FEDERAL COURT OF AUSTRALIA

Sino Iron Pty Ltd v Secretary of the Department of Infrastructure and Transport [2014] FCA 28

THE COURT ORDERS THAT:

1.    The proceedings be dismissed.

2.    The parties confer as to any order for costs and, in the event that they do not agree, each party file and serve written submissions, limited to five pages, and its proposed draft orders for costs on or before 12 February 2014 and any written submissions in reply limited to three pages on or before 19 February 2014.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT ORDERS THAT:

1.    The proceedings be dismissed.

2.    The parties confer as to any order for costs and, in the event that they do not agree, each party file and serve written submissions, limited to five pages, and its proposed draft orders for costs on or before 12 February 2014 and any written submissions in reply, limited to three pages, on or before 19 February 2014.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 31 January 2013, a delegate of the Secretary of the Department of Infrastructure and Transport, the first respondent in the present judicial review proceedings, designated Mineralogy Pty Ltd, the second respondent, to be the port operator for the security regulated port of Port of Cape Preston in north west Western Australia pursuant to s 14(1) of the Maritime Transport and Offshore Facilities Act 2003 (Cth) (the Act). The designation became effective when the notice of its making was published in the Commonwealth of Australia Gazette on 13 February 2013.

2    The applicants, 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) contended that the designation should be set aside under s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act). Sino Iron and Korean Steel are each parties with Mineralogy to a number of agreements relating to a project for the development of the Port and the mining and processing of magnetite and other minerals. Mineralogy holds the relevant mining leases and tenements granted by the State of Western Australia. Citic is the manager of Sino Iron’s and Korean Steel’s interests in the project. Citic engaged CPPC to manage its land and marine based assets in the Port.

3    The Citic parties challenge the designation of Mineralogy as port operator on two bases, namely that, first, a breach of the rules of natural justice occurred in connection with its making or it was not made in accordance with s 14(2)(c) of the Act because they were not heard before it was made (s 5(1)(a) of the ADJR Act) and, secondly, its making was an improper exercise of the power under s 14(1) because the delegate failed to take into account relevant considerations prescribed by s 14(2)(a) and (b) or took into account irrelevant considerations (ss 5(1)(e), (2)(a) and (b) of the ADJR Act).

4    The Citic parties have an unusual ally in judicial review proceedings in that the Secretary also contends that his delegate made a jurisdictional error in the designation by failing to ask himself, for the purpose of s 14(2)(a) of the Act, whether Mineralogy was in a position to operate, in the sense of managing, controlling or having oversight of, the whole of the lands and waters comprising the Port.

5    By late 2012, Mineralogy and the Citic parties had ceased to co-operate with one another in developing proposals for maritime security plans and associated matters in relation to the Port. That falling out was related to broader commercial differences that developed between those parties relating to the overall iron ore project. Mineralogy brought another proceeding seeking an injunction preventing the Citic parties from bringing or pursuing the judicial review proceedings. During the course of argument senior counsel for Mineralogy conceded that its separate proceedings for an injunction against the Citic parties for breach of cl 27.2(b) of the mining right/lease agreements referred to at [26] below could not succeed if, as the Secretary contended, its designation as port operator was affected by jurisdictional error. Thus, I have not dealt with that claim in these reasons.

6    I will describe the legislative scheme and outline the relevant facts before dealing with the Citic parties’ and the Secretary’s challenges to the designation.

The legislative scheme

7    The critical provision of the Act is in s 14 which provided:

“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.” (original emphasis)

8    The Secretary had a power of delegation under s 202 to a person in the position of the delegate here. Section 12 contained a broad definition of “port” as an area of water, or land and water, including buildings, installations and equipment situated in or on the land or water that are intended for use wholly or partly in connection with the movement, loading, unloading, maintenance or provisioning of ships. The word “port” also included areas of water between the land of the port and the open waters outside intended for use by ships to gain access to loading, unloading or other land based facilities as well as areas of open water intended for anchoring or otherwise holding ships before they enter water intended for use to gain access to the port facilities and also areas of open water between the anchorage and the port facilities (s 12(2)).

9    The Secretary had power, by notice published in the Gazette, to declare areas of a port intended for use either wholly or partly in connection with the movement of loading, unloading, maintenance provisioning of security regulated ships to comprise a security regulated port. The notice had to include a map of the Port that showed the boundaries of the security regulated port, but this could not include an area controlled exclusively by the Australian Defence Force (s 13).

10    The Act stated that its purpose was to safeguard against unlawful interference with maritime transport or offshore facilities (s 3(1)). To achieve that purpose, the Act established a regulatory framework centred around the development of security plans for ships, other maritime transport operations and offshore facilities (s 3(2)). It required the implementation of a security plan to make an appropriate contribution to the achievement of the Act’s stated maritime security outcomes, including Australia’s obligations under Ch XI-2 of the International Convention for the Safety of Life at Sea done at London on 1 November 1974 as amended from time to time (the SOLAS Convention) and the International Ship and Port Facility Security (ISPS) Code as amended from time to time and referred to in Ch XI-2 of the SOLAS Convention, the reduction of vulnerability to terrorist attack of Australian and other ships within Australian ports and offshore facilities, the reduction in risk that maritime transport offshore facilities could be used to facilitate terrorist or other unlawful activities and the effective communication of security information among maritime industry participants and government agencies with security responsibilities for maritime transport and offshore facilities (s 3(4)).

11    The Act provided that it was not intended to exclude or limit the operation of the law, relevantly, of a State to the extent that that law was capable of operating concurrently with it (s 8). In addition, unless the contrary intention appeared, it did not apply in relation to a warship or other government ships operated by Australia or a foreign state, or relevantly, a security regulated port, or part of a port, that at any time was under the exclusive control of the Australian Defence Force (s 9(1)). Section 10 contained a number of definitions including “maritime security zone” as meaning a port security zone that in turn was defined in s 102(1) and the following:

“maritime industry participant

means:

(a)    a port operator; or

(b)    a port facility operator

…

maritime security plan means a plan prepared for the purposes of Part 3.

…

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.”

12     Part 2 of the Act dealt with maritime security levels and security directions. The default security level was known as maritime security level 1, unless the Secretary made a declaration for maritime security levels 2 or 3 to be in force in respect, relevantly, of a security regulated port (ss 21, 22). A maritime industry participant had to comply with a maritime security plan and, where the Secretary had made a declaration under s 22(1) of a maritime security level 2 or 3, the participant had to implement measures set out in the plan for the participant, or the area controlled by the participant or the particular operations of the participant, as required, for that maritime security level (s 25(1)). Next, s 27(1) provided:

“27    Notifying declarations covering security regulated ports

(1)    If the Secretary declares that a maritime security level is in force for a security regulated port, the Secretary must, as soon as practicable, notify:

   (a)    the port operator; and

(b)    each maritime industry participant who is required to have a maritime security plan and who:

(i)    controls an area within the boundaries of the security regulated port; or

(ii)    operates within the boundaries of the security regulated port; and

    (c)    each offshore industry participant who is required to have an offshore security plan and who operates within the boundaries of the security regulated port.” (emphasis added)

13    If the Secretary gave a port operator a notice of a declaration of a security level under s 27(1), the port operator had to give notice of that declaration as soon as practicable to each maritime industry participant covered by the port operator’s maritime security plan who controlled an area within the boundaries of the security regulated port or operated within those boundaries as well as to the master of every security regulated ship within the port or about to enter it (s 27(2)). The Secretary had similar obligations to notify, as soon as practicable, each maritime industry participant who controlled an area and, when that person was not the port operator, the port operator (s 29). Next, s 35 gave the Secretary power to provide, in a security direction given to a port operator that the port operator communicate all or a part of the direction to one or more specified maritime industry participants in the port (s 35(3)).

14    Part 3 of the Act dealt with maritime security plans. Each of a port operator and a port facility operator was required to have a maritime security plan (s 42(1)(a) and (b)). A maritime industry participant committed an offence if it was required to have a maritime security plan under s 42 but did not have one (s 43(1)). A maritime industry participant was prohibited from engaging in conduct that hindered or obstructed compliance with the maritime security plan of another maritime industry participant (s 45(1)) and that obligation could be made the subject of an enforcement order made by the Secretary under s 189 or an injunction granted by this Court on application by the Secretary under s 197 (s 45(4)). Relevantly, s 45(3) provided:

(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.” (original emphasis)

15    A maritime security plan for each maritime industry participant had to include a security assessment for that participant’s operation, 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, designate by name or reference to position all security officers responsible for implementing and maintaining the plan, make provision for the use of declarations of security and demonstrate that the implementation of a plan will make an appropriate contribution towards the achievement of the Act’s maritime security outcomes (s 47(1)). The regulations could prescribe, pursuant to s 48, matters to be dealt with in each maritime security plan.

16    Pursuant to s 50, a maritime industry participant could request the Secretary to approve a maritime security plan for it. If the Secretary were satisfied that the plan adequately addressed the relevant requirements under Div 4 of Pt 3 of the Act, the Secretary had to approve the plan and notify the participant of that approval and, in making such a determination, could take account of “existing circumstances as they relate to maritime transport, and offshore facility, security” (s 51(1) and (3)). The Secretary could also direct maritime industry participants to vary or revise plans and could cancel plans if satisfied that they no longer addressed the requirements of Div 4 of Pt 3 (ss 53, 55 and 57).

17    Under s 102(1), the Secretary had power to establish one or more port security zones within the port by written notice to a port operator of a security regulated port. If the Secretary approved a maritime security plan that included a map identifying port security zones proposed by the operator, each such zone was deemed to have been established by s 102(2A). Different types of port security zones could be prescribed by the regulations for purposes including controlling the movement of people or ships or any other thing within security regulated ports, restricting access to areas within those ports, providing cleared areas within those ports, preventing interference with ships, people or goods that have been, or are to be, transported by ship and ensuring the security of fuel storage areas, cargo handling facilities, navigational aids and critical installations that, if interfered with or damaged, could put the operation of a port or ship at risk (s 103(2) and (3)).

18    The Maritime Transport and Offshore Facilities Security Regulations 2003 (Cth) (the Regulations) provided for requirements for maritime security plans in Pt 3 and Maritime security zones in Pt 6. A port operator had to give each port facility operator and each port service provider conducting operations within a security regulated port, the information prescribed in reg 3.35 (including contact details for the port security officer), the measures to be used by the port operator to inform persons of the location of maritime security zones established within the boundaries of the security regulated port and the measures to confirm the identity of persons authorised to have access to maritime security zones in the port (reg 3.15). A port facility operator who was required to have a maritime security plan had to give the port operator, relevantly, the information required in reg 3.100 (which was similar to that required in regs 3.15 and 3.35) (reg 3.20).

19    A maritime security plan for a port operator had to cover all matters of ship/port interface (being the interaction that occurs when a security regulated ship is directly and immediately affected by activities involving the movement of persons or goods or the provision of port services to or from the ship (as defined in reg 1.03)) that were to be conducted within the security of a regulated port and that were not covered by a maritime security plan for any other maritime industry participant that conducted operations within or in connection with the security regulated port (reg 3.30).

20    The plan for a port operator had to be accompanied by a document that set out the name of the port operator, contact details for it, the name of the port’s harbourmaster, and contact details for the harbourmaster and certain other material (reg 3.35(1)). The security assessment required for inclusion in a port operator’s maritime security plan included a statement that outlined the risk context or threat situation for the port, identification and evaluation of strategically important assets, infrastructure operations that needed to be protected, identification of possible risks or threats and the likelihood and consequences of their occurrence, identification of existing security measures, procedures and operations together with any gaps in port wide security arrangements and identification, selection and prioritisation of possible risk treatments and their effectiveness in reducing risk levels and vulnerability (reg 3.40).

21    The plan for a port operator also had to set out the knowledge, skills and other requirements for a port security officer and the relevant training that he or she had to have (reg 3.45). The plan also had to identify, by reference to their positions, port personnel with, or who had been assigned, security duties and responsibilities in addition to the port security officer (reg 3.50). It also had to address measures to prevent unauthorised access to any port security zones established, or ship security zones declared, in the security regulated port and, among other matters, procedures for responding to security threats or breaches of security, including maintaining critical operations in the port and procedures for responding to any security directions given by the Secretary (reg 3.55(a)-(c)). The plan also had to set out a mechanism for consultation between a port operator and each of the maritime industry participants conducting operations within the port for the purposes of co-ordinating their security regulated activities (reg 3.60)

22    The Secretary could establish three types of port security zones pursuant to reg 6.20, being land-side restricted zones, cleared zones and water-side restricted zones. A security barrier for a land-side restricted zone or cleared zone had to deter and deny unauthorised access to the zone, allow detection of unauthorised access, have access control points to permit authorised access and be subject to regular patrols or surveillance or other measures allowing for inspection of the security barrier for damage and to detect and deter unauthorised access (reg 6.25(2)). The boundaries of a land-side restricted zone had to be clearly identifiable and defined by means of a security barrier, persons who were in or in the vicinity of the security regulated port in which land-side restricted zone was established had to be informed that access to a zone was controlled and any unauthorised entry into it was an offence under the regulations (reg 6.30). Importantly, regs 6.33 and 6.35, relevantly, created the following offences of strict liability:

“6.33    Duties of port operator

(1)    A port operator must monitor and control access to any land-side restricted zone in the security regulated port in which the zone is established.

Penalty:    200 penalty units.

…

6.35    Duties of port facility operator

(1)    A port facility operator must monitor and control access to any land side restricted zone within the boundaries of the port facility.”

Penalty:    200 penalty units.”

…

(emphasis added)

A port service provider had a similar obligation to monitor and control access to any port security zone within the boundaries of the area under its control (reg 6.40).

23    The port operator also had to give notice of the establishment and boundaries of water-side restricted zones by appropriate measures to identify them, such as buoys, land-side signs and the giving of notices (reg 6.65(2)). If the Secretary gave notice of the establishment of a water-side restricted zone, the port operator had to ensure that persons who were in, or in the vicinity of, the security regulated port were informed in accordance with the maritime security plan that access to the zone was controlled and that any unauthorised entry into it was an offence under the regulations (reg 6.70(1)). Importantly, regs 6.70(3) and (5) provided:

“(3)    A port operator for a security regulated port must monitor access to any water side restricted zone established in the port.

Penalty:    200 penalty units.

….

(5)    A port operator must ensure that the security measures and procedures to control access to water-side restricted zones detect and deter unauthorised access to those zones.” (emphasis added)

24    The Shipping and Pilotage Act 1967 (WA) gave the Minister power to appoint any person to be the harbourmaster of a port (s 4). The harbourmaster had power to control the entry and departure of vessels into and from a port, control their berthing, mooring and movement within the port and exercise any other prescribed powers relating to the control and direction of vessels and persons within the port and maintaining a good order within it as work prescribed (s 5(1)(a)-(c)). The harbourmaster also had special powers in dangerous situations provided under s 7. The regulations could declare an area of water, or of land and water, to be a port (s 10(1)).

25    The Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA) ratified and authorised the implementation of an agreement between the State, Mineralogy, Korean Steel, Sino Iron and certain other companies. Among other things, that agreement made provision for the State to assist in the establishment of projects for the mining and concentration of iron ore from mining tenements held in the Pilbara region by Mineralogy that one or other corporate parties to the agreement were to develop as well as the establishment of new port facilities in the Pilbara region (Schedule 1, recital (c)). The agreement contemplated that a number of projects might be pursued, but that each project would separately address the establishment and operation of its own relevant infrastructure, including port development works (cl 6(2)(m)). It provided, in particular, for the development of Cape Preston and that proposals for future development had to make reasonable provision for future third party use of port facilities at Cape Preston (cl 6(5)). Mineralogy had an obligation to develop port facilities for all the projects in accordance with approved proposals. It had to construct a wharf and carry out all necessary dredging of approach channels, swinging basins and berths at the wharf and provide all necessary buoys, beacons, marks and navigational aids, lighting equipment, services and facilities required in connection with those facilities (cl 21).

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.

29    In 2010, Mineralogy engaged Risk Resolution Australia Pty Ltd to prepare a port security risk assessment. Risk Resolution prepared that assessment and provided it to Mineralogy in early 2011. It contained confidential material about matters to do with security of the port that should not be in the public domain and for the protection of which I made a suppression and non-publication order during the hearing. Risk Resolution prepared the assessment after a site visit and consultation with, among others, senior personnel of the Citic parties. The assessment stated that the risk assessment had been undertaken by both Mineralogy and Citic, as the (then) first port facility operator. It assumed that Mineralogy would be port operator and Citic, at that stage, would be a port facility operator. Importantly, the assessment noted that Mineralogy had demonstrated sufficient financial strength to undertake the role of port operator.

30    During the course of 2011 and 2012, Mineralogy developed a maritime security plan for the port in consultation with the Citic parties, the Department and Capt David Heppingstone who was initially the harbourmaster appointed by the Western Australian government before he took up employment as deputy director of port operations for the Citic parties in October 2012. At that time he was replaced as harbourmaster by Capt David Harrod.

31    Regular meetings occurred in 2012 between the Citic parties, Mineralogy, the Department and the harbourmaster on behalf of the State. The harbourmaster chaired the meetings and they were minuted by another Western Australian government employee. The minutes were all in draft form but were before the delegate when he made his decision. The minutes contained discussions of progress being made with respect to the drafting of maritime security plans by both Mineralogy and the Citic parties. As contemplated by the Act, the Citic parties did not have access to all of the draft plans prepared by Mineralogy, since the negotiations were progressing on the basis that Mineralogy would be the port operator and CPPC would be a port facility operator. Thus, the draft minutes for the meeting of 13 July 2012 recorded the Citic representative as indicating that he had not seen the entire document, being Mineralogy’s then draft, due to confidentiality so he could only assume that it was accurate, but he had sent his comments to the security consultant engaged by Mineralogy. A Citic representative, Andrew Thomson, was recorded as saying that he would like to get the (whole of Mineralogy’s) port security plan in order to match the terminal security plan (i.e. the plan for the port facility operation which CPPC would be managing).

32    The draft minutes for the meeting of 22 October 2012 noted Capt Heppingstone’s replacement as harbourmaster by Capt Harrod. One of Citic’s representatives, Ralph Larbey, was to forward all security plans to Capt Harrod by the end of the week and he said that Citic was reviewing the security plans to make sure that all was in order in terms of what Citic was required to do. Vimal Sharma, Mineralogy’s managing director, Western Australia, was recorded as saying that he had met with Citic, supplied it with a draft acknowledgment letter (of the kind contemplated by s 45(3)(b)(iii) of the Act) and was waiting for Citic to do the same. An officer of a third party, Iron Ore Holdings, Brett Hazelden was present. The minutes recorded that Iron Ore Holdings had been in discussions with various government departments and had sought guidance about the proposed further development by it in the tenement areas. Mr Hazelden was minuted as saying that he hoped all approvals would be received by July 2013.

33    By January 2013, the development of the Port had progressed, but not so far as to enable capesize ships (i.e. ships of about 270 metres length overall or greater) to berth in the Port for the purposes of loading iron ore. Instead, pending the construction of a facility for direct loading onto capesize vessels to occur, the Port would operate through the loading of barges that would tranship the ore to capesize vessels at anchor in the deepwater anchorage area about 20 km north of the northern-most land area of the Port. The first cargo was anticipated to be loaded in March 2013).

34    The Port was a declared port pursuant to s 10 of the Shipping and Pilotage Act. The delegate used the same boundaries as the State had declared when he declared the Port to be a security regulated port on 31 January 2013 in a notice published in the Gazette on 13 February 2013.

35    Mineralogy’s port manager for the Port, Paul Robinson, gave unchallenged evidence that, prior to Mineralogy’s designation as port operator, no representative of the State had ever suggested that the State should fulfil the role of port operator for the Port under the Act or that Mineralogy should not assume it. He said that the State had not objected to Mineralogy carrying out security functions in accordance with the Act in areas owned by the State and over which Mineralogy did not have tenure. Mr Robinson also said that, prior to Mineralogy’s designation as port operator, no representative of any of the Citic parties had ever indicated that the State should be the port operator or that Mineralogy should not be. He said that Mineralogy intended to continue the development of the Cape Preston area by subleasing other parts of its tenements for further projects to extract iron ore in excess of the two billion tonnes that Sino Iron and Korean Steel were permitted to extract under their agreements with Mineralogy.

The emails relied on by the Citic parties

36    As part of the foundation of their argument that they had a legitimate expectation that their views would be taken into account by the delegate, the Citic parties relied upon not only the contents of the draft minutes that were before the delegate but also the following email communications. The delegate was either a party to some of those or he had received them as a forwarded message from another officer of the Department at or about the time that the original email had been sent.

37    On 29 November 2012, the delegate received an email from Brian Rankin, the regional compliance manager maritime and offshore oil and gas, transport security operations in the Western Australian office of the Department. Mr Rankin was the main representative of the Department in the minuted meetings. He reported to the delegate about the recent conflict that had arisen between Mineralogy and the Citic parties. He observed that the conflict had been exemplified that day when the Citic parties submitted a draft port facility operator maritime security plan for informal pre-submission guidance and liaison that contained no recognition of Mineralogy’s role in port operations as the port operator.

38    Mr Rankin noted that the Citic parties’ new draft was “in stark contrast to the contents of a previous ‘work in progress’ plan” by the Citic parties that acknowledged Mineralogy as the port operator and was satisfactorily harmonised with Mineralogy’s plan to meet requirements of the Act and Regulations. Mr Rankin wrote that Capt Harrod had confirmed that the Western Australian government acknowledged Mineralogy as the port operator. Capt Harrod had informed him that the State had not officially prescribed Mineralogy as the port operator since the government considered that such a designation was a matter for the Commonwealth under the Act.

39    On 7 December 2012, Mr Rankin emailed Mineralogy and the Citic parties. That followed meetings he had held the previous day with each of them in which they had indicated that there were differences between who was responsible for particular matters in relation to security in the Port in their respective draft plans. Mr Rankin noted that his office within the Department had been providing impartial pre-submission guidance and liaison for both the port operator and port facility operator plans by each of Mineralogy and CPPC for some time. That was in an effort to ensure that appropriate plans were developed for the Port, meeting the requirements of the Act and Regulations, together with the Department’s policies and that these would progress to a state of readiness for formal lodgement, assessment, review and approval by the Secretary. Mr Rankin gave examples of some of the problems in the differences of approach in the respective draft plans that were discussed on 6 December 2012. One difficulty was whether Mineralogy or CPPC was to be responsible for the provision of security guards on and at the land-side restricted zone and for overall access control, since both parties’ draft plans indicated that the respective proponent was to have that responsibility. Similarly, Mineralogy had informed the Department that it would maintain security of the water-side restricted zones and anchorages by monitoring and controlling access, while CPPC had informed the Department that it had vessels for those purposes. Mr Rankin referred to Mineralogy’s assertion that it had sent to CPPC, for signature, a letter that contained the elements of Mineralogy’s plan, as port operator, so far as it affected the Citic parties’ position as port facility operator in which each would acknowledge the other’s plans for the purposes of satisfying the Department. He noted that Mineralogy had advised him that that letter had not been returned by CPPC and that it had not received the elements of CPPC’s draft plan relating to port operations. In contrast, CPPC had advised him that it had no knowledge of Mineralogy’s letter.

40    Mr Rankin observed that such anomalies and or omissions of documentation in the plans would not be conducive to plan approvals by the Secretary’s delegate where each of the parties needed to have an agreed and collegiate approach to port security. He reminded the parties of the requirements of regs 3.55 (dealing with the port operator’s plan) and 3.125 (dealing with requirements of a port facility operator’s plan). Mr Rankin concluded the email by suggesting that it would be very useful and appropriate for the parties’ respective decision-makers in respect of the maritime security plans to consider holding tripartite discussions or workshops with his office to resolve any anomalies or inconsistencies, and to progress the harmonious development of each of the plans. He noted that the Department had a 60 day period for consideration following the submission of a formal plan and that, as he understood it, the first security regulated vessel to load export cargo was scheduled to be at anchorage in the Port in late March 2013. He reiterated the Department’s willingness to facilitate and provide guidance between the parties for the development of such plans.

41    On 7 December 2012, shortly after receiving Mr Rankin’s email, Mr Sharma, of Mineralogy, replied to all its recipients. He stated that he had hand delivered a letter of mutual acknowledgment of Mineralogy’s plan and an attached draft of its section 6.2 personally to Citic’s executive chairman and that subsequently Mr Robinson had also provided those documents to another senior officer of Citic, but both had received no response. He said that he would send the letter again that day and seek that the Citic parties provide to Mineralogy the relevant section of their port operator draft plan. He noted that in Capt Heppingstone’s previous role, as harbourmaster, he had fully reviewed Mineralogy’s draft plan and had full knowledge of its contents. He noted that Mineralogy would be employing the security guards and officers and was fully committed to port security in its role as port operator.

42    Capt Heppingstone responded on behalf of the Citic parties to all the recipients on 17 December 2012. He observed that the Citic parties had not received a “signed letter of agreement” from Mineralogy but only an unsigned version. He noted that the Citic parties had previously only received section 6.2 of Mineralogy’s draft plan, despite having requested a full copy of it in order, so he said, to be reasonably able to provide the acknowledgment sought. He observed that Mineralogy had refused to provide the entire draft but that Mr Sharma’s email of 7 December 2012 had contained an updated letter and attached the entire section 6 of the draft plan but had not included a number of attachments that were referenced in it. Capt Heppingstone asserted that the new section 6 had material changes including a change by which certain anchorages would not be available for use. He asserted that the exact role to be undertaken by each party “remains yet to be agreed”. Capt Heppingstone wrote that Citic’s position, as the only project expected to be operating at the Port, was that the majority of security functions on the ground would most logically and efficiently be performed by it. He concluded by stating that, prior to any further involvement of the Department, Mineralogy and the Citic parties had to meet in order to discuss and agree their roles. He said that the Citic parties were in contact with Mineralogy on those issues and would arrange for tripartite discussions when the parties were in a position to do so with agreed roles.

43    On 18 December 2012, Mr Sharma replied to Capt Heppingstone, copying in all the other email recipients. He attached a form of letter of acknowledgment, that had been agreed with Mr Rankin, for the Citic parties to sign and return to Mineralogy together with the relevant sections of the CPPC’s plan. That was an unsigned letter dated 25 September 2012 from Mineralogy and CPPC to the Secretary informing the Secretary that Mineralogy as port operator, and CPPC, as port facility operator acknowledged the elements of their respective maritime security plans. It referred to section 6 of Mineralogy’s plan and a yet to be specified paragraph of CPPC’s draft plan. Mr Sharma’s email concluded by acknowledging the Citic parties’ desire to look at the whole of Mineralogy’s plan. He reminded Capt Heppingstone of the confidential nature of the plan and the advice of Mr Rankin about matters that should not be provided or shared. Mr Sharma also included a number of the attachments to section 6 of Mineralogy’s latest version of its plan that had been finalised on 14 December 2012. Mr Sharma attached a letter dated 31 August 2012 from Capt Harrod that discussed proposed anchorages within the Port area. The letter advised that the final location of the approved anchorages would depend upon the final channel alignment for approach to the Port. Mr Sharma explained that the plan stated some anchorages located in a gazetted shipping fairway on the published chart of the port, a copy of which he attached, would not be monitored or controlled while the fairway covered the same area of water.

44    On 9 January 2013, Mr Rankin replied to Mr Sharma and all the other email recipients. He noted Capt Heppingstone’s comments in the email of 17 December 2012 about the need for further discussion between Mineralogy and the Citic parties and enquired whether progress had been made despite the intervention of Christmas and the New Year break.

45    Mr Sharma replied shortly afterwards on 9 January 2013, that all these matters had been dealt with in his email of 18 December 2012. He said that the Citic parties had all the information required and that all they needed to do was to sign the previously forwarded letter of acknowledgment. He said that Citic parties appeared to be delaying progress for no obvious reason.

46    Later on 9 January 2013, Mr Rankin forwarded the above email chain to the delegate and reported his assessment of the current position. He reported that Mineralogy had commenced legal proceedings against the Citic parties. He noted that the Citic parties’ recent draft plan did not acknowledge Mineralogy’s role as port operator in any way and that the above emails had indicated that the Citic parties had not agreed to security functions being undertaken at the Port. He then observed that Mineralogy’s proposed plan was close to a stage where it could be formally submitted and that it was likely to push for that to occur at the earliest opportunity, notwithstanding the Citic parties’ stance. He also noted that, while common sense and the achievement of sound security outcomes suggested that the two parties should have harmonised plans, there was no legislative basis to compel that to occur. He observed that the parties appeared to be very wide apart and were unlikely to agree in the short term.

47    On 14 January 2013, Capt Heppingstone wrote only to Mr Rankin in response to his email of 9 January 2013. He said that he was updating Mr Rankin that discussions between Mineralogy and the Citic parties had been scheduled for 21 January 2013 but, at Mineralogy’s request, had been deferred until 28 January 2013. He said he would let Mr Rankin know of any outcomes after the meeting.

48    On 17 January 2013, Mineralogy submitted to the Secretary an application form for approval of a maritime security plan for a port operator, and its proposed maritime security plan.

49    On 22 January 2013, Mr Sharma sent to the Department a copy of the full boundary of what he described as the “Gazetted Port” that was to be included in Mineralogy’s latest draft plan. That included 12 anchorages, some of which were in the shipping fairway.

50    On 31 January 2013, the delegate declared the area of the whole of the State’s gazetted port to be a security regulated port pursuant to s 13(1) of the Act, as noted above, and also designated Mineralogy as port operator pursuant to s 14(1) of the Act.

The delegate’s decision

51    The delegate prepared a statement of reasons that he signed on 5 June 2013. The reasons referred to the requirements of s 14 of the Act and noted that s 42 specified that maritime industry participants, including a port operator, were required to have a maritime security plan. He noted that s 50 required a plan to be submitted to the Secretary for approval. He said that in reaching his decision he had had regard to the draft plan submitted by Mineralogy on 17 January 2013 and the minutes of the Cape Preston marine safety meetings between 13 February 2012 and October 2012. He continued:

“9.    Mineralogy’s draft MSP [Maritime Security Plan] submitted in January 2013, set out how it would undertake the functions of a port operator if designated under the Act. I assessed the arrangements contained in the draft MSP and determined that they 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. Aspects of the draft MSP which were of particular relevance included:

•    the security assessment, made in accordance with regulations 3.05 and 3.40;

•    Schedules and procedures for conducting audits and reviews of the MSP (regulation 3.10);

•    Port operator details (regulation 3.35);

•    Requirements for the port security officer (regulation 3.45) and other personnel (regulation 3.55 [sic: the parties agreed that this was a typographical error for reg 3.50];

•    Mechanisms for consultation and communication (regulation 3.60); and

•    Measures to be implemented at maritime security levels 1, 2 and 3 (regulation 3.70).

[9.] [sic: I will refer to this as [9.2] in these reasons]

In regard to operational features of the Port of Cape Preston, Mineralogy’s draft MSP stated that port operations would be managed by Mineralogy, with Citic Pacific undertaking import and export shipping operations from the barge loading berth which has been constructed at Cape Preston. The draft MSP proposes that Citic Pacific (operating under the name Cape Preston Port Company Pty Ltd) will conduct transhipping operations, using tugs, barges and transhipper/s. Citic Pacific is identified as the Port Facility Operator under the Act and it is proposed that it would operate under its own Port Facility Security Plan. These arrangements were consistent with what had been discussed at and agreed by all participants of the Cape Preston Marine Safety Meetings throughout 2012. I considered these arrangements supported Mineralogy’s designation as the port operator.

10.    I noted that the draft MSP set out the physical features of the port area, including the infrastructure that has already been built at the Port of Cape Preston.” (emphasis added)

52    The delegate’s reasons said that the Port was owned by the Western Australian government but was not operated by a port authority under the Port Authorities Act 1999 (WA). He observed that there were eight other ports in that State that had similar governance arrangements and that it, in general, those ports and related export facilities were operated by resource companies. He said that, with the exception of the Port Derby, the relevant resource company was the port operator for the purposes of the Act and gave a number of examples (at [11]-[12]). The delegate observed that Mineralogy held leases that encompassed the land and water within the boundary of the security regulated port as approved by the delegate on 31 January 2013. He noted that the leases had been issued by the relevant State department and covered the area where the berth facilities were located and were also covered in Mineralogy’s draft plan. He said (at [13]):

“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.”

53    The delegate said that while the Port was not managed by a port authority, the State had appointed a harbourmaster to control movement of vessels in the Port. He noted that Capt Heppingstone had been appointed as harbourmaster and had chaired the committee, to the minutes which the delegate took into account, until September 2012 when he resigned from the Department and was replaced by Capt Harrod. He said that the views expressed by the State officials at those meetings were supportive of the arrangements set out in the draft plan and (at [14]):

“I therefore concluded that these were representative of the views of the owner of the port.

15.    Based on my assessment of the information before me as delegate, I decided to designate Mineralogy as the port operator for the Port of Cape Preston.”

54    In his affidavit, the delegate said that he had not considered any of the lease documentation under which Mineralogy was the lessee, but only had regard to the fact that those leases had been referred to in the draft plan. He also said that the views expressed by the Western Australian Department of Transport officials to which he had referred in his reasons reflected his conclusion as to those persons’ views based on the minutes of the meetings to which he had had regard.

The Citic parties’ arguments

55    Denial of natural justice: The Citic parties argued that in light of the emails passing between them, the Department and Mineralogy in December 2012 and January 2013 and the evident impasse that existed between them and Mineralogy, they had a right to be heard before the delegate exercised the power to designate Mineralogy as port operator under s 14(1) of the Act. They contended that this right arose both under s 14(2)(c) of the Act, because they were persons responsible for managing the operations of the Port, and alternatively at common law because the decision was apt to affect their interests adversely. The Citic parties contended that the sources of their standing, or the potential for adverse affectation of their interests, that entitled them to be heard were that:

(1)    Sino Iron and Korean Steel had constructed, or were in the process of constructing, port facilities to enable the exportation of their products;

(2)    as disclosed in Mineralogy’s proposed plan:

    Citic would be the first user of the port;

    CPPC would be the port facility operator;

    when the port commenced operations, CPPC would conduct, under its port facility operator’s maritime security plan, the transhipping operations to transfer the iron ore and other cargo on barges between the port’s land-side facilities and the ships at anchorage.

56    The Citic parties asserted that they had been denied a real and meaningful opportunity to put information and submissions to the delegate. They pointed to Capt Heppingstone’s email of 17 December 2012 that had stated that the “exact roles to be undertaken by each party remains yet to be agreed” and the subsequent absence of any suggestion in the email correspondence of any agreement being reached. They argued that Mineralogy had submitted its plan on 17 January 2013 without, first, copying them into the correspondence or, secondly, including a signed letter of agreement in relation to their respective roles under the respective port operator’s and port facility operator’s plans.

57    Relevant and irrelevant considerations: The Citic parties relied on statements in the Explanatory Memorandum for the Bill that became the Act as aids to construction of s 14. That had stated in relation to cl 14 of the Bill:

“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.” (emphasis supplied by the Citic parties)

58    The Citic parties contended that the delegate had considered only the security responsibilities of a port operator as revealed, so it argued in [9] of his reasons and he did not consider the ability of Mineralogy to undertake the general role of port operator. They submitted that the delegate did not “properly” consider Mineralogy’s ability to discharge its statutory functions other than those under Div 3.2 of the Regulations to which he referred at [9]. The Citic parties argued that the delegate did not consider what regs 6.33, 6.65 and 6.70 required, namely, Mineralogy’s ability to undertake the functions of monitoring and controlling access to any land-side or water-side restricted zones, controlling vessel movement and managing port infrastructure over the whole port. They also argued that he did not consider Mineralogy’s ability to undertake the function of being the liaison for communication between the Department and other maritime industry participants, including the port facility operator.

59    The Citic parties contended that due consideration of those matters was necessary because of the legislative purpose and scheme designed to prevent acts of terrorism that Australia had international obligations to perform. They said that the Explanatory Memorandum expressly singled out that a port operator had to be able to demonstrate its ability to discharge the functions of monitoring and controlling the port. In addition, they submitted that the draft plan did not indicate that CPPC agreed with what Mineralogy was proposing and, indeed, the delegate was aware from the recent email exchanges that CPPC had yet to do so. The Citic parties also argued that the delegate could not have taken into account Mineralogy’s ability to undertake the role of port operator because he did not address how it could perform that role given the recent breakdown in relations between it and them. They argued that this breakdown was current information available to the decision-maker that bore on the need for maritime industry participants to co-operate and referred to what Mason J had said in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 44-45.

60    The Citic parties also contended that s 14(2)(b) of the Act required the delegate to take into account the physical and operational features of the port and that Mineralogy’s tenements were not co-extensive with the area of the port. They argued that the delegate only gave cursory consideration to the physical features of the port area in [10] and then cast that matter aside. They submitted that, in [9.2] of his reasons, the delegate had referred to Mineralogy managing port operations while Citic would undertake shipping operations and be the port facility operator. The Citic parties argued that the delegate’s conclusion that the draft plan’s treatment of those proposals was consistent with “what had been discussed and agreed by all participants of the Cape Preston Marine Safety Meetings throughout 2012” was illogical and unsupported by the evidence. That was because, they said, the delegate knew from the recent email exchanges that CPPC had yet to agree with the measures proposed at the last meeting on 22 October 2012, there was no agreement as to the exact roles to be undertaken by each party and tripartite discussions to clear those matters up were continuing. Finally, the Citic parties argued that the delegate had to, but did not, take their views into account pursuant to s 14(2)(c) as persons responsible for the management of the port.

The Secretary’s submissions

61    The Secretary argued that the delegate failed to consider, for the purposes of s 14(2)(a), whether Mineralogy was in a position to operate, in the sense of managing, controlling or having oversight of the whole of the port area. He submitted that the delegate failed to take into account a number of significant operational features of the port. Those arose, so he contended, because Mineralogy’s final draft plan:

    indicated that it had leases over only small parts of the land and water of the port, but did not explain how Mineralogy proposed to “operate” the far greater areas of the whole security regulated port, including the 12 anchorages;

    did not enable consideration of whether Mineralogy was in a position to control, manage or have oversight of port infrastructure or vessel movements;

    did not explain how Mineralogy’s proposal interacted with the powers and duties of the harbourmaster appointed under s 4 of the State Shipping and Pilotage Act, such as controlling vessel movement, mooring and berthing, as well as good order within the port; and

    did not disclose how Mineralogy might be able to undertake its functions as port operator in relation to any additional infrastructure that other commercial entities might construct in the future.

62    The Secretary argued that, at [13] of his reasons, the delegate looked only at Mineralogy’s capacity to control or manage the limited parts of the port that were the subject of its leases. He contended that this, and the absence of consideration of how Mineralogy would discharge the security responsibilities referred to in [9] of his reasons, revealed a failure by the delegate to engage in an active intellectual process as to what he had to take into account. Finally, the Secretary argued that the above matters revealed a “potential ‘operational lacuna’” that Mineralogy had. He contended that this arose also in relation to what he said was the delegate’s failure to address, for the purposes of s 14(2)(b), “whether Mineralogy was in a position to operate the whole of the relevant areas of land and water comprising the port (in the sense of having capacity to exercise a degree of control, management or oversight of those areas)”.

63    I enquired whether the Secretary was contending that the designation was no decision at all because of jurisdictional error by reason of the errors he asserted. Counsel for the Secretary eventually accepted that he was asserting that there was jurisdictional error in the designation.

Consideration – Relevant and irrelevant considerations

64    The power of designation of a person as the port operator under s 14(1) is directed to the appointment of that person to carry out the functions of a port operator created by the Act. The Act creates, defines and regulates those functions and clothes a port operator with concomitant powers. The Act does not prescribe any particular pre-existing characteristics that a person must have to be designed as port operator except to the extent that s 14(2) requires that the Secretary (or delegate) must take certain matters into account and give weight to them as a fundamental element in making his decision.

65    I explained how a decision-maker must deal with matters that a statute requires him or her to “take into account” or “have regard to” in Telstra Corporation Ltd v Australian Competition and Consumer Commission (2008) 176 FCR 153 at 181-183 [103]-[112] in terms that were approved by Jacobson, Lander and Foster JJ in Telstra Corporation Ltd v Australian Competition Tribunal (2009) 175 FCR 201 at 242 [267].

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).

67    Likewise, consideration of, for example, a lawyer’s ability to undertake the functions of a judge or harbourmaster cannot be linked to some notion of his or her existing ability to exercise the power that can only come with appointment to the office. A lawyer who had never practised law and had spent his or her life in maritime pursuits at sea or in control of port activities might have no, or insufficient, ability to be a judge but could be thought able to be a harbourmaster. The same is true of any situation in which a person is being considered for a job offer, appointment to an office or a promotion. 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.

68    Without being either exhaustive or prescriptive, the matters that it would be open for the Secretary to take into account in respect of a person’s ability for the purposes of s 14(2)(a), 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 appears to have addressed adequately or appropriately the requirements for the security of the port under the Act and Regulations. However, the precise details that the Secretary must take into account under s 14(2)(a) as to a person’s ability will depend on the circumstances of each particular case. Those matters are not susceptible of, and should not be construed as having, greater prescription than conveyed by the general words of s 14(2)(a) itself. Moreover, the designation of a person as a port operator can occur before that person prepares a maritime security plan, or after, as was the present case, although it could also occur when a new port operator must be designated to replace an existing one. Thus, different considerations may be relevant under s 14(2) where a new port is being established from those where a new port operator must be designated for an established port.

69    The statement about cl 14 of the Bill in the Explanatory Memorandum on which the Citic parties relied cannot be determinative of the meaning of s 14 as enacted. The statement is, of course, an available aid to construction in the circumstances provided for in s 15AB(1) of the Acts Interpretation Act 1901 (Cth). However, French CJ, Hayne, Crennan, Bell and Gageler JJ said in Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 293 ALR 257 at 268-269 [39], namely:

“‘This court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text’ [Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47]]. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.” (emphasis added)

70    The ordinary and natural meaning of the words of s 14(2)(a) does not convey the sense of the meaning of “ability” in which the Citic parties seek to use the statement in the Explanatory Memorandum set out at [57] above. Rather the portion of the statement emphasised by the Citic parties encapsulates the effect of the immediately preceding sentence: i.e. once a person has been designated as a port operator, that person is able to demonstrate that it has the relevant responsibilities. The Citic parties inverted the sense of the Parliamentary explanation of the purpose of the designation as port operator, to clothe the person with the statutory authority, into a sense of requiring the pre-existence of that authority as a necessary qualification for appointment. The argument has no coherence. I reject it.

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.

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.

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).

87    The Secretary’s next argument, that the draft plan did not disclose how Mineralogy might undertake its functions as port operator in relation to the development of theoretical further infrastructure, has no substance. How would a person know what to do for the security of a facility for that may not even be thought of or be in a planning stage, let alone constructed? That question was left unexplained by the Secretary. No doubt when new infrastructure is planned or ready for building approvals, the Secretary and the port operator will have a keen interest in dealing appropriately with security issues in relation to that infrastructure and its relevance to the port. The proponent will be a new or existing maritime industry participant with its own obligations under the Act. The Act expressly provides for revision and variation of plans, as I have explained. The Secretary must be involved in reassessing what will be required, if and when, the planning for new infrastructure reaches the point where this should be done. A draft plan, such as Mineralogy’s, is not deficient because it does not box at shadows.

88    It follows that the Secretary’s “concession” that a jurisdictional error affected the delegate’s decision was misconceived.

Denial of natural justice – consideration

89    The Citic parties argued, if their primary argument failed, that they had an interest falling within the category of legitimate expectation (based on a phrase used by Mason CJ, Dawson, Toohey and Gaudron JJ in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 577) that attracted a requirement that they be heard. I reject that argument. First, s 14(2)(c) created a mandatory matter that the Secretary had to take into account, being the views of a particular person or persons that it specified. For the purposes of the present argument, however, the Citic parties accept that they were not persons whose views the delegate had to take into account under s 14(2)(c). Rather, they contended, they were affected in a way that required the delegate to seek their views, even though they fell outside the class that the statute identified whose views had to be considered. Secondly, as the Citic parties pointed out in their written submissions, more recently the High Court has moved away from the concept of “legitimate expectations” in relation to a denial of procedural fairness. Thus, in S10/2011 v Minister for Immigration and Citizenship (2012) 246 CLR 636 at 658-659 [65]-[68] Gummow, Hayne, Crennan and Bell JJ said that the question was whether the exercise of a power was “apt to affect adversely what is a sufficient interest” of the party affected (246 CLR at 658 [66]). The Citic parties put that they had, in effect, commercial interests in the way in which the port operated based on their investment in infrastructure and their intended uses and operations.

90    I do not consider that the matters on which the Citic parties relied created a right for them to be heard at common law on the designation of a person as port operator. That designation involved the performance of a public office providing for overall security arrangements for the Port. If the Citic parties were correct, every person with business interests or sufficient business interests in a port could, or perhaps would, have a right to be heard on each application by someone else to be designated as port operator under s 14(1).

91    For example, a small tenant with a restaurant business who had a dispute with his or her landlord, which might be a State or public authority, could assert a right to be heard on whether the landlord should be designated as port operator because the tenant had invested his or her life savings in the business. Moreover, acceptance of the Citic parties’ argument would mean that the Secretary would have the duty to identify all persons who might have a sufficient interest of the kind the Citic parties suggest and then invite those persons to express any views they may have for the purposes of s 14. The consequences for the administration of the Act in a major port like Port Botany or the ports of Brisbane, Fremantle, Melbourne or Sydney would be significant because there are many businesses, items of infrastructure and persons managing operations in those ports.

92    The Citic parties’ argument concerns a situation quite unlike one dealing with the impact that a particular draft or actual maritime security plan may have on a maritime industry participant. Their argument that, somehow their interests may be adversely affected merely because Mineralogy had applied to be designated as port operator, did not identify any right or interest sufficient in a public law context to give them a right to be heard before that was done.

93    The Parliament created a limited class of persons whose views had to be taken into account by the Secretary or his delegate in s 14(2)(c). I am of opinion that while the delegate could have taken into account views of the Citic parties, he was not bound to seek those views or to take them into account before he designated Mineralogy as port operator. Thus, the Citic parties were not denied natural justice when the delegate made that designation.

Conclusion

94    Accordingly, I am of opinion that the Citic parties and the Secretary have not shown, for the purposes of s 5(1)(a) and (e) of the ADJR Act, that the delegate acted in error in breach of the rules of natural justice or improperly in exercising his power under s 14(1) of the Act. The Citic parties’ proceedings must be dismissed.

95    I will hear the parties on costs. My preliminary view is that the Citic parties and the Secretary should pay Mineralogy’s costs of the proceedings that I have determined and that Mineralogy should pay the Citic parties’ costs of the injunction proceedings with those costs being set off. However, there may be reasons that the parties can elaborate on why such a view is inappropriate.

Associate:

Dated:    5 February 2014