Federal Court of Australia

Tipakalippa v National Offshore Petroleum Safety and Environmental Management Authority [2022] FCA 838

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application filed on 8 July 2022 be dismissed.

2.    The respondents’ costs be reserved.

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

REASONS FOR JUDGMENT

BROMBERG J:

1    The second respondent, Santos NA Barossa Pty Ltd (Santos), proposes to conduct an offshore drilling and completions campaign in the Timor Sea some 140 kilometres north of the Tiwi Islands. It is intended that six wells be drilled over a period of some 490 days, with approval granted for an additional two contingency wells. The drilling of the first well is due to commence in three days, on 17 July 2022. There is an obvious need for expedition in the delivery of my judgment. Accordingly, a short ex tempore judgment explaining why I have rejected the interlocutory relief sought by the applicant is, in the circumstances, appropriate.

2    In October 2021, Santos submitted to the first respondent, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), an environment plan, later revised on 11 February 2021 called the Barossa Development Drilling and Completions Environment Plan (the Drilling EP).

3    NOPSEMA is the regulator under the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009 (Cth) (the Regulations) made under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth). The Drilling EP needed to be approved by NOPSEMA. That is so because the Regulations prohibit a “titleholder” of a petroleum-related licence like Santos from commencing a “petroleum activity” unless an “environment plan” has been submitted to and accepted by NOPSEMA (see regs 3, and 6).

4    Regulation 6(1) relevantly provides:

6    Accepted environment plan required for an activity

(1)     A titleholder commits an offence if:

(a)    the titleholder undertakes an activity; and

(b)     there is no environment plan in force for the activity.

Penalty: 80 penalty units.

(1A)    An offence against subregulation (1) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

(2)    This regulation does not affect any other requirement under the regulations for a consent to construct or install, or a consent to use, a facility.

Note: The term ‘the regulations’ is defined in regulation 4 to mean ‘...regulations (including these Regulations) made under the Act’.

5    It is convenient to here refer to several other of the provisions of the Regulations of primary relevance to this proceeding. Pursuant to Regulation 10(1), for NOPSEMA to accept an environment plan, NOPSEMA must be “reasonably satisfied that the environment plan meets the criteria set out in regulation 10A.” Regulation 10A sets out the criteria for acceptance of an environment plan as follows:

10A    Criteria for acceptance of environment plan

For regulation 10, the criteria for acceptance of an environment plan are that the plan:

(a)     is appropriate for the nature and scale of the activity; and

(b)    demonstrates that the environmental impacts and risks of the activity will be reduced to as low as reasonably practicable; and

(c)    demonstrates that the environmental impacts and risks of the activity will be of an acceptable level; and

(d)    provides for appropriate environmental performance outcomes, environmental performance standards and measurement criteria; and

(e)    includes an appropriate implementation strategy and monitoring, recording and reporting arrangements; and

(f)    does not involve the activity or part of the activity, other than arrangements for environmental monitoring or for responding to an emergency, being undertaken in any part of a declared World Heritage property within the meaning of the EPBC Act; and

(g)    demonstrates that:

(i)    the titleholder has carried out the consultations required by Division 2.2A; and

(ii)    the measures (if any) that the titleholder has adopted, or proposes to adopt, because of the consultations are appropriate; and

(h)    complies with the Act and the regulations.

6    Relevantly, and by reason of Regulation 10A(g), in order to accept an environment plan, NOPSEMA must be reasonably satisfied that the consultation required by Division 2.2A has been carried out by the titleholder. Division 2.2A has but one provision. Regulation 11A is in the following terms:

11A    Consultation with relevant authorities, persons and organisations, etc

(1)    In the course of preparing an environment plan, or a revision of an environment plan, a titleholder must consult each of the following (a relevant person):

(a)    each Department or agency of the Commonwealth to which the activities to be carried out under the environment plan, or the revision of the environment plan, may be relevant;

(b)    each Department or agency of a State or the Northern Territory to which the activities to be carried out under the environment plan, or the revision of the environment plan, may be relevant;

(c)    the Department of the responsible State Minister, or the responsible Northern Territory Minister;

(d)    a person or organisation whose functions, interests or activities may be affected by the activities to be carried out under the environment plan, or the revision of the environment plan;

(e)     any other person or organisation that the titleholder considers relevant.

(2)    For the purpose of the consultation, the titleholder must give each relevant person sufficient information to allow the relevant person to make an informed assessment of the possible consequences of the activity on the functions, interests or activities of the relevant person.

(3)    The titleholder must allow a relevant person a reasonable period for the consultation.

(4)    The titleholder must tell each relevant person the titleholder consults that:

(a)    the relevant person may request that particular information the relevant person provides in the consultation not be published; and

(b)    information subject to such a request is not to be published under this Part.

7    On 14 March 2022, NOPSEMA, in purported compliance with the provisions to which I have referred, accepted the Drilling EP and provided a statement of reasons on 6 May 2022.

8    The applicant is an elder, senior law man and traditional owner of the Munupi clan of the Tiwi Islands, one of eight clan groups on the Tiwi Islands who have traditional and cultural connections and interests in relation to the sea country within the environment that may be affected by the activities that are the subject of the Drilling EP.

9    In this proceeding, the applicant claims that he, and the Munupi clan, were people whose functions, interests or activities may be affected by the activities that are the subject of the Drilling EP. The applicant claims that Santos did not consult with him or other members of the Munupi clan in the course of preparing the Drilling EP and that the Drilling EP did not demonstrate that any such consultation was carried out. As a result of that failure, the applicant claims that:

(a)    NOPSEMA could not have been reasonably satisfied that the consultations with members of the Munupi clan, required by the Regulations in relation to the Drilling EP were undertaken by Santos; and/or

(b)    the consultations required by the Regulations had not been undertaken by Santos.

10    On either basis, the applicant contends relying primarily on s 5(1)(c), (d) and (f) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth), that NOPSEMA’s decision is invalid and should be set aside.

11    The proceeding has, on the application of the applicant and with the consent of the respondents, been listed for an expedited trial on 22, 23 and 25 August 2022. I will return to the relevance of that, but these reasons are addressing the applicant’s claim for an interlocutory injunction restraining Santos from commencing or continuing offshore drilling pursuant to the Drilling EP. It is necessary to outline the relevant principles for the grant of an interlocutory injunction which are well settled.

12    In determining an application for interlocutory relief, the Court addresses two main enquiries. First, whether the applicant has made out a prima facie case in the sense that, if the evidence remains as it is, there is a probability that, at the trial of the action, the applicant will be held entitled to relief. Second, where the balance of convenience lies, namely, whether the inconvenience or injury which the applicant would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the respondent would suffer if the injunction were granted: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [19] and [65].

13    The requirement of a “prima facie case” does not mean that the applicant must show that it is more probable than not that the applicant will succeed at trial. It is sufficient that the applicant show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial. How strong the probability needs to be depends upon the nature of the rights the applicant asserts and the practical consequences likely to flow from the order the applicant seeks. In that context, there is no objection to the use of the phrase, “serious question” to convey the strength of the probability: O’Neill at [65] - [72] and at [19]. Furthermore, as the relief sought is discretionary, it may be denied for a range of reasons including the conduct of the applicant.

14    I am satisfied that the applicant has demonstrated a prima facie case that:

(i)    he is a relevant person within the meaning of Regulation 11A(1)(d), because he is a person whose functions, interests or activities may be affected by the activities to be undertaken under the Drilling EP;

(ii)    the applicant and the Munupi clan were not consulted by Santos either at all or at least in the manner required by the Regulations; and

(iii)    NOPSEMA’s decision to accept the Drilling EP is invalid and should be set aside.

15    It is not necessary to set out in any more detail the basis for that prima facie satisfaction because even assuming in favour of the applicant I had been satisfied that the prima facie case was strong, I would not grant the relief being sought because of the balance of convenience and discretionary considerations to which I now turn.

16    I should say at the outset of this discussion that my consideration of the balance of convenience and the discretionary considerations has been made in a relevant context, namely, the context provided by the fact that the expedited trial is scheduled to be completed by 25 August 2022. That context means that by that time, or shortly thereafter, effective relief may be granted to the applicant, either by the Court setting aside the decision of NOPSEMA, or alternatively, the Court having had the entirety of the evidence before it tested, and having received full and final submissions, grants an interim injunction of relatively short duration pending the delivery of its judgment. In that context, the relevant question on the issue of balance of convenience is whether the inconvenience or injury which the applicant is likely to suffer until the completion of the expedited trial if an injunction were refused outweighs or is outweighed by the inconvenience or injury which Santos would suffer to that time if an injunction were granted.

17    There are aspects of the applicant’s conduct which inform those balance of convenience and discretionary considerations which I need to address. By reference to the evidence before me, that conduct is fairly recorded in the submissions of Santos to which I now largely refer.

18    On 5 April 2022, some three weeks after NOPSEMA’s decision, the applicant gave instructions to his solicitors that he had not been consulted about the Drilling EP.

19    On 6 May 2022, NOPSEMA, as I have said, published its reasons for accepting the Drilling EP.

20    On 3 June 2022, the applicant filed his originating application for judicial review.

21    On 6 June 2022, the applicant’s solicitors wrote a letter to the solicitors for Santos, requesting that Santos give a written undertaking that it would not take any steps that are the subject of the Drilling EP until the determination of the substantive application.

22    On 10 June 2022, the solicitors for Santos responded to the applicant’s solicitors and advised that Santos declined to give this undertaking. The same letter advised that on or around 8 July 2022, a drilling rig was scheduled to arrive in the Barossa production licence area and that petroleum-related activities would commence thereafter and were estimated to take approximately 490 days. I would infer that, by reason of that advice, the applicant’s solicitors must have appreciated that drilling would commence on 8 July or very shortly thereafter.

23    On 10 June 2022, the applicant’s solicitors responded to the letter of the same date in terms which included the following:

We thank the representatives of the Second Respondent for providing us with this information concerning when activities that are the subject of the Drilling EP are anticipated to commence.

In light of the information provided by the Second Respondent, we note that we will need to take instructions from our client with respect to potentially seeking an expedited hearing in this matter or interim relief.

We will keep you updated in relation to the instructions that we obtain.

24    As Santos contended, there was no suggestion in this correspondence, or otherwise, that the applicant required further particulars about the activities that were expected to commence using the drilling rig from 8 July 2022.

25    On 16 June 2022, the applicant’s solicitors wrote an email to the solicitors for Santos seeking:

[F]urther information confirming the date on which commencement of drilling for the purpose of well construction (including riserless drilling) is anticipated or scheduled to commence...

26    On 16 June 2022, the solicitors for Santos responded that:

As identified in paragraph 5 of our letter of 10 June 2022, drilling activities are scheduled to commence from 8 July.

27    On 17 June 2022, the first case management hearing in these proceedings took place before Hespe J in her Honour’s capacity as duty judge. At that hearing, counsel for the applicant stated:

We understand that the drilling activities will commence on 8 July 2022 and so there is urgency from the applicant’s perspective. We haven't made a formal application for expedition but, essentially, these orders seek an expedited or at least a compressed timetable. And, as I understand it, there’s agreement between all parties that this timetable is reasonable and can accommodate a hearing in August, so the urgency is essentially in relation to works that are going to commence on 8 July and the – essentially expedited timeframe that’s sought.

28    For the purposes of that hearing, and following conferral that had occurred previously, all parties had consented to an order for a hearing to occur not before 22 August 2022.

29    Ten days later, on 27 June 2022, the applicant’s solicitors wrote to the solicitors for Santos requesting more information about the commencement dates for specific activities listed in the Drilling EP. It was stated that a response was required by 4 pm the following day to enable the applicant’s solicitors to communicate with the client and the Court “with respect to expedition and potential interim relief”.

30    On 28 June 2022, the solicitors for Santos responded by providing the information requested, including that the scheduled commencement date for riserless drilling for Well 1 was 16 July 2022.

31    On 29 June 2022, the second case management hearing in these proceedings took place before me in my capacity as the docket judge. In an exchange with counsel for the applicant, I addressed the prospect raised by counsel that interim relief might be sought after orders for an expedited hearing were made, stating:

I am not particularly attracted to the idea that I give you an expedited trial, which is what you are asking for… and then [to] be told that you will also be seeking an injunction.

32    This comment was in response to an indication from counsel for the applicant that instructions were still being obtained in relation to interim relief, following correspondence having been received on 28 June 2022 indicating that drilling was scheduled to commence on 16 July 2022. As Santos contended there was nothing revelatory in the correspondence of 28 June 2022 that might have complicated the process of obtaining instructions from the applicant concerning interim relief. The letter in fact indicated that it was expected that drilling would commence later than the applicant had previously understood, the change being from 8 July to 16 July 2022.

33    At the case management hearing, I made the following comments about the interconnection between the request for expedition and the lingering threat of an application for interim relief:

I could take the matter on 22, 23 and 25 August. But if I were to do that, it would only be on the basis that I am satisfied that the trial deserves expedition. And it would, I suppose, be done on the basis that a speedy – relatively speedy judgment would need to follow. Now, I am not sure that I would be comfortable to proceed on that basis in the knowledge that despite the grant of an expedited trial, your client may come to the Court some time between now and then and seek interim relief, which would be an additional burden both on the resources of the Court and the resources of the parties.

34    Counsel for the applicant indicated that from the applicant’s perspective, securing the expedited hearing was a “good outcome”. The Court expressly raised with counsel the tension between having a concern to prevent drilling on the one hand and pressing only for an expedited hearing that would commence after some drilling had commenced. The response from counsel for the applicant confirmed that this involved an informed and deliberate choice by the applicant. The applicant was pressing for an expedited hearing commencing on 22 August 2022 and not interim relief, in the knowledge that some amount of drilling would likely occur in the interim, which had been taken into account by the applicant. Counsel for the applicant relevantly said this:

The fourth item is commencement of riserless drilling for Well 1, 16 July 2022. Now, there is going to be a number of wells drilled over a lengthy period of time. And so in the context of the whole of the works, the hearing date sought, while I accept that the drilling will have started, they – the whole of the works won’t have [gotten] underway to any significant extent by the time the hearing comes about. So that is a matter that my client has taken in to account.

(Emphasis added.)

35    I accept Santos’ submission that the case for expedition was presented to the Court by the applicant as an informed compromise on his part, accepting that it would not prevent some drilling from occurring in the interim but conducive to addressing the substance of his concerns. As the above passage shows, and as was submitted by Santos, the applicant’s counsel was at pains to emphasise that only a limited amount of drilling would be expected to occur prior to the scheduled final hearing, in the context of a program of work scheduled to proceed for a much longer period of time and over a much wider area. This acknowledgment by the applicant, fairly made, is relevant not only to showing that an informed choice was made but also in assessing the balance of convenience for reasons I will explain.

36    On 4 July 2022, I made orders for the programming of the expedited hearing that was the subject of discussion at the case management hearing on 29 June 2022.

37    Later on 4 July 2022, the applicant’s solicitors wrote to the solicitors for Santos seeking an undertaking that Santos would not take any steps to commence drilling until the determination of the proceeding or until further order.

38    On 7 July 2022, the solicitors for Santos advised that Santos declined to provide the undertaking sought in relation to drilling.

39    On 8 July 2022, the applicant filed the present application for interlocutory relief and sought an urgent hearing of that application. That was done without any prior notice to Santos that the applicant would make such an application.

40    From that evidence, a number of inferences are to be drawn. First, I would infer that at least by 10 June 2022, the applicant, as advised by his lawyers, was well aware that drilling activities would likely commence by 8 July 2022 or shortly thereafter. By that time, the applicant had a solid basis for applying for an interlocutory injunction and seeking that it be heard and determined prior to the anticipated commencement of drilling. I infer, however, that despite there being a basis to press for an urgent injunction, the applicant was reluctant to do so.

41    The basis for that reluctance is not clear. It may have been due to a fairly held view that, in terms of the burden that would be placed upon both the parties and the Court, it was unreasonable in the circumstances for the applicant to pursue an urgent injunction closely followed by an expedited trial. Whatever the basis for the reluctance, that reluctance was accompanied by a preparedness by the applicant to live with the consequences for the applicant of obtaining no relief, at least until the expedited trial could be heard.

42    Second, I would infer that after an expedited trial was secured and some time between 4 and 8 July 2022, on the advice of his lawyers, the applicant decided to change course. The prior reluctance to pursue an urgent application for an injunction evaporated and the applicant made his application. That change of course has not been explained or justified and has had several prejudicial consequences.

43    Contrary to the overarching purpose of civil practice and procedure, as expressed by s 37M(1) of the Federal Court of Australia Act 1976 (Cth), the applicant’s conduct has denied the parties and the Court the capacity to have avoided the expense and the inefficiency involved in providing the applicant access to urgent relief by means of two processes, rather than one. Conduct of that kind ought not be encouraged and, if it were rewarded, it would be encouraged.

44    I accept that Santos has suffered some prejudice in this respect, although the extent of it is difficult to discern on the evidence before me. I also accept that Santos is likely to have suffered some prejudice by the applicant’s delay in making its application for an interlocutory injunction. It is likely that Santos could have avoided incurring significant costs avoidable if an injunction had been pressed for and granted by early to mid-June 2022 which could not now be avoided if an injunction was granted today. However, again, the manner in which Santos has presented its evidence makes it difficult to discern the full extent of the prejudice involved.

45    Turning then more directly to the balance of convenience, I accept Santos’ unchallenged contention that if it’s drilling, due to commence on 17 July 2022, is injuncted, it will suffer a daily loss in the order of hundreds of thousands of dollars. The drilling operations are a step in an elaborate project involving billions of dollars in investment that is the subject of extensive planning and scheduling. The works and support services necessary for the drilling operation are to be provided by multiple contractors to Santos. The contractual obligations in place which have now been engaged will require Santos to pay ‘standby rates’ or other compensation to contractors even if no work can be performed.

46    Further, and beyond those immediately quantifiable losses, there is, I accept, a substantial risk that a delay in the commencement of the drilling operations will prejudicially impact upon the scheduled work necessary to be undertaken once drilling has been completed, because essential contractors and equipment may become unavailable. Santos has also relied upon the likelihood of detriment to third parties but I have given that little or no weight. That is because I am assessing the balance of convenience over a six week period until the completion of the expedited trial and the evidence is that third party contractors are likely to be compensated by Santos for any disruption and consequent loss.

47    For justifiable reasons concerned with his financial capacity to do so, the applicant does not offer the usual undertaking as to damages. Although the absence of an undertaking is a factor that may weigh against the grant of an interlocutory injunction, I accept that, in the circumstances, the absence of an undertaking should not be a disqualifying factor against the applicant: See Inetstore Corporation Pty Ltd (in liq) v Southern Matrix International Pty Ltd (2005) 221 ALR 179 at [27] (Campbell J); Environment East Gippsland Inc v VicForests (No 2) [2009] VSC 421 at [12]-[21] (Forrest J ); Kaurareg Native Title Aboriginal Corporation RNTBC v Torres Shire Council [2019] FCA 746 at [8] (Logan J). Those circumstances include the applicant’s financial position, the strength of his prima facie case and the fact that the litigation is not confined to the enforcement of private rights but engages the public interest. The absence of an undertaking as to damages, nevertheless, weighs against the grant of an injunction because it serves to emphasise that the financial loss relied upon by Santos is not recoverable and will, in the end, be entirely borne by it.

48    In the context of the substantial and largely certain injury that Santos will suffer, I turn to consider the injury which the applicant contends he and the Munupi clan will suffer if an injunction is not granted. Again my consideration is confined to the six week period in question and is based on the evidence that during that period, the drilling by Santos will be confined to only one of the six wells to which the Drilling EP refers.

49    The effect of the proposed drilling activities proceeding was addressed in the affidavits of five Munupi witnesses, including the applicant and was reinforced by the expert anthropological report of Gareth Lewis. Those effects may, for convenience, be divided into two categories, although I readily accept that the division is somewhat artificial because there are overlaps. The first category of harm is the possible impact of the drilling on marine life and on the food, fishing, hunting and collecting activities of the Munupi clan. In relation to that feared harm, it is important to recognise that some of the marine life involved includes totemic marine life, such as dugongs, sharks, crocodiles and various turtle species. The second category of feared harm may be described as the spiritual ramifications upon the health and wellbeing of the applicant and his people.

50    As to the first category, I accept that the feared harm is a possibility, mainly because it is possible that the drilling operations will result in an oil spill or other unplanned calamity. However, there is no evidence before me as to the likelihood of such an event and I am unable to characterise that asserted injury as any more than a possibility. I am not satisfied that by reason of the drilling alone of one well over a six week period, any significant harm will be caused to either the marine life or the Munupi activities in question. I note in that respect that insofar as there is evidence before me as to the impact of drilling alone on fauna, the evidence is that, on a worst case scenario, the consequence is minor.

51    As to the second category of feared harm, I accept the unchallenged evidence of the Munupi witnesses of the spiritual and social loss that drilling of itself will occasion upon them. The evidence is replete with expressions of fears and apprehensions, including the fear of sickness eventuating from interference with the spiritual connection between the Munupi people and their sea country as well as their responsibility to look after and protect that country, including its marine life. I accept that those fears are genuinely held and that some harm of this kind will be occasioned should drilling commence. However, the extent of that harm has to be assessed in the light of the fact that on the basis already explained, the applicant was prepared to live with the harm occasioned by the drilling of one well over a short period in circumstances where an expedited hearing availed the applicant of the opportunity to stop the vast majority of the drilling operations intended under the Drilling EP.

52    Taking together the discretionary considerations adverted to already, including the prejudice caused to Santos by the applicant’s conduct, as well as the largely certain loss and damage that an injunction will cause to Santos and balancing that against the harm likely to be occasioned upon the applicant and the Munupi people and bearing in mind the strength of the applicant’s prima facie case which I have presumed, it seems to me that on balance the interests of justice do not favour the grant of the interlocutory injunction sought by the applicant.

53    I note, for the sake of completeness, that I have had regard to the applicant’s contention that this is public interest litigation which should be differentiated from litigation confined to the enforcement of private rights. The applicant argued that for that reason, any adverse consequences for the applicant arising from his delay and associated conduct should have no bearing upon the Court’s preparedness to grant an injunction. I am prepared to accept that the litigation may be characterised as involving an element of the public interest and, in particular, the public interest in the protection of the environment, as well as the protection of Aboriginal heritage. To some extent, I have taken into account that public interest. But ultimately, I am not persuaded that, to the extent that the public interest may weigh in favour of the applicant’s position, it serves, in combination with the other factors weighing in favour of the applicant, to tip the scale.

54    Accordingly, the applicant’s application for an interlocutory injunction will be dismissed.

Associate:

Dated:    18 July 2022