1 Australian Review Mechanisms JUDICIAL REVIEW Conducted by State - PDF document

Review Mechanisms for Gas Pipeline Decisions Sharon Henrick 27 July 2006 8534872 Overview � Availability of Rights of Review in Australia, the United Kingdom and Texas � Judicial Review � Merits Review 1 Overview � Judicial Review in Australia � Epic’s application for judicial review of OffGAR’s draft decision � Merits Review in Australia � EAPL’s application for merits review in the Tribunal of the Commission’s final decision � The Commission’s subsequent application for judicial review of the Tribunal’s decision 2 1

Australian Review Mechanisms JUDICIAL REVIEW � Conducted by State Supreme Courts, or Federal Court of Australia � Only available for procedural error (e.g., breach of natural justice, improper exercise of power, failure to take into account relevant consideration) � The decision under review may have been made by the Commission or the Australian Competition Tribunal 3 Australian Review Mechanisms � No statutory time limits to commence an application, or for Court to deliver judgment � Generally, judicial review does not involve the court considering the merits of the decision � Where procedural error is found, the court often remits the decision to regulator for reconsideration in accordance with directions � Court may award costs 4 Availability of review � Striking degree of similarity between availability of, and mechanisms for, judicial review in Australia, the United Kingdom and Texas � These jurisdictions have a common law heritage 5 2

Australian Review Mechanisms MERITS REVIEW � Conducted by the Australian Competition Tribunal, or the Western Australian Gas Review Board � Must apply within 14 days of Commission’s decision � Tribunal must make a decision within 90 days, but may extend the 90 day period for further periods of 30 days � Evidence is limited to material before the Commission when the Commission made its decision 6 Australian Review Mechanisms � Involves a re-consideration of the merits of the decision, but only where: � the Commission has made an error in its findings of fact � the Commission has exercised its discretion incorrectly or unreasonably � the occasion for exercise of the discretion did not arise 7 Australian Review Mechanisms � Tribunal or Board may: � exercise the same powers as the Commission � set aside or vary the Commission’s decision � remit the decision to the Commission for reconsideration in accordance with directions � make orders for costs 8 3

Availability of review � Differences in the availability of merits review: � in Australia, the Commission’s decisions are subject to limited merits review (new evidence is not admissible) � in Texas, the FERC’s decisions are subject to limited merits review (however, in some circumstances, new evidence is admissible) � in the United Kingdom, Ofgem’s decisions are not subject to merits review 9 Australian Review Mechanisms EPIC’S APPLICATION FOR JUDICIAL REVIEW � In 2001 Epic sought judicial review in the Supreme Court of Western Australia of OffGAR’s draft decision to not accept Epic’s proposed Access Arrangement for the Dampier to Bunbury Natural Gas Pipeline � In 2002, the Court found that OffGAR’s draft decision was infected by errors of law 10 Australian Review Mechanisms � The Court required OffGAR to reconsider those parts of the draft decision which related to the Initial Capital Base and the Reference Tariff � After reconsideration, OffGAR increased the Initial Capital Base for the pipeline from $1.234 billion to $1.55 billion 11 4

Australian Review Mechanisms THE MOOMBA TO SYDNEY PIPELINE – MERITS THEN JUDICIAL REVIEW � In 2004, EAPL applied to the Australian Competition Tribunal for limited merits review of the Commission’s decision to not approve EAPL’s Access Arrangement for the Moomba to Sydney Pipeline � EAPL alleged that the Commission exercised its discretion unreasonably when it applied an idiosyncratic valuation methodology to establish the Initial Capital Base of the Pipeline 12 Australian Review Mechanisms � In 2005, the Tribunal found in favour of EAPL and set aside the Initial Capital Base of $502 million proposed by the Commission. In doing so, the Tribunal stated that it could not see any reasonable basis for the valuation method used by the Commission � The Commission subsequently applied to the Federal Court for judicial review of the Tribunal’s decision 13 Australian Review Mechanisms � In 2006, the Federal Court found that the Commission had not erred in any of the 3 ways necessary to enliven the Tribunal’s powers to conduct a limited merits review: � Tribunal is not empowered to set aside Commission’s decision simply because the Tribunal considered another decision would have been preferable 14 5

Australian Review Mechanisms � Where it is alleged that the Commission exercised its discretion unreasonably, the Tribunal is only empowered to set aside the Commission’s decision when: � there is a want of reason in the Commission’s decision because the decision is not justified by the Commission’s stated reasons � the Commission’s reasons contain an error of logic, a discontinuity, or a non sequitur 15 Australian Review Mechanisms � the Commission’s reasons contain an element of arbitrariness due to an absence of reasons to explain the discretionary choices made by the Commission � Court re-instated the Commission’s decision to establish the ICB at $502 million � Court’s decision only reviewable by the High Court of Australia, with leave 16 Review Mechanisms for Gas Pipeline Decisions Sharon Henrick 27 July 2006 8534872 6