Federal Court of Australia

Environment Council of Central Queensland Inc v Minister for the Environment and Water [2023] FCA 1117

REASONS FOR JUDGMENT

MCELWAINE J:

1    These are my reasons for three evidentiary rulings I have made in the course of the trial. There are two judicial review proceedings before the Court, each of which is concerned with a decision made by the first respondent Minister pursuant to ss 78 and 78C of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the Act) not to revoke a controlled action decision earlier made by a delegate pursuant to s 75 of the Act, despite being satisfied that the applicant in each case had provided the Minister with substantial new information about the impacts of mining coal from the two coalmines that are the subject of this proceeding.

2    Each judicial review application is in identical terms. VID 400 of 2023 concerns the expansion of an existing coal mine near Narrabri, New South Wales. VID 401 of 2023 concerns the expansion of an existing coal mine at Mt Pleasant in New South Wales. In these reasons I will refer to the reasons of the Minister dated 11 May 2023 (MD), given in relation to the Mt Pleasant mine. In each case the reasons are relevantly identical.

3    The grounds of review are fulsome in expression, preceded by a considerable amount of background information. In all, the applicant presses 10 grounds, of which ground 6 is presently relevant. This ground contends that the Minister’s finding was affected by irrationality, was not logical or was unsupportable on the material before her. The steps in that ground are:

1)    The Minister reasoned as follows. The irrationality arises from the final step (e).

(a)    Premise. Climate change caused by the total accretion of greenhouse gas emissions, before it stops increasing, from sources including (in a universe where it is taken) burning of coal from the Proposed Action will have a significant impact on very many MNES.

However…

(b)    Premise. Whether or not the Proposed Action proceeds, the total level of accreted global greenhouse gas emissions and average temperature at which each stops increasing will be determined by a range of variables.

(c)    Premise. There are therefore some future scenarios without the Proposed Action that result in total greenhouse gas emissions greater than or equal to some future scenarios with the Proposed Action.

(d)    Preliminary conclusion. It is therefore not possible to say that total emissions will be higher if the Proposed Action is taken than if the Proposed Action is not taken.

(e)    Final Conclusion. The significant impacts from greenhouse gas emissions including those from burning the coal from the Proposed Action are not likely significant impacts the Proposed Action is likely to have.

(Original emphasis.)

4    Where “MNES” refers to Matters of National Environmental Significance.

5    The gravamen of the point as submitted by Mr Nekvapil SC, is that the Minister employed scenarios by adopting probabilistic reasoning that was not rational, in scientific terms, because: “the sheer volume of complex interconnected variables on a global scale over decades, [did not permit the making of] probabilistic judgments for the purpose of applying the relevant statutory provisions”. To understand that submission, it should be understood that at the heart of this case is the contention that the Minister did not make a legally valid decision not to accept the applicant’s very considerable evidence and submissions to the effect that the taking of action, the direct consequence of which is to extract and sell coal, was likely to have the indirect consequence that is provided for at s 527E of the Act. In short, the burning of coal is an indirect consequence of extracting it which is a significant contributor to total global greenhouse gas emissions, and therefore a major cause of adverse climate change. An indirect consequence within the meaning of that provision arises if the proposed action “is a substantial cause” of an event or circumstance that is the indirect consequence.

6    It should be noted that this is not a case about denial of the science of climate change by the Minister. In her somewhat extensive reasons, the Minister accepted that human activity unequivocally contributes to a global increase in temperature, that climate change is one of the most significant threats to a number of Matters of National Environmental Significance and in that regard concluded that the considerable volume of material as provided to her by the applicant amounted to substantial new information about the impacts that the proposed action has, will have or is likely to have, on matters protected by Pt 3 of the Act. In particular the Minister found at MD [97] that much of the information contained in the request lodged with her was not before the delegate at the time of the original controlled action decision and “is of substance and is not trivial or inconsequential” as demonstrating that “climate change has various effects” on Matters of National Environmental Significance. At MD [98] the Minister listed 17 Australian World Heritage properties likely to be impacted by climate change. Specifically the Minister found at MD [99]:

The information in the reconsideration request identifies that climate change and its flow-on effects are affecting or will affect the ecology of the identified declared World Heritage properties. Based on the information provided, the extent of the effects appears to vary between the properties, reflecting their unique natural environments. In summary, World Heritage properties containing ecosystems and/or species with low temperature range tolerances (e.g. alpine and coastal environments) are more susceptible to climate change. In general, climate change reduces the resilience of ecosystems due to the increased risks from a range of factors including:

a.    altered (or reduced) abundance and distribution of species critical (and/or unique) to the ecological integrity of the property;

b.    altered hydrological flows causing increasing incursions of saltwater into freshwater (and the reverse) damaging important feeding and breeding habitat;

c.    invasive/pest species gaining a greater foothold;

d.    extreme temperature events causing heat stress to susceptible plants and animals (e.g. the Spectacled Flying Fox Pteropus conspicillatus); and

e.    altered or inappropriate fire regimes associated with temperature extremes.

7    At MD [104] the Minister said:

I considered that the request contains information which demonstrates in a general sense that climate change from anthropogenic sources of GHG emissions has and/or will have physical effects on protected matters. In particular, I accepted that the combustion of coal and/or gas on a global scale results in GHG emissions, which increases the effects of climate change, including the regularity, scope and intensity of climate hazards. I accepted that these effects of climate change will adversely affect the MNES named by EJA in their application.

8    Further, the Minister (at MD 105) accepted advice from her department that having regard to the information provided, and through the consultation process subsequently undertaken, the:

…[P]hysical effects of climate change on the world heritage values are declared World Heritage properties… are, if anything, indirect consequences of the proposed action: they are events or circumstances that are removed in time and distance from the taking of the action, which is the extraction of coal.

(Original Emphasis)

9    Hence, the Minister considered that the statutory test at s 527E of the Act required her to be satisfied that the proposed action “must be a substantial cause of the physical effects of climate change on the world heritage values of the declared World Heritage property”: MD [106].

10    However, the Minister then concluded that she was not so satisfied for the reasons set out at MD [107]:

I determined that the proposed action is not a substantial cause of the stated physical effects of climate change on the world heritage values of declared World Heritage properties. Therefore, the information is not about impacts the proposed action has or will have, or is likely to have, on the world heritage values of declared World Heritage properties. As explained below, this is because:

a.    the information does not demonstrate that the proposed action will cause any net increase in global GHG emissions and global average temperature (and so, any physical effects of climate change on the world heritage values of declared World Heritage properties). I considered that whether this will happen is subject to multiple variables; and

b.    even if that were demonstrated, any contribution from the proposed action to global GHG emissions would be very small. It is therefore not possible to say that the proposed action will be a substantial cause of the physical effects of climate change on the world heritage values of declared World Heritage properties.

11    In the following paragraphs, and in some detail, the Minister set out her reasons why, addressing first the question whether the proposed action will cause a net increase in greenhouse gas emissions and global average temperature, and even if that was so, if the proposed action were to cause such a net increase, would it be a substantial cause of any physical effects of climate change on the world heritage values of declared World Heritage properties?

12    To each of those questions, the Minister answered: no. The Minister engaged in the same reasoning process for each of the other 16 Matters of National Environmental Significance in issue.

13    The irrationality ground assumes that it was open to the Minister to deploy a counter-factual, which is the subject of ground 1 and need not be further considered presently, but then contends that the Minister reasoned irrationality by employing scenarios in order to predict, in terms of probability, the interrelationship and operation of a complex and large number “of interconnected variables on a global scale over decades” in order to inform her judgment on the statutory question of likelihood (s 78(1)(a)(ii) of the Act). Put more precisely, the submission is that the Minister: “reasoned from the premise that if a thing can happen, to a conclusion based on a thing in fact happening”. The claimed irrationality arises from that which is described as the missing step: “not only can the thing happen, it will happen”: Applicant’s opening submissions (AS) at [126].

14    That submission is further developed, and put differently, at AS [128]. The Minister’s conclusion that she was not satisfied the proposed action “will cause” any net increase in global greenhouse gas emissions, involves a conclusion or a prediction as to a probable likely future outcome, with a high level of confidence. On the totality of the evidence before the Minister, the submission is that this type of conclusion or prediction is not scientifically supported.

15    In each case it is further said that the Minister’s findings, anchored with her high degree of confidence, necessarily and implicitly eliminated “any real chance of an event or circumstance for any MNES, from cumulated greenhouse gas emissions to which the action was a substantial cause”: AS [130]. On the applicant’s case, the evidence demonstrated that this level of confidence could not be rationally attained.

16    It is the complexity of the variables, and the improbability of reasoning in this way, that undermines the Minister’s approach on the applicant’s case. All of this can be deduced “only on the material” that was before the Minister: AS [146]. However, the applicant seeks to support those contentions by reference to some expert evidence.

17    There are two reports. One is from Ms Rachel Wilson who is an energy policy and economics expert. She has considerable experience in energy systems analysis and modelling. Her report answers a series of questions. She makes the point at paragraph [13] that:

[F]orecasts from energy market models will never be precise predictors of the future because they depend on a multitude of input assumptions that are inherently uncertain. That uncertainty is driven by several different factors.

18    She goes on to explain those factors in detail. A further point that she makes in her report at [23] is that given the degree of uncertainty in various assumptions: “[it] is not possible to make a definitive statement regarding the probability that a certain forecasted outcome will occur.” She is critical of the CRU Consulting - Coal Market Substitution Study (CRU Report) that was before the Minister, provided by the proponent (the second respondent) in this matter and which does contain predictions about markets for the demand for and supply of coal, predicted into the future.

19    The other expert is Dr Matthew Gidden. He is an expert in modelling global scenarios to address the impacts of climate change. In doing so, he engages with the scientific community and with issues such as the anthropogenic emission effects on climate and human health. He explains in some detail the number of variables that apply to modelling of this type, and as explained in submissions, it is not possible to make probabilistic assessments of a given scenario, or an aspect of it, in order to make a judgment about the relative likelihood of different scenarios into the future. It is said that his evidence explains the approach of the IPCC that was before the Minister in the form of several reports. One point that he makes in his evidence at [48] is:

[I]t is not possible to assign a probability to a given scenario or to assign relative probabilities to two or more scenarios, meaning it is not possible to say that the CRU scenario is probabilistic leak more or less likely to occur than any other scenario.

20    In other respects, Dr Gidden is critical of the methodology applied, and the assumptions made, in the CRU Report.

21    The respondents object to the receipt of this evidence. The starting point is that the receipt of evidence that was not before a decision-maker in a judicial review proceeding (as distinct from a merits review proceeding) is irrelevant and therefore inadmissible: Waterford v Commonwealth (1987) 163 CLR 54 at 77-78 (Brennan J):

A finding by the A.A.T. on a matter of fact cannot be reviewed on appeal unless the finding is vitiated by an error of law. Section 44 of the AA.T. Act confers on a party to a proceeding before the AAT. a right of appeal to the Federal Court of Australia “from any decision of the Tribunal in that proceeding” but only “on a question of law”. The error of law which an appellant must rely on to succeed must arise on the facts as the A.AT. has found them to be or it must vitiate the findings made or it must have led the A.AT. to omit to make a finding it was legally required to make. There is no error of law simply in making a wrong finding of fact. Therefore an appellant cannot supplement the record by adducing fresh evidence merely in order to demonstrate an error of fact

22    However, there are exceptions, and one is legal unreasonableness, or as in this case, irrationality: see Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707; 148 FCR 446 at [471]-[477] (Weinberg J); Chandra v Webber [2010] FCA 705; 187 FCR 31 at [40]-[41] where Bromberg J usefully summarised the position:

The admissibility of evidence on an application for judicial review of an administrative decision will depend on the ground of review and the circumstances of the case: McCormack v Deputy Commissioner of Taxation (2001) 114 FCR 574 at [38]-[40] per Sackville J. The touchstone for the determination of admissibility will usually be relevance. That is, is the evidence sought to be adduced relevant to the ground of review sought to be relied upon? Ordinarily there is no reason, in a case involving judicial review, for any evidence to be placed before the Court, apart from evidence of what was before the decision-maker at the time of the decision: Australian Retailers Association v Reserve Bank of Australia (2005) 148 FCR 446 at [442] per Weinberg J. However, the admissibility of evidence not before the decision-maker depends upon the grounds of review on which the application relies: Attorney-General (NT) v Minister for Aboriginal Affairs (1989) 23 FCR 536 at 539-540 per Lockhart J; Australian Retailers at [455]; Attorney-General (NT) v Hand (1988) 16 ALD 318 at 319-320 per Wilcox J; and Saint v Holmes (2008) 170 FCR 262 at [54] per Siopis J.

Authorities dealing with ADJR Act challenges have recognised that in relation to particular grounds of review, evidence beyond the evidence that was before the decision-maker may be relevant and admissible. Without seeking to suggest that the following list is exhaustive, evidence beyond that which was before the decision-maker may be relevant where the following grounds of review are raised:

•    the unreasonable exercise of the power given to the decision-maker: Attorney-General (NT) v Minister for Aboriginal Affairs at 539-540; Australian Retailers at [458]; Hand at 320; Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at 169;

•    excess of jurisdiction because of the absence of a jurisdictional fact: McCormack at [38]-[40]; Attorney-General (NT) v Minister for Aboriginal Affairs at 539-540; and

•    a breach of the rules of procedural fairness: Percerep v Minister for Immigration and Multicultural Affairs (1998) 86 FCR 483 at 495 per Weinberg J; McCormack at [38]; Hand at 320.

23    Recognising the force of these authorities, although commencing with the general position that expert evidence of this character is not generally to be received, Mr Emmett SC for the second respondent submits that neither expert report will assist in the resolution of the issues in this proceeding. The case that the applicant seeks to advance is already set out, in some detail, in its written submissions or by reference to the material that was before the Minister. On the assumption that the expert evidence does not go beyond that case, it should not be received because it does not add to it, and general reference is made to the overarching purpose at ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth). If, contrary to that assumption, the expert evidence goes beyond the articulated case, then it should not be received because that case has not been explained.

24    The submission continues that it is important to maintain a focus on the statutory question that the Minister was required to address pursuant to s 78 of the Act: the Minister may only revoke the first decision if satisfied that revocation and substitution “is warranted by the availability of substantial new information about the impacts that the action”, amongst other things, “is likely to have” on a matter protected by a provision of Pt 3 of the Act. In resolving that question, the views of scientists to the effect that one cannot engage in scenario reasoning by reference to the probability of outcomes in considering the anthropogenic effects of carbon emissions and climate change, do not bind the Minister to proceed in a particular way. The Act requires the Minister to make a prediction about likely future outcomes. The IPCC reports are prepared for a different purpose and address a different question.

25    In short, the submission is that this is not a case that turns on establishing that a fact, based on expert scientific evidence, is established on the balance of probabilities. The question, at least on this ground, is whether the Minister’s reasoning is infected by unreasonableness or irrationality.

26    Separately, and addressing the evidence of Ms Wilson, it is pointed out that her opinions at paragraphs [13], [23] and [45] respectively are simply to the effect that one cannot be definitive in predicting market outcomes into the future for the demand for and supply of coal, which view differs from those in the CRU Report, and to that extent it simply demonstrates that there is a range of views on this question. One of those views, as contained in the CRU Report was before the Minister, and the other was not. On the material set out in the applicant’s submissions, it was readily comprehended that the Minister may engage in substitution reasoning and a detailed submission was put as to why that would not amount to a rational reasoning pathway.

27    Mr Lloyd SC for the Minister broadly adopts the submissions of Mr Emmett, but further submits that upon a careful reading of the entirety of the Minister’s reasons, and in particular the paragraphs sought to be impugned on this point at [115]-[118], the Minister simply did not commit the error that is attributed to her. The Minister’s reasoning on the substitution point is supportable as an observation that it is likely that there will be buyers for coal that would otherwise be produced from the proponent’s mine, even if the expansion is not approved. It was open and indeed a reasonable assumption for the Minister to make that there will be a demand for coal into the future. The Minister was not obliged to interrogate every scenario, and indeed her reasoning does not turn upon elaborate scenarios or frameworks. The question before the Minister was whether the likely greenhouse gas emissions produced as a secondary consequence of the expansion of the mine would cause a net increase in total global greenhouse gas emissions. The Minister was not satisfied that the proposed action is likely to result in a net increase of greenhouse gas emissions or affect the extent to which the world heritage values of declared World Heritage properties will be impacted by the physical effects of climate change: MD [116].

28    Thus, the Minister did not commit the attributed probabilistic error.

29    What this analysis demonstrates is the point made by Mr Nekvapil in reply that, at least on the scientific question, there are fundamental differences in the way in which the case is put as between the parties. On the applicant’s case, it was simply not open to the Minister to reason by reference to probabilistic outcomes that are not supported by the scientific analysis. On the respondents’ case, that is not the relevant question because Parliament requires the Minister to engage in an assessment as to likely future outcomes, and the Minister is not bound by the views of the scientific community.

30    The difficulty at this stage of the case is that the respective arguments have not been fully developed. I have heard only part of the opening oral submissions for the applicant. I have not been taken in any detail to the documentation that was before the Minister and which is said to make out the applicant’s case on this point. I have not heard any oral submissions from the respondents. I do, however, have the benefit of very extensive written submissions from each party. One point that is made by Mr Nekvapil at this early stage is that the evidence of Dr Gidden is likely to cut through a large volume of material that was before the Minister, part of which is included in the court book, in a way that exposes the applicant’s point more succinctly and efficiently.

31    On the authorities that I have referred to, it is open to me to receive the evidence as relevant evidence pursuant to s 55 of the Evidence Act 1995 (Cth) if it could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue in this proceeding. Conceptually, that gives rise to a difficulty: what is the fact in issue? This is not a case where I am required to find whether the Minister was or was not correct in forming the view that she did as the correct or preferable conclusion on the material before her: indeed it would be quite impermissible for me to do so as it would involve an excursion into the merits. The issue is whether the Minister’s reasoning is affected by legal unreasonableness or irrationality. That requires me to form a view about whether the Minister made a decision that no reasonable Minister would have made, if properly instructed as to the facts and the law. This point is made by Neil Williams SC and Alan Shearer in their article “Evidence in Public Law Cases”, published as chapter 9 of Williams SC (ed), Key Issues in Judicial Review, (Federation Press, 2014) at p 142, that expert evidence in judicial review cases is of limited utility because:

It can only possibly have relevance if lack of any plausible basis is the test: but again, if the test is that extreme, how does an expert help in showing what an ordinary or rational person might regard as within the range?

32    It seems to me that this is the most significant hurdle faced by the applicant on the admissibility question. When I raised this in argument, an answer provided by Mr Nekvapil is that a rational Minister, in making a decision that turns upon a substantial body of scientific material, cannot ignore the fact that this material does not allow for probabilistic assessments of outcomes in modelling the likely impacts of climate change, because there are simply far too many variables.

33    I have concluded that the evidence of Dr Gidden should be received as provisionally relevant pursuant to s 57 of the Evidence Act because its relevance depends on my conclusion about the applicant’s argument that as a matter of construction, the Act did not permit the Minister to reason in the way that is impugned by ground 6. In the event that the applicant’s contention is accepted, the evidence may rationally affect my assessment of legal unreasonableness or irrationality.

34    I am not of the same view in relation to the evidence of Ms Wilson. With respect, her evidence does not seek to explain the material before the Minister in a way which demonstrates that it could not be used on the substitution scenario. Her evidence is that one cannot be definitive about energy market models because of the variability of input assumptions, which are inherently uncertain. On that opinion, she is critical of the modelling that was undertaken in the CRU Report and which was before the Minister. This opinion reflects a difference between Ms Wilson and the author or authors of the CRU Report. It is not relevant in this proceeding to resolve that difference in order to determine whether the Minister proceeded or concluded irrationality at MD [113]-[117] where she accepted departmental advice that if the proposed action did not proceed, that would not necessarily affect the level of greenhouse gas emissions worldwide, which she acknowledged was “subject to a range of other factors, including the level of emissions from sources other than the proposed action” at MD [113]. In the next paragraph (MD [114]), the Minister acknowledged that these variables “make it very difficult to estimate the likely net increase”, reasoning by, inter alia, reference to her observations at MD [115] that prospective purchasers will acquire an equivalent amount of coal from an alternative supplier and at MD [116] by assessing the likely global demand for coal by reference to the IEA Coal 2022 report. If I were to engage in a resolution of those competing opinions, I would likely slide into impermissible merits review. The applicant’s case on this issue must stand or fall on the material that was before the Minister.

35    Accordingly, the evidence of Ms Wilson will not be received.

36    Of course, whether the evidence of Dr Gidden is of weight in resolving the issue on this ground is not a matter affected by my present ruling.

37    Finally, there is a minor dispute about the admissibility of a document that was referenced in material before the Minister, but inadvertently not provided to her and which is the subject of affidavit evidence from Ms Berryman made on 18 September 2023. The particular report is titled: Climate Change 2022: Mitigation of Climate Change – Annex III: Scenarios and\Modelling Methods.

38    Mr Emmet maintains, but faintly presses, his objection to the admissibility of this document. It will be received in evidence. The fact that it is referred to in the material before the Minister is in my view sufficient to incorporate it.

Associate:

Dated:    19 September 2023