including the shared facilities) and other relevant plan and program relating to the Sino Iron Ore Project; contract for the construction of all project related infrastructure (including the shared facilities) and supervise the construction works of all facilities such as processing plant and equipment, electrical supply port, facilities, desalination plants and other related infrastructure.
e) acting on behalf of Other Mining Participants to complete construction of mining and related facilities, carry out mining operations and otherwise conduct all activities necessary for the efficient conduct of all relevant projects, including the Sino Iron Ore Project.
f) except for the items specified in the Sino Iron Ore Project Agreements, carry out the operation, management and maintenance of all infrastructure (including all production plant and equipment);
g) except for the items specified in the Sino Iron Ore Project Agreements, carry out the transportation of the magnetite iron ore, other materials and products from the Mine Area to the production plant and the port;
h) based on the production and distribution plan, shall be responsible for the production, transportation and distribution of products for the Sino Iron Ore Project;
i) carry out all communications with and applications to relevant government authorities for the purpose of obtaining all necessary approvals as required for compliance with the regulations governing mining, production and operation of the Sino Iron Ore Project, including but not limited to preparing and submitting any reports or documents if so required by law for compliance with all relevant laws in Australia;
j) act on behalf of CITIC and Sino Iron in negotiation with Mineralogy Pty Ltd, Other Mining Participants and other relevant parties for the Sino Iron Ore Project;
k) act on behalf of Sino Iron in negotiations with the port manager for preparing the timetable and specific arrangements as required for the shipment of the products of the Sino Iron Ore Project;
…
63 The obligations of Sino Iron were stated as follows:
Article 3 – Rights and Obligations of Parties
…
3.2 Obligations of Sino Iron
(a) provide capital investment necessary for the project and provide the infrastructure facilities including mining facilities, production plants, ports, supply of water and electricity and other infrastructure;
…
64 The Service Level Agreement made on 1 September 2011 recited:
Recitals
A CITIC Pacific has built a port facility at Cape Preston, Western Australia (the Port), to process and export iron ore mined by [CP Mining Management] on behalf of Sino Iron Pty Ltd (Sino Iron) and Korean Steel Pty Ltd (Korean Steel) (each of which is a subsidiary of CITIC Pacific).
B The tenure from which the Port is constructed, as well as the tenure on which the mine is located, is held by Mineralogy Pty Ltd (Mineralogy). Mineralogy has provided [CP Mining Management], Sino Iron and Korean Steel with rights of access and use of its tenure for the purposes of the iron ore project. [CP Mining Management] exercises these rights on behalf of Sino Iron and Korean Steel.
C [CP Mining Management] has engaged [Cape Preston Port Company] to manage both land and marine based assets at the Port, on the terms set out in this Agreement.
65 “Port, Terminal and Marine Services” were defined by cl 1.1:
Port, Terminal and Marine Services or PTM Services means the services to be performed by or on behalf of [Cape Preston Port Company] under the terms of this Agreement, including:
(a) cargo handling and transfer operations;
(b) barge and transhipment operations;
(c) port towage operations;
(d) line boat and handling;
(e) stevedoring;
(f) acting as shippers agent;
(g) draft surveying and vessel trimming;
(h) vessel and harbour piloting;
(i) fuel, bunkering and waste management;
(j) port security;
(k) vessel traffic management;
(l) facilities and asset maintenance including navigational aids;
(m) hydrographic surveying; and
(n) laytime, demurrage and despatch management.
including as described in more detail in Schedule 2.
66 Clause 3.1 provided:
3.1 [Cape Preston Port Company’s] Primary Responsibilities
In addition to its other obligations under this Agreement, during the Term [Cape Preston Port Company] must:
(a) provide the PTM Services in accordance with this Agreement;
(b) comply with the supply chain planning provisions set out in Schedule 4;
(c) ensure that the port, terminal and marine assets are managed in compliance with relevant regulatory requirements;
(d) supply [CP Mining Management] with information and any assistance that may be necessary to enable [CP Mining Management] to comply with the Mineralogy Agreements and any Law;
(e) operate the Port to enable the Target Annual Ore Throughput to be handled through the Port each year during the Term;
(f) take all reasonably practicable steps to maintain the volume and integrity of the ore by minimising handling losses, degradation and avoiding contamination of the ore with other materials;
(g) protect the environment of the Port Area and minimise the impact of Port activities on that environment; and
(h) be responsible for security and occupational health and safety issues within the Port.
67 Clause 5 provided:
5. Port, Terminal and Marine Services
5.1 Provision of Port, Terminal and Marine Services
[Cape Preston Port Company] will provide, or will procure provision of, the PTM Services with effect from the Commencement Date.
5.2 Standard of Port, Terminal and Marine Services
[Cape Preston Port Company] must perform the PTM Services:
(a) in the same manner as would be expected of a prudent, diligent, skilled and experienced port, terminal and marine operator;
(b) in accordance with any operating protocol or standard which has been agreed in writing between [CP Mining Management] and [Cape Preston Port Company], including the Operating Protocol set out in Schedule 7; and
(c) in accordance with relevant regulatory requirements.
5.3 [Cape Preston Port Company] Policies and Procedures
[Cape Preston Port Company’s] operating policies and procedures must not fall below the standard of the then-current [CP Mining Management] operating policies and procedures.
5.4 Key Performance Indicators
(a) [Cape Preston Port Company] and [CP Mining Management] will agree, within 12 months of full operational commencement of the Port and MTF [marine transhipment fleet], a set of Key Performance Indicators.
(b) [Cape Preston Port Company] will use reasonable endeavours to achieve the Key Performance Indicators.
5.5 Environment
[Cape Preston Port Company] must take all reasonable measures to:
(a) prevent pollution, damage or injury to air, soil, water, animal or plant life and property; and
(b) avoid environmental harm or nuisance arising through the provision of the PTM Services.
68 Schedule 2, by cll 1 and 2 provided:
Schedule 2
Port, Terminal and Marine Services
1. Port and Facilities Management
1.1 Port and Facilities Management
[Cape Preston Port Company’s] port and facilities management activities at the Port include:
(a) management of maintenance of the stackers and associated yard conveyors in the stockpile area;
(b) management of maintenance and operation of port facilities and infrastructure including reclaimers, stockpile conveyors, barge loader equipment, vessel berths, moorings, breakwater infrastructure, bunker fuel storage and port offices;
(c) preparation and management of annual budgets for operation and maintenance of port facilities;
(d) safe handling of product from stockpile to the loading terminal, barge to the floating transhipment barge and subsequent loading of export vessels;
(e) importing and associated stevedoring activities as required;
(f) port traffic management, scheduling and communications, safety and incident response;
(g) provision of ancillary services including pilots, towage, maintenance of navigational aids, surveys, storage and provision of bunkers, fuels, hazardous goods and noxious substances on site;
(h) developing and implementing the Port environmental management plan, security plan, emergency response, oil spill response and cyclone preparedness, mitigation response activities, as set out in more detail in Schedule 3;
(i) developing and implementing procedures for the scheduling of product, management of the [marine transhipment fleet], export vessels and their loading, in accordance with the Supply Chain Planning provisions set out in Schedule 4;
(j) management of relationships and liaison between [CP Mining Management], [Pacific Resources Trading Pte Ltd], Mineralogy, and Australian regulators; and
(k) compliance with all Government, Regulatory, and any other requirements relating to the management of the Port.
…
2. Port Governance and Regulatory Requirements
(a) [Cape Preston Port Company] must maintain licenses and port plans relating to both the port and marine assets as are required by Government Acts, Regulations, Codes and Guidelines.
(b) [CP Mining Management] will retain ultimate oversight and responsibility for health, safety, environmental, contractual and regulatory requirements at the Port. [Cape Preston Port Company] must account to [CP Mining Management] for any aspects of these requirements related to its scope of operations.
(c) In consultation with [CP Mining Management], [Cape Preston Port Company] will manage the relationship and liaise directly with relevant government agencies and regulatory bodies in relation to the development and management of the supply chain. The key external relationships that require [Cape Preston Port Company] management include:
(i) WA Department of Transport;
(ii) Australian Hydrographic Service;
(iii) Australian Maritime Safety Authority (AMSA) and OTS;
(iv) Australian Customs Service; and
(v) Australian Quarantine Inspection Service (AQIS).
(d) [Cape Preston Port Company] is responsible for obtaining and maintaining relevant licenses pertaining to their supply chain operations, including jetty, pilotage, pilot exemption, towage operations, to the extent that Mineralogy is not otherwise responsible for that role under Law or the Mineralogy Agreements.
(e) [Cape Preston Port Company] must ensure that internal and external requirements relating to the safe operation of the Port and its marine assets are adhered to, including:
(i) compliance with Acts, Regulations, Codes and Guidelines;
(ii) approval of plans, installation and maintenance of navigational aids; and
(iii) compliance with Government and Classification compliance and survey requirements for the marine assets managed by [Cape Preston Port Company].
69 The primary judge referred to this agreement as a “private arrangement” saying:
85 … The agreement between Citic and CPPC was a private arrangement between those two corporations, amongst the Citic parties themselves, that could not, and did not, confer any status as to the public role of managing the operations of the Port. That agreement did not affect Mineralogy’s position as the Citic parties’ effective landlord. …
70 In my respectful view, neither the lack of a “public” dimension to the operational responsibilities referred to in the Service Level Agreement, nor any reservation of Mineralogy’s role as a “landlord” denies that effective operational control of the port (subject to directions of the harbourmaster) appeared to be in the hands of the Citic parties. As the primary judge went on to say in the same paragraph:
85 … The Citic parties would be the first users of the Port, would have a role as a, or the only, port facility operator and would conduct the transhipping and export operations. …
71 In this respect, it does not matter, in my view, that shipping movements at the port had not yet commenced. One reason why such a circumstance is not determinative against the Citic parties on the present issue is provided by MTOFSA itself. Section 14(2)(c) refers to the management of the operations of the port. “Port” is defined in s 12 of MTOFSA as follows:
12 Meaning of port
(1) A port is an area of water, or land and water (including any buildings, installations or equipment situated in or on that land or water) intended for use either wholly or partly in connection with the movement, loading, unloading, maintenance or provisioning of ships.
(2) A port includes:
(a) areas of water, between the land of the port and the open waters outside the port, intended for use by ships to gain access to loading, unloading or other land-based facilities; and
(b) areas of open water intended for anchoring or otherwise holding ships before they enter areas of water described in paragraph (a); and
(c) areas of open water between the areas of water described in paragraphs (a) and (b).
(Emphasis added.)
72 The Port of Cape Preston met this definition. It was intended for shipping movements. The Citic parties were responsible for managing its operations in that intended state and in its existing state.
73 In a context where it was an established practice for resource companies to be regarded as responsible for port operations in a port where no port authority had been established and where the Citic parties had effective day-to-day operational control over the port facilities and would have such control over commercial shipping operations when they commenced, it was obligatory for the views of at least Cape Preston Port Company to be taken into account under s 14(2)(c). Does that mean that relief should be granted in the present appeal?
Should relief be granted
74 There are some competing considerations to be taken into account, bearing in mind that, ultimately, relief of the nature sought in the present proceedings is discretionary.
75 First, although the delegate made no reference to the views of the Citic parties, and did not say that Mr Rankin’s emails were matters he took into account, nevertheless at a level of basic practicality the delegate knew (because he had been informed by Mr Rankin) that the Citic parties no longer accepted Mineralogy as port operator. On one view it should not be supposed that he simply ignored that practical circumstance.
76 Furthermore, there was no suggestion at the hearing of the appeal that any Citic party should have the role of port operator instead of Mineralogy. At the hearing of the appeal the Citic parties made it clear that their position was that, instead of Mineralogy, it was the State of Western Australia, or the harbourmaster appointed by it, which should be designated as port operator under MTOFSA.
77 Before the primary judge there was unchallenged evidence that at no time before the delegate’s decision was it suggested that the State or the harbourmaster should be the designated port operator under MTOFSA. In any event, the delegate understood and recorded that the position of the State, as conveyed by the current harbourmaster, was that Mineralogy was the appropriate port operator.
78 A Full Court of this Court recently observed:
87 The importance of fair procedure, of the fair exercise of power, of not exercising power in a manner that is practically unjust explains why it can be said that there is nothing technical about the rules of natural justice: Salemi at 419 (Gibbs J). …
(TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd [2014] FCAFC 83).
79 That observation was preceded by the following passage:
86 The required content of fairness in any particular case will depend on context: constitutional, statutory and human, on all the circumstances of the case: Salemi v MacKellar (No 2) [1977] HCA 26; 137 CLR 396 at 419. The fairness required relates principally to the procedure employed in dealing with the party in question. That may involve the exercise of state or governmental power over the individual, who may be vulnerable and powerless, or a great corporation. The terms of any statute will be critical. The common element is that, generally speaking, the exercise of power should be fair. That exercise will always have a human context. That is why, as Gleeson CJ said in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at 14, fairness is not an abstract concept, but essentially practical. The concern of the law is to avoid practical injustice. Fairness is normative, evaluative, context-specific and relative.
80 In the circumstances of the present case, there may have been no practical unfairness in not seeking some developed statement of the views of the Citic parties. Those views were apparent. They were also of questionable significance in circumstances where it was not at any time suggested (and is not now) that Cape Preston Port Company should be designated port operator and where the position of the State, as conveyed through the harbourmaster, was that Mineralogy was an appropriate designate.
81 To that doubt may be added the fact that, in my view, none of the matters upon which the Citic parties relied at first instance or on the appeal to suggest a lack of ability on the part of Mineralogy to be port operator should be accepted. Once those matters are put aside there may be little practical force in any suggestion that the mere opposition of the Citic parties to Mineralogy as a commercial opponent (no matter how forcefully opposed) could have influenced the decision.
82 Nevertheless, it appears to me to be clear from the delegate’s own reasons that the delegate did not take into account the views of Cape Preston Port Company as required by s 14(2)(c) of MTOFSA, or any of the Citic Parties.
83 In his decision the delegate identified the “evidence or other material” on which his findings were based as follows:
EVIDENCE OR OTHER MATERIAL ON WHICH MY FINDINGS WERE BASED
8. In reaching my decision, I had regard to the following material:
8.1 A draft MSP submitted by Mineralogy, email dated 17 January 2013.
8.2 Minutes of the Cape Preston Marine Safety Meetings (13 February 2012 – October 2012). These meetings were chaired by WA Department of Transport and comprised senior representatives of Mineralogy and Citic-Pacific. The Department was invited to attend to provide advice on the process for obtaining regulatory approvals under the Act for Cape Preston. Brian Rankin, Compliance Manager, Maritime, Department of Infrastructure and Transport represented the Department at these meetings.
84 When the delegate addressed the specific requirements of s 14(2)(c) he referred, in the passages I have set out above, to the stated position of Mineralogy (as a person responsible for managing the operations of the port) and the views of WA DoT officials expressed at meetings with Mineralogy and the Citic parties (as representative of the views of the owner of the port) but he made no reference to the draft MSP submitted by Cape Preston Port Company (which disclosed a lack of acknowledgement of Mineralogy as port operator) or the information given to him by Mr Rankin about the views of the Citic parties. He did not seek the views of any of the Citic parties directly.
85 The better view is, therefore, that the delegate did not take into account the views of the Citic parties, probably because he thought it was not relevant to do so.
86 On the construction of s 14(2)(c) which I prefer, that approach was based on a misunderstanding of the statutory requirements and resulted in a failure by the delegate to carry out the task assigned to him under s 14 of MTOFSA.
87 As a result, I accept that the appeal should be upheld and the decision of the delegate should be set aside.
Common law procedural fairness
88 If I am wrong in my view that s 14(2)(c) required the delegate to take account of the views of Cape Preston Port Company, neither that appellant nor any other Citic party had, in my view, a sufficient interest in the question of who should perform the public function of port operator under MTOFSA to have an enforceable right to be heard on that question. I agree with the primary judge about that issue.
89 If I am correct in my construction of s 14(2)(c), no greater or different case for relief can arise under the common law. It is therefore not necessary to deal further with this issue.
Other matters
90 The amended notice of appeal challenged only the judgment given, and orders made, on 5 February 2014.
91 Those orders did not deal with the costs of the proceedings at first instance. Those costs were addressed in further orders made by the primary judge on 28 February 2014. No party to the proceedings at first instance has appealed against those further orders. In the circumstances those orders should be left undisturbed.
Conclusion
92 The appeal should be upheld and the decision of the delegate should be set aside. The second respondent should pay the appellants’ costs of the appeal.
| I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. |
Associate:
| IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | |
| GENERAL DIVISION | NSD 219 of 2014 |
| ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA |
| BETWEEN: | SINO IRON PTY LTD First Appellant KOREAN STEEL PTY LTD (ACN 058 429 600) Second Appellant CAPE PRESTON PORT COMPANY PTY LTD (ACN 147 842 153) Third Appellant CITIC PACIFIC MINING MANAGEMENT PTY LTD (ACN 119 578 371) Fourth Appellant |
| AND: | SECRETARY, DEPARTMENT OF INFRASTRUCTURE AND TRANSPORT First Respondent MINERALOGY PTY LTD (ACN 010 582 680) Second Respondent |
| JUDGES: | BUCHANAN, PAGONE AND PERRY JJ |
| DATE: | 20 AUGUST 2014 |
| PLACE: | SYDNEY |
REASONS FOR JUDGMENT
PAGONE J:
93 The appellants (collectively referred to as “Citic”) appeal from a decision dismissing an application for judicial review in which they had challenged the designation of the second respondent (“Mineralogy”) as the port operator for the Port of Cape Preston pursuant to s 14(1) of the Maritime Transport and Offshore Facilities Securities Act 2003 (Cth) (“the Act”).
94 The Secretary may designate a person as the port operator under s 14(1) of the Act for a security regulated port. That power may be, and in this case was, delegated to an officer of the Department of Infrastructure and Transport. On 31 January 2013 the delegate designated Mineralogy as the port operator of the security regulated Port of Cape Preston. The designation was published in the Gazette on 13 February 2013 and became effective upon publication. On 5 June 2013 the delegate gave his reasons for the designation which was then challenged by Citic under s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth). The challenge, as recorded by his Honour the primary judge at [3], had two bases: first, that there had been a breach of the rules of natural justice in connection with the making of the designation because Citic had not been heard before the designation was made, and secondly, that the making of the designation was an improper exercise of the power under s 14(1) because the delegate had failed to take into account relevant considerations, or had taken into account irrelevant considerations, in considering the requirements of s 14(2)(a) and (b). His Honour found against Citic on both grounds.
95 Citic’s appeal from his Honour’s decision raised four grounds. The principal ground of appeal was that his Honour had erred in his finding that the delegate had correctly determined Mineralogy’s “ability” to undertake the functions of a port operator as required by s 14(2)(a) and (b) of the Act. Citic’s first ground of appeal, as amended, said:
1. The primary judge erred in finding that the Delegate took into account relevant considerations prescribed by section 14(2)(a) and (b) of MTOFSA in circumstances where:
(a) the Delegate did not, in his reasons, consider Mineralogy’s ability (either before or after the proposed designation) to monitor or control those areas of the Port which were outside Mineralogy’s mining tenure;
(b) the Delegate relied on, in his reasons, an out dated collaborative arrangement between Mineralogy and the CITIC Parties when he knew those arrangements no longer existed when the decision was made;
(c) the Delegate did not, in his reasons, consider Mineralogy’s ability to undertake the functions of a port operator without the collaboration of the CITIC Parties; and
(d) the Delegate did not, in his reasons, refer to regulations 6.33, 6.35 and 6.70 of the Maritime Transport and Offshore Facilities Security Regulations 2003 (regarding Mineralogy’s ability to monitor and control waterside and landside restricted zones), the inference being that he did not take these matters into account.
In considering this ground it needs to be remembered that judicial review is not the same as a reconsideration of the decision. The task before the Court in an application for judicial review is not to reconsider the decision of the delegate but to determine whether it was reached by legal error. Citic was required to show, relevantly to ground 1, that the delegate had misconstrued, or misapplied, the legal meaning of the provisions, or took into account something which the delegate was not permitted by law to take into account or had failed to take into account something which he was by law required to take into account.
96 Section 14 of the Act provides:
14 Port operators
(1) The Secretary may, by notice published in the Gazette, designate a person as the port operator for a security regulated port.
(2) In designating a person as a port operator, the Secretary must take into account:
(a) the ability of the person to undertake the functions of a port operator; and
(b) the physical and operational features of the port; and
(c) the views of the person, or persons, responsible for managing the operations of the port.
The first requirement for the Secretary’s delegate to take into account was, therefore, the “ability” of Mineralogy to undertake the functions of a port operator. His Honour found that the Secretary’s delegate had correctly understood the concept of “ability” in s 14(2)(a), had correctly applied that understanding to the facts, and had neither failed to take into account what the Act required to be taken into account nor had he taken into account something which he was not by law permitted to take into account.
97 Citic contended that his Honour, and before him that the delegate, had taken an erroneous view of the word “ability” in s 14(2)(a), and had not considered Mineralogy’s ability in the sense of “suitability” or “fitness”. Citic’s argument in that context also relied upon the requirement in s 14(2)(b) to take into account the physical operational features of the port. It is clear, however, that his Honour, and before him that the delegate, had construed the word “ability” broadly, and as requiring a consideration of all factors bearing upon the ability of a person to be designated as a port operator. His Honour considered that those factors “could include the person’s financial capacity and resources to provide all, or some, of the resources, such as personnel, plant and equipment needed to discharge the functions of port operator, the fitness and propriety of the person and whether any draft plan prepared by the person [appeared] to have addressed adequately or appropriately the requirements for the security of the port under the Act and Regulations”: [68]. His Honour went on to state that the matters to be taken into account “will depend on the circumstances of each particular case” and that they were “not susceptible of, and should not be construed as having, greater proscription than conveyed by the general words of s 14(2)(a)”.
98 His Honour found that the Secretary’s delegate had carefully considered Mineralogy’s detailed maritime security plan, including (as his Honour said “critically”) the port security risk assessment which had been prepared early in 2011 by Risk Resolution on Mineralogy’s instructions. His Honour said at [71]-[81] (retaining the emphasis in his Honour’s judgment):
71 I am of opinion that the submissions of the Citic parties and the Secretary misconceived the concept of the “ability” of Mineralogy that the delegate had to take into account under s 14(2)(a). Nor am I able to accept their argument that the delegate simply looked at the matters he set out in his reasons and discarded them. To the contrary, he adopted those matters, as appropriately qualifying Mineralogy for the designation. Once the misconception under which the Citic parties and the Secretary criticised Mineralogy’s pre-designation power is put to one side, the delegate’s reasoning appears to be rational and a fulfilment of his statutory functions. He reviewed the final draft plan in order to assess whether Mineralogy, in effect, knew what it would have to do if designated as port operator and had the “ability”, in the sense I have explained above, to do it. That exercise was the task that s 14(2)(a) and (b) required the delegate to undertake.
72 Critically, one of the attachments to the final draft plan was the port security risk assessment prepared in early 2011 by Risk Resolution on Mineralogy’s instructions. It appeared to be a comprehensive security assessment for the purposes of regs 3.05 and 3.40, being a matter that the delegate considered of particular relevance in his assessment of Mineralogy’s ability. As I have noted at [29] above, the assessment referred to Citic’s participation in its formation and to Mineralogy’s financial strength to undertake the role of port operator.
73 In Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1966) 185 CLR 259 at 272 Brennan CJ, Toohey, McHugh and Gummow JJ identified the practical restraints on judicial review in the following well-known passage:
“… a court should not be “concerned with looseness in the language … nor with unhappy phrasing” of the reasons of an administrative decision-maker. The Court continued: “The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error.”
These propositions are well settled. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. In the present context, any court reviewing a decision upon refugee status must beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision.” (emphasis added; citations omitted)
74 The Citic parties’ and the Secretary’s criticisms of the delegate’s reasons were essentially attempts to attack the merits of his decision in a manner not open in judicial review proceedings. For example, those submissions criticised the delegate for not considering that Mineralogy’s leasehold interests in the port formed a minor part of its total area and did not include the bulk of water-side areas. Ordinarily, such an absence of rights over the realty (if water areas in a port can be so described) would be common to all persons, unless the port operator were a government. However, the authority of being a designated port operator under the Act overcomes any difficulty that would exist because the person did not have an interest in the real property. A police constable’s lack of an interest in real property is no obstacle in his or her being able to exercise a common law or statutory power of entry onto land to effect an arrest if he or she satisfies the conditions stipulated by the law. So too, a port operator exercises the power under the Act to regulate, or cause, matters to be done with in the port.
75 Moreover, if a port operator were experiencing, for example, recalcitrance in complying with s 45 from a maritime industry participant in the port, the Secretary has extensive powers to seek to bring about compliance with the port operator’s plan. Importantly, a maritime industry participant cannot engage in conduct that obstructs or hinders compliance with a maritime security plan of another participant pursuant to s 45(1). That obligation is enforceable by injunction proceedings. Where a port operator has given the relevant part of its maritime security plan or covering plan to an affected maritime industry participant, if that participant agrees in writing to the activities being covered by the covering plan, the participant must take all reasonable steps to comply with the covering plan (s 45(3)).
76 The provisions of s 45 demonstrate that the Parliament had ensured that, where co-operation between maritime industry participants was lacking, plans could be enforced. And, of course, the Secretary must approve each participant’s maritime security plans under ss 50 and 51. The approval process enables the Secretary to ensure that discordant plans are harmonised before they are approved, and the Secretary also has power to direct variation, revision or cancellation of plans that are in force under ss 53-59 of the Act. The power to direct revision of a plan under s 55 is available where the Secretary is no longer satisfied that it adequately addresses the relevant requirements of a plan under Div 4 of Pt 3 of the Act.
77 I reject the Citic parties’ argument that, as the principal user and Mineralogy’s nominated port facility operator, their consent to Mineralogy’s port security plan was necessary. That argument was misconceived. If correct, it would give any person within a port an effective veto over, first, who could be designated as port operator and, secondly, what the port operator, as the statutory appointee with overall responsibility for the security of the port, could require, or create obligations for, others to do under s 45. The argument only has to be appreciated for what it was to see it is unworkable. The Act created the hierarchy of authority for the provision of security in a security regulated port. While co-operation between maritime industry participants is desirable, and would be the ordinary and sensible course, the Act contained its own mechanisms to ensure that, where co-operation is absent, security outcomes can be imposed.
78 The ability of Mineralogy to undertake the role of port operator did not depend on its commercial relationship with the Citic parties. The recent breakdown in their relationship was not relevant to the delegate’s decision-making. The Act prescribed how maritime industry participants had to conduct themselves and gave powers to the Secretary to enforce requirements in maritime security plans. If another participant hinders or obstructs a port operator in complying with its plan or does not comply with it themselves, the Act gives the Secretary powers to deal with that participant. The Act did not give a person in the position of the Citic parties a right to veto, or urge against, the designation of a person as a port operator merely because those parties had a dispute or were, or one was, not prepared to co-operate with the other. Those matters did not bear on Mineralogy’s ability to undertake the functions of port operator.
79 For these reasons, the argument that the delegate failed to take into account, under s 14(2), that the Citic parties did not agree to the final draft of the plan or were in dispute with Mineralogy must be rejected. In any event such agreement was premature. The delegate was not considering the approval of the plan at the time he exercised his power to designate the port operator. He recognised in [9.2] of his reasons that Mineralogy’s draft plan proposed CPPC as port facility operator and that it would have its own plan: i.e. it was a draft that the Secretary was yet to approve. He correctly recorded that that was how the parties had proceeded at the minuted meetings in 2012. Mr Robinson’s unchallenged evidence was that no-one, including the Citic parties, ever suggested that Mineralogy not be the port operator. All the meetings proceeded on the agreed basis that it would be designated.
80 However, the Citic parties stated at the meeting of 22 October 2012, through Mr Larbey, that they were reviewing the security plans (i.e. the part of Mineralogy’s plan they had seen and their own) “to make sure all ok in terms of what we are required to do”. That did not suggest that the Citic parties no longer agreed that Mineralogy would be port operator. The commercial differences between Mineralogy and the Citic parties became more pronounced late in 2012, to the point where the Citic parties’ port facility operator’s security plan apparently did not recognise Mineralogy’s role as port operator as noted in Mr Rankin’s email to the delegate of 29 November 2012. However, its draft plan was only that of a port facility operator. Capt Heppingstone took a similar position in his email of 17 December 2012. He articulated in a general way that the Citic parties had issues as to some of the content of Pt 6 of Mineralogy’s draft plan and wanted to see the whole plan. That desire was expressed in the context that the Citic parties saw themselves as providing more of the security for the port than Mineralogy in the port’s regulatory structure, not as undertaking a different role or suggesting that Mineralogy’s draft plan, as port operator, was misconceived because Mineralogy should not have been in that office.
81 The allocation, between maritime industry participants in a port, of particular security responsibilities under draft plans was not a matter that s 14(2) required the Secretary to take into account in considering the designation of a port operator.
His Honour had previously (at [51]-[54]) set out the delegate’s reasons which showed that the Secretary had taken into account, as bearing upon Mineralogy’s ability to be designated as a port operator, matters which existed prior to designation as well as factors which would arise post designation. The delegate’s reasons had expressly referred to having had regard to the draft maritime security plan which Mineralogy had submitted (dated 17 January 2013) and the minutes of the Cape Preston Maritime Safety meetings for the period between 13 February 2012 and October 2012. A consideration of that material, as was undertaken by the Secretary’s delegate, and as understood by his Honour to have been undertaken, revealed a detailed and complex consideration of matters bearing upon Mineralogy’s ability to be designated as a port operator.
99 Citic’s argument before his Honour, and on appeal, had also sought to rely, in the construction of s 14, upon a statement in the Explanatory Memorandum concerning the clause in the Bill that became s 14 in the Act. In considering the passage from the Explanatory Memorandum relied upon, it is useful to bear in mind that reliance upon it arose in the context of a claim by Citic that there was a commercial dispute between Citic and Mineralogy which bore upon the ability (within the meaning of s 14(2)(a) propounded by Citic) of Mineralogy to be designated as port operator. A significance of the commercial disagreement was said by Citic to be that the disagreement between them was a cause of Mineralogy lacking legal or practical control or access over certain areas and facilitates which would have been available to Mineralogy with Citic’s co-operation. Citic’s point can be seen from the terms of the first ground of appeal of the notice of appeal, namely, that Mineralogy could not be found to have the requisite “ability” where (a) Mineralogy’s mining tenure did not cover all of the areas of the Port which it would need to monitor or control if designated as port operator, (b) the delegate had relied upon an out of date collaborative arrangement, (c) the delegate had not considered whether Mineralogy had the requisite ability without the out dated collaborative arrangement which the delegate was said to have assumed, and (d) the delegate should be presumed not to have considered the relevance of regulations 6.33, 6.65 and 6.70 to the assessment of Mineralogy’s ability.
100 It was in that context that Citic relied upon the passage appearing in the Explanatory Memorandum relating to cl 14 of the Bill which was subsequently enacted as s 14 of the Act. The relevant passage in the Explanatory Memorandum was:
This clause provides that the Secretary may publish a notice in the Gazette designating a person as the port operator for the security regulated port. The port operator must be able to demonstrate that it has responsibility for the relevant waterside and landside areas within a proposed or an established security regulated port, for example, control of vessel movement and management of port infrastructure.
The second sentence in the passage quoted above expressed the view that cl 14 of the Bill required the port operator to “demonstrate that it had responsibility for” the waterside and landside areas. The issue as raised by Citic became, in effect, whether the “responsibility” to be demonstrated (in the sense used in the passage in the Explanatory Memorandum) informed the meaning of the word “ability” such as to make designation dependent upon Mineralogy having the legal, or at least the practical, “power” before designation to monitor and control areas of the Port outside Mineralogy’s mining tenure. Citic contended that Mineralogy’s lack of tenure and that its dispute with Citic deprived Mineralogy of the “powers” it needed to establish the “ability” to be designated as a port operator, and that in determining Mineralogy’s “ability” it was not permissible to take into account the “powers” that Mineralogy would have under the Act arising from designation if it were designated.
101 That was the context in which his Honour rejected a construction of s 14(2)(a) that required the ability of Mineralogy to be assessed only by reference to the legal powers of Mineralogy (such as it might have from specific mining tenure or from co-operative arrangements with Citic) before designation, rather than also by reference to those powers which would be conferred upon Mineralogy by virtue of the Act, or otherwise, after designation. His Honour said at [66]:
When s 14(2)(a) requires the Secretary to take into account the ability of the person to undertake the functions of a port operator, it contemplates him giving consideration to the person’s characteristics so that, if given the powers and authorities that the Act creates and confers on a port operator, the person will be able to perform the functions of that office. Consideration of “the ability of the person” referred to in s 14(2)(a), cannot be confined to, or perhaps require assessment of, the person’s pre-designation powers in respect of the port. The relevant powers that the person will exercise, if designated as port operator, do not derive from the person’s antecedent rights to possession, ownership or control of land or waters. Those powers will derive, and derive only, from the statutory conferral of authority, once the Secretary designates the person as the port operator under s 14(1).
This passage, Citic contended, indicated that his Honour had adopted a construction of s 14(2)(a) that did not require consideration of a person’s pre-designation ability to undertake the functions of a port operator post designation. That submission, however, misreads his Honour’s reasons in the passage in question and misreads his Honour’s reasons as a whole. In [66] his Honour was explaining why a consideration of a person’s “ability” was not to be confined to the “powers” which a person had before designation. The reason was that some “powers” would be conferred upon designation and the ability of the person for the purpose of designation should assume that the person would, post designation, have those powers. That, in essence, is why the example given by his Honour at [67] of a lawyer’s ability to undertake the functions of a judge was apposite to the reasoning. It was open to his Honour, and to the delegate, to take into account the powers that designation would confer upon Mineralogy (together with all of the other factors bearing upon its ability for designation) in determining its ability for designation.
102 The Act does not require that Mineralogy’s ability be determined only by reference to its legal tenure of the areas to be monitored and controlled, nor does it require a person’s ability to be determined by excluding from consideration the power which the person would obtain by designation. It was permissible (at very least), as his Honour observed, that the powers of a person after designation be taken into account in assessing that person’s ability to be designated. Mineralogy’s lack of mining tenure over the whole of the area to be monitored and controlled, and the state of co-operation existing between Citic and Mineralogy, did not preclude the assessment of Mineralogy as able to undertake the functions of port operator. The delegate was plainly aware, as was his Honour, of the extent, and limitations, of Mineralogy’s mining tenure over the area to be monitored and controlled and of the state of co-operation existing between Mineralogy and Citic.
103 Citic’s contention concerning the relevance of the commercial dispute with Mineralogy to a consideration of Mineralogy’s ability to be designated was in part also that the designation had been incorrectly based on Mineralogy’s Maritime Security Plan which was submitted to have been erroneously “predicated on the continued existence of a significant degree of co-operation between Mineralogy and the Citic parties”. However, the Maritime Security Plan, to which the delegate had regard, was not so predicated and the contention that a commercial dispute needed to be taken into account at the point of designation under s 14(1) misunderstands the role and function of designation of a person as port operator for a security regulated port under the Act. The purpose of the Act is to “safeguard against unlawful interference with maritime transport or offshore facilities” through, in part, the requirement that security plans be developed and adhered to. The scheme of the Act requires the Secretary to make, under s 14, a decision designating a port operator and, under ss 50 and 51, a separate decision approving the Maritime Security Plan of a port operator and port facility operators. The two classes of decisions are based upon separate criteria, and the role of port operator, as distinct from a port facility operator, is required to monitor restricted zones within a declared port. Section 42 of the Act requires a port operator to have a Maritime Security Plan but such a plan is not a requirement before designation. The draft Maritime Security Plan provided by Mineralogy to the delegate contemplated co-operation between Mineralogy and Citic as one option but the plan was not predicated upon such co-operation. Thus, for example, the section in the draft plan dealing with control of access to waterside restricted zones contemplated a number of measures, some of which may have required Citic’s co-operation but others which did not. The relevance, if any, of the state of co-operation between Citic and Mineralogy is a matter that might be relevant to the approval of a plan rather than at the point of designation.
104 The first ground of appeal also claimed that his Honour had erred in not finding that the delegate had failed to take into account relevant considerations as prescribed by s 14(2)(b). That provision required the delegate to take into account “the physical and operational function of the port” and, in rejecting Citic’s submission, his Honour said at [82]-[83]:
82 Nor did the delegate fail to take into account the physical and operational features of the port under s 14(2)(b) in the ways complained of. In [10] of his reasons he expressly referred to those matters having been set out in the final draft plan. The draft addressed the matters concerning the port's security that were affected by the physical and operational features. While the delegate's discussion of the matters arising under s 14(2)(b) was brief, in context it was sufficient. The matters in s 14(2)(b) are essential considerations because the person(s) being considered for designation as port operator must not only have “the ability … to undertake the role of a port operator” as required by s 14(2)(a), but must be able to do so for the particular port, having regard to its characteristics. Thus, while many of the considerations that ordinarily would arise under s 14(2)(a) will have regard to the particular port, that provision expressly used the indefinite article “a” to qualify “port operator”.
83 Hence, s 14(2)(b) required the Secretary to take into account the particular port in relation to the person(s) whose designation as port operator he was considering. In that way a person who may have the ability to be a port operator may, at the same time, not be suitable for the particular port because of the size or complexity of its physical or operational features. The delegate, himself, had declared the Port to be a security regulated port earlier on the same day as he made his designation of Mineralogy as port operator. Here, the final draft plan was written about how Mineralogy proposed to act as port operator of the Port of Cape Preston. The delegate had already considered the draft on that basis in [9] and [9.2] of his reasons, hence his brief, but sufficient, reference to those matters in [10]. The reasons showed that the delegate understood the relevant features of the Port from his review of the draft plan. That was his statutory function.
His Honour was correct in these conclusions. The delegate did take into account the physical and operational functions of the port as the delegate was required to do.
105 Grounds 3 and 4 of Citic’s appeal were to the effect that his Honour had failed to hold that the delegate had not complied with s 14(2)(c) of the Act. Section 14(2)(c) required the delegate to take into account the views of “the person, or persons, responsible for managing the operation of the port”. Citic contended that it was the “person, or persons, responsible” within the meaning of the provision whose views were to be taken into account. The dispute between the parties before his Honour, and on appeal, was whether it was Citic whose views were required to be taken into account under that provision.
106 The way in which this issue was conducted before his Honour, and on appeal, is of significance because there was a difference between his Honour and the delegate about the identity of the person or persons whose views were to be taken into account (independently of Citic’s contention that its view was to be taken into account). Section 14 of the Act contemplates that in every case where a designation is to be made there will be a person or persons who is or are responsible for managing the operations of the port. The Secretary’s delegate considered this provision and concluded that Mineralogy’s draft Maritime Security Plan articulated the views of a person responsible for managing the operations of the port. He also went on to take into account the views of the harbour master and of the Western Australian Department of Transport as representative of the views of the owner of the Port. Relevantly, the Secretary’s delegate’s reasons stated:
13 Mineralogy holds leases that encompass land and water within the boundary of the security regulated port (as approved by the delegate on 31 January 2013). These leases were issued by the then WA Department of Mines and Petroleum. These leases cover the area where the berth facilities are located and are covered by the draft MSP. Accordingly, I concluded that the views articulated in Mineralogy’s draft MSP were the views of a person responsible for managing the operations of the port.
14 While Cape Preston is not managed by a port authority, the WA DoT is responsible for appointing a harbour master to control movement of vessels in the port. Captain David Heppingstone had been appointed by the WA Government as the harbour master for the Port of Cape Preston. Captain Heppingstone chaired the Cape Preston Marine Safety Committee until September 2013 (when he resigned from DoT) and was replaced by David Harrod, MG Marine Safety (WA DoT) as Chair of the meeting. The views expressed by WADoT officials at these meetings were supportive of the arrangements as set out in the draft MSP, I therefore concluded that these were representative of the views of the owner of the port.
His Honour at [85], in rejecting Citic’s contention that it was the relevant person or persons whose views were required to be taken into account under s 14(2)(c), said that the person whose views were to be taken into account were that of “the harbour master and the State, to whose views the delegate did have regard”. No point was taken on appeal that his Honour’s view was contrary to that expressed by the delegate. It was, of course, true (as his Honour said) that the delegate had taken into account the views of the harbour master and of the State, but his Honour and the delegate differed about whether Mineralogy, on the one hand, or the harbour master and the State, on the other hand, was or were the person or persons fitting the statutory description. It was not that difference upon which the case was conducted before his Honour, or on appeal, but, rather, whether it was Citic whose views were required to be taken into account. Citic’s objective, after all, was to have its views taken into account. The question on appeal remained, therefore, whether it was Citic’s views that were to be taken into account for the purpose of the provision.
107 Citic contended that it had responsibilities for managing the operations of the declared port and that, therefore, its views (perhaps amongst those of others) ought to have been taken into account under the provision. His Honour accepted that Citic conducted activities at the port but rejected that its activities came within the contemplation of the provision. His Honour’s construction of s 14(2)(c) was that the expression “responsible for managing the operations of a port” referred to the person or persons with “overall responsibility for managing the operations of the port, and not to persons with functions that affect or are relevant to the operations of parts of the port”. In that regard his Honour at [84]-[85]:
84 I reject the Citic parties’ argument that their views had to be sought under s 14(2)(c). In my opinion, the expression “responsible for managing the operation of a port” in s 14(2)(c) refers to the person or persons with the overall responsibility for managing the operations of the port, and not to persons with functions that affect or are relevant to the operation of parts of the port. If every person who had responsibility for managing any infrastructure or operational matters in various parts of a port were caught by s 14(2)(c), a very wide net would be cast. The expression in s 14(2)(c) should not be read to extend to persons who do not have broad overall management responsibility for the operations of the port.
85 The Citic parties were not persons responsible for managing the operations of the Port. Rather, they were persons responsible for managing some operations in certain areas of the Port. They were not able to point to any agreement or source of rights that gave them power to manage the operations of the Port. Such rights as they had derived from their agreements with Mineralogy and nothing in those, to which they referred in argument, conferred such a right. The agreement between Citic and CPPC was a private arrangement between those two corporations, amongst the Citic parties themselves, that could not, and did not, confer any status as to the public role of managing the operations of the Port. That agreement did not affect Mineralogy’s position as the Citic parties’ effective landlord. The Citic parties would be the first users of the Port, would have a role as a, or the only, port facility operator and would conduct the transhipping and export operations. However, those were private activities that did not amount to a responsibility for managing the operations of the Port. That was the role of the harbourmaster and the State, to whose views the delegate did have regard.
I agree with the construction adopted by his Honour and the reasons given. Section 14(2)(c) contemplates a single management of the operation of the Port, albeit that the single management may be conducted by more than one person. It is in that sense that the section requires the identification of the person or persons “with the overall responsibility”. Citic’s activities were not of that character. Citic, and CPPC, were undertaking activities which did not make them responsible for managing the operations of the Port.
108 Ground 2 of Citic’s appeal was that his Honour had been in error in holding that the delegate was not required to accord Citic with an opportunity to be heard before designating Mineralogy as the port operator. His Honour held that Citic did not have a right at common law to be heard on the question of whether Mineralogy should be designated as port operator. Citic contended, correctly, that the common law principles of procedural fairness are not excluded unless parliament has used “plain words of necessary intendment”: Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at [126]. What Citic needed to show, however, as it accepted that it needed to do, was that the designation of Mineralogy as port operator was apt to affect its rights and interests in such a way as to attract an obligation to accord procedural fairness: Kioa v West (1985) 159 CLR 550, 584; Plaintiff S10 of 2011 v Minister for Immigration and Citizenship (2012) 246 CLR 636, 658-9. In that regard it was for Citic to establish some right or interest which was apt to be adversely affected by Mineralogy’s designation, but it did not do so beyond general statements that Citic might have security obligations and that it had an overall financial interest. However, neither interest was shown to be affected in any way by the fact of designation of Mineralogy as port operator: no financial interest was shown to have been affected by the designation of Mineralogy as port operator and no security obligation of Citic was shown to be affected by the designation of Mineralogy as port operator. A subsequent approval of a Marine Security Plan could, conceivably, affect those interests in some way but that was not the decision which was under current review.
109 Accordingly, I would dismiss the appeal.
| I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Pagone. |
Associate:
Dated: 20 August 2014
| IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | |
| GENERAL DIVISION | NSD 219 of 2014 |
| ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA |
| BETWEEN: | SINO IRON PTY LTD (ACN 058 429 708) First Appellant KOREAN STEEL PTY LTD (ACN 058 429 600) Second Appellant CAPE PRESTON PORT COMPANY PTY LTD (ACN 147 842 153) Third Appellant CITIC PACIFIC MINING MANAGEMENT PTY LTD (ACN 119 578 371) Fourth Appellant |
| AND: | SECRETARY, DEPARTMENT OF INFRASTRUCTURE AND TRANSPORT First Respondent MINERALOGY PTY LTD (ACN 010 582 680) Second Respondent |
| JUDGES: | BUCHANAN, PAGONE AND PERRY JJ |
| DATE: | 20 AUGUST 2014 |
| PLACE: | SYDNEY |
PERRY J:
REASONS FOR JUDGMENT
1. INTRODUCTION
110 The appeal concerns the validity of the decision of a delegate of the Secretary, Department of Infrastructure and Transport (the Secretary), made on 31 January 2013 to designate Mineralogy Pty Limited under s 14 of the Maritime Transport and Offshore Facilities Security Act 2003 (Cth) (the Act) as the port operator for the Port of Cape Preston (the Declared Port). On the same day, the Port was declared by the Secretary to be a “security regulated port” under s 13(1) of the Act. The boundaries of the Declared Port correspond with those within which the State of Western Australia had earlier declared a port pursuant to s 10 of the Shipping and Pilotage Act 1967 (WA).
111 The primary judge found the decision designating Mineralogy as port operator to have been validly made.
112 The appellants, Sino Iron Pty Ltd, Korean Steel Pty Ltd, CITIC Pacific Mining Management Pty Ltd and Cape Preston Port Company Pty Ltd (CPPC) (collectively, the Citic parties), contend that the designation of Mineralogy as port operator should have been set aside by the primary judge under s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act). First, it is said that the Secretary failed to take into account relevant considerations prescribed by s 14(2) of the Act, namely: the ability of Mineralogy to undertake the functions of a port operator and the physical and operational features of the Declared Port (subss (a) and (b)); and the views of the appellants, or at least one of them (subs (c)).
113 Secondly, the appellants contend that the Secretary was in breach of his duty of procedural fairness by failing to give the appellants an opportunity to be heard before making the designation. The duty was said to be owed on the basis that the appellants were persons affected by the decision even though they did not contend that they should have been considered for the role of port operator. I agree for the reasons given by Pagone J that there was no breach of procedural fairness.
2. FACTS
114 The salient facts can be stated shortly.
115 Mineralogy is the registered holder of mining tenements granted by the State of Western Australia over areas of land and seabed in and around the Declared Port.
116 In March 2006, Mineralogy entered into separate mining right/lease agreements with Sino Iron and Korean Steel pursuant to which they were to conduct a mining project (the Sino Iron project) in a defined area within the tenements held by Mineralogy: primary judge at [26]. CITIC is the manager of the Sino Iron Project on behalf of Sino Iron and Korean Steel which were subsidiaries of CITIC: primary judge at [28].
117 At the time of designation, the Port was not yet being used in connection with the loading or unloading of security regulated ships as shipping had not commenced. However, construction by Sino Iron and Korean Steel of port facilities within the Declared Port was (and is) continuing. On completion, the port facilities are to be used to export iron ore mined by Citic on behalf of Sino Iron and Korean Steel pursuant to project proposals approved under a State agreement ratified by the Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Act 2002 (WA) and other agreements with Mineralogy: primary judge at [25] and [28].
118 On 1 September 2011, CITIC entered into a service level agreement with CPPC, which is a related company, to conduct operations at the Declared Port and to undertake shipping operations, including at the twelve transshipment anchorages. Mineralogy has tenure over some areas of land and seabed within the boundaries of the Declared Port, including relevant landside facilities and the approach from the transshipping anchorages to those facilities, with the remaining waters within the Declared Port being in the control of Western Australia. Its tenure does not include the twelve transhipment anchorages.
119 The appellants contend that by late 2012, they were in dispute with Mineralogy and had conflicting views about their respective responsibilities for matters concerning the Port. They also contend that the delegate who made the decision under challenge was aware of this.
120 On 5 June 2013, the Secretary provided reasons for the designation of Mineralogy as port operator on 31 January 2013. He explained that in reaching his decision, he “had regard to the following material:
8.1 A draft [Maritime Security Plan] submitted by Mineralogy, email dated 17 January 2013.
8.2 Minutes of the Cape Preston Marine Safety Meetings (13 February 2012 – October 2012). These meetings were chaired by WA Department Of Transport and comprised senior representatives of Mineralogy and Citic-Pacific. The Department was invited to attend to provide advice on the process for obtaining regulatory approvals under the Act for Cape Preston. Brian Rankin, Compliance Manager, Maritime, Department of Infrastructure and Transport represented the Department at these meetings.
121 On the basis of these materials, the Secretary found that:
1. Mineralogy’s draft Maritime Security Plan (MSP) set out how it would undertake the functions of a port operator if designated under the Act and the arrangements “demonstrated that Mineralogy understood the security responsibilities that would be required to be undertaken by the port operator, and that it was capable of undertaking these responsibilities”.
2. Arrangements identified in the draft MSP included that Mineralogy would manage port operations while CPPC, the “Port Facility Operator” under the Act, would be undertaking import and export shipping operations and operate under its own Port Facility Security Plan. These arrangements were consistent with what had been discussed at the Cape Preston Marine Safety Meetings and agreed by all participants throughout 2012.
3. The draft MSP set out the physical features of the Declared Port including infrastructure already built.
4. With respect to the views of persons managing the operations of the Declared Port, the Port is owned by the Western Australian government but not operated by a port authority established under the Port Authorities Act 1999 (WA). Eight other ports in Western Australia have similar governance arrangements and, aside from the Port of Derby, the relevant resource company is the port operator.
5. Mineralogy holds leases encompassing land and water within the Declared Port, including where the berth facilities are located and are covered by the draft MSP. As such, the views in Mineralogy’s draft MSP were the views of the person responsible for managing the operations of the Port.
6. The Western Australian Department of Trade, which is responsible for appointing a harbourmaster to control movement of vessels in the Port, expressed support for the arrangements in the draft MSP at the meetings. These were representative of the views of the owner of the Port.
3. LEGISLATIVE CONTEXT IN WHICH S 14 FALLS TO BE CONSTRUED
122 The proper construction of s 14 of the Act lies at the heart of the appeal. That section provides that:
(1) The Secretary may, by notice published in the Gazette, designate a person as the port operator for a security regulated port.
(2) In designating a person as a port operator, the Secretary must take into account:
(a) the ability of the person to undertake the functions of a port operator; and
(b) the physical and operational features of the port; and
(c) the views of the person, or persons, responsible for managing the operations of the port.
123 A “security regulated port” is an area of a port intended for use either wholly or partly in connection with the movement, loading, maintenance or provision of “security regulated ships” which is declared to be a security regulated port (s 13, the Act). As is the case here, a port includes areas of water, or land and water, including buildings and installations, and areas of water outside the port for access to land-based facilities or for anchoring, and areas of open water between such areas and areas intended for such use (s 12). A “security regulated ship” includes Australian passenger ships, Australian cargo ships over a set tonnage used for overseas or interstate voyages, foreign passenger ships, and foreign cargo ships over a set tonnage in Australian waters proceeding to an Australian port (ss 15-17).
124 In requiring that the Secretary “take into account” the matters identified in s 14(2), the Secretary must give weight to them “as a fundamental element in making his determination”: R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 180 CLR 322 at 329 (Mason J (Gibbs J agreeing at 324)). In other words, when required to consider material, the process of consideration must involve “‘an active intellectual process’ directed at the nominated subject-matter”: Telstra Corporation Ltd v Australian Competition and Consumer Commission (2008) 176 FCR 153 at 182 (Rares J, citing Black CJ in Tickner v Chapman (1995) 57 FCR 451) (approved in Telstra Corporation Ltd v Australian Competition Tribunal (2009) 175 FCR 201 at 242 [267] (the Court)).
125 It was not in dispute that the word “ability” in s 14(2)(a) refers to the suitability or capacity of the person to discharge the functions in question. However, the appellants contended that “ability” falls to be considered by reference to the pre-designation powers and responsibilities of the person and not to its powers and responsibilities on designation. It is said by the appellants that the Secretary failed to undertake that task and thereby failed to take into account a relevant consideration.
126 The proper approach to statutory construction was recently confirmed by a unanimous High Court in Federal Commissioner of Taxation v Unit Trend Services Pty Ltd (2013) 87 ALJR 588 (Unit Trend) at 597 [47] in the following passage:
As French CJ, Hayne, Crennan, Bell and Gageler JJ said in Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [(2012) 87 ALJR 98 at [39]]: “This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text.” Context and purpose are also important. In Certain Lloyd’s Underwriters Subscribing to Contract No IH00AAQS v Cross [(2012) 87 ALJR 131 at [24]] French CJ and Hayne J said:
The context and purpose of a provision are important to its proper construction because, as the plurality said in Project Blue Sky Inc v Australian Broadcasting Authority, [(1998) 194 CLR 355 at [69]] “[t]he primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute”… That is, statutory construction requires deciding what is the legal meaning of the relevant provision “by reference to the language of the instrument viewed as a whole” [Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320; 55 ALJR 434; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]; 72 ALJR 841], and “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed” [Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397 per Dixon CJ; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]; 72 ALJR 841].
(Emphasis of French CJ and Hayne J)
127 The limitation for which the appellants contend does not appear in the text of s 14(2)(a) of the Act. However, as is emphasised in Unit Trend, context and purpose are also important.
128 In this regard, the functions of a port operator comprise an integral part of the regulatory framework created by the Act around the development and implementation of maritime security plans for the expressed purpose of safeguarding against unlawful interference with maritime transport or offshore facilities (s 3, the Act).
129 Within this framework, the port operator is one of a number of “maritime industry participants” who are defined in s 10 of the Act to mean:
(a) a port operator; or
(b) a port facility operator; or
(c) the ship operator for a regulated Australian ship; or
(d) the ship operator for a regulated foreign ship; or
(da) an offshore industry participant; or
(f) a contractor who provide services to a person mentioned in paragraphs (a) to (d); or
(g) a person who:
(i) conducts a maritime-related enterprise; and
(ii) is prescribed in the regulations.
130 A “port facility operator” in turn means a person who operates a “port facility”, being “an area of land or water, or land and water, within a security regulated port (including any buildings, installations or equipment in or on the area) used either wholly or partly in connection with the loading or unloading of security regulated ships” (the Act s 10). As mentioned, CPPC is the port facility operator with respect to the Declared Port.
131 There are four key components of the framework created by the Act of particular relevance on which I elaborate below, namely: the obligation imposed upon a port operator to have a maritime security plan; the obligations imposed upon others to comply with, and not to hinder compliance with, a maritime security plan; the capacity to establish port security zones within security regulated ports; and the Secretary’s power to give additional directions in circumstances of heightened risk.
3.1 Obligation to have a maritime security plan (MSP)
132 First, the port operator, together with other maritime industry participants, is required to have a MSP in place and to comply with it under ss 42 and 44 respectively. A contravention of either of these provisions constitutes an offence. Furthermore, a failure to comply with the Act can lead to the making of an enforcement order against the maritime industry participant by the Secretary under s 189 of the Act and an injunction under s 197. The Secretary must approve each MSP, together with any variations or revisions which the responsible participant may request or the Secretary direct, and may cancel such plans (Div 5, Part 3 of the Act).
133 The matters with which a MSP must deal with are specified by ss 47 and 48 of the Act and the Maritime Transport and Offshore Facilities Security Regulations 2003 (Cth) (the Regulations). These include a security assessment for the participant’s operation, the security activities or measures to be implemented by the participant for the various maritime security levels, designated security officers responsible for implementing and maintaining the plan, and provision for declarations of security. As to the second of these matters, “level 1” is the default maritime security level for a security regulated port, regulated Australian ship and maritime industry participant, but the level may increase to level 2 or 3 if the risk escalates (ss 21 and 22). Changes in the maritime security level must be notified by the Secretary to the relevant maritime industry participant and, if that person is not the port operator, the port operator (ss 29 and 30).
134 The MSP must also demonstrate that its implementation will make an appropriate contribution towards the achievement of the “maritime security outcomes” specified in s 3(4) of the Act which include:
a) reduction in the vulnerability of ships and ports to terrorist attack without undue disruption to trade;
b) reduction in the risk that maritime transport facilities are used to facilitate terrorist or other unlawful activities; and
c) effective communication of security information among maritime industry participants and relevant government agencies.
3.2 Obligations to ensure compliance by other actors
135 Secondly, the Act imposes obligations to ensure compliance with maritime security plans by other relevant actors. Specifically, s 45 provides that a maritime industry participant (the first participant) must not engage in conduct that hinders or obstructs compliance with the MSP of another such participant (the second participant) (s 45(1)). Furthermore, where the first participant’s activities are covered by the MSP of the second participant (the covering plan), the first participant is relieved of the requirement to have a MSP but must take all reasonable steps to comply with the covering plan (s 45(2)). It is apparent from the scheme of the Act that the detail of how responsibilities are to be allocated between maritime security participants is a matter to be worked out in each case through the approval process for the MSPs for each regulated port and through on-going mechanisms for variation, revision and cancellation of the MSPs.
136 In addition, s 46 provides that the operations of a regulated Australian ship must not hinder or obstruct compliance with an MSP. That obligation is enforceable by a ship enforcement order made under s 195 by the Secretary directing the ship operator or master of a ship to act or refrain from acting, or by an injunction under s 197.
3.3 Port security zones
137 Thirdly, s 102 of the Act provides that the Secretary may, by written notice given to the port operator, establish one or more port security zones within the port of a type prescribed by the Regulations in accordance with s 103, including for the purpose of controlling the movement of people and ships within security regulated ports and restricting access to areas within such ports. In considering whether to establish a port security zone, the Secretary is required to have regard, among other things, to the views of the port operator, each person who controls an area of land to be included within the boundaries of the zone, and the relevant offshore facility operator (s 104). Ship security zones may also be established under s 106 of the Act by the giving of written notice to the ship operator of a security regulated ship and the relevant port operator to protect ships within those zones from unlawful interference. Power is conferred to make regulations regarding (among other things) access to such zones, for the management of people and goods within them, and for the movement, management or operation of vessels and vehicles within them, and penalties may be prescribed for offences against those regulations: see ss 105 and 109. The Act provides for monitoring and control through the conferral of limited powers on maritime security guards who may physically restrain a person, request identification and information, and remove a person, vehicle or vessel from a maritime security zone: Division 5, Part 8 of the Act.
3.4 Additional security measures
138 Finally, the Secretary may direct that additional security measures be implemented or complied with where an unlawful interference with maritime transport or offshore facilities is probable or imminent (s 33). Such a direction may be given to a maritime industry participant or an employee, passengers or other persons within the boundaries of the security regulated port (35(1)). Where the Secretary requires a port operator to communicate a security direction to specified maritime industry participants operating within the port, the port operator must as soon as practicable communicate the direction to those participants (s 35(3) and (4)). Where the direction is given to the participant by a port operator, by subs (7), “the direction is taken to have been given to the participant by the Secretary.” Section 39 of the Act makes it an offence for a person to fail to comply with a security direction to whom the direction has been given or communicated.
4. CONSTRUCTION OF S 14(2)(a) AND (b) OF THE ACT
139 As explained, the appellants urge that the person’s “ability” in s 14(2)(a) of the Act must be considered by reference to such pre-designation powers and responsibilities as the person might have to monitor or control the areas to which its functions would relate and not by reference to its ‘powers’ once designated as port operator. In the appellants’ submission, “[t]he predicate of the scheme of [the Act and the regulations made thereunder] is that a prospective port operator will have such rights and responsibilities in respect of access to and management of a declared port as are required to exercise the functions of the port operator.” It was on this basis that the appellants submitted that it was necessary for the Secretary to consider Mineralogy’s pre-designation capacities to undertake its responsibilities if designated as port operator, including the limits of Mineralogy’s tenure within the Designated Port, and the breakdown in relations between Mineralogy and the sole facility operator for the port, CPPC.
140 The appellants’ submission must be rejected. No error is shown in this respect in the approach of the primary judge and the Secretary.
141 First, to the extent that reliance in construing s 14(2) was placed upon regulations made under the Act, the submission is based upon the erroneous premise that an Act can be construed by reference to subordinate legislation: see, eg, City of Kwinana v Lamont (2013) 201 LGERA 334 at 347 [65] (Murphy, Mazza JJA and Edelman J). This is not to say, however, that the Regulations may not further define the functions of the port operator and therefore be relevant in this sense to the assessment of ability in the individual case.
142 Secondly, s 14(2)(a) in its terms imposes no such limitation upon the matters to which the Secretary may have regard in taking into account the person’s ability to undertake the functions of a port operator. As the primary judge held at [70], the natural and ordinary meaning of the words of s 14(2)(a) do not convey that limitation. Mineralogy’s construction would read words into the section which do not appear.
143 Thirdly, there is no reason why s 14 should be so construed. To confine the question of ability to the pre-designation powers of the person would be to ask the Secretary to engage in a hypothetical exercise. What would be the utility, one might ask, of considering the fitness or suitability of a person to assume responsibility for such vital functions divorced from the framework of statutory powers and obligations which exist to facilitate the discharge of those functions. The Act already creates a comprehensive framework of enforceable obligations in order to achieve its objects. It does not need to ‘piggyback’ on the rights of private landholders in order to enable the port operator or other maritime security participants to undertake their functions, as the submissions of the appellants imply. This is especially so where, as here, those functions have no parallel outside of the Act and their discharge may require coercive and enforcement powers which can be conferred only by statute. As the primary judge found at [67]:
At the time consideration is being given to the appointment of the person it would be unrealistic to consider, let alone focus on, some powers, rights or characteristics, that, of necessity, cannot yet exist, namely how the person would be able to exercise a function or power that the person will only be able to exercise if subsequently appointed, and then, by virtue of that appointment.
144 I am reinforced in this view by the fact that it is apparent from other provisions of the Act that the port operator may not be the person who controls areas within the security regulated port. For example, s 29 requires the Secretary to notify the maritime industry participant who controls an area within a security regulated port of a maritime security level and, if that person is not the port operator, the port operator. Similarly, among other things s 104 requires the Secretary in establishing a port security zone to have regard to the views of the port operator and each person who controls an area of land within the proposed zone.
145 This is not say that within the broad parameters of the discretion in s 14(1) it would be impermissible for the Secretary to take into account, for example, the extent of tenure held by a person within the security regulated port, as indeed the Secretary’s reasons suggest he did.
146 In the fourth place, the existence of disharmony between different maritime security participants for a security regulated port could not displace their obligations under the Act, including those with respect to the MSP of each other once approved (see [133] above), or the capacity for those obligations to be enforced if they should fail to comply with them such as by way of an enforcement order under s 189 of the Act or an injunction under s 197 (see [134] above). The Act does not rely upon voluntary co-operation between private entities who are maritime security participants: primary judge at [78]. As the primary judge also pointed out at [76], the separate approval process for the MSPs which each maritime security participant must have in place also enables the Secretary to ensure that discordant proposed MSPs, which may be the product of disagreement between participants, are harmonised. Further, provision exists for their later variation, revision or cancellation if, for example, difficulties in their implementation should arise. As such, the primary judge correctly at [79] rejected the argument that the Secretary failed to take into account, as a relevant consideration in undertaking the stask of designating the port operator, the fact that the Citic parties did not agree to the final draft of the plan or were in dispute with Mineralogy.
147 Finally, the Secretary did not fail to take into account the physical and operational features of the port under s 14(2)(b). As the primary judge held at [82]:
In [10] of his reasons [the Secretary] expressly referred to those matters having been set out in the final draft plan. The draft address the matters concerning the port’s security that were affected by the physical and operational features. While the delegate’s discussion of the matters arising under s 14(2)(b) was brief, in context it was sufficient. The matters in s 14(2)(b) are essential considerations because the person(s) being considered for designation as port operator must not only have “the ability… to undertake the role of a port operator” as required by s 14(2)(a), but must be able to do so for the particular port having regard to its characteristics.
(Emphasis in original)
5. THE FAILURE TO COMPLY WITH S 14(2)(c)
5.1 Construction of s 14(2)(c)
148 The primary judge held at [85] that the Citic parties were not persons responsible for managing the operations of the Declared Port for the purposes of s 14(2)(c) whose views must therefore be taken into account. Rather, his Honour consider that the Citic parties were:
…persons responsible for managing some operations in certain areas of the Port. They were not able to point to any agreement or source of rights that gave them power to manage the operations of the Port. Such rights as they had derived from their agreements with Mineralogy and nothing in those, to which they referred in argument, conferred such a right. The agreement between Citic and CPPC was a private arrangement between those two corporations, amongst the Citic parties themselves, that could not, and did not, confer any status as to the public role of managing the operations of the Port. That agreement did not affect Mineralogy’s position as the Citic parties’ effective landlord. The Citic parties would be the first users of the Port, would have a role as a, or the only, port facility operator and would conduct the transhipping and export operations. However those were private activities that did not amount to a responsibility for managing the operations of the Port. That was the role of the harbourmaster and the State, to whose views the delegate did have regard.
149 I would respectfully take a different view.
150 I agree with Buchanan J that the reference to a “person responsible for managing the operations of the port” for the purposes of s 14(2)(c) of the Act is not limited to those who may be charged with a public role of managing port operations but includes those who, by reason of private arrangements, may be described as having such responsibility.
151 First, the Act does not differentiate between ports operated by a State port authority on the one hand, and those, such as the Declared Port, that are operated by resource companies or otherwise by persons engaged in private enterprise on the other hand. The anterior question posed by s 14(2)(c) which the decision-maker must decide (ie, who is the “person [or persons] responsible for managing the operations of the port”), must be considered in that context and is not framed so as to exclude the possibility that persons in private enterprise might have that responsibility.
152 Secondly, the narrow construction of s 14(2)(c) adopted by the primary judge would not, in my view, further the objects of that provision. Read in context, s 14(2)(c) imposes an obligation to obtain the views of the person (or persons) responsible for managing operations of the port in question in order to assist the Secretary to make an informed decision about who to designate as port operator. Given that, in making that decision, the Secretary must also have regard among other things to the physical and operational features of the port by s 14(2)(b), it makes sense to require the Secretary to have regard to that person’s views, as such a person is likely to be well placed to provide that and other potentially relevant information. Limiting, therefore, those whose views must be sought to those persons vested with a public role of managing port operations would not, in my view, promote this purpose, and therefore is not to be preferred: Project Blue Sky v Australian Broadcasting Association (1998) 194 CLR 355 at 382 [70]; Acts Interpretation Act 1901 (Cth), s 15AA.
153 In this regard, the primary judge appeared to consider that the purpose of s 14(2)(c) was to afford those persons whose views must be sought an opportunity to be heard. In other words, in his view the provision imposed a statutory requirement to accord procedural fairness to such a person. It may be that this comprises part of its object although I consider that unlikely. No equivalent opportunity is afforded in relation to the designation of other maritime security participants under the Act. Nor is the designation of a particular person to assume particular statutory functions a decision of such a nature as would ordinarily attract a right of procedural fairness to third parties. It is difficult to see how the rights and interests of others would be affected so as to attract any such procedural right at common law in line with the principles recently affirmed by the High Court in Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 246 CLR 636 at 658-9. Nonetheless, even if that is part of the purpose, that does not mean that the provision is not also intended to achieve the object of ensuring that an informed decision is made on a matter of intense public importance.
154 Thirdly, I do not consider that s 14(2)(c) necessarily assumes that only one person will be responsible for managing the operations of a security regulated port. In this regard, no party contended that the views of Mineralogy should not have been taken into account under s 14(2)(c), as the Secretary found. Nor in any event does anything in s 14 of the Act suggest that the views of other persons, such as those of the harbourmaster, might not also be taken into account.
5.2 Failure to have regard to CPPC’s views contrary to s 14(2)(c)
155 I agree with Buchanan J that CPPC was a person whose views should have been taken into account by reason of its responsibilities for managing the operations of the Declared Port under private arrangements. I gratefully adopt his Honour’s detailed reasons at [57]-[73] for that finding.
156 It is apparent from the Secretary’s reasons and, in particular, from the list of “evidence or other material” which he identified as the basis of his findings, that the Secretary did not take the views of CPPC into account in making his decision. No submission was made to the contrary. Nor, rightly in my view, was it disputed that the requirement in s 14(2)(c) to take into account the views of the person(s) responsible for managing the operations of the port is a relevant consideration which the Secretary was bound to take into account in the sense used in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39 (Mason J); see also Craig v South Australia (1995) 184 CLR 163 at 179; and Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 339-340 [41]. It follows that the decision falls within the potentially overlapping grounds of review under s 5(1) of the ADJR Act including, as the appellants contend, that the decision was an improper exercise of the power (s 5(1)(e), ADJR Act).
5.3 Discretion to grant relief
157 The appellants seek orders to quash or set aside the Secretary’s decision. The question of whether relief should be granted, as well as the form of the relief, is discretionary: see s 16 of the ADJR Act, exercisable by this Court on appeal under Federal Court of Australia Act 1976 (Cth), s 28(1). Thus, for example, the Court may decline to grant relief under s 16 of the ADJR Act where it would be futile or where the failure to have regard to a relevant consideration could have had no material effect on the decision under review: see, eg, Martincevic v Commonwealth (2007) 164 FCR 45 at 64 [67] (the Court); Kamha v Australian Prudential Regulation Authority (2005) 147 FCR 516 at 536 [87] (the Court). In my opinion, no such considerations apply here; nor did Mineralogy contend otherwise. It is not possible in my view to exclude the possibility that the port operator’s views might have affected the Secretary’s decision to designate Mineralogy as port operator under s 14(1). Furthermore, to exclude that possibility would, in my view, potentially undermine the object of s 14(2)(c) in ensuring that a decision is made which is properly informed.
6. CONCLUSION
158 In those circumstances, I agree with Buchanan J that the appeal should be allowed and that the decision of the Secretary’s delegate should be set aside. I also agree with the orders that Buchanan J proposes as to costs.
| I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry. |
Associate:
Dated: 20 August 2014
