GREYMOUTH GAS TURANGI LTD v MINISTER OF ENERGY AND RESOURCES [2020] NZHC 2712 [15 October 2020]

GREYMOUTH GAS TURANGI LTD v MINISTER OF ENERGY AND RESOURCES [2020] NZHC 2712[15 October 2020]ISSUED TO COUNSEL ONLY AND EMBARGOED UNTIL4.00PM MONDAY, 19 OCTOBER 2020IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2018-485-237[2020] NZHC 2712UNDER the Judicial Review Procedure Act 2016BETWEEN GREYMOUTH GAS TURANGI LIMITEDApplicantAND MINISTER OF ENERGY ANDRESOURCESRespondentHearing: 24-26 August; 28 August 2020Counsel: J A Farmer QC, F J Cuncannon, P I Comrie-Thomson andR M Kós for applicantV E Casey QC, N C Anderson and S J Jensen for respondentJudgment: 15 October 2020RESERVED JUDGMENT OF DOBSON JContentsIntroduction [1]The parties [10]Greymouth [10]NZP&M and the decision-maker [12]The legal context [14]The 2013 minerals programme for petroleum [19]The factual background [25]The evidence [39]Greymouth deponents [39]NZP&M deponents [52]Greymouth's reply affidavits [57]Admissibility objection [61]Confidential information in the affidavits [66]First to third grounds of review: assessment of Greymouth's proposed work programme [67]First ground: error of fact in evaluating Greymouth's proposed work programme [69]Second ground: error of law in assessing the proposed work programme [81]Third ground: legitimate expectation where minimum work programme requirements met [91]Fourth to sixth grounds of review: consideration of the likelihood of Greymouth complyingwith its proposed work programme [103]Fourth ground: breach of procedural fairness in evaluation of compliance history [107]The surrenders of PEP 51154 and 51152 [114]The course of dealings with Mr Jeaffreson [132]Fifth ground– error of fact in respect of compliance history [146]Sixth ground: error of law, failure to take all relevant considerations into account onGreymouth's compliance history [151]No balancing of positive compliance [153]Wrong standard on likelihood of compliance [156]Seventh ground of review: unlawful abdication of authority [169]Eighth ground of review: unreasonableness [172]Inconsistency as an indication of unreasonableness [196]Conclusion on unreasonableness [207]Relief on the first to eighth grounds of review [208]The test for substantive relief [211]Ninth ground of review: ban an invalid change in government policy and/or suspendedoperation of the Act [242]Unpleaded complaints? [247]Factual circumstances of the ban [253]Character of steps taken between 12 April and 13 November 2018 [256]Costs [271]Summary [274]Introduction[1] The applicant (Greymouth) is one of a group of companies that is active in theexploration of hydrocarbons in the Taranaki area, and the mining of such resourceswhere they have been found in commercially exploitable quantities.[2] Greymouth has brought this application for judicial review on eight grounds tochallenge the lawfulness of the decision by a delegate of the respondent (the Minister)to decline an uncontested bid for a petroleum exploration permit (PEP) off the northernTaranaki coast (the decision). Greymouth's bid was made in what was known as the2017 block offer.[3] Mr Joshua Adams (Mr Adams/the decision-maker) was the Minister's delegatewho made the decision in her name. He was the official delegated to do so withinNew Zealand Petroleum and Minerals (NZP&M), the responsible division of theMinistry of Business, Innovation and Employment (MBIE). Mr Adams accepted arecommendation from an evaluation team comprising officials within NZP&M (theevaluation team) to decline the offer on 6 March 2018.[4] On 12 April 2018, the Prime Minister announced that henceforth there wouldbe a ban on issuing any permits for exploration or mining of petroleum products in alloffshore regions of New Zealand (the ban). At the same time, the Minister announcedthe terms on which NZP&M would issue an invitation for bids in the 2018 block offer.In doing so, the ban was taken into account, so that potential offshore areas in Taranakiwere excluded where such areas had been included in prior years' offers.[5] A separate challenge brought under a ninth ground of review in this proceedingclaims that the exclusion of offshore areas through the ban was illegal in thesecircumstances, namely where that year's process for inviting bids was undertakenbefore appropriate amendment to the Crown Minerals Act 1991 (the Act) had beenpassed to provide legislative authority for the ban. This challenge invites analogy withthe judgment in Fitzgerald v Muldoon where executive action was undertakenanticipating legislative change, but inconsistently with the terms of the existingempowering Act.1[6] The grounds for challenging the decision-maker's rejection of Greymouth's2017 bid included eight allegations of errors of fact and law, includingunreasonableness in the administrative law sense. In her statement of defence to thoseallegations, the Minister made limited admissions as to errors of fact and inadequacies1 Fitzgerald v Muldoon [1976] 2 NZLR 615 (SC). That case involved a post-election announcementby an incoming Prime Minister that employer contributions to superannuation schemes were tocease, despite an existing statutory obligation that they be paid.in the process for assessing the bid. The Minister concedes that relief is appropriateto the extent that the decision be quashed, and NZP&M be directed to undertake theassessment of Greymouth's 2017 bid afresh. It is accepted that such reconsiderationshould occur on the terms of the law as it then stood.[7] The Minister's concessions do not satisfy Greymouth. It has pursued itsclaims, seeking an order from the Court granting Greymouth the permit on the termsof its bid. In doing so, the Court would be using the powers of the decision-maker asauthorised by the Judicial Review Procedure Act 2016. Alternatively, Greymouthseeks a direction that reconsideration by the decision-maker should occur on the basisof a number of positive factual findings which Greymouth contends reflect the positionthe decision-maker ought to have found to exist when assessing Greymouth's 2017bid. Such findings would implicitly make it difficult for the decision-maker, applyingthe statutory criteria, to reject the bid on its reconsideration.[8] Greymouth argues that such further forms of relief are warranted incircumstances where it has lost faith in the objectivity and competence of theevaluation team responsible for assessing the bid.[9] The response for the Minister is, having made the extent of concessions thatwere pleaded, no further relief is appropriate. The Minister denied that any groundscould be made out for doubting the integrity or competence of the evaluation team,2and a decision on whether to accept a bid for such a permit involves complex technicalanalyses that the Court is not adequately equipped to deal with.The partiesGreymouth[10] In an affidavit sworn in the proceedings, Mr Mark Dunphy, who is a directorof the applicant and chair of its parent holding company, Greymouth PetroleumMining Group Limited, describes Greymouth's participation in exploration for, and2 Ms Casey QC took the preliminary point that no allegations of bad faith, bias or impropriety hadbeen pleaded in respect of the conduct of officials dealing with Greymouth's bid, and that suchserious matters ought not to be considered unless explicitly pleaded with adequate opportunity forresponse.production of, petroleum in New Zealand. Since it commenced activities in 2000,Greymouth has been granted, or has otherwise acquired, 17 PEPs and eight petroleummining permits (PMP). Currently, Greymouth companies hold three PEPs and sixPMPs. Greymouth companies supply approximately 10 per cent of New Zealand'sdaily gas consumption and, in addition, crude and condensate are exported to overseasmarkets. The Greymouth group ranks as the second largest New Zealand-ownedpetroleum company measured in barrels of oil-equivalent produced per day.[11] Mr Dunphy provides detail of the very significant sums spent by Greymouthon exploration activities and also provides details of the amount paid to thegovernment by way of royalties and income tax, which amounts reflect a significantcommitment to the industry. Mr Dunphy deposes that the only other company inNew Zealand executing equivalent (and not necessarily greater) on-going programmesof work in recent years is the Todd mining group.NZP&M and the decision-maker[12] NZP&M is responsible for administering all aspects of various types of miningpermit. It is described by Mr David Jeaffreson, the head of petroleum exploration andproduction within NZP&M,3 as a brand name maintained within the energy andresource markets branch of MBIE. The work is undertaken by appropriately qualifiedofficials within that branch of MBIE.[13] The power to issue PEPs is vested in the Minister of Energy and Resourcesand, by the terms of the Act, that power is delegated to the chief executive of MBIEand then sub-delegated to the national manager, petroleum. Mr Adams was contractedto carry out that role throughout the relevant period.The legal context[14] The system for mining permits of various types is administered under the Act.The purpose of the Act is specified in s 1A as follows:3 Mr Jeaffreson's role is known internally as the chief petroleum geologist.1A Purpose(1) The purpose of this Act is to promote prospecting for, exploration for,and mining of Crown owned minerals for the benefit of New Zealand.(2) To this end, this Act provides for—(a) the efficient allocation of rights to prospect for, explore for,and mine Crown owned minerals; and(b) the effective management and regulation of the exercise ofthose rights; and(c) the carrying out, in accordance with good industry practice,of activities in respect of those rights; and(d) a fair financial return to the Crown for its minerals.[15] Section 24 of the Act authorises the Minister to offer permits for allocation bypublic tender from time to time, and as the Minister considers appropriate. Section 24requires that notices of the offer of permits are to specify certain material details andthat the Minister is not to accept any tender which does not comply in a material waywith the requirements of the notice. The Minister is required to assess tenders inaccordance with the procedure in s 24 and the criteria set out in s 29A of the Act.[16] The provisions in s 29A are important to the contested issues in this case. Itspecifies:29A Process for considering application(1) An applicant for a permit must provide to the Minister—(a) the name and contact details of the proposed permitparticipants and the proposed permit operator; and(b) a proposed work programme for the proposed permit, whichmay comprise committed work, or committed and contingentwork; and(c) in the case of an exploration permit for minerals other thanpetroleum, an estimate of the expected total work programmeexpenditure in relation to the permit; and(d) any other information prescribed in the regulations.(2) Before granting a permit, the Minister must be satisfied—(a) that the proposed work programme provided by the applicantis consistent with—(i) the purpose of this Act; and(ii) the purpose of the proposed permit; and(iii) good industry practice in respect of the proposedactivities; and(b) that the applicant is likely to comply with, and give propereffect to, the proposed work programme, taking intoaccount—(i) the applicant's technical capability; and(ii) the applicant's financial capability; and(iii) any relevant information on the applicant's failure tocomply with permits or rights, or conditions in respectof those permits or rights, to prospect, explore, ormine in New Zealand or internationally; and(c) that the applicant is likely to comply with the relevantobligations under the Act or the regulations in respect ofreporting and the payment of fees and royalties; and(d) in the case of a Tier 1 permit for exploration or mining, thatthe proposed permit operator has, or is likely to have, by thetime the relevant work in any granted permit is undertaken,the capability and systems that are likely to be required tomeet the health and safety and environmental requirements ofall specified Acts for the types of activities proposed underthe permit.(3) For the purposes of the Minister satisfying himself or herself of thematter in subsection (2)(d), the Minister—(a) is only required to undertake a high-level preliminaryassessment; and(b) must seek the views of the health and safety regulator andmay, but is not required to, obtain the views of any otherregulatory agency; and(c) may, but is not required to, rely on the views of the regulatoryagencies; and(d) is not required to duplicate any assessment process that aregulatory agency may be required to undertake inaccordance with a specified Act.(4) To avoid doubt, subsection (2)(d) does not limit, have any effect on,or have any bearing on—(a) whether the permit holder or permit operator is required toobtain any permit, consent, or other permission under anyhealth and safety or environmental legislation:(b) the granting to the permit holder or permit operator of anypermit, consent, or other permission necessary under anyhealth and safety or environmental legislation by anygovernment agency, consent authority, or Ministerresponsible for the administration of that legislation.(5) This section is subject to section 29B.[17] Part 1A of the Act provides for the promulgation of minerals programmes.These are statutory instruments that are, in their final terms, issued by the Governor-General by Order in Council. By s 14(2) of the Act they may describe how theMinister or the chief executive will exercise any specified powers or discretions underthe Act in relation to any minerals that are subject to the programme. Mineralsprogrammes may include any other information the Minister considers likely to be ofassistance to any person wishing to use or understand the Act, including how theMinister or the chief executive will interpret and apply specified provisions in relationto any Crown-owned minerals. Section 14(4) stipulates that a minerals programmemust not be inconsistent with the Act or regulations under it and s 18 provides for themaking of submissions by interested persons on any draft of a minerals programmebefore it is settled in final form. Section 22 of the Act requires the Minister and chiefexecutive to act in accordance with a minerals programme.[18] Separate minerals programmes are contemplated for petroleum, and for otherCrown minerals.The 2013 minerals programme for petroleum[19] The current minerals programme for petroleum (MPP) came into force on24 May 2013.4 The document contains information and guidance for those who mayhave an interest in the management of the regime under the Act in relation toprospecting, exploration and mining of petroleum. In commenting on the purposestatement in s 1A of the Act, the MPP states:4 Issued by the Minerals Programme for Petroleum 2013 Order (No 2) 2013.1.3 Interpretation of the purpose statement in relation to petroleum(4) An underlying premise in the Act is that the government wants otherparties, such as public and private corporations, to undertakeprospecting for, exploring for and mining of Crown-owned minerals,including petroleum. The government does not wish to undertakethese activities itself, although it may from time to time undertakeseismic survey or other prospecting activities for the purpose ofproviding information to promote interest in New Zealand'spetroleum estate.[20] The same section of the MPP on the interpretation of the purpose statementacknowledges that:(6) An important component of promoting prospecting, exploration andmining is minimising sovereign risk for investors by providing for astable and coherent regulatory regime for petroleum.[21] A definition of the expression "sovereign risk" specifies that it is the risk thatthe government may unexpectedly change significant aspects of its policy andinvestment regime and the legal rights applying to investors to the detriment ofinvestors.[22] The reference in s 1A of the Act to the purpose being exploration and mining"for the benefit of New Zealand" is defined in the MPP as:5 best achieved by increasing New Zealand's economic wealth throughmaximising the economic recovery of New Zealand's petroleum resources.[23] That section notes that other components of "the benefit of New Zealand"including environmental considerations are covered by other legislation. That point isamplified in the following paragraphs:1.4 Broader statutory framework(3) The Minister and the Chief Executive, in administering the Act, donot have powers and functions (except where and to the extentspecifically provided for in the Act) relating to matters covered byother legislation. In particular, the Minister and the Chief Executiveare not required (except where and to the extent specifically provided5 MPP, clause 1.3(7).for in the Act) to duplicate the activities and requirements of ministersand departments responsible for administering other legislation.(5) The clear separation in the statutory framework between powers andfunctions (and rights and obligations) under the Act on the one handand under other legislation on the other is designed to ensure clearaccountability and avoid conflicting interests and objectives on thepart of ministers and departments responsible for administeringrelevant legislation.[24] The section of the MPP providing guidelines for applications for explorationpermits included:7.7 Processes for staged work programme bidding and grant ofpermits(1) The Minister may, among other things:(a) decide not to award any permits (the Minister is not requiredto accept the best bid or any bids)(b) ask an applicant to clarify an aspect of their bid or providefurther information or a technical presentation. However, noapplicant will be given the opportunity to modify or improvea bid (except if there is only one bid and the bid is notacceptable: see paragraph (1)(d) below)(c) if there are no acceptable bids, invite all applicants to re-submit modified bids within a specified period. The modifiedbids will then be considered as if they were the original bids.(d) if there is only one bid but it is not acceptable, request thebidder to improve its bid.(6) The Minister may invite a bidder to accept a work programmeproposed by the Minister where, as a result of deciding to grantpermits to other bidders, blocks that were part of the bidder's bidremain available. The Minister may consult with the bidder on theproposed invitation before making the invitation.(7) Where there is only one acceptable work programme bid for a blockor blocks and where that bid has been submitted under section 29Abut the Minister is not satisfied that the bidder meets the requirementsof section 29A, the Minister may invite the bidder to amend its bid tostate that it is to be considered under section 29B.(8) The processing of staged work programme bids will usually becompleted within five months after the closing date for applications.Applicants will be notified if processing will take longer than this.(9) As far as possible, applicants will be notified of the outcome of theirbids before any statements are made to the media about the outcomeof the Permit Round. Details of unsuccessful applicants andapplications will not be given to the media or disclosed to other parties(unless required under the Official Information Act 1982 or otherwiserequired by law).(10) The granting of a PEP will be subject to the conditions of grant thatwere advertised in the Notice for the Round, unless those conditionsare modified by agreement with the applicant. The Minister will notagree to any modifications that the Minister considers to besubstantial.The factual background[25] The events that are immediately relevant to the decision began on 22 March2017 when NZP&M published an invitation for bids (IFB) for the 2017 block offer.Obviously, before that date, there was an on-going relationship between NZP&Mpersonnel and Greymouth in relation to Greymouth's other permitted activities.[26] The IFB posted on the NZP&M website was a 52 page document describingthe process and setting a timetable, with bids required to be submitted by 6 September2017. It included an indicative date of 1 April 2018 for announcing decisions ongranting permits. Inviting bids for exploration permits by this means was a settledpractice for NZP&M and one which Greymouth was familiar with by 2017.[27] On 6 September 2017, Greymouth submitted its bid for a total of 358.7 squarekilometres within two of the offshore blocks north of New Plymouth that had beenidentified as available for offers in the IFB (the bid area). A key component of the bidwas Greymouth's proposed work programme, which was required to comply withminimum levels of exploratory work as stipulated in the IFB.[28] On 21 September 2017, NZP&M advised Greymouth that its bid did notcomply with the IFB requirements and invited Greymouth to submit a revised workprogramme. Greymouth duly submitted a revised work programme for its bid on25 September 2017. The following day, NZP&M confirmed that the proposed workprogramme now complied with the minimum requirements and the bid would proceedto a substantial evaluation.[29] On 1 December 2017, the evaluation team provided a draft of its report toMr Adams in his capacity as the delegated decision-maker. The draft reportrecommended that Greymouth's bid be declined. On 8 December 2017,Mr Jeaffreson, the chair of the evaluation team, wrote to Greymouth advising that thedecision on Greymouth's bid was likely to be made on or about 14 December 2017and that the evaluation team's intention was to recommend that the decision-makerdecline the bid. Mr Jeaffreson's letter cited consideration of matters listed ins 29A(2)(a) and (b)(iii) of the Act as influencing the team's recommendation.[30] On 11 December 2017, Mr James Willis, external counsel for Greymouth,wrote to Mr Jeaffreson seeking particulars of alleged non-compliance with permitconditions that the evaluation team considered to be inconsistent with good industrypractice. Mr Willis's letter included an offer to meet and he had a telephone discussionwith Mr Jeaffreson on that day.[31] On 13 December 2017, Mr Jeaffreson set out in appendices to a reply toMr Willis the instances of alleged non-compliance that had been focused on by theevaluation team. He also responded to Mr Willis's contention that NZP&M had anexplicit obligation to raise concerns about non-compliance with a bidder and afford anopportunity for the bidder to comment on them.[32] The next day, 14 December 2017, Mr Dunphy wrote to Mr Jeaffreson, withcopies to the Minister and the general manager of NZP&M, providing an interimresponse to the matters of concern that had been raised in Mr Jeaffreson's13 December 2017 letter. Mr Dunphy expressed concern at having to respond soquickly against what was then perceived to be the timeline for a decision onGreymouth's bid.[33] The following day, 15 December 2017, the acting national manager ofpetroleum at NZP&M replied to Mr Dunphy's letter, inviting a full response to thematters that had been raised in Mr Jeaffreson's 13 December 2017 letter, and affordingmore time in which to do so.[34] In a further 10 page letter dated 12 February 2018, addressed to the nationalmanager of petroleum at NZP&M, Mr Dunphy provided a detailed submission as towhy the bid ought to be accepted. His letter was copied to the Minister and to theMinister for Economic Development and the general manager of NZP&M. Itcontained outlines of many of the arguments now advanced in the judicial review forchallenging the grounds cited by Mr Jeaffreson as those on which the evaluation teamwas recommending the decision-maker should decline the bid.[35] On 1 and 6 March 2018, the evaluation team provided to Mr Adamsrespectively a draft and the final version of its block offer evaluation report.6 In eachof the draft and in the final report, the evaluation team adhered to two views thatsupported the recommendation that the Greymouth bid should be declined. First, theevaluation team perceived deficiencies in the proposed work programme so thedecision-maker should not be satisfied, on the criteria in s 29A(2)(a), thatGreymouth's proposed work programme was indeed consistent with the purposes ofthe Act and the proposed permit, or that it constituted good industry practice.Secondly, the evaluation team considered that previous instances of non-compliancewith the conditions of other permits meant that the decision-maker should not besatisfied, on the criteria in s 29A(2)(b)(iii), that Greymouth was likely to comply andgive proper effect to the terms of its proposed work programme.[36] On 6 March 2018, the decision-maker accepted the evaluation team'srecommendation and declined Greymouth's bid. In a letter despatched by thedecision-maker on the same day, Mr Adams offered to meet with Greymouth'srepresentatives to discuss queries they might have about the 2017 block offer bidevaluation process.[37] Greymouth promptly objected to the decision and accepted the offer to meet.After an exchange as to the terms on which the proposed meeting might occur, it tookplace on 10 April 2018. The attendees were Mr Adams, Mr Stevenson-Wallace (thegeneral manager of NZP&M), Mr Mathieson (solicitor at NZP&M), Mr Dunphy andMr Missingham (internal counsel at Greymouth).6 Ministry of Business, Innovation and Employment, Block Offer 2017: Evaluation Chair Reportand Permit Recommendations: Bid 60403.[38] This proceeding was commenced on 16 April 2018.The evidenceGreymouth deponents[39] Mr Dunphy's affidavit reviewed the history of the Greymouth group to sustainhis claim that its overall record of substantial work in the exploration and miningbusinesses, plus its financial capacity (which was not in any event questioned) shouldbe seen positively when assessing the relevant bid. He also deposed to his involvementin the dialogue between Greymouth and the evaluation team on Greymouth's bid. Inaddition, he provided factual details about the circumstances of the Prime Minister's12 April 2018 announcement of the ban on issuing exploration permits for anyoffshore areas.[40] Mr Harry Crighton is the chief operating officer for the Greymouth group. Hedeposes that he has worked in the oil and gas industry for around 35 years as ageologist, petrophysical engineer, provider of advisory services to the oil and gasindustry and, since December 2010, in a range of senior roles at Greymouth.Mr Crighton is the principal point of contact between Greymouth companies andNZP&M as well as other regulators. His affidavit provides details of Greymouth'sresponse to the concerns of non-compliance with other permits that were raised byMr Jeaffreson when assessing the likelihood of Greymouth complying with theprovisions of a work programme for its 2017 bid. Mr Crighton deposed that a numberof the allegations of non-compliance were factually incorrect, some were reasonablyjustified and some were not deserving of the seriousness attributed to them byNZP&M. He deposed that some of the concerns of non-compliance were raised for afirst time in Mr Jeaffreson's explanation for the evaluation team's recommendation.[41] An affidavit was completed by Mr Allan Bulte, the manager of geology andgeophysics for the Greymouth group. He has been working in the oil and gas industrysince 1982 and his evidence described the proposed exploration target and workprogramme that Greymouth developed for its 2017 bid. Mr Bulte explainedGreymouth's view that a two year period between completing the proposed initialtechnical analysis and a commitment to either surrender the permit or proceed withdrilling an exploration well was necessary to provide an adequate time for the workinvolved at that point.7 Mr Bulte rejected other concerns that had been cited in theNZP&M evaluation report, expressing his views about the adequacy andappropriateness of the work programme Greymouth had proposed.[42] Greymouth also filed four affidavits from deponents expressing opinions asexperts. One of these was from Mr Adam Feeley, who is qualified as a lawyer and hasheld numerous management positions in central and local government, including asnational manager of a number of business registries and as director of the SeriousFraud Office. Relevantly to the opinions expressed in his affidavit, he was groupmanager of Crown Minerals between 2003 and 2007, which was the predecessor ofthe business unit within MBIE now identified as NZP&M. Mr Feeley opined aboutthe importance he attributes to New Zealand maintaining a reputation for very lowsovereign risk in the administration of its regulatory framework.[43] Mr Feeley was critical of the approach to, and adequacy of, the evaluationundertaken by NZP&M of Greymouth's bid, in particular contrasting the unfavourabletreatment of Greymouth's bid against the decision by NZP&M to grant a permit in the2017 block offer to Westside New Zealand Limited (Westside), a subsidiary of anultimate parent company based in China. Mr Feeley concluded that it was difficult totreat NZP&M as having observed good, let alone best, practices because of a range ofconcerns, including the paucity of information NZP&M provided to Greymouth andits lack of willingness to meaningfully engage on the substantive matters in dispute.He described a degree of rigour and harshness applied to considering the Greymouthbid, which he considered to be inconsistent with the more relaxed approach to theWestside bid.[44] Greymouth also filed an affidavit from Mr Mark Aliprantis who was thepetroleum group manager for Crown Minerals from 2003 to 2009. Mr Aliprantis is ageologist now in business on his own account as a consultant. He opines that lowsovereign risk is a key pillar for encouraging investment in New Zealand. He cites aclaim in an MBIE 2017 publication in terms:7 This responded to NZP&M's concern that a period of 24 months was a year too long betweenthose two milestones.New Zealand has a reputation for honesty. Transparency International's 2017corruption perception index ranks its public sector the least corrupt on theplanet.[45] From a perspective that fairness is important in dealing with matters such asGreymouth's bid, Mr Aliprantis explained concerns that NZP&M had notcommunicated Greymouth's reported non-compliance to it in a timely manner.Further, that NZP&M had insisted on compliance with a work programme, even wherethe course of action required was not supported by data. He also opined thatNZP&M's refusal to award Greymouth's bid disproportionately penalised non-compliances that he considered to have been justified.[46] Mr Aliprantis also undertook a comparison of NZP&M's assessment ofGreymouth's and Westside's bids, opining that the level of substantive evaluation wasdisproportionate as between those two bids. His view was that financial pressures aremore likely to lead to material non-compliance than any lack of a "complianceculture". Accordingly, he considered it was wrong, both as a matter of logic andfairness, that Greymouth should be treated as unlikely to fulfil its proposed workprogramme, whereas Westside's financial capacity was not the subject of any rigorousassessment. Mr Aliprantis's conclusion was that Greymouth's uncompeted andcompliant bid, given his assessment that Greymouth had a satisfactory record ofregulatory compliance overall, rendered NZP&M's decision to decline the bid as onemade without a reasonable basis.[47] Greymouth also filed an affidavit from Mr Alan Dent, who is the leader of thefinancial advisory services practice within Deloitte New Zealand. Mr Dent'schartered accountancy practice involves financial viability reviews of entities and hecites experience with evaluation processes involving businesses in the oil and gassector, including in the Taranaki region. Mr Dent was given access, on a confidentialbasis, to the detail of Westside's bid and was requested, on behalf of Greymouth, tocompare its content with the content of Greymouth's own bid in the 2017 block offer.[48] Mr Dent treated the financial capability of any firm applying for a permit asbeing a critical test, given the focus on it in the Act and the IFB.8 On the basis of his8 Crown Minerals Act 1991, s 29A(2)(b)(ii).analysis of confidential details, Mr Dent raised a number of grounds for concern at theextent of Westside's financial capability to carry out the obligations it was committedto in its bid. In contrast, Mr Dent opined that there could be no reasonable groundsfor concern at the extent of Greymouth's financial capabilities to carry out theproposed work programme in its 2017 bid.[49] The fourth of the experts who completed an affidavit on behalf of Greymouthwas Mr Christian Linskaill. He is based in Edinburgh, Scotland, where he haspractised as a specialist oil and gas lawyer. Mr Linskaill also has over 25 years ofinternational oilfield experience and is qualified as a petroleum engineer, explorer,project developer and latterly as a consultant. Mr Linskaill also provided expertevidence for Greymouth in an earlier judicial review challenge to a decision ofNZP&M that I determined in 2019.9 Mr Linskaill responded to a request that hecomment on the processes and reasoning in NZP&M's decision to declineGreymouth's bid.[50] Mr Linskaill advances a range of criticisms of NZP&M's analysis of theGreymouth bid. In particular, he considered surprising NZP&M's concern that a twoyear hiatus between completion of technical work and a commitment to eithersurrender the permit or proceed with drilling was longer than necessary. In hisopinion, the two year period was well justified. Mr Linskaill ranked other concernsof non-compliance as either not being justified or as being minor matters, to an extentthat, in his opinion (which he stated to be expressing "unfortunately") he was left witha concern that the objections were not raised in good faith, given the lack of any realsubstance. He did not consider them to be credible.[51] Mr Linskaill also undertook a comparative analysis of Greymouth's andWestside's proposed work programmes. He could find little material differencebetween the work programmes proposed in both bids, and considered thatGreymouth's work programme was arguably more expeditious than that proposed byWestside. He questioned the evaluation team's criticism that Greymouth's proposedwork programme was not a timely one. Part of the context for Mr Linskaill's criticism9 Greymouth Petroleum Mining Group Ltd v Minister of Energy and Resources [2019] NZHC 1222.of the approach adopted by the evaluation team when considering Greymouth's workprogramme was that overly detailed and prescriptive work programmes "are neithernecessary, helpful nor desirable for exploration acreage".NZP&M deponents[52] The affidavits for the respondent did not traverse the narrative of events or thegrounds for the challenged decision in the same level of detail as the affidavits forGreymouth. Having made concessions that certain aspects of the evaluation reportwere made on incomplete information, the deponents for the respondent addressedthese issues at a somewhat more abstracted level. However, Mr Jeaffreson doesexplain the sequence of dealings and considerations undertaken by the evaluationteam, providing his perspective on the various concerns cited in the reasons forrecommending that the bid be declined.[53] Mr Jeaffreson explains the relative importance to the regulator of the holder ofan exploration permit surrendering it without completing a drilling programme,10 andthe regulator's perspective on other matters that were considered by the evaluationteam. Mr Jeaffreson acknowledges the errors in the decision-making process that wereappreciated by NZP&M after the judicial review proceeding was commenced. He alsoexplains the approach adopted to the Westside bid. Mr Jeaffreson denies that therewas any "broader strategy" involved in the considerations leading to therecommendation that the bid be declined. He also denied that the 12 April 2018 banon offshore PEPs was known in advance by the evaluation team and states that theforthcoming ban did not have any influence on the recommendation that the evaluationteam made.[54] Mr Adams initially filed a relatively short affidavit covering his considerationsin reaching the decision on Greymouth's bid. His initial affidavit also responded toMr Dunphy's recollection of the meeting between them on 10 April 2018, and hedenied allegations that the decision to decline the bid had somehow been influencedby a broader strategy.10 This being a primary concern with Greymouth's previous performance.[55] As a consequence of possible inconsistencies between the timing described inMr Adams' first affidavit for considering the evaluation team's recommendation, andthe documents said to be relied on, Mr Adams was invited to complete a furtheraffidavit clarifying that matter. His second affidavit explained in somewhat moredetail the extent of documents provided to him and the timing within which thatoccurred.[56] Shortly before the hearing, and as a result of quite coincidental discovery of afurther ringbinder containing a draft version of the recommendation memorandum,Mr Adams swore a third affidavit which annexed additional versions of the drafts ofthe recommendation paper that he had seen.Greymouth's reply affidavits[57] Mr Crighton completed a reply affidavit providing relatively detailedresponses to aspects of Mr Jeaffreson's reasoning for the recommendations he made.He challenged Mr Jeaffreson's account of previous exploratory work done within thepermit area, suggesting a more lenient approach having been adopted to non-performance of permit obligations by other operators in the past.[58] Mr Willis had not originally completed an affidavit as to his part in the dealingswith NZP&M on behalf of Greymouth. However, he did complete an affidavit in replyto contest Mr Jeaffreson's recollection of exchanges between Greymouthrepresentatives and NZP&M in December 2017. He also raised instances ofNZP&M's dealings with other permit applicants seen by him to have been treatedmore leniently than Greymouth.[59] In addition, Messrs Feeley and Linskaill completed affidavits in reply asexperts. Mr Linskaill criticised the approach adopted by Messrs Adams and Jeaffresonto the relative importance of a permit holder carrying out a drilling commitmentincluded in a work programme, without having regard to the extent of informationindicating that a proposed well would not advance the state of knowledge about thearea being explored sufficiently to justify the expenditure. Mr Linskaill also criticisedthe relatively low value the evaluation team attributed to seismic re-processing whichwas an exercise undertaken by Greymouth.[60] In Mr Feeley's reply affidavit, he was critical of NZP&M's failure to inviteGreymouth to improve its bid, which initiative was (in Mr Feeley's opinion) a logicalstep open to NZP&M under cl 7.7(1)(d) of the MPP. Mr Feeley went so far as to saythat it was "incomprehensible" to him that Mr Adams did not exercise that power,given Mr Adams' own acknowledgement that the decision was a finely balanced one.Mr Feeley raised a sequence of other criticisms of the process as described in theaffidavits of Messrs Jeaffreson and Adams.Admissibility objection[61] NZP&M filed a notice of objection to substantial parts of the evidence of eachof the four deponents for Greymouth who were propounded as experts. Each hadacknowledged awareness of, and a commitment to comply with, the code for expertsin schedule 4 to the High Court Rules 2016. Notwithstanding that, a relativelyextensive list of objections was lodged citing specific grounds for individual passagesin both their original and reply affidavits.[62] The evidence of Messrs Feeley and Aliprantis was objected to on the basis thattheir experience in a predecessor of NZP&M was too old to be relevant, particularlygiven that it pre-dated the current MPP which has governed the block offer processessince 2013. It was contended for NZP&M that there was insufficient foundation for anumber of the criticisms of the evaluation team's work advanced by them. For bothMessrs Feeley and Aliprantis, and in particular for Mr Linskaill, an additional groundof challenge was that their trenchant criticisms of the process belied any satisfactoryassurance of impartiality. Mr Linskaill was criticised as providing in large measure asequence of submissions to support the grounds of challenge. Given the absence ofany experience with the New Zealand regime, Mr Linskaill was challenged as nothaving the requisite expertise to opine on the matters he addressed.[63] Having recorded the scope of those objections, Ms Casey QC did not requireme to formally rule on them. Rather, I was invited to bear the grounds for objectionin mind when assessing the evidence, on the basis that I should either reject some orall of the challenged passages entirely on the grounds of objection raised, or have thosegrounds in mind when assessing the weight appropriately given to them.[64] I have assessed the expert evidence with those objections in mind. There is ameasure of justification for NZP&M's concern that Mr Linskaill has approached thematters he was asked to consider from the perspective of an overseas advocate for, orsupporter of, businesses involved in petroleum exploration. In some opinions, heappears to expect national regulatory bodies to facilitate exploration permits with aview to optimising the return on the resource, leaving a large measure of autonomy tothe explorer who should be trusted to optimise exploratory opportunities. I have notfound it necessary to formally exclude any of the evidence, but I am certainlypersuaded to lessen the weight given to some of the opinions where they are expressedin what can fairly be described as partisan terms.[65] I am not persuaded that the age of Messrs Feeley and Aliprantis's experiencewith the regulator requires their opinions to be disregarded, but again that is a factorgoing to the weight they can be given. So too are the somewhat trenchant terms inwhich some of their opinions are expressed.Confidential information in the affidavits[66] The affidavits contain information which, by consent, was recognised asconfidential to Greymouth. In other respects, the affidavits drew on information thatwas confidential to third parties and which had been provided to experts subject toconfidentiality constraints. It was referred to in their affidavits on that basis. At theoutset of the hearing, I confirmed confidentiality orders to preserve the agreed extentof confidentiality of such information. I have been mindful of that in preparing thejudgment and it has been issued to counsel only on an embargoed basis for twoworking days to allow any concerns about inadvertent disclosure of confidentialmaterial to be raised with me.First to third grounds of review: assessment of Greymouth's proposed workprogramme[67] The first three grounds of review alleged errors in NZP&M's evaluation of thework programme as proposed by Greymouth in its bid. Greymouth's bid was declinedin part because (consistently with the recommendation to him) the decision-maker wasnot satisfied that Greymouth's proposed work programme was consistent with thepurposes of the Act, the purpose of the proposed permit and good industry practice inrespect of the proposed activities.11 The decision-maker did accord greater weight toconcerns about Greymouth's commitment to comply with the work programme,12 butthe content of the proposed work programme was also cited as a reason for decliningthe bid.[68] Greymouth alleges that this component of the decision included threereviewable errors:• first, that the decision-maker made errors of fact in respect of the proposedwork programme;• secondly, that the decision-maker made errors of law in respect of thatassessment; and• thirdly, that the conclusion about it was in breach of a legitimate expectationthat if a work programme complied with the minimum requirements in the IFB,then it would constitute "good industry practice".First ground: error of fact in evaluating Greymouth's proposed work programme[69] The IFB was relatively prescriptive in requiring all bids to meet therequirements for a minimum work programme as set out in schedule 4 to the IFB. Therelevant provision in that schedule required bids within the Taranaki Offshore ReleaseArea to include specific minimum work programme requirements as follows:TARANAKI OFFSHORE; HAWKE BAY OFFSHORE (12-YEAR PERMIT)Timeframe fromCommencement dateActivity (all key deliverables)Within 60 months Commit or surrender point (for drilling by 72 months)Within 60 months Relinquish 50% of the permit area179Within 72 months Drill an exploration well to an approved objective and/ordepthWithin 108 months Relinquish 25% of the original permit area 180Within 120 months Commit or surrender point (for drilling by 138 months)Within 138 months Drill an exploration well to an approved objective and/ordepth179 Except where the original permit area is < 100 km2, then relinquish 25%, or wherethe original permit area is < 10km2, then relinquish 10%.180 Except where the original permit area is < 10km2, then relinquish 10%.11 Crown Minerals Act 1991, s 29A(2)(a).12 Challenged in the fourth to sixth grounds of review.[70] After being invited to vary its content, Greymouth submitted a proposed workprogramme in the following terms:Timeframe fromcommencementActivityTypeActivityWithin 24 months Committed Key Deliverable: Reprocess 393 sq km 3D seismicwithin or adjacent to the permit NZ$200,000Key Deliverable: Sequence stratigraphic study,NZ$100,000Within 48 months Optional Key Deliverable: Commit to next stage of workprogramme or surrender the permitWithin 60 months Optional Key Deliverable: Drill exploration wellKey Deliverable: Relinquish 50% of permit areaWithin 72 months Optional Key Deliverable: Agree with the Minister a workprogramme for the remainder of the permit termWithin 108 months Optional Key Deliverable: Relinquish 25% of permit areaWithin 120 months Optional Key Deliverable: Commit to next stage of workprogramme or surrender the permitWithin 138 months Optional Key Deliverable: Drill exploration well to anapproved objective and/or depth[71] In the evaluation report, Mr Jeaffreson stated that the evaluation team was notsatisfied that the work programme provided in Greymouth's bid was consistent withthe requirements in s 29A(2)(a) of the Act:13In particular, officials consider that the work programme provided in the bidis not demonstrated by the bidder to be a timely, comprehensive plan toexplore the bid area, or be likely to sensibly enable a drilling commitment tobe made.These concerns relate to the details of a proposed committed seismicreprocessing obligation, as well as the scheduling of a commit or surrenderobligation two years after the completion of this work.[72] Mr Bulte, supported by the expert deponents for Greymouth, defended theadequacy of its proposed work programme. He treated the first stage, which involvedthe reprocessing of 3D seismic data of some 393 square kilometres, plus a sequencestratigraphic study which it would commit to at an indicative cost of $300,000, asprudent and adequate. He also considered that the proposed work programme wasconsistent with good industry practice.13 Evaluation Report at [31].[73] The evaluation team took a different view of the value of reprocessing existingseismic data. In Mr Jeaffreson's affidavit, he states that the officials considered therewas insufficient detail to satisfy the decision-maker that the first two years of workwould enable Greymouth to decide whether or not they should commit to drilling anexploration well. They were also unclear as to how the data would be reprocessed.As with other aspects of the adverse opinions formed by the evaluation team, there isscope for concern that components of their recommendation adverse to Greymouthwere made on the basis that they did not have enough information to make a positivedecision. That gives rise to the process concern that the regulator ought to haverequested further information, which the process entitled it to do.[74] Clause 1.2 of sch 4 of the IFB required a bidder to present sufficient detail inthe bid to satisfy the Minister for the purposes of s 29A(2)(a) of the Act and to includesufficient and appropriate technical detail, including the seismic reprocessing tosensibly enable a drilling commitment decision to be made within the requisite time.Imposing that obligation on bidders helped minimise the risk that dialogue betweenany particular bidder and the officials after submission of a bid might result in a bidderproviding additional information that improved the status of the bid when it wascompeting with others. That constraint on dialogue after a bid has been submitteddoes not arise where it was "uncompeted" (that is, there was no competing bid for thesame permit area). In such cases, the MPP authorised dialogue between officials andthe bidder to both clarify and improve the content of the bid.14[75] A second concern raised by the officials at the terms of Greymouth's proposedwork programme was that there was an "extended hiatus" of two years between theperiod in which Greymouth would complete the reprocessing of seismic data and asequence stratigraphic study before committing to its next stage of work. Theevaluation report stated that officials would normally expect a "commit or surrenderdecision" to be made soon after the completion of the technical work required for sucha decision to be made. This concern led to the evaluation team not being satisfied thatthe commit or surrender obligation within 48 months of the grant of the permit would14 MPP, cls 7.7(1)(b) and (d). See [85]–[88] below as to its interpretation and effect.represent a timely plan to explore the bid area. The two year hiatus was characterisedas a sufficient ground for the bid to be declined.[76] That view was challenged by Greymouth's deponents. They explained that, inthe circumstances of this bid, it was consistent with good industry practice toundertake time-consuming research between having the best available data anddeciding on the nature and location of any proposed exploration well. Whilst this partof Greymouth's timetable appeared to have a gap, and without conceding that therewas one, Greymouth's submission was that the minimum work programmerequirement was for a commit or surrender point to be reached within 60 months, andfor an exploration well to be drilled within 72 months. In fact, Greymouth's proposedwork programme would achieve that point 12 months earlier, given its proposal wasto drill an exploration well within 60 months and relinquish 50 per cent of the permitarea by that time.[77] The explanation for Greymouth's proposed work programme appearsreasonable to a lay person and it conforms to the minimum requirements set out incl 2.2 of sch 4(2) of the IFB. However, that is not determinative of Greymouth'schallenge that the decision-maker, arguably adopting the evaluation team'srecommendation, committed errors of fact in this regard.[78] The test for an error of fact in findings by a decision-maker that will be so starkas to amount to an error of law was described by the Supreme Court in Bryson v ThreeFoot Six Ltd in the following terms:15[26] An ultimate conclusion of a fact-finding body can sometimes be soinsupportable – so clearly untenable – as to amount to an error of law: properapplication of the law requires a different answer. That will be the positiononly in the rare case in which there has been, in the well-known words of LordRadcliffe in Edwards v Bairstow, a state of affairs "in which there is noevidence to support the determination" or "one in which the evidence isinconsistent with and contradictory of the determination" or "one in which thetrue and only reasonable conclusion contradicts the determination". LordRadcliffe preferred the last of these three phrases but he said that eachpropounded the same test.15 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 (footnotes omitted).[79] The conclusions on the value of the seismic reprocessing and other analyticalwork, and the justification for the "hiatus", reflect opinions within the technical areasrequired to be addressed by the officials. It cannot be said that there was no evidenceto support their conclusions, nor are the opposite conclusions on those points advancedfor Greymouth so starkly preferable as to be the only reasonable conclusion on theissues confronting the evaluation team. Greymouth's challenge was to the merits ofthe decision on these points, rather than there being no factual basis on which to arriveat them.[80] I am accordingly satisfied that errors of fact on these two considerations of theproposed work programme cannot be made out.Second ground: error of law in assessing the proposed work programme[81] The evaluation report which was adopted by the decision-maker expressed theview that Greymouth's bid was not consistent with the purpose of either the Act orPEPs, nor was it consistent with good industry practice. Greymouth's second groundof review contends that this conclusion involved an error of law.[82] Arguably, reaching that conclusion had to involve a misconstruction of thepurpose of the Act and PEPs, and what is good industry practice. That phrase isdefined to mean acting in a manner that is technically competent and at a level ofdiligence and prudence reasonably and ordinarily exercised by experienced operatorsengaged in a similar activity and under similar circumstances. Greymouth's case wasthat its proposed work programme met that standard, given its content and thestandards of Greymouth's previous performance. Greymouth characterised theapproach reflected in its proposed work programme as being consistent with the"efficient allocation of rights to prospect for, explore for, and mine Crown ownedminerals", which is the legislative purpose set out in s 1A(2)(a).[83] Greymouth has not identified views expressed in the evaluation report that itargues reflect a positive misconstruction of one of these mandatory considerations inthe decision-making process. Rather, Greymouth reasons that because its deponentsare satisfied that the content of the work programme was indeed consistent with thepurpose of the Act and of PEPs, and that it also reflects good industry practice, itfollows that the conclusions to the contrary in the evaluation report must rely on anerror of law in interpreting or applying those purposes. Greymouth supported thisargument by reference to the opinions of its experts who supported its characterisationof its bid, and criticised the contrary views expressed in the evaluation report.[84] The purpose of the Act is to promote exploration for Crown-owned mineralsfor the benefit of New Zealand. In rejecting the adequacy of Greymouth's proposedwork programme, the evaluation report arguably was frustrating, rather thanpromoting, that statutory purpose. Arguably, this was so because there was nocompeting bid for the PEP sought by Greymouth, the proposed work programmecomplied with the specific requirements contemplated as the minimum necessary insch 4 to the IFB and Greymouth should have been seen as the party most likely toundertake exploratory work.[85] Greymouth submitted that the error of law in the approach adopted to assessingthe proposed work programme was compounded by NZP&M's failure to use "thelevers" it had available under cl 7.7(1)(b) and (d) of the MPP to obtain further detailabout aspects of the bid, or to request the bidder to improve its bid.16 Mr Jeaffresonhad explained in his affidavit that NZP&M was given "insufficient detail" on whatGreymouth intended by its work programme, thereby leaving it unclear as to what wasactually being proposed.[86] Particularly in cases of uncompeted bids where cl 7.7(1)(d) of the MPP freesNZP&M of what is otherwise a constraint not to have one bidder improve its bid,NZP&M had a free hand to ask Greymouth to clarify aspects of its bid undercl 7.7(1)(b). After the initial exchange in which Greymouth did alter the terms of itsbid to make it a qualifying one, NZP&M did not take the opportunity to seek anyclarification.[87] On this and other grounds of review, Ms Casey emphasised that the grant of apermit is always discretionary and that no bidder has a right to a permit in anycircumstances. The decision-maker is entitled to decline a bid, even if it is notcompeted for by another. This could be on the basis (in the environment that applied16 Quoted at [24] above.at the time this decision was made) that it may be better to preserve an area offered fora PEP in anticipation of a better offer in a subsequent year, rather than to allocate anexclusive permit to explore, inevitably for a substantial number of years, on what thedecision-maker considers to be less than optimal terms. Greymouth's was not the onlybid that was declined in the 2017 block offer.[88] Accordingly, from the Minister's perspective, the mere fact that on anotherevaluation of the relative merits of Greymouth's bid it might be seen as being worthyof acceptance because it promoted the purpose of the Act, that did not translate into afinding that the decision-maker had erred as a matter of law in declining it wherereasoned grounds existed to treat it as not being sufficiently attractive in advancing thepurpose of the Act and the MPP.[89] I accept the Minister's arguments on this ground. The criticisms advanceddepended on a contrary view being reached on the merits of various aspects of theproposed work programme.[90] As to NZP&M's failure to use cl 7.7(1)(b) and (d) of the MPP during itsassessment process, for Greymouth to reach the standard of an error of law on thispoint would require it to make out an obligation for NZP&M to use those provisionsin the circumstances that arose. I am not satisfied that such an error has been madeout. I do accept that an applicant in Greymouth's position might reasonably expectthat if NZP&M was left unclear as to the work that would be involved in a proposedwork programme, the regulator would seek clarification. That adds to a sense ofunease as to the quality of treatment Greymouth received, but it cannot reach the levelof an error of law.Third ground: legitimate expectation where minimum work programmerequirements met[91] Greymouth pleaded that it had prepared and submitted its proposed workprogramme in reliance on the minimum levels of exploratory work set out in the IFB.In doing so, Greymouth claims that where the work programme was subsequentlyaccepted by NZP&M as being compliant with the IFB, Greymouth had a legitimateexpectation that such compliance meant that the proposed work programme would beaccepted as consistent with good industry practice. Put in the negative, Greymouthclaimed that where its proposed work programme exceeded a specific minimum workprogramme requirement, it had a legitimate expectation that the bid would not bedeclined on the basis that it did not constitute good industry practice.[92] In reliance on the acknowledgement that the proposed work programme metthe minimum requirements, Greymouth sought a declaration that the proposed workprogramme was consistent with good industry practice.[93] The Minister disputed the existence of any representation or settled practicethat an acknowledgement that any proposed work programme met the specificminimum requirements in sch 4(2) to the IFB was sufficient to assure a bidder that itwould also be treated as consistent with good industry practice.[94] The specific minimum work programme requirements in cl 2.2 of the IFB arepreceded by the general minimum work programme requirements in cls 1.1 to 1.10 ofsch 4(1). Ms Casey submitted that after a bid has been accepted as qualifying forconsideration by reference to the specific minimum work programme, it must still besubject to an in-depth evaluation on an individual bid basis on separate considerationssuch as whether the proposed work programme is consistent with good industrypractice.[95] Accordingly, on the terms of the IFB to which Greymouth was responding, theMinister submitted that there was no scope for the creation of anything in the natureof a legitimate expectation.[96] NZP&M also denied that as a matter of law any relevant legitimate expectationcould arise. Both parties cited the criteria for making out legitimate expectation andrelevant breach from the Court of Appeal judgment in Comptroller of Customs vTerminals (NZ) Ltd:17[125] Where legitimate expectation is raised, the inquiry generally has threesteps. The first is to establish the nature of the commitment made by the publicauthority whether by a promise or settled practice or policy. This is a questionof fact to be determined by reference to all the surrounding circumstances. A17 Comptroller of Customs v Terminals (NZ) Ltd [2012] NZCA 598, [2014] 2 NZLR 137.promise or practice that is ambiguous in nature is unlikely to be treated asgiving rise to a legitimate expectation in administrative law terms.[126] The second is to determine whether the plaintiff's reliance on thepromise or practice in question is legitimate. This involves an inquiry as towhether any such reliance was reasonable in the context in which it was given.[127] The third, and often most difficult part of the inquiry, is to decide whatremedy, if any, should be provided if a legitimate expectation is established.[97] A party claiming a legitimate expectation is not required to establish that it hasrelied to its detriment on the relevant representation, but the absence of suchdetrimental reliance can count against the claim. In a subsequent Court of Appealjudgment adopting the approach in Comptroller of Customs, the Court observed:18[14] We accept that success at the first step – establishing the existence andcontent of the expectation pleaded – might not come in the form of an explicitpromise. A promise can be implied from past practice or policy. But wherethe expectation is in the form of a practice or policy, as alleged here, itsexistence and content must equally be established to the level of a commitmentor undertaking. The existence and content of such a practice or policy mustbe both unambiguous, and settled in the sense that it is regular and wellestablished.[15] We also emphasise the importance of the second element –establishing reasonable reliance on the unambiguous and settled policy orpractice – to a successful claim of a legitimate expectation. The presence ofreliance (that is, reasonable reliance) helps distinguish a legitimateexpectation from one which is a mere hope that a course of action will bepursued. It is difficult to see how a party could have a legitimate expectationwithout relying on the undertaking (whether by a promise or otherwise), giventhat its foundation is that a public authority should be bound by itsundertakings when it "has promised to follow a certain procedure, [because]it is in the interest of good administration that it should act fairly and shouldimplement its promise".[98] That judgment described the need for establishing an unambiguous and settledcommitment by the decision-maker as a "high threshold".19[99] Greymouth pleaded the expectation arose from the terms of the IFB. Therewas no allegation of a specific representation made on behalf of NZP&M in the courseof dealings over the bid at issue in this proceeding. Greymouth's submissions alludedin general terms to reasonable reliance on NZP&M's past practice, but the point wasnot developed.18 Green v Racing Integrity Unit Ltd [2014] NZCA 133, [2014] NZAR 623 (footnotes omitted).19 At [31].[100] Greymouth relied on the opinion expressed by Mr Linskaill in his replyaffidavit that a minimum work programme conveys a reasonable expectation that if itscriteria are met, then the bid would not be declined on the ground that the proposedwork programme is insufficient. Given the factual analysis specific to thecommunications or course of conduct between the parties that is essential toestablishing any representation, I am not assisted in this regard by the opinion ofMr Linskaill when he has no personal involvement in the course of dealings betweenGreymouth and NZP&M.[101] Greymouth's claim on this ground of review rests implicitly on the premisethat offering a work programme that complies with, or exceeds, the minimumrequirements set out in specific terms in the IFB necessarily results in that workprogramme being accepted as constituting good industry practice. However,Greymouth does not cite any representation made on behalf of NZP&M that equatesthose two concepts. Any bid must comply not only with the specific requirements setout in cl 2.2 of sch 4 to the IFB, but also the broader considerations under the generalrequirements in cl 1 of sch 4. That ought to convey to the reader that an assessmentof whether a proposed work programme is accepted as being consistent with goodindustry practice will depend on wider considerations than whether it complies withthe specific minimum requirements in cl 2.2 of that schedule.[102] I accordingly agree with the submission for the Minister that this ground ofreview claiming a legitimate expectation fails because Greymouth has not made out arepresentation in clear and unambiguous terms.Fourth to sixth grounds of review: consideration of the likelihood of Greymouthcomplying with its proposed work programme[103] These grounds of review focus on the evaluation by NZP&M as to whether, ifgranted the permit, Greymouth was likely to comply with the work programme itproposed. This was a mandatory consideration under s 29A(2)(b).2020 The text of s 29A is set out at [16] above.[104] Mr Jeaffreson's 13 December 2017 letter responding to Mr Willis's request forparticulars of alleged non-compliance with permit conditions listed eight matters. Thefirst two listed were the surrenders of two PEPs by Greymouth companies withoutstanding obligations to drill exploration wells.21 In addition, other matters seen asrelating to, or having a bearing on, the type of activities proposed under the bid citednon-compliance between 2014 and 2017 in respect of PMPs (rather than PEPs) grantedto Greymouth. These were:• PMP 38148 (Ngatoro) – flaring without consent (2015–2016); wellplugging and abandonment without consent (Ngatoro South-1 (2017);• PMP 38157 (Radnor) – cessation of continuous production without consent(January 2014 to September 2014);• PMP 38159 (Surrey) – cessation of continuous production without consent(intermittent between 2016, 2014);• PMP 38161 (Turangi) – flaring without consent (2016); and• PMP 50509 (Moturoa) – cessation of continuous production withoutconsent (intermittent between 2014 and 2016).[105] In a separate appendix to Mr Jeaffreson's 13 December 2017 letter, heresponded to Mr Willis's contention that NZP&M had an obligation to raise concernsin respect of non-compliance with a bidder, given the terms of cl 5.3(6) of the MPP.That provides:(6) If the Minister may otherwise grant a permit, but has concerns aboutthe applicant's record of compliance with other permits or rights, the Ministerwill raise these concerns with the applicant and inform the applicant of thematter or matters the Minister considers to be relevant to the granting of thepermit. Before making a decision, the Minister will consider any commentsthat the applicant makes.21 These were PEPs 51154 and 51152 – the circumstances are described at [114]–[131] below.[106] Mr Jeaffreson advised the view of NZP&M that the obligation to confer witha bidder about matters of non-compliance was only triggered if the Minister mayotherwise grant a permit. In the present case, Mr Jeaffreson suggested that theexistence of other grounds for declining the bid removed any obligation for NZP&Mto raise matters of non-compliance with Greymouth. The correctness of thatinterpretation of cl 5.3(6) of the MPP is among the issues raised by Greymouth in itsfourth to sixth grounds of review. More generally, Greymouth challenges theconclusion that there had been non-compliance, and that any non-compliance that wasestablished was sufficient to justify the conclusion that Greymouth was not likely tocomply with the provisions of its proposed work programme. These grounds allegethat NZP&M committed errors of both fact and law on this aspect of its evaluation anddecision.Fourth ground: breach of procedural fairness in evaluation of compliance history[107] Greymouth pleaded that it was unaware of NZP&M's views on alleged priornon-compliance in respect of work programme commitments and permit conditionsuntil receipt of NZP&M's 13 December 2017 letter. Consequences arising fromGreymouth only being advised of the eight alleged non-compliances at that timeincluded the absence of a material opportunity to demonstrate to NZP&M that theNgatoro abandonment allegation and the Radnor production allegation were bothfactually incorrect, and that Greymouth had not been afforded any proper opportunityto respond to others of those allegations. Greymouth claimed that NZP&M's processin this regard was unfair and breached natural justice. Any such alleged material non-compliance ought to have been raised with Greymouth at the earliest opportunity and,at the latest, at the first annual review meeting (ARM) that was convened between theregulator and Greymouth after the alleged non-compliance was said to have occurred.[108] Greymouth pleaded that if it had been afforded the opportunity to address theeight alleged non-compliances fairly, it would have had a meaningful opportunity toensure factual errors were corrected, and been able to address the remaining issueswhen preparing its bid. On the basis of these allegations, Greymouth sought adeclaration that it was unfair and in breach of natural justice for any of the instancesof non-compliance to be taken into account when its bid was assessed.[109] NZP&M admitted there had been factual errors, and in particular that it waswrong to treat the Ngatoro abandonment allegation and the Radnor productionallegation as examples of non-compliance. It further admitted that its process wasinadequate, as a consequence of which it consented to the quashing of the decision anda direction that the bid be reconsidered. Beyond those matters, NZP&M did not admitother aspects of the allegations of procedural inadequacies and it opposed anyadditional relief.[110] NZP&M relied on the terms of the IFB as alerting bidders to the relevance ofpast compliance in the evaluation of bids, and as providing explicit requirements fordisclosure of all such matters in bids. Schedule 6 to the IFB required information tobe provided on a bidder's compliance history. Compliance with previous or currentpermit or licence obligations over the previous 10 years was to be provided where itwas material and related to, or had a bearing on, the type of activities proposed underthe bid. An inclusive list of such matters included:22c. details of any petroleum permits or licences, minerals permits orlicences held by the Bid participant (or a related company) inNew Zealand or internationally that have been surrendered withoutstanding obligations at the date of the surrender. If so, providedetails of those obligations (in particular, obligations to drillexploration wells or complete seismic survey work) and reasons forthe surrender and outstanding obligation.[111] This obligation on a bidder was subject to it reasonably assessing themateriality of any previous non-compliance. It was not suggested for NZP&M thatthe obligations on a bidder to make disclosure of previous instances of non-complianceis a complete answer to the criticisms levelled of an inadequate process.[112] It remains relevant, at least to relief, to review the divergent positions of theparties on the materiality of the remaining instances of alleged non-compliance thatwere taken into account by NZP&M. This is because these instances were material toNZP&M forming the view that the extent of non-compliance justified the decision-22 IFB, sch 6(4), cl 4.2(1).maker taking the position that Greymouth would be unlikely to comply with the termsof the proposed work programme.[113] Some detail is required of the circumstances in which Greymouth surrenderedPEPs 51154 and 51152.The surrenders of PEP 51154 and 51152[114] These two PEPs had been granted for onshore Taranaki areas, originally in2008. Mr Crighton's evidence traversed a relatively detailed history of the workGreymouth had undertaken within each of those permit areas. Initial drillingcommitments had been met, and when Greymouth still had time to make decisionswhether to "drill or drop",23 Greymouth identified an apparently more positiveprospect, the exploration of which required a further well to be drilled in the optimumposition that was somewhat outside the boundary of PEP 51152.[115] Greymouth shared its analysis leading to that point with NZP&M, and madeapplication for an extension of land (EOL) to extend the boundary of PEP 51152.After dialogue with officials, including reducing the extent of the additional areasought and adjusting proposed work programmes for the areas, the EOL was grantedin October 2016.[116] Greymouth personnel perceived NZP&M officials to share their excitementabout this new "play", and to be supportive of Greymouth's proposal to drill in theextended area as the means of best advancing the state of knowledge of those permitareas. The Ngatoro South-1 well was duly drilled but no commercial hydrocarbonswere discovered. In January 2017, Greymouth advised NZP&M of that, and that thewell was being abandoned. However, at least in the view of Mr Crighton, it hadgenerated significant information and insight for the Crown's benefit to betterunderstand its potential resources in the Taranaki basin.[117] At the ARM between officials and representatives of Greymouth on 25 May2017, Mr Crighton and other Greymouth representatives discussed with the officials23 That is, relinquish the areas by surrendering the permits or commit to further drilling activity.the abandonment of the Ngatoro South-1 well in terms they perceived as beingaccepted and agreed to by the officials. In discussions at that time, Mr Crightonindicated they were likely to surrender the whole of PEP 51152 as they saw nopotential in it.[118] In June 2017, Mr Crighton wrote to NZP&M to surrender PEP 51154. Hestated that Greymouth was surrendering the permit on the basis that it did not considerthe remaining prospectivity in the surrounding area was commercially viable in thecurrent economic environment. The application to surrender was the subject of amemorandum from a junior geologist at NZP&M to Mr Adams, the delegateddecision-maker in respect of it, dated 11 July 2017. The questions to be addressed insuch a report included consideration of whether it would be in the interests of theCrown for the Minister to acquire the permit. The only reference to non-compliancewas to the effect that the officials considered the permit "has been surrendered in astate of non-compliance due to the failure to complete the committed work programmeobligation stage three, 5(a) by the due date of 23 June 2017". The conclusion in thereport was that officials considered everything was in order and therefore theapplication must be accepted. The report did not include any acknowledgement ofreasons for non-compliance.[119] Mr Adams advised Mr Crighton by letter dated 18 July 2017 that theapplication for a full surrender of PEP 51154 had been granted. There was noreference to any concern about non-compliance with the terms of the permit, or thatthe request for surrender was likely to have adverse effects for Greymouth in thefuture.24[120] Greymouth undertook further analysis to evaluate the basin in whichPEP 51152 was located. It was unable to identify any targets and in November 2017Mr Crighton applied to surrender it. Greymouth indicated that the only well-definedprospect had been tested unsuccessfully at Ngatoro South-1 and no furtherprospectivity was recognised within the permit at that time. In the report from thesame junior geologist at NZP&M to Mr Adams, it was noted that the outstanding24 Email from Mr Adams to Mr Crighton, 18 July 2017.drilling obligation had existed prior to the grant of the EOL, with the EOL bringing anobligation to drill a second well. The memorandum commented:It is likely that the permit holder only intended to drill the second well in thesuccess case of the first [sic].[121] The memorandum stated that all other general and work programme conditionshad been met, with the exception of the outstanding drilling obligation and recorded:Officials consider the permit has been surrendered in poor standing due to thefailure to complete the committed work programme obligation 5(a), beforeapplying to surrender the permit.That resulted in the recommendation from officials that the surrender "should begranted with the permit surrendered in poor standing".[122] Despite the terms of that recommendation, the formal advice to Greymouthconveyed on 24 November 2017 made no reference to any adverse view formed byNZP&M arising out of the non-compliance with the work programme.[123] When Greymouth received Mr Jeaffreson's 13 December 2017 letter, it learntthat surrendering PEPs 51154 and 51152 with outstanding drilling commitments wasthe primary basis for NZP&M's view that Greymouth was likely not to comply withthe terms of the work programme it had proposed. Thereafter, Greymouth advancedarguments to refute the view adopted by NZP&M, inviting reflection on the extent ofresources Greymouth had committed to work programmes in both of the PEPs, andthe reasonableness of the views it had come to that drilling further wells could not bejustified on the updated state of the knowledge of the areas following analysis of thedata obtained from drilling the Ngatoro South-1 well.[124] Part of Greymouth's process complaint was that NZP&M ought only to takeinto account aspects of non-compliance that had been raised with it at an ARM, whenassessing the likelihood that Greymouth would comply with a proposed workprogramme for a current bid. As the sequence of events about the surrender ofPEPs 51154 and 51152 shows, such complaint could not avail Greymouth in respectof these matters as there had not been an ARM between the surrenders occurring andNZP&M evaluating the bid that is currently in issue.[125] Officials maintained their view that non-compliance with the drillingobligations under PEPs 51154 and 51152 justified their recommendation that thedecision-maker could not be satisfied that Greymouth was likely to comply with itsproposed work programme in the 2017 bid.[126] Both Messrs Adams and Jeaffreson deposed that surrendering a PEP withoutcomplying with a committed drilling requirement is a serious matter. They consideredthat Greymouth personnel would have appreciated that at the time they applied tosurrender PEPs 51154 and 51152, without needing to be told of the risk of adverseconsequences by NZP&M. Mr Jeaffreson treats Greymouth's justifications forsurrendering those permits with outstanding drilling commitments as an indication thatGreymouth fails to recognise the prospect of alternatives available to it that wouldhave eliminated or reduced the extent of non-compliance when permits weresurrendered. The final evaluation report presented to the decision-maker respondedto Greymouth's arguments explaining why further wells were not drilled, implicitlydismissing the prospect that drilling Ngatoro South-1 well could be seen as a substitutefor either of the pre-existing commitments to drill in PEPs 51154 and 51152. Theresults of the unsuccessful Ngatoro South-1 well may have provided data that justifiedthe view that further drilling in both permits would be unproductive and could not bejustified. However, that was not a sufficient rationale where drilling commitmentswere often made with prospects of success no better than 20 per cent.[127] A further example of Mr Jeaffreson's view on the materiality of Greymouth'snon-compliance with the drilling requirements under PEPs 51154 and 51152 iscontained in his more recent 13 March 2020 memorandum to the Minister, reportingon the evaluation of Greymouth's bid in the 2018 block offer for an onshore Taranakiblock. The differences of view about Greymouth's claimed justification forsurrendering those permits with drilling obligations outstanding had been thoroughlyaired by the time of his March 2020 memorandum. In it, Mr Jeaffreson made thefollowing comments:• The committed exploration well drilling obligations that were notcompleted on these permits were key deliverables – activities crucialto the success of these permits As such, officials considered thatthe surrenders of PEP 51152 and PEP 51154 would count against thegranting of a permit to the bidder.• That Greymouth's compliance with work programmes in numerousexploration permits had generally been good.• That no further relevant issues have arisen on exploration permitssince the surrender of PEPs 51152 and 51154.[128] In rejecting Greymouth's explanation that the results of Ngatoro South-1meant they could not justify any further drilling, Mr Jeaffreson commented:25However, it is characteristic of petroleum exploration that there is a lowprobability of success when drilling a well, especially when the well tests anew petroleum play. It is of concern to officials that the commitment to drillNgatoro South-1, required in order to be granted an EOL application, wasapparently made in the knowledge that the drilling of the other two committedwells was contingent on the (statistically unlikely) success of NgatoroSouth 1. However, the decision to grant the EOL was made on theunderstanding that these pre-existing obligations would be honoured,irrespective of the result of Ngatoro South-1.[129] Under the heading of "The Bidder's likely future behaviour", the March 2020memorandum commented:26By raising these matters with the Bidder during the evaluation of the Bid, theBidder may be encouraged to give more consideration to the completion ofcommitments in future. However, the Bidder appears to consider that thesurrender of PEPs 51152 and 51154 without completing committed wells wasjustified.In summary, the Bidder has not provided sufficient assurance to satisfyofficials that similar decisions would not likely be made by the Bidder inrelation to the current permit sought.[130] The first of Mr Jeaffreson's comments in the preceding paragraph providesome basis for the implication that officials considered declining Greymouth's bid wasappropriate to encourage them to comply more fully in the future. In his affidavitcommenting on Greymouth's explanations for having surrendered PEPs 51154 and51152 without completing drilling commitments, Mr Jeaffreson stated:[Greymouth's] response on this issue was concerning because there was noacknowledgement that it ought to have done anything differently. Thissuggested to us that Greymouth would make the same decision again if it madecommercial sense to Greymouth. We continued to have concerns as to25 Memorandum of Mr Jeaffreson to the Minister of Energy and Resources, 13 March 2020 at 9.4.14.26 At 9.4.14.whether [Greymouth] was likely to comply with the proposed workprogramme in its bid.[131] There is certainly scope for the contrary implication, namely that onceGreymouth appreciated the attitude NZP&M would take to non-compliance, it wouldassess more cautiously the circumstances in which it proposed to surrender permits.The course of dealings with Mr Jeaffreson[132] In advancing its concerns that the evaluation team would not deal with theissues with an open mind on any reconsideration, Greymouth focused onMr Jeaffreson's conduct. This included the circumstances in which six other aspectsof alleged non-compliance were noted, following Greymouth's request for details ofMr Jeaffreson's recommendation that the decision-maker should not be satisfied thatGreymouth would likely comply with the provisions of its proposed work programme.In Mr Jeaffreson's affidavit, he introduced that expanded list by deposing:We also noted other instances of perceived non-compliance, but in our viewthese were relatively immaterial and only had a relatively minor additionaleffect on top of the surrendering of PEP 51152 and PEP 51154.[133] In a footnote added at that point in his affidavit, he stated:A lot of these instances of non-compliance only came to the fore when[Greymouth] asked for a list of the non-compliance we relied on when formingour recommendation. At that point it was necessary to ensure we had acomplete list and these came out.[134] That evidence raises the prospect that, in engaging with Greymouth at thatpoint in the assessment of the bid, Mr Jeaffreson considered it appropriate to bolsterthe basis for an opinion adverse to Greymouth by citing instances of alleged non-compliance that would not otherwise have featured in the evaluation team'sassessment. That is a step beyond communicating to a bidder the provisional basis forassessment of its bid, as matters stood at the time.[135] This is not a situation where officials are attempting to improve the groundsfor a formal decision after it has been made, as was the subject of comment by theCourt of Appeal in Taylor v Chief Executive of the Department of Corrections.27However, there is some basis for the concern expressed by Mr Feeley that whereperceived non-compliance was not material enough to be raised at the ARM after theconduct occurred, then a reasonable implication arises that NZP&M acquiesced in theconduct at the time. Caution should be applied in giving them any greater significancewhere raised as justification for deciding to decline a bid.[136] Greymouth supported its concerns about Mr Jeaffreson's objectivity byreference to my judgment on an earlier judicial review proceeding brought byGreymouth to challenge the lawfulness of NZP&M's imposition of a condition of awork programme in a PMP requiring that part of the permit area be surrendered.28 Inthat case, there had been some focus on a letter written by Mr Jeaffreson to Greymouthin the course of a vigorous exchange of positions. I commented:[167] Although communications in this context might understandably besomewhat testy, some of Mr Jeaffreson's language could be criticised forbeing potentially threatening. For example, Mr Jeaffreson stated that if thearea outside the polygon were surrendered before 16 March 2017, any non-compliance would not be taken into account in assessing any futureapplications. Given the seriousness of non-compliance, raising it in thismanner could be seen as an implicit threat. [137] In Mr Jeaffreson's 8 December 2017 letter to Greymouth warning that theevaluation team intended to recommend to the decision-maker that the bid be declined,he referred to that being "in consideration of the matters listed under s 29A(2)(a) and(b)(iii) of the [Act]". His letter advised that a final decision was likely by 14 December2017, and there was no suggestion that Greymouth would be afforded an opportunityto make submissions to NZP&M about matters that might be taken into accountagainst Greymouth in relation to its likely compliance.[138] Mr Willis's 11 December 2017 response to Mr Jeaffreson cited cl 5.3(6) of theMPP, which specifies that where the Minister has concerns about an applicant's recordof compliance, those concerns are to be raised with the applicant and, before makinga decision, the Minister will consider any comments the applicant makes about its27 Taylor v Chief Executive of the Department of Corrections [2015] NZCA 477, [2015] NZAR 1648at [33].28 Greymouth Petroleum Mining Group Ltd v Minister of Energy and Resources, above n 9.record of compliance. Ultimately, NZP&M did afford Greymouth further time tomake submissions about its record of compliance and the decision on the permit wasdeferred from the proposed date of 14 December 2017 until 6 March 2018. However,it is a fair inference that, but for Mr Willis's protest, Mr Jeaffreson would have beencomfortable having the evaluation process and decision made without affordingGreymouth an opportunity to put its case as to the adequacy of its compliance record.[139] Mr Jeaffreson took the view that cl 5.3(6) of the MPP did not apply toassessment of Greymouth's bid because it is prefaced by the words "if the Ministermay otherwise grant a permit". He argued that was not the case here given additionalconcerns under s 29A(2)(a) of the Act (that is, whether the proposed work programmewas consistent with the Act and other instruments). Given the relative weighting ofconcerns about the likelihood of Greymouth complying with the work programme,and the more minor concerns about the adequacy of that work programme, that is adifficult interpretation to sustain and there was no attempt by Ms Casey to defend it.[140] Mr Jeaffreson deposed that the relevant assessment was a purely forward-looking one and there was no way a bid would be declined to punish the bidder forpast non-compliance. Mr Willis disputed that in his affidavit in reply, citing aconversation with Mr Adams in which he recalled the latter using phrases such as "inthe dog box" or "in the naughty corner" where non-compliance would result in nofurther bids being accepted for a period.[141] There was no opportunity for a rejoinder to Mr Willis's evidence on this pointand I put the contention to one side.[142] Reviewing the course of dealings between Mr Jeaffreson and Greymouthrepresentatives reveals a combative relationship. Greymouth was assertive andpotentially aggressive: Mr Willis's 11 December 2017 letter included "we nowdemand;" (followed by a list of information demanded urgently) and "the permitapplicant demands that you particularise". On 12 February 2018, when Mr Dunphyreplied substantively to the concerns NZP&M identified, he responded not merely tothe national manager of petroleum at NZP&M, but also to the general manager ofNZP&M, to the Minister and to the Minister for Economic Development.[143] In reflecting on his frequent dealings with Greymouth whilst he was in a seniorposition at the regulator, Mr Feeley described Greymouth as:An often-challenging permit holder who did not always enjoy goodrelationships with other members of the industry, and who frequentlychallenged Crown Minerals' views on legislation, policy and industrypractices.[144] It would be understandable for an official in Mr Jeaffreson's position torespond defensively to such pressure. From the perspective of an official in hisposition, it might be said that Greymouth's tactics had brought that on themselves.Another perspective is that the exercise of statutory powers requires even-handedobjectivity consistent with good faith.[145] The process was inarguably inadequate. The consequences of the breaches ofnatural justice are likely to be idiosyncratic and fact-specific. Depending on later stepsin the process, it may well be that at least a partial cure for the procedural deficienciesis provided by later steps in any particular bid evaluation process. A broader concernthat a reconsideration might not be dealt with objectively on its merits is a matter thatbecomes relevant in dealing with the justification for any additional relief.29Fifth ground– error of fact in respect of compliance history[146] Greymouth pleaded that the decision-maker erred in fact by proceeding on thebasis that any of the eight alleged non-compliances taken into account in reaching thedecision to decline its bid were true, accurate and relevant. The Minister did not pleadto the individual allegations in the second amended statement of claim about the extentto which the evaluation reports were factually wrong about alleged non-compliance.Instead, the statement of defence admitted inadequacies in the process of evaluatingthe bid, sufficient to warrant the decision being quashed and a reconsideration beingrequired.[147] NZP&M admitted that the Ngatoro abandonment allegation and the Radnorproduction allegation were both wrong. There was no refutation of the explanationsgiven by Mr Crighton as to why a number of the other alleged items of non-compliance29 I summarise my decision on additional relief at [275]–[276] below.were not justified. For instance, the allegations that there had been unconsented flaringat Ngatoro and Turangi failed to acknowledge that the relevant regulations permittedflaring without consent in certain circumstances, which Greymouth claimed had beenrelevant in both those cases. The existence of flaring had been deduced by officialsfrom production reports, which did not provide for permit holders to explain thecircumstances in which flaring had occurred.[148] The non-compliance where there had been cessation of continuous productionat Moturoa without consent was alleged to have been intermittent between 2014 and2016. Mr Crighton's explanation was that lapses in production between 1 January2014 and 30 August 2014, and then between 23 October 2015 and 31 December 2016,had been discussed with officials during the periods they occurred and none of thoseinstances had been raised by officials as a source of concern during the ARMs in 2015,2016 and 2017. The explanation for the cessation of continuous production was suchthat Greymouth disputed that it had any possible relevance to an assessment of thelikelihood of it complying with its work programme on its 2017 bid.[149] In his reply affidavit, Mr Crighton expresses concern at the manner in whichthe six more minor instances of non-compliance had been raised only whenGreymouth questioned the recommendations that its bid be declined. I have addressedthat at [133] to [136] above. I accept Mr Crighton's implication that these instancesof non-compliance were not relevant to NZP&M's assessment until it was asked byGreymouth to justify the opinion that it was likely Greymouth would not comply withcommitments made in its proposed work programme. That raises the spectre of anex post facto justification for the recommendation, which does little to provide anassurance of the integrity of the process.[150] Greymouth has made out material errors of fact that go beyond the limitedadmissions made by NZP&M.Sixth ground: error of law, failure to take all relevant considerations into accounton Greymouth's compliance history[151] This ground cited the matters required to be considered under s 29A(2)(b) ofthe Act, and alleged that any information about an applicant's failure to comply witha permit needed to be true and accurate. Also, such information had to reflectcircumstances where the failure to comply had a tendency to inform how the applicantfor a permit would conduct itself in the future. Greymouth also pleaded that theassessment needed to be a balanced one, taking into account the extent of anapplicant's history of compliance. On the facts here, Greymouth pleaded that therewas no forward-looking assessment of likelihood of compliance, that the decision wasmade without identifying and assessing all relevant information and that irrelevantinformation was taken into account, including errors of fact.[152] Greymouth contended there were two errors in the legal approach adopted bythe evaluation team and the decision-maker to the determination required unders 29A(2)(b) of the Act. First, their evaluation allegedly focused on the negativeaspects of Greymouth's past record when Greymouth's interpretation of the sectionrequired an holistic and forward-looking analysis. Secondly, the standard applied wasallegedly inconsistent with the likelihood that Greymouth would comply with, andgive proper effect to, the proposed work programme.No balancing of positive compliance[153] As to the first aspect of these criticisms, the extent of an applicant's past failureto comply with the terms of the permit is made relevant by the terms ofs 29A(2)(b)(iii). Whilst there is a filter that it is only information that is relevant to afailure to comply, it is unsurprising that past performance is treated by the statute as apotentially relevant indicator to the likelihood of future compliance. However, it islogical that a reasonable decision-maker would not focus solely on occurrences of pastnon-compliance, without balancing that against the extent of the applicant's record ofcompliance.[154] Greymouth's argument on this aspect was driven by its belief in the highquality of the record of its own past performance. Not only did Mr Dunphy and otherdeponents consider that there were adequate justifications for not drilling the wellsGreymouth had been committed to before surrendering PEPs 51154 and 51152, butthose aspects of non-compliance were substantially outweighed by the far greaterextent of compliant performance under a significant number of other PEPs and PMPs.Greymouth's criticism that NZP&M had given undue weight to its non-compliancewith the obligation to complete drilling of two wells depended on the relative weightan assessor ought arguably to give to the positive aspects of its record.[155] There is no evidence of a balanced comparison by the evaluation team of theextent of Greymouth's compliance with other permits, against the relative significanceof its non-compliance with drilling obligations in PEPs 51154 and 51152. Thiscriticism is a valid one in a broader assessment of the quality of the decision-making,but the decision-maker was empowered to attribute the relevant weight he consideredappropriate to positive and negative factors in this evaluation. I cannot be satisfiedthat Mr Adams failed entirely to have regard to the positive aspects of Greymouth'shistory of compliance.30 His decision rests either on the premise that the positiveaspects deserved only scant attention or that they were heavily outweighed by therelevance of significant non-compliance with the drilling commitments underPEPs 51154 and 51152. I am not persuaded that it reaches the threshold for an errorof law.Wrong standard on likelihood of compliance[156] The second aspect is that NZP&M had applied too high a standard of proof inrequiring Greymouth to establish that it was likely it would comply with, and giveproper effect to, the proposed work programme.[157] The approach adopted by the evaluation team in the final version of theevaluation report focused on the non-compliance in surrendering PEPs 51154 and51152 without completing drilling commitments. The report also reviewed the otherinstances of non-compliance, but there was no reference to balancing them against theextent of Greymouth's compliance over the years.31 The matter was left on theseterms:32Officials do not necessarily consider that non-compliance with the workprogramme of Bid 60403 will occur. Rather, officials are simply not satisfiedthat the bidder's compliance with the proposed work programme in Bid 60403can be said to be likely.30 His note, quoted at [165] below, acknowledged Greymouth's positive record.31 Evaluation report at [37]–[39; Appendix 4 of Evaluation report at 21-29.32 At 29.[158] In addition, Ms Cuncannon, who presented this aspect of Greymouth'ssubmissions, focused on the terms in which Mr Jeaffreson had described thecompliance assessment undertaken by the evaluation team in his affidavit. He stated:33 the main reason why we care about compliance is tied in to the generaljudgement call as to whether the Crown's interests are best served by the landbeing permitted to the bidder or not. It will only be in the Crown's bestinterests for a permit to be granted if we are confident the promised work willactually be carried out. Otherwise the land could be permitted without beingactively explored, which would mean little or no data would be produced andno hydrocarbons found.[159] Ms Cuncannon focused on the words Mr Jeaffreson had used in the secondsentence of that explanation. She argued that if Mr Jeaffreson had applied the testrequired by the statute, he would have expressed himself in terms that the permit wouldbe granted if "we are satisfied the promised work is likely to be carried out". Arguably,it was materially more difficult for Greymouth to establish to NZP&M's satisfactionthat the regulator could be confident the work would actually be carried out, than ifNZP&M had only to be satisfied that the promised work was likely to be carried out.[160] Ms Casey dismissed the perceived differences as a matter of semantics. In anyevent, if Mr Jeaffreson had been other than entirely precise in the language he chosein his affidavit, that could not create an error in the standard applied by the evaluationteam in its report, or by the decision-maker.[161] Counsel for both parties invited analogy with the interpretation of the word"likely" in other statutory contexts. With respect, the differences between them weremore apparent than real. In McGrath v Accident Compensation Corporation, theSupreme Court had to consider whether a claimant was likely to achieve vocationalindependence, in the context of accident compensation legislation.34 "Likely" in thatcontext was seen as being an outcome reasonably in prospect.35 In the context of thetest under s 67(3) of the Commerce Act 1986 of likely future benefits and detrimentsof a proposed transaction, the Court of Appeal in NZME Ltd v Commerce Commission33 Affidavit of D H S Jeaffreson, 3 July 2020, at [62].34 McGrath v Accident Compensation Corporation [2011] NZSC 77, [2011] 3 NZLR 733.35 At [33].considered an effect to be likely if there is a "real and substantial risk" or a "realchance" that it will occur.36[162] In Talleys Fisheries Ltd v Cullen, Ronald Young J addressed whether it waslikely that future benefits of overseas investment in fishing quota had been made out.37He characterised "likely" in this context as meaning both a distinct possibility, andthen – treating it as the same thing – more than a mere possibility.[163] I hesitate to accrete another layer on the various attempts to distil in differentstatutory contexts any more useful test than that provided by Parliament in the Act.Accretion can readily become encrustation, unnecessarily weighing down the wordsof the statute with multiple qualifiers. The onus on the decision-maker is a positiveone to be satisfied that compliance is an outcome that is reasonably in prospect, thatbeing an outcome that is a distinct possibility. It is not by any means a high onus tomake out.[164] I accept that there would be a material difference between a test of whether adecision-maker could be satisfied that work committed to in a work programme waslikely to be carried out, when contrasted with a higher onus required to enable thedecision-maker to be confident that the work would actually be carried out.[165] Mr Adams' contemporaneous handwritten notes of his assessment of thisaspect of the test recorded:• Compliance → not OK but on balance over 15 years would probably beaccepted as OK re WP delivery in terms of ability to find petroleum andpay royalties.o Dropped 2 committed wells in 2017. But drilled the only explorationwell in NZ that year – potential play opener.[166] That suggests a more balanced evaluation, taking into account the positiveperformance by Greymouth over 15 years and the rest of its performance in the yearin which it failed to drill committed wells. In his principal affidavit, Mr Adamsacknowledged that the decision to decline the bid was not a decision that he made36 NZME Ltd v Commerce Commission [2018] NZCA 389, [2018] 3 NZLR 715 at [83]–[89].37 Talleys Fisheries Ltd v Cullen HC Wellington CP287/00, 31 January 2002 at 43 and 56.lightly, that he found it a difficult judgement call and wavered a couple of times beforesettling on a view adopting the recommendation of the evaluation team. He deposedthat he had publicly stated the importance of Greymouth's Turangi field discovery ata petroleum conference in Wellington in 2018 and acknowledged a significant amountof respect for their achievement. In the end, he endorsed the evaluation team's viewthat he could not be satisfied that compliance with the proposed work programme waslikely.[167] I consider that the evaluation report reflected the application of a higher onusbeing required of Greymouth than the wording of s 29A(2)(b) contemplated. That isborne out by the terms in which Mr Jeaffreson explained his analysis. Had that beenthe final decision it would have reflected an error of law in this regard. However,whilst a risk of error by the decision-maker remains, I am not satisfied that the samestandard was applied by Mr Adams in his decision. The notes made at the time andterms of his affidavit reflect a more balanced assessment with what he saw as a difficultline call decision.[168] I make the same finding in respect of the allegation of failure to take intoaccount all relevant considerations. There was no acknowledgement in the evaluationreport balancing the specific instances of non-compliance against the history ofGreymouth's compliance over a substantial number of years. The failure to undertakethat aspect of the evaluation amounts to the omission to have regard to a relevantconsideration. However, when the evaluation team's recommendation was beingconsidered by Mr Adams, the notes suggest that he did have regard to the extent ofsubstantial compliance by Greymouth. I infer this is why the ultimate decision underthis criterion was one that he wavered on, whereas the focus on negative aspects ledto a firmer conclusion against Greymouth in the evaluation report.Seventh ground of review: unlawful abdication of authority[169] There were two parts to this ground for review. First, Greymouth attributedresponsibility to Mr Adams for the inaccuracies in the evaluation report on which herelied. Secondly, that the records allegedly showed that Mr Adams failed to exerciseindependent judgement or apply a statutory discretion, but rather adopted the decisionthat had effectively been made by the evaluation team in their report. Greymouthpleaded that this constituted an unlawful abdication or sub-delegation of Mr Adams'decision-making responsibilities.[170] The first of these propositions was conceded. As the Court of Appealacknowledged in Daganayasi v Minister of Immigration, where a statutory decision-maker instructs a referee to ascertain facts for him and report, the decision-maker bearsresponsibility for a misleading or inadequate report.38 In conceding that the evaluationreport contained material inaccuracies, providing part of the justification for quashingthe decision and requiring a reconsideration, the Minister has conceded this first aspectof this ground.[171] However, Ms Casey firmly refuted any suggestion that that concessionnecessarily meant that the second aspect of this ground was made out. Her submissionwas that Mr Adams' handwritten notes clearly showed that he had read all thecorrespondence, spoken to the evaluation team and to the NZP&M legal adviser, andprovided ample evidence of his independent thinking. On the matters I reviewed at[165] above, I accept that is the effect of the evidence for which there is no effectiverebuttal by Greymouth. I accordingly find that the allegation of sub-delegation of thedecision-making responsibility cannot be made out.Eighth ground of review: unreasonableness[172] Greymouth pleaded that the decision to decline its bid was unreasonable giventhat it complied in all material respects with the requirements of the Act and the IFB.Further, because it was the only bid in respect of the relevant blocks, there was noprospect of another bidder being able to complete the necessary technical work andcommit to drilling a well before Greymouth would be able to do so. Greymouthfurther claimed it was unreasonable to decline its bid as it was a New Zealandapplicant with a proven positive track record in exploration and production activitiesthat was providing significant returns to the Crown.38 Daganayasi v Minister of Immigration [1980] 2 NZLR 130 (CA) at 149, and Air Nelson Ltd vMinister of Transport [2008] NZCA 26, [2008] NZAR 139.[173] In addition, Greymouth alleged that the decision to decline its bid wasunreasonable by virtue of its inconsistency with the treatment accorded by NZP&Mto Westside, whose bid in the same block offer was accepted. On all of these grounds,Greymouth alleged that no reasonable decision-maker could have declined its bid.[174] The Minister made limited admissions in respect of Greymouth's bid being anuncompeted one and as to its history in the industry, but otherwise denied theallegations. This included a denial that the circumstances of assessment of theWestside bid were relevant to the reasonableness of the decision made in respect ofGreymouth's bid.[175] On the basis of matters raised in Greymouth's affidavits in reply, itssubmissions included additional criticisms of inconsistency by comparingGreymouth's treatment with that of a bid made in the 2018 block offer by ToddExploration Services Limited (Todd), plus alleged different standards applied byNZP&M in considering two applications for the different type of PMPs sought by TagOil (NZ) Limited and its subsidiary, Cheal.[176] Ms Casey objected to any argument inviting comparison with NZP&M'streatment of Todd or Tag Oil and Cheal. There had been no pleading raising suchinconsistencies, and the factual basis for them had been advanced only in replyaffidavits so NZP&M had no opportunity to respond to alleged inconsistencies.[177] I can understand why Greymouth's deponents, having learned of certain detailsin respect of NZP&M's dealings with the other bidders it sought to put in issue, addedthe apparent inconsistencies as perceived from Greymouth's perspective to its claimthat the decision in respect of its bid was unreasonable in the administrative law sense.Greymouth argued they were legitimately raised in reply because Mr Jeaffreson'sexplanation for the evaluation adverted to consistency of approach to all bids.[178] However, I accept the validity of the Minister's objection to the allegedinconsistencies being taken into account when they were not a matter of pleading andwere only raised in an unanswerable form in the reply affidavits for Greymouth. Giventhe timing and scale of other issues, I do not accept that it would have been reasonableto expect the Minister to seek leave to reply to those points so as to render themadmissible as an aspect of the unreasonableness ground of review.[179] The classic test for administrative law unreasonableness or, as generallyknown, Wednesbury unreasonableness, is that the courts will interfere where it isestablished that a decision-maker has arrived at a decision which a reasonabledecision-maker, properly directed as to the law and on a full understanding of the facts,could not have come to.39 The circumstances of the present challenge do not requireconsideration of authorities which contemplate a graduated scale of the levels ofreview, such as whether a "hard look" is warranted. I respectfully agree with theapproach of Duffy J in Woolworths New Zealand Ltd v Alcohol Regulatory andLicensing Authority that regulatory decisions do not require anything in the nature ofa "hard look", and the classic Wednesbury unreasonableness is the appropriatestandard.40 As urged by Mr Farmer QC, I treat as appropriate in this case the citationsDuffy J relied on, including from Lord Diplock in Secretary of State for Educationand Science v Tameside Metropolitan Borough Council to the effect:41 it must be conduct which no sensible authority acting with due appreciationof its responsibilities would have decided to adopt.[180] Duffy J's own construction from that observation and those in Padfield vMinister of Agriculture, Fisheries and Food was that the approach to judicial reviewof decisions on unreasonableness can:42 meld into a single principle: namely, that no reasonable decision-makerwould act in a way that would frustrate the policy and objects of the Act underwhich he or she was exercising authority.[181] The acknowledgements that the decision was made in reliance on factuallyinaccurate information and following an inadequate process, plus further findings tothat effect, to an extent justifying quashing the decision and requiring it to bereconsidered, do not of themselves establish that the decision was unreasonable in the39 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 233 (CA) at229.40 Woolworths New Zealand Ltd v Alcohol Regulatory and Licensing Authority [2020] NZHC 293.41 Secretary of State for Education and Science v Tameside Metropolitan Borough Council[1977] AC 1014 at 1064.42 Woolworths New Zealand Ltd v Alcohol Regulatory and Licensing Authority, above n 40, at [58],relying on Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997 (HL).administrative law sense. I took the competing submissions on unreasonableness toimplicitly rest on the counterfactual situation that disregarded the factual inaccuracies.In essence, NZP&M's position was that had it ignored the factually inaccuratereferences to matters of non-compliance, and afforded Greymouth an adequateopportunity to explain its position, then it would still have been open to the decision-maker to decline the bid in circumstances that would not render it an unreasonabledecision.[182] Greymouth contended that the decision was contrary to or frustrated thepurpose of the Act to promote exploration for Crown-owned minerals for the benefitof New Zealand. Greymouth's was an uncompeted bid and, on its view of its ownattributes, it was entitled to positive findings under each of the criteria required to beconsidered under s 29A. Given that Greymouth's bid was a qualifying one in that itmet the specific minimum requirements, and given Greymouth's largely positive trackrecord in exploration and mining for hydrocarbons, declining the bid frustrated thestatutory purpose.[183] In responding at this abstracted level, Ms Casey submitted that no bidder hadany right to a permit, and the Minister is not obliged to accept any particular bid inany circumstances. Judgements are required in applying the expertise of those whoevaluate the bids to ensure, in terms of s 1A(2), that there is efficient allocation of suchrights, with the best prospects for effective management in the exercise of those rightsby applicants who will carry out their activities in accordance with good industrypractice. In essence, the scope of those statutory responsibilities means that it cannotbe unreasonable in the administrative law sense to decline any particular uncompetedbid where it might comply with the specific minimum requirements stipulated in anIFB.[184] At the time of the evaluation of Greymouth's bid, it was legitimate for thoseevaluating it to contemplate that a better offer might be made to explore the relevantblock in a subsequent year's block offer. Greymouth questions the reasonableness ofthat approach when there had been no bid at all for this block in the previous year'sblock offer. Greymouth had submitted a compliant bid which would result in adecision to drill an exploratory well or surrender the permit within a shorter time framethan that contemplated in the minimum work programme requirements. However, itremained a matter of judgement for the decision-maker to decline the bid against theprospect of a more attractive bid in a later year.[185] The consideration under s 29A(2)(a) was whether the proposed workprogramme was consistent with the purpose of the Act, the purpose of the proposedpermit and whether it represented good industry practice in respect of the proposedactivities. The recommendation was that there was insufficient detail on the scope andlikely output of the reprocessing 3D seismic data, leading to a doubt that it wouldgenerate sufficient good quality data to test the bidder's understanding of the prospectsof the block. In addition, the recommendation was that a commitment to either drillor surrender within 48 months did not represent a timely plan to explore the potentialpetroleum resources and was inconsistent with the condition that the bidder make allreasonable efforts to explore the block in a proactive and efficient manner.[186] Greymouth's deponents, including its expert witnesses, strongly contestedthose judgements. They considered that the evaluation team's concern about an hiatusbetween completion of the seismic data reprocessing and a decision on commitmentto an exploratory well was unrealistic and wrong. They were also emphatic that thescale of reprocessing would produce a materially enhanced level of understanding ofthe potential resource that would have real utility both for Greymouth and for theCrown.[187] The consideration under s 29A(2)(b) was whether the decision-maker could besatisfied that Greymouth was likely to comply with, and give proper effect to, theproposed work programme. Greymouth's technical and financial capabilities wouldenable it to comply. However, as previously reviewed, the evaluation team consideredthat previous instances of non-compliance with permits, principally the surrender ofPEPs 51154 and 51152 with outstanding drilling commitments, meant that thedecision-maker could not be satisfied that Greymouth was likely to comply with itsproposed work programme.[188] I take the Minister's defence of this aspect of the decision to be on the basisthat if the less material aspects of alleged non-compliance were ignored, that wouldstill leave the two instances of surrender of PEPs with outstanding drillingcommitments. Arguably, they were sufficiently material for the range of optionsavailable to the decision-maker to include such non-compliance meaning that thedecision-maker could not be satisfied that Greymouth was likely to comply with itsproposed work programme.[189] As discussed above, a concerning aspect of NZP&M's analysis as to thelikelihood of Greymouth complying with the commitments made in its workprogramme is that there was no recognition that Greymouth surrendered PEPs 51154and 51152 without being advised at the time that it would be held against Greymouthon subsequent permit applications. Greymouth was therefore not warned that itsconduct in those surrenders would or could cause it to be deemed in poor standing.[190] NZP&M rejects the need to give Greymouth notice that it took that view, onthe basis that it would be abundantly clear to Greymouth that that was the case. Itreferred to the inclusion of failure to comply with permits in s 29A(2)(b)(iii), and tothe requirements in the IFB for every bidder to make full disclosure of any previousnon-compliance, as making the point so obvious that it was unnecessary for any adviceto be conveyed, and not reasonable for Greymouth to expect it would be so advised.[191] Mr Adams agreed with Mr Jeaffreson that advice to Greymouth of the adverseconsequences of surrendering permits with outstanding drilling commitments wasunnecessary. He stated that Greymouth:43 are well aware that dropping a committed well is serious and given thatoccurred twice around the same time as Block Offer 2017 they ought to haveknown there was a risk that [Greymouth's] bid might not be successful as aresult.[192] On a review of all the evidence, I am not satisfied that this stance on behalf ofthe regulator is a sufficient answer. There had been extensive dialogue aboutGreymouth's work in PEP 51152 leading to the arrangements made with the eventualconcurrence of the regulator to drill the Ngatoro South-1 well. Thereafter thereappears to have been a sensible progression in Greymouth's analysis of the remaining43 First affidavit of Mr Adams, 2 July 2020, at [16.4].prospects in both permits, after the unsuccessful completion of that well. I am notsatisfied on the evidence that Greymouth ought to have appreciated that NZP&Mwould treat it as having surrendered PEPs 51154 and 51152. Relevant circumstancesincluded its commitment to the Ngatoro South-1 well, its analysis of the negative dataprovided and concerns at the justification for further major expenditure at a time ofreduced prices for hydrocarbons, and the terms of dialogue with NZP&M leading toacceptance of those surrenders without any warning that it put Greymouth in poorstanding.[193] I do find on all the evidence that Greymouth personnel dealing with theregulator believed that the circumstances in which they surrendered those permitswere sufficient to avoid a finding that they were in poor standing, at least until theywere given a clear warning of that consequence.[194] This gap in understanding between the parties is relevant. If Greymouth wasfixed with knowledge that any surrender of a permit with a material work commitmentoutstanding (regardless of the strength of mitigating circumstances) would result in afinding of poor standing, and that this factor would lead to the regulator decliningsubsequent bids, then Greymouth would be materially motivated to take sufficientsteps to avoid such a finding. All witnesses addressing the point agreed that it isimportant for a company in Greymouth's position to maintain its reputation as anexplorer of good standing. Once on notice that the circumstances of its surrender ofPEPs 51154 and 51152 resulted in its being held in poor standing – notwithstandingits vigorous defence of the justification for doing so – Greymouth would be motivatedto discharge sufficient obligations to avoid any repetition. It would also have had animproved opportunity to cast its bid in terms doing more to persuade the decision-maker that it could discharge the onus under s 29A(2)(b)(iii) than if it laboured undera misapprehension that the non-completion of the drilling commitments was tolerated.[195] The regulator's approach gives no credence to the reasonableness ofGreymouth's belief that the circumstances in which it decided to surrender PEPs51154 and 51152 with drilling commitments outstanding justified its decision to doso, without adverse consequences with the regulator. The absence of recognition ofthat factor is material. I am satisfied that a proper appreciation of it, if added to theother balancing considerations undertaken by Mr Adams may have been sufficient toreverse the most telling aspect of the reasons for the bid being declined.Inconsistency as an indication of unreasonableness[196] It was acknowledged for Greymouth that the Court is reluctant to delve intothe competing merits of applications in a judicial review such as this.44Notwithstanding that reluctance and the need to recognise the specialist expertise ofthe evaluation team and the decision-maker, Greymouth submitted that there weresuch stark differences between the level of scrutiny of Greymouth's bid and Westside'sbid that it could make out that like aspects of the applications were being treatedunalike.[197] Greymouth cited an observation of Arnold J, writing for himself and Elias CJ,in Ririnui v Landcorp Farming Ltd, to the effect that rule of law considerations andthe need for rationality in public decisions mean that consistency of treatment has arole to play in judicial review when issues of arbitrariness or unreasonableness areraised.45 That general observation arose in the context of intervention by the Ministerfor State-Owned Enterprises in contractual dealings by a state-owned enterprise inselling farm lands, where the Minister's considerations were affected by a perceptionas to which among a group of potential purchasers of the land were iwi interests thathad settled their Treaty of Waitangi claims.[198] In relation to comparisons at a more focused level, Greymouth also cited LordHoffman's observation in Pratt Contractors Ltd v Transit New Zealand that alltenderers had to be treated equally and one could not be given a higher mark thananother if relevant attributes were the same.46 Submissions for NZP&M cited theobservation of Allan J in PP &G Basra Ltd v Rangitoto College Board of Trustees thatfor inconsistency of treatment to give rise to a finding of unreasonableness orirrationality:4744 Citing NZI Financial Corp Ltd v New Zealand Kiwifruit Authority [1986] 1 NZLR 159 (HC) at175.45 Ririnui v Landcorp Farming Ltd [2016] NZSC 62, [2016] 1 NZLR 1056 at [95].46 Pratt Contractors Ltd v Transit New Zealand [2003] UKPC 83, [2005] 2 NZLR 433 at [47].47 PP & G Basra Ltd v Rangitoto College Board of Trustees [2010] NZAR 372 (HC) at 383. it would need to be shown that this case produced an utterly abnormal resultcompared with a broad selection of truly comparable cases.[199] That observation was made in the context of decisions regarding the tradinghours authorised for off-licence premises.[200] Greymouth submitted that a comparison of two aspects of the respectiveassessments of Greymouth's and Westside's bids demonstrated that different standardshad been applied. First, in relation to the adequacy of their proposed workprogrammes, NZP&M was critical of Greymouth and held against it the two yearhiatus between completing the technical reprocessing of data and reaching a decisionon drilling. NZP&M considered that period to be longer than was warranted.[201] In contrast, a more relaxed approach to timing of commitments appeared to beadopted in analysing Westside's bid. The evaluation report for Westside's bidrecorded that while a prospect within the area Westside was bidding for: may be argued to be drill ready, significant technical risk remains (eg inregards to the imaging of the structure of this sub-thrust prospect). Acompelling economic case to justify drilling is therefore required. As such,the bidder's measured, portfolio approach to the exploration of the bid area isconsidered to be consistent for the purpose of the proposed permit [202] Also in Westside's bid, it proposed completion of a survey within 72 monthsand a subsequent exploration drilling commitment date within 120 months. That lapseof 48 months was acknowledged as a "minor concern" but was not the subject of anadverse finding, with the evaluation team treating Westside's work programme astaking into account certain contingencies so that it was "as realistic as possible". Thecontingencies identified included the particulars of a contemplated survey and laterobligations in a work programme becoming compressed through "unavoidable delay".Arguably no such tolerances on timing commitments were made when assessingGreymouth's bid.[203] Greymouth also contrasted what it treated as a much more relaxed analysis ofthe adequacy of Westside's financial capacity than the rigorous standards it claimedhad been applied to all aspects of its bid. Mr Dent's expert analysis suggested that thelimited assets of the Westside New Zealand company that was bidding, and the lessthan full guarantees of its performance provided by its parent company, ought to havegiven cause for concern in the financial capacity analysis when there was nosuggestion that had occurred.[204] I accept these concerns raised by Greymouth as understandable. Theirdeponents credibly sketch grounds for seeing unfairness and an inconsistency in thestandards applied. There are grounds to be uneasy about NZP&M's response alludingto different circumstances applying to different blocks on offer, and the characteristicsof different applicants, without identifying such differences or explaining why theymake a difference.[205] However, this is not an area in which the Court can make a determination ofinconsistency when there is inadequate detail of the full circumstances surroundingthe officials' assessment of the Westside bid. As a lay person in this regard I am notconfident to identify an inconsistency in respects where I would necessarily have tobe satisfied that the officials were treating like cases unalike.[206] I can also understand why the differences perceived by Greymouth deponentsbetween the standards applied in its case, and the apparently different standardsapplied in NZP&M's dealings with Todd, Tag Oil and Cheal, gave rise to furthercomplaints of inconsistency. Again however, assessing the justification for apparentdifferences is not a matter within the Court's competence. In this regard, I uphold theobjection that such additional criticisms were raised too late to be taken into account.Whilst criticisms of inconsistency of treatment cannot avail Greymouth in arguing thatthe decision was unreasonable, I will reflect on these concerns in the different contextwhen considering forms of relief.Conclusion on unreasonableness[207] Greymouth's argument on the alleged unreasonableness of the decision bolsterits submissions on the cause for concern at the process by which the decision wasmade. However, in the context in which the decision was made, I am not satisfied thatthe test for unreasonableness, given its high threshold, can be made out. Thecomponent aspects of the adverse decision, and the overall outcome, cannot becharacterised as decisions that the decision-maker could not reasonably arrive at. Thebases for the decision may, however, be characterised differently when consideringrelief.Relief on the first to eighth grounds of review[208] Greymouth's second preference for relief (beyond the admitted ordersquashing the original decision and directing a reconsideration) was for ordersrequiring the reconsideration to occur on certain terms. The proposed terms variedaccording to the nature of the error alleged by Greymouth in various of its grounds forreview. The constraints on the decision-maker's reconsideration sought in the variousprayers for relief were implicitly on the basis that, to the extent Greymouth made outthe grounds of review, the existence of such errors on the original assessment shouldpreclude the decision-maker from undertaking that aspect of the assessment whencarrying out the reconsideration.[209] The specific terms upon which Greymouth sought reconsideration were asfollows:• the decision must be made in accordance with the legal requirements,processes, rules and policies properly applicable to Block Offer 2017as at 6 March 2018 (grounds 1-8);• Greymouth's proposed work programme is consistent with the purposeof the Act, the purpose of a PEP, and good industry practice (grounds1-3);• only non-compliances that have been sufficiently material to have beenpreviously raised at an ARM are to be considered (ground 4);• the decision-maker must take into account Greymouth's full record ofcompliance, including its long and substantial history of safe,compliant and successful exploration and production (ground 4);• the eight alleged non-compliances are not true, accurate or relevant andmust not be considered (ground 5).[210] The first, and a modified version of the fourth, of these directions were notopposed. On the latter, NZP&M accepted that the prospects of non-compliance shouldbe assessed in light of all of Greymouth's history as an explorer for and producer ofhydrocarbons. Beyond that, the Minister opposed any constraints being imposed onthe terms on which the reconsideration should occur.The test for substantive relief[211] Greymouth's first preference for relief was not to go through a reconsiderationon any terms, but instead to have the Court direct the decision-maker to grantGreymouth the permit it bid for, on appropriate terms. Such substantive relief injudicial review is a relative rarity, as the courts are reluctant to substitute the Court'sown view on the merits of the challenged decision for that of the decision-maker. Thisis not merely a matter of deference to the expertise of the decision-maker, butacknowledges that judicial review is an exercise of the Court's supervisory jurisdictionas to the lawfulness of the process by which decisions made in exercise of statutorypowers are arrived at.48 It contrasts with an appeal where the merits of the challengeddecision are in dispute.49[212] Exceptions where the Court is persuaded to substitute its own decision for thatof the decision-maker whose conduct is challenged rely primarily on the approach ofthe Court of Appeal in Fiordland Venison Ltd v Minister of Agriculture andFisheries.50 In that case, the Minister had declined to grant a licence for a gamepacking house where a positive duty to issue a licence existed under the GameRegulations 1975 once the Minister was satisfied as to five matters specified in theregulations. The Court inferred that the decision to decline the application was madeout of concern for the reduction in turnover or profit of other game packing businesses,which was not a relevant consideration. There had been a considerable delay since theapplication for a licence had been declined and the Court of Appeal accepted that therewas no evidence on which the Minister could reasonably or properly determine thathe was not satisfied of the matters prescribed in the relevant regulation. The Courtgranted the appellant a declaration that, subject to certain upgrading of the packing48 Kent v Valuer-General HC Wellington CP57/90, 27 July 1993 at 4.49 For example, Taylor v Chief Executive of the Department of Corrections , above n 27, at [91].50 Fiordland Venison Ltd v Minister of Agriculture and Fisheries [1978] 2 NZLR 341 (CA).house premises in accordance with plans and specifications that had been submitted,it was entitled to the licence that had been declined by the Minister.[213] The reasoning in Fiordland Venison is treated as justifying the Courtsubstituting its own view where the statutory decision-maker could not, on applicationof the correct tests, have reached any other decision.51 Greymouth submits that it canmake out the case for substantive relief, given that this is such an exceptional or clearcase.[214] Ms Casey distinguished Fiordland Venison because the regulations in that casemandatorily required the Minister to grant the licence if satisfied of certain matters.The decision-making did not involve the exercise of any discretion or an evaluationbeyond the presence or absence of the stipulated matters. In contrast, in the presentcase there were numerous aspects of nuanced evaluation and a discretionary decisionthat legitimately reflected value judgements in the application of expertise by thedecision-maker.[215] Further, the Minister opposed any relief beyond a direction for reconsiderationbecause Greymouth's affidavits foreshadowed an intention to apply any positivedecision that it be granted the permit to require reversal of the subsequent decisionmade to decline its 2018 bid. Such parity of reasoning was foreshadowed on the basisthat the primary ground for declining both applications was the same, namely thefindings by (different) decision-makers that they were not satisfied that Greymouthwas likely to comply with the terms of its proposed work programmes.[216] The essence of this ground of opposition is that this is not a case in which theCourt can be satisfied that there would be no decision on reconsideration by a newdelegated decision-maker other than the granting of the permit. Arguably there wasstill scope for legitimate decisions finding that the decision-maker could not besatisfied Greymouth was likely to comply with the work programme, and that theperiods proposed for the taking of various steps in the work programme extended overlonger periods than were reasonable for a work programme that reflected good51 For example, Darvell v Auckland District Legal Services Subcommittee [1993] 1 NZLR 111 (HC)at 127; Edwards v Attorney-General [2017] NZHC 3180 at [118].industry practice and was consistent with the purposes of the Act. There is nosuggestion that there would be new factors, adverse to Greymouth, likely to be takeninto account on a reconsideration.[217] A possible analogy with circumstances in which the Court has foundadministrative law error but declined to grant substantive relief is ProfessionalPromotions & Services Ltd v Attorney-General.52 In that case, relevant error was madeout in a decision to decline a licence to operate a radio frequency and the applicant forreview sought an order directing the decision-maker to grant the licence. The HighCourt declined to do so, instead requiring reconsideration on terms directing thecorrect legal position. Jeffries J observed:53The Court will go no further because the availability of frequencies might havea bearing and it is a highly technical issue upon which the Court should notembark, at least on the state of the evidence before it. The Court is certainlynot brought to the decision that the Departmental officers are making mistakesof fact on the number of available frequencies. Moreover, there are appealsbefore the High Court against decisions of the Broadcasting Tribunal [218] In the present case, there are a number of idiosyncratic factors that are relevantto the evaluation of whether the delegated decision-maker, properly directed on areconsideration of the bid, could not reach any decision other than to accept the bid.[219] First, on a reconsideration there would be no basis for evaluating the merits ofGreymouth's bid relative to the prospects of a more attractive bid being made in afollowing year's block offer. The bid was uncompeted and is now to be assessed inabsolute, rather than relative, terms because the subsequent change of law removes theprospect of any later bids for PEPs in offshore areas.[220] The approach to evaluating the bid consistent with the purpose in s 1A of theAct requires the decision-maker to promote exploration, relevantly in the area offeredin the IFB to which the Greymouth bid responded. The decision has to be whether topromote exploration for petroleum by accepting the bid, or to deny an opportunity forsuch exploration.52 Professional Promotions & Services Ltd v Attorney-General [1990] 1 NZLR 501 (HC).53 At 512.[221] On the original evaluation of the attributes of Greymouth's proposed workprogramme, it complied with the minimum requirements once it was on termsaccepted by NZP&M as a qualifying bid. The concern that Greymouth proposedtaking longer between completion of the reprocessing of seismic data, and making adecision on drilling, was based on the prospect of a bid in a subsequent year achievingthat milestone more promptly. That prospect no longer exists. Further, with thepassage of time and change in focus of administration of the Act, it does not seemreasonable that the lapse in time between the relevant milestones in Greymouth'sproposed work programme could assume materiality in forming an adverse view toGreymouth's proposed work programme.[222] There do not appear to be any different considerations that would apply onGreymouth's financial capability and its technical capacities, which were consideredto be acceptable on the original consideration of the bid. If it could be relevant, thereis no evidence suggesting a material change since that time.[223] That leaves the major adverse factor in the original decision, namely therelative likelihood of Greymouth complying with its proposed work programme, if thebid was accepted. Greymouth's case was that the officials who would evaluate the bidare likely to bring a closed mind to this relative likelihood, exposing Greymouth to therisk that a new delegated decision-maker would be persuaded to accept the evaluationteam's opinion that Greymouth could not satisfy the decision-maker that it was likelyto comply with its proposed work programme.[224] Greymouth does not allege anything in the nature of bad faith. It cites theconsistency of approach reflected in Mr Jeaffreson's subsequent report onGreymouth's 2018 bid, where Mr Jeaffreson approached the assessment of thelikelihood of compliance consistently with the analysis in his report on the 2017 bid,despite exchanges with Greymouth about its arguments seeking to justify surrender ofPEPs 51154 and 51152 with drilling obligations outstanding. In short, Mr Jeaffresonmaintains his original view on the relative seriousness of Greymouth's failure to carryout those drilling commitments, and treats them as sufficient to outweigh all otherfactors that Greymouth can call on to provide an assurance that it will honour thecommitments it has made to the proposed work programme. Mr Jeaffreson took theview that Greymouth's attempts to justify the adequacy of its work on PEPs 51154and 51152 by reference to the drilling of Ngatoro South-1 and subsequent analysis ofthe data obtained constituted an attempt by Greymouth to deny fault on its part. Hetreated that as indicative of a risk that Greymouth would do so again in the future.[225] I have found that, prior to applying to surrender PEPs 51154 and 51152,Greymouth was not explicitly on notice that the consequence of doing so would resultin its being held in poor standing, and that this factor might well be determinative indeclining one or more future bids. I have not been persuaded that NZP&M's stanceon this is a complete answer, namely that such consequences were so blindinglyobvious to an experienced operator such as Greymouth that it did not need any warningof them.[226] Nor am I convinced by Greymouth's rejoinder that had it been warned of theadverse consequences of surrendering those PEPs with drilling commitmentsoutstanding, it would have "drilled post holes". That is, it would have undertaken theminimum work necessary by way of perfunctory drilling to discharge the commitment,irrespective of its analysis that the prospects did not justify that expenditure. The pointis that Greymouth proceeded to surrender those permits without being on notice thatit should consider alternatives that might lessen the prejudice to their subsequent bids.[227] It would be artificial, and in my view wrong, to consider how thereconsideration of the 2017 bid would occur, without having regard to the subsequenthistory. Relevantly, the circumstances of Greymouth's surrender of PEPs 51154 and51152 without completing drilling commitments has now been found not once, buttwice by NZP&M as the primary ground for recommendations that the decision-makershould not be satisfied that Greymouth is likely to comply with its proposed workprogramme. That consequence is very obvious to Greymouth in a workingrelationship that is critical to the future of its business. Having had the opportunity topersuade officials that the circumstances of non-compliance are not as serious as theywere ranked when considering its 2017 bid, Greymouth is now certainly on notice thatany repetition will be held against it.[228] I am satisfied that on a reconsideration in the current circumstances, butapplying the law as it stood at the time of the original decision, the extent of the focuson the adverse consequences of not complying with a work programme means that theeconomically rational course of conduct would be for Greymouth to comply. Therelative likelihood of that course of conduct ensuing clearly meets the relatively lowthreshold for the decision-maker to be satisfied that compliance is likely.[229] I have accepted Ms Casey's objection to considering examples of NZP&M'sdealings with other applicants, which were put in issue belatedly by Greymouth toadvance its arguments of inconsistency of treatment, as an aspect of its claim to makeout Wednesbury unreasonableness. Nonetheless, and appreciating the significantdifferences of the identity of the applicant and the context being an application for amining permit rather than an exploration permit, it is instructive to cite a differentapproach to an applicant having surrendered a permit with unfulfilled drillingobligations:5410.3.3. The surrender of exploration permits with unfulfilled key committeddrilling obligations is considered serious non-compliance, and it isquestionable that a company would be considered likely to complywith similar obligations if granted further exploration permits.However this non-compliance took place as a result of budgetconstraints in a low oil price environment, in respect of commitmentsthat might be considered discretionary by a cash-strapped board. Inthe context of a mining permit application, the applicant has asubsequent right to apply for a permit and is incentivised toresponsibly develop a project that is considered to have a high chanceof providing revenue.10.3.4. Officials consider that, despite the non-compliance on previousexploration permits, the Mining permit application should be granted.[230] In Mr Willis's affidavit filed in reply, he cited the circumstances of anotherinstance of NZP&M being understanding of another operator having relinquished aPEP without completing work that it had committed to as a condition of that permit.Whilst the point does not avail Greymouth in making out unreasonableness, thecircumstances provide a modest measure of assurance that officials can validly take asomewhat more generous approach to the prospects of compliance than has been thecase with Greymouth in its 2017 and 2018 bids.54 Internal NZP&M memorandum, 16 October 2018.[231] The instance Mr Willis cited was of a bidder that had a majority interest in, andwas the operator of, a PEP where the permit was surrendered without a key deliverableof a prescribed minimum of 3D seismic data having been produced. The terms ofcl 5.3(5)(c) of the MPP appear to put failures to complete seismic survey work on thesame level as failure to carry out committed drilling, when a bidder has to report suchfailures to comply in the details submitted with a bid. In Mr Jeaffreson'smemorandum to the Minister recommending acceptance of the other bid instanced byMr Willis, he commented that officials considered the non-completion of the seismicdata commitment to be an "isolated incident" that was seen as having limited bearingon the likelihood of the bidder complying with the proposed work programme.Reasons for that view were withheld and the report continued:559.4.2. Officials have reviewed the work programme compliance record ofthe Bidder, and one item of material non-compliance has been noted.However, the circumstances leading to this non-compliance are notexpected to arise again for a permit granted pursuant to this Bid.[232] I readily accept that officials might view the performance history of the bidderbeing considered in that case more favourably on the basis of longer standing and moreextensive involvement. However, it demonstrates a reasonable and open approach,rather than a blanket or non-negotiable stance that the surrender of another permit withcommitments outstanding will necessarily cause the decision-maker to not be satisfiedthat the bidder is likely to comply with the terms of its proposed work programme.[233] In the course of dialogue about its 2018 bid, on 28 November 2019 Greymouthoffered to discuss with officials appropriate terms to be included in permit conditionsto provide further assurance of its commitment to comply with its proposed workprogramme.56 NZP&M did not engage on that offer. In the context of an uncompetedbid, it was permissible for NZP&M under cl 7.7(1)(d) of the MPP to do so. That sameoffer is a component of Greymouth's proposal as to the terms on which its claims forrelief should be considered. No details of the terms or effect of such an offer wereaddressed in submissions. Mr Farmer did acknowledge that the terms on whichGreymouth's bid could be accepted may include "some tweaking". It raises the55 Briefing to Hon Megan Woods, Recommendations on bids received under block offer 2018,13 March 2020.56 Letter from Greymouth to NZP&M, 28 November 2019.prospect of some variant on the forms of relief Greymouth seeks, subject to resolutionof the level of detail that would generally follow from an indicative acceptance of sucha bid, including negotiation between the parties on the terms for such furtherassurances of compliance.[234] The tenor of the evidence on this topic from Greymouth's experts is generallypersuasive that a reasonable decision-maker taking a balanced view of Greymouth'shistory and the circumstances of the non-compliance on the surrender of PEPs 51154and 51152 would approach the future prospects of compliance more positively. Theyillustrate potentially credible views that would result in a positive conclusion on thisissue. However, to the extent that they reflect advocacy for Greymouth's cause, I havenot been prepared to rely on those opinions to find that the recommendation made inthe evaluation report, and the decision-maker's decision on the likelihood ofcompliance, had to be wrong.[235] The evaluation looks materially different when assessing the terms on which areconsideration of Greymouth's bid should take place. On the basis of the variousfactors I have reviewed in considering the prospect of substantive relief, I am satisfiedthat it would no longer be reasonable for the decision-maker to decline the bid on thebasis of an opinion that Greymouth is likely not to comply with the commitments inthe proposed work programme. In reaching this view, I acknowledge a risk toGreymouth that Mr Jeaffreson could bring a closed mind to a third consideration byhim of this topic. Failures by the evaluation team, led by Mr Jeaffreson, to have regardto the positive aspects of Greymouth's record of performance ([155] above) and thepotential application of a higher onus on whether there would be compliance ([167]above) were both saved by Mr Adams' approach. He would not be the decision-makeron a reconsideration.[236] Given all of the findings in this judicial review, I am satisfied that the risk of aclosed mind by senior officials is not one to which Greymouth should be exposed.This does not impugn Mr Jeaffreson's good faith and I have endeavoured toacknowledge the tensions involved for officials in his position in dealing with suchmatters with a bidder adopting the approach that Greymouth has. Although it shouldbe obvious, and as observed at [219]–[220] above, the reconsideration is also to occuron the basis of an absolute assessment of the adequacy of Greymouth's proposed workprogramme, rather than a relative one measuring it against the prospect of a moreattractive bid being made for the block in a subsequent year.[237] Given the justification for orders in these terms to apply to the reconsideration,it follows that I either accept, or am extremely close to accepting, that this is areconsideration where a reasonable decision-maker could not reach a conclusion otherthan to grant the permit. However, I am not persuaded that this more positive form ofsubstantive relief is warranted, because I am mindful of the extent of technical detailthat the parties ought reasonably be required to resolve as conditions of the permit,once a decision in principle that the bid is to be accepted has been made.[238] In addition, the evidence was not sufficient to eliminate the prospect that, on areconsideration, other matters may assume relevance and reasonably be required to betaken into account by the decision-maker.[239] I accordingly decline Greymouth's application for an order directing that thepermit is to issue. Instead, I direct that reconsideration is to occur, subject toconditions as described in the preceding paragraphs, and the terms of which I formalisein the orders at the end of this judgment.[240] For the avoidance of doubt, I reject the validity of any analogy Greymouth mayseek to make in reasoning that the relief granted in respect of the present challengeshould apply to the circumstances of Greymouth's unsuccessful 2018 bid. Whilst theground relied on for declining that bid appears the same, the decision is made in thecontext of a different year's bid for a different area. That bid was for an area onshorein Taranaki, which is obviously not affected by the ban, so that relatively moreattractive bids are in contemplation in subsequent years. In addition, officials wereconcerned at Greymouth making that bid where it covered much of the same land ashad been surrendered in PEPs 51154 and 51152. Those material differences precludemy decision on relief in the present case having any application in respect ofGreymouth's unsuccessful 2018 bid.[241] For the further avoidance of doubt, and recording what I took to be the positionagreed between counsel during the hearing, I address the circumstances if the permitdoes issue and in due course leads to an application by Greymouth for a PMP on thebasis of discoveries made within the permit area. In that event, NZP&M is to assessany such further applications, grounds for which derive from the permit in issue in thisproceeding, on the basis of the law as it stood on 6 March 2018, the date of the originaldecision on this permit.Ninth ground of review: ban an invalid change in government policy and/orsuspended operation of the Act[242] The first to eighth grounds of review challenged the lawfulness of theMinister's decision to decline Greymouth's 2017 bid. The subject of the ninth groundof review is the discrete issue as to whether the Executive took steps which dependedfor their validity on the provisions in the Act, but were inconsistent with the Act in theperiod between the 12 April 2018 announcement of the ban and 13 November 2018when the Crown Minerals (Petroleum) Amendment Act 2018 (the amendment Act),came into force. After dealing with objections that the arguments raised forGreymouth went beyond the scope of the pleading on this point (which I deal withbelow), Ms Casey met the merits of this argument on terms which reduce the need forextensive analysis on points of constitutional law.[243] The essence of Greymouth's complaint is that a government cannot operate byExecutive fiat and must exercise powers consistently with the terms and purpose ofrelevant statutes. The exercise of powers derived from statute must be consistent withthe empowering provision.57 When a government introduces a change in policy, thepronouncement by the Executive of that change is not effective to authorise it to actinconsistently with the relevant empowering legislation and it must procure theimprimatur of Parliament by appropriate amendments to the relevant law.[244] Greymouth also argued that the rationale for the change in policy was for apurpose that was extraneous to the purposes of the Act, namely to advance climate57 Fitzgerald v Muldoon, above n 1, at [622].change concerns, when a division of Executive responsibilities explicitly requiredsuch concerns to be managed elsewhere.[245] For Greymouth, Mr Farmer accepted that had the amendment Act come intoforce before any of the steps taken between 12 April 2018 and its enactment, then theterms of the amendment Act would legitimise all those actions. For the Minister,Ms Casey accepted that had any steps that required the exercise of a statutory powerbeen taken before the amendment Act came into force, then (barring retrospectiveauthorisation in the amendment Act) they would have been unlawful on the groundthat they were inconsistent with the Act in its unamended form.[246] Accordingly, the essence of the ninth ground is whether the announcement ofthe policy change and the contemporaneous announcement by the Minister as to stepstowards the terms on which the 2018 block offer would be made, or anything donebetween then and the amendment Act coming into force, constituted actions that wererequired to be authorised by the Act. Alternatively, whether there were actionsinconsistent with, in the sense of suspending the operation of, the Act between 12 April2018 and 13 November 2018.Unpleaded complaints?[247] Ms Casey took the point that the criticism of the 12 April 2018 announcementof the ban was pleaded as an additional ground for challenging the decision to declineGreymouth's 2017 bid. Given that the Minister had conceded that the decision todecline should be quashed and a reconsideration take place, and having acknowledgedthat a reconsideration would occur disregarding the ban and applying the law as itstood before it had any effect,58 the pleaded response was that the status of theannouncement was not justiciable and that the point was moot.[248] Ms Casey noted a concern expressed by Mr Dunphy in his affidavit thatofficials would have been aware of the government policy to promote the ban, and inanticipation of its announcement the prospect of the ban had improperly influencedthe decision to decline Greymouth's 2017 bid. That suggestion was rejected in58 This saving was included in cl 28, sch 1 to the amendment Act.unqualified terms by Messrs Adams and Jeaffreson, so the status of the policyannouncement could not be made relevant to Greymouth's challenges to the decisionto decline its 2017 bid.[249] Greymouth's written submissions were criticised as advancing a new groundof challenge in relation to the ban in that NZP&M had given effect to the ban in andfrom April 2018, including making a decision on the terms of the 2018 block offer,which, on Greymouth's analysis, was unlawful as being contrary to the Act. It wasalso argued to have been made unlawfully because it was based on concerns relatingto climate change when the terms of the Act and MPP made clear that the Executivewas to advance policy on such matters by exercise of powers under other statutes, andthat such considerations were outside those relevant to the exercise of powers underthe Act.[250] Ms Casey submitted that the Minister would be prejudiced in having to answerthese new arguments because, had they been pleaded, a response to them would haveincluded evidence to establish that no decision was made on the 2018 block offer, norwere there any other exercises of statutory power in relation to the ban prior to theamendment Act coming into force which authorised such steps.[251] Ms Casey's concern that the terms of Greymouth's complaint about the banmoved on from its pleading is a valid one. Indeed, in his reply submissions at the endof the hearing, Mr Farmer was still recasting the terms on which Greymouth sought tojustify a declaration of invalidity of steps said to be taken pursuant to the ban beforethe amendment Act came into force. He sought to invoke both provisions in the Billof Rights 1688 and the common law as grounds for finding invalidity for what hecharacterised as steps taken to govern by executive fiat.[252] However, the challenge raises a point of some significance and whilst it is tobe considered independently of the complaints in respect of the decision to declineGreymouth's 2017 bid, I consider it ought to be addressed. That can only be on termsthat take into account the absence of the opportunity for the Minister to respond byway of evidence addressing whether steps taken consistently with the ban prior to theamendment Act coming into force constituted steps that depended on powers underthe Act with which they would be inconsistent. The evidentiary onus to establish thatsuch steps had occurred was for Greymouth to discharge.Factual circumstances of the ban[253] The planning for the 2018 block offer began in June 2017. In a memorandumrecommending initial terms on which the block offer might be made, NZP&M officialsacknowledged that the onshore and offshore environments in the Taranaki basincontinued to be the only producing basin and that, while recent industry investmenthad been low, the fundamental prospectivity continued to draw interest.59 When thegovernment was mooting a change in policy to ban offshore exploration, officialsprovided a briefing paper issued in the name of the head of NZP&M that identifiedcertain legal risks and implications for the change in policy. The officials' concernsincluded:• the increased risk to the security of the future gas supply;• increased prices for consumers;• increased uncertainty for major users in the industrial sector;• the perception of increase in sovereign risk following what officials saw asa major policy shift;• negligible impact in reducing domestic greenhouse gases and a likelyincrease in global greenhouse gas emissions;• a detrimental economic impact on the Taranaki region; and• an increase in Crown liabilities arising from accelerating decommissioningtime frames.59 Block offer 2018, Steering Group memorandum, 14 June 2017.[254] Understandably, in that and other papers the terms of legal advice have beenwithheld as legally privileged. However, in a briefing paper dated 19 April 2018 onchanges to the Act, MBIE recorded its view that immediate legislative changes weredesirable to give effect to the recent policy announcement, considering that changeswere likely to be necessary both to the Act and to the MPP. Greymouth focused on astatement referring to the possibility that "the block offer 2018 decision could bechallenged" as a recognition by officials that that decision had already been made.Consistently with it, Greymouth pointed to a comment that to fully minimise the riskof legal challenge, some of the changes "would likely need to be made retrospectiveback to (at least) April 2018".60[255] On the same day as the Prime Minister announced the ban, the Ministerannounced the start of consultation with iwi and hapū on the proposed 2018 blockoffer release area. Her announcement stated that the proposed release area wasrestricted to onshore Taranaki basin areas. The purpose of consultation with iwi andhapū was to identify areas of sensitivity or significance within those proposed forrelease. The press statement indicated that the final area for the tender was expectedto be announced in August 2018.61 However, the contemplated consultation did notcommence until 28 November 2018, with submissions scheduled to close on 12 March2019.62Character of steps taken between 12 April and 13 November 2018[256] Greymouth's argument was that under s 22 of the Act, all conduct not only hadto be consistent with the purpose in s 1A of the Act but also in accordance with theMPP. The announcement of the ban, and an indication of the intention to confine the2018 block offer to onshore areas in Taranaki, were arguably contrary to ss 1A and 22of the Act and contrary to the MPP, and were therefore unlawful. The ban and itsimplementation were inconsistent with, or contrary to, the purpose of promoting (interalia) exploration for petroleum for the benefit of New Zealand. I took Mr Farmer's60 Briefing paper concerning progressing changes to the Crown Minerals Act 1991: Options forconsideration, 19 April 2018 at 3, 5.61 Press release of Hon Megan Woods, "Consultation opens on Block Offer 2018", 12 April 2018. .62 The terms of the announcement were not in evidence but were annexed to the Minister'ssubmissions, and no objection was taken to my receiving them informally.final position to be that the Minister's 12 April 2018 announcement was the decisionon the scope of the 2018 block offer, and that such decision was unlawful because itwas contrary to those provisions, which could only be countered by legislativeamendment. Alternatively, that the ban suspended the effect of the law, whichrendered it unlawful.[257] The Minister's response to this challenge is that the statements on 12 April2018 were no more than foreshadowing a policy: an indication of a limited scope forthe 2018 block offer was not a commitment to that course and it remained open forNZP&M to subsequently invite bids for larger or different areas. Ms Caseydistinguished the reasoning in Fitzgerald v Muldoon because in that case the Executivehad acted on the proposed policy change in terminating the existing superannuationscheme by directing that payments would cease to be made when there was still alegislative obligation for them to be made. In contrast, the conduct being challengedhere did not include any committed step that was inconsistent with the Act. Rather, itwas limited to indications of the effect of changes in government policy aboutpermitting exploration for hydrocarbons. Ms Casey invited me to infer that theExecutive paused on taking matters any further until it had legislative authoritybecause of concerns of the type raised by NZP&M about the prospect of challenge toany steps taken inconsistently with the Act, prior to an authorising amendment.[258] There are a number of decisions that have considered responses to a change ingovernment policy which have occurred before changes have been made to therelevant empowering provisions.[259] Greymouth cited the approach of the Supreme Court in Unison Networks Ltdv Commerce Commission:63A statutory power is subject to limits even if it is conferred in unqualifiedterms. Parliament must have intended that a broadly framed discretion shouldalways be exercised to promote the policy and objects of the Act. These areascertained from reading the Act as a whole. The exercise of the power willbe invalid if the decision-maker "so uses his discretion as to thwart or runcounter to the policy and objects of the Act". 63 Unison Networks Ltd v Commerce Commission [2007] NZSC 74, [2008] 1 NZLR 42 at [53] citingPadfield v Minister of Agriculture, Fisheries and Food, above n 42, at 1030 per Lord Reid.[260] In terms of inconsistency between an existing policy reflected in the statuteand a new policy initiative, Greymouth also cited the Court of Appeal's decision inWesthaven Shellfish Ltd v Chief Executive of the Ministry of Fisheries.64 That involveda challenge to the criteria applied when the director-general of the Ministry ofFisheries granted permits to take types of shellfish not brought under a managementsystem. The challenged decisions had been made in accordance with a series of policyguidelines and an issue was whether the terms of the policy constrained the discretionexercised by the chief executive inconsistently with the Act. The Court of Appealobserved:65A policy might well state a presumption, or even a strong presumption, againstnew permits. We are not saying that a policy has to be open ended. But thepolicy cannot deny the power which the law has conferred.[261] Greymouth argued that the 12 April 2018 announcement of the ban, theMinister's simultaneous announcement and all steps thereafter had the same characteras the steps found to be unlawful in the decisions just cited. In effect, thereafter theapplication of the policy was inexorable and could only result in one thing – theexclusion of any permits offered for offshore Taranaki areas. Such an approach wasunlawful because it thwarted the policy and objects of the Act until they were modifiedby the amendment Act.[262] I took Greymouth's position to be that the Minister's announcement on12 April 2018 initiated the allocation of permits by commencing an offer for permitsby public tender, being an action pursuant to s 24 of the Act. It was takeninconsistently with the Act and was therefore unlawful. Alternatively, invoking theprovisions of s 1 of the Bill of Rights 1688, the ban amounted to a step by theExecutive that suspended the law or the execution of laws contrary to that provision,which is still a part of the law of New Zealand.[263] The scope of s 1 has recently been considered by a Full Court of the High Courtin Borrowdale v Director-General of Health.66 That case challenged the lawfulnessof orders given to implement the initial stages of the COVID-19 lockdown.64 Westhaven Shellfish Ltd v Chief Executive of the Ministry of Fisheries [2002] 2 NZLR 158 (CA).65 At [48].66 Borrowdale v Director-General of Health [2020] NZHC 2090.Mr Borrowdale argued that the restrictive measures unlawfully suspended s 5 of theNew Zealand Bill of Rights Act 1990. In responding to Mr Borrowdale's argumentthat restrictive measures offended against s 1 of the Bill of Rights 1688 because theypurported to promulgate a law without legislative authority, the Full Courtcommented:67[239] In our view, however, that is not what this part of s 1 is about. Thewords "pretended power of suspending" qualify both "laws" and "theexecution of laws". And suspending the "execution" of laws involvessuspending the operation of laws – by leaving them intact but rendering themimpotent. This seems to us quite clear when the "no dispensing" provision isread together with the "late dispensing" provision (as set out at [228] above),where the "pretended power of dispensing" plainly refers both to "laws" and"the execution of laws". [264] This aspect of Greymouth's case is therefore whether announcement of the banleft the Act intact, but rendered it impotent.[265] Ms Casey submitted that nothing done prior to the coming into force of theamendment Act rendered any relevant provisions in the Act "impotent", nor did theyhave the effect of suspending the Act. Rather, they were no more than pronouncementsof a change in government policy about the extent to which it would promoteexploration for petroleum.[266] Ms Casey invited analogy with the steps that were challenged by way ofjudicial review in Criminal Bar Association of New Zealand Inc v Attorney-General.68In that case, the Secretary for Justice decided to implement a new scheme for paymentfor criminal legal aid work. One of the criticisms of that decision was that theSecretary had wrongly considered himself bound by prior cabinet decisions tointroduce a regime of fixed fees when the statute required him to make such decisionsindependently of government policy. On a similar point to Greymouth's complaintthat a government policy was acted upon prior to legislation authorising it,Simon France J observed:69 Nor, to respond to another submission, do I consider it matters that thegovernment policy was set prior to the Act coming into force. The comparison67 Footnote omitted.68 Criminal Bar Association of New Zealand Inc v Attorney-General [2012] NZHC 1572.69 At [67] (footnotes omitted).the plaintiff draws with Fitzgerald v Muldoon is not valid. Although here thedecision was prior to the new Act coming into force, the challenged policywas not put into place until after that time. [267] I accept Ms Casey's submission that there is no evidence of any step takenuntil the amendment Act was in force which could not have been reversed, ifparliamentary approval of the change had not been procured by the passing of theamendment Act. The initial stage of consultation with iwi and hapū interests was notundertaken until the amendment Act was in force. In any event, such consultation isa preliminary step and the MPP in cl 7.3(2) stipulates that consultation, including thatto be undertaken with iwi and hapū, is to occur "before decisions are made about thetiming and location of blocks on offer". Consistently with that, the provisions ofcls 2.2 and 2.4 of the MPP clearly contemplate that such consultation will occur priorto the step under s 24 of the Act of inviting bids for a block offer round.[268] Neither the Prime Minister's policy announcement nor the Minister'sannouncement the same day depended on the powers in the Act. Rather, theyforeshadowed administrative action that was to ensue later.[269] The second aspect of Greymouth's challenge to the ban can be dealt withshortly. It was argued that the purposes and policy of the Act were to be advancedonly consistently with the purpose and that if other government policies, such asaddressing concerns at climate change, were to arise, they would be dealt withseparately from initiatives taken under the Act. It is tolerably clear that the ban onoffshore prospecting was motivated in large part to address climate change policies,quite discretely from the management of Crown minerals. The status of that policyaspiration was not a matter to which the government could be committedprospectively: subject to not governing by executive fiat, separation of policies on themanagement of Crown minerals from matters such as climate change policy was amatter that could be revisited and for which the government would answer, if at all, atthe ballot box. The alleged inconsistency with the policy of advancing matters suchas climate change by exercising powers other than under the Act cannot add anythingto this ground of challenge.[270] Accordingly, I do not find the steps taken prior to the amendment Act to becontrary to the Act so as to justify a declaration of the type sought by Greymouth underits ninth ground of review.Costs[271] The Minister had conceded that Greymouth would be entitled to costs up to thepoint in the proceedings at which Greymouth's entitlement to have the decisionquashed was admitted.[272] Reviewing all aspects of this relatively complex judicial review in light of theoutcome, I am satisfied that Greymouth is entitled to costs for all steps in theproceeding on a 2B basis. On the one hand, Greymouth pursued a number ofarguments that were unsuccessful, and in the context of this judicial review that canbe reflected in it not being awarded costs at a higher band.[273] On the other hand, Greymouth has been vindicated in not accepting the extentof relief conceded for the Minister so should be entitled to the appropriate level ofrecovery for all those steps. I certify for second counsel, and for disbursements which,if necessary, are to be fixed by the Registrar.Summary[274] By consent, the decision is quashed.[275] I direct that Greymouth's bid in the 2017 block offer is to be reconsidered onthe basis of an absolute assessment of the adequacy of Greymouth's proposed workprogramme, rather than a relative one measuring it against the prospect of a moreattractive bid being made for the block in a subsequent year.[276] In the re-assessment of the bid, the parties are to negotiate in good faith on theaddition of terms of the type contemplated by Greymouth in its letter of 29 November2019 (in respect of its 2018 bid), which would provide further assurances ofGreymouth's commitment to carry out the work proposed in its work programme.Irrespective of the terms negotiated in good faith for such assurances, the bid is to beassessed on the basis that the decision-maker is satisfied that Greymouth is likely tocomply with the terms of its proposed work programme.[277] Greymouth's challenge to the lawfulness of the ban on offshore explorationactivity, as announced in April 2018, is dismissed.[278] Greymouth is entitled to costs and disbursements on a 2B basis.Dobson JSolicitors:Meredith Connell, Wellington for applicantCrown Law, Wellington for respondent