The High Court appears likely to examine the constitutionality of Scott Morrison’s secret ministerial appointment to the Resources portfolio after the energy company whose project he vetoed updated its claim in the Federal Court to argue he acted unlawfully.
Asset Energy revised its case last week to introduce a constitutional argument about Morrison’s powers, meaning it is now expected to end up in the High Court. Filed in Western Australia, the case becomes the first test of the constitutionality and legal consequences of Morrison’s actions in having himself appointed secretly to five extra portfolios as prime minister. Further, it becomes the first test case of the legal dimensions of a key principle known as “responsible government”.
Newly released documents filed in the case also reveal more of Morrison’s arguments for blocking the proposed gas exploration project, including that Australia already had enough gas and his government favoured other gas projects over Asset Energy’s.
On October 25, Asset Energy refiled its court application against the decision not to extend the permit for its Petroleum Export Permit project, known as PEP11, arguing Morrison acted unlawfully by not disclosing he had “purported” to take on the Resources minister’s powers before making it.
It said he could not have exercised powers legally as the “responsible” minister if nobody knew he held the position.
The company has also changed the first respondent of its action from “the Prime Minister, as the responsible Commonwealth minister” to the “Minister for Resources”, reflecting its argument that Morrison was not, in fact, empowered to decide. The New South Wales Regional minister – who has responsibility for resources – is the second respondent.
As part of its changed application, the company filed a notice of “a constitutional matter” – indicating the case may go the High Court, either before it is heard in the Federal Court or later. Only the High Court can rule on matters of constitutional law.
The notification alerts the federal, state and territory attorneys-general of constitutional questions and gives them the option to send the case directly to the High Court to answer them, or to intervene as parties should the case end up there.
Federal Attorney-General Mark Dreyfus appears unlikely to refer the case. His recent predecessor, Christian Porter, intervened in just 31 High Court cases out of a possible 653. Dreyfus’s spokesman confirmed he had received the notice. “He will consider it in the usual way.”
When Asset Energy launched its proceedings, it was based on having been allegedly denied procedural fairness. At that stage, it was still not known publicly that the then prime minister had taken on five extra portfolios, including Resources, under cover of the Covid-19 pandemic during 2020 and 2021.
That was revealed on August 13 this year, prompting his successor, Anthony Albanese, to obtain, and take the rare step of publishing, legal advice from Solicitor-General Stephen Donaghue, KC, on whether Morrison was lawfully appointed to administer the Resources portfolio. It was the only portfolio in which he is known to have sought to exercise any of the extra powers. Donaghue found he was lawfully appointed but raised some legal questions.
Federal Court documents released to The Saturday Paper this week reveal Asset Energy’s revised application reflects a legal concern Donaghue raised about the secrecy. He found that publicising ministerial appointments was crucial to the principle of “responsible government” – being accountable to its electors.
His advice raised a second query as to whether Morrison had been properly appointed to “hold the office” of minister, as well as just to administer the portfolio. The latter power falls under section 64 of the constitution, the former under section 65. Some legal experts argue that both are required to exercise ministerial authority fully. Donaghue suggested the drafting of the paperwork – missing what he said were the legally important words “hold the office of” – may mean it did not confer all the power Morrison assumed he had.
In its new argument, Asset Energy raises the legal impact of the secrecy on Morrison’s administrative power under section 64. It appears to have scope to also raise the validity of his appointment under section 65.
The argument it has adopted was first canvassed publicly in The Saturday Paper on August 27. At that time, University of Canberra constitutional law expert Professor Kim Rubenstein argued that the lack of transparency breached the principle of responsible government. Morrison had declared himself the “responsible” Commonwealth minister, a term with connotations for legal accountability.
At the time, one other constitutional lawyer confirmed they shared Rubenstein’s view. In October, The Australian newspaper reported that former High Court judge William Gummow also believed the secrecy made Morrison’s appointments constitutionally invalid.
This week, Rubenstein told The Saturday Paper the company’s new constitutional notification potentially allows the states to join any High Court proceedings in the case and broadens its implications.
“By introducing a constitutional point, this now enables the states to choose to make a contribution to the analysis of the significance of the alleged breach of responsible government,” Rubenstein said. “This will be an important contribution to accountability principles in Australia.”
For the first time, the court documents also detail how Morrison justified his decision to veto the PEP11 project, including claiming Australia’s east coast had enough gas without it.
Morrison rejected Asset Energy’s application to extend its existing permit and dismissed its insistence that the project could resolve east coast supply problems.
“After weighing the merits of the application with the other relevant matters, I am of the opinion that the application should be refused,” he wrote.
The Albanese government is currently wrestling with how to increase gas supply and drive down high prices, which are further straining household and business budgets.
On Wednesday, Shadow Treasurer Angus Taylor, formerly the Energy minister, accused the government of demonising gas producers and supported more gas exploration. “We’ve just got to get it out from under the ground and frankly New South Wales and Victoria would be good places to start,” Taylor told the National Press Club.
As the current respondent in the Asset Energy case, the new federal government had to provide the court with documents Morrison used to make his decision. That included draft and final correspondence between himself, the NSW government, the National Offshore Petroleum Titles Administrator (NOPTA) and Asset Energy.
The documents filed last month include an undated, unsigned draft letter from Morrison approving the permit extension, which was based on NOPTA recommending it proceed. There was also an alternative draft refusal letter, which is the option Morrison ultimately chose.
He outlined that decision in a signed letter, dated February 15 this year, to NSW Deputy Premier Paul Toole, who shared responsibility for the joint federal–state decision. Morrison wrote that the market regulator reported there was “now sufficient supply” of gas to “address previous near-term shortfall forecasts”.
Morrison referred to a 2017 Australian Competition and Consumer Commission inquiry, saying there “should be sufficient gas to meet domestic and contracted LNG export demand” until 2025.
Morrison rejected the company’s extension plea and queried its funding capability. He also wrote that public opinion opposed PEP11 as “not the right project” for the “pristine beaches and waters” of the NSW coast.
Morrison had included the same phrase in a media release announcing the decision two months earlier, on December 21, 2021, four days after the company received an intention-to-refuse notice and when it still had a month to respond. The release was issued jointly with NSW federal Liberal MPs and candidates based in Sydney’s eastern suburbs, northern beaches and on the Central Coast.
Morrison’s February letter declared his government wanted much more gas development but favoured projects in “other locations”. He named the Beetaloo, North Bowen and Galilee basins and cited plans to “also accelerate gas development in other strategically important gas basins around the country”.
The Federal Court documents show the back-and-forth between the company, NOPTA and the two governments began in 2020.
On January 23 that year, Asset Energy applied for a two-year extension to the NSW exploration permit that was due to expire on February 12 that year. It had also sought a two-year suspension of its work program and a variation to its permit. It based its request on the legal principle of “force majeure” – or forces beyond the parties’ control – citing changes to its corporate board and parent company, and internal conflict over its exploration strategy.
With these resolved, it wanted to skip a planned 3D seismic survey of the seabed off Newcastle and go directly to exploration drilling, claiming a lack of public support for the survey stage. Because there was a significant need for gas on Australia’s east coast, it claimed a substantial public benefit in drilling sooner.
NOPTA noted the company had missed the due date for a previous 2D survey report by four months but found it “extremely responsive”. It found the corporate issues did not qualify as force majeure but acknowledged they had impacted the company’s strategy and drilling timetable.
On April 29, 2020, NOPTA agreed to the request, with reporting conditions. Reasons included that the Covid-19 pandemic had imposed delays and posed a risk to future rig availability and contract opportunities.
On February 4, 2021, the company applied for another extension, citing more delays linked to Covid-19. The then federal Resources minister, Keith Pitt, wrote seeking the view of his then NSW counterpart, John Barilaro. Barilaro replied that previous state ministers had recommended refusal and so did he. He said while he was “well aware of the challenge we face as a nation” in respect of affordable gas supplies, NSW preferred other proposals, such as the Narrabri Gas Project.
Morrison was secretly appointed to the Resources portfolio two months later, on April 15, having written to the governor-general recommending his own appointment. In the letter, released under freedom of information, Morrison described the change as “of an administrative nature only”. The company was served its preliminary notice in December.
Toole indicated that NSW supported the refusal. He cited his government’s recently released Offshore Exploration and Mining Policy, which did not support offshore commercial exploration or mining “in or adjacent to NSW coastal waters”.
An undated draft letter back from Morrison emphasised other potential gas sites and said that while Asset Energy had “not committed environmental or safety breaches” there were other grounds for refusal. He acknowledged the NSW offshore exploration policy but pointed out it was released after the application was received, so could not be included among the reasons. Asset Energy began its court proceedings in June.
Its lawyers wrote to the Australian Government Solicitor (AGS) on August 22, seeking access to the legal instrument that authorised Morrison’s appointment and the extent to which it was made public. They asked how this combination was sufficient to make Morrison the “responsible Commonwealth minister” as required under the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
The AGS provided a hyperlink to the instrument, signed by Governor-General David Hurley on April 15, 2021, to “direct and appoint” Morrison to the Resources portfolio “pursuant to sections 64 and 65 of the Constitution”.
In a new, 317-page affidavit, sworn on October 25, Asset Energy’s lawyer, Nicholas Tiverios, of Ensign Legal, said previous administrative arrangements orders outlining which ministers ran which portfolios had been published on the federal register of legislation. Morrison was appointed to the Health portfolio on March 14, 2020, and no order was published for that or any of the other four secret ministries.
After a subsequent ministerial reshuffle, a new set of orders took effect on March 18, 2021. Morrison took on the Resources portfolio clandestinely a month later.
Governor-General Hurley signed all the secret appointments. Last week, his official secretary, Paul Singer, told a senate estimates committee that it was up to the government, and not his office, to make them public.
Singer defended omitting the appointments from the governor-general’s official program. “In fact, I can refer to 38 different occasions over the last 10 years where those such occasions have not been reflected in the Governor-General’s program, because the communication of those administrative appointments is the prerogative of the government of the day,” Singer said.
In August, Prime Minister Albanese appointed former High Court judge Virginia Bell to examine the circumstances and implications of the secret appointments and report back by November 25. Separately, the courts will now test their legality.
Asset Energy wants Morrison’s joint decision with NSW quashed and to be allowed to resubmit its proposal. Should it succeed, the politically sensitive question of whether to allow gas exploration off the NSW coast will become the new Labor government’s problem.
This article was first published in the print edition of The Saturday Paper on November 5, 2022 as "Push for legal case against Morrison to go to High Court".
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