Power to alter, vary and revoke an Administrative Decision versus the need for finality & certainty – Where do we draw the line?

In a recent Judgement by the Supreme Court in Arran Energy (Elavala) Ltd v Kua [2024] PGSC 54; SC2585 (31 May 2024) [1], the Supreme Court considered an important legal issue as concerns finality or otherwise of decisions or determinations of administrative bodies.

In that case, the Appellant applied for a Petroleum Development License (APDL12) under the?Oil and Gas Act?1998. The Minister refused the Appellant’s application for APDL 12 and the Appellant commenced judicial review proceedings. Faced with that proceeding, the Minister decided to retract and revoke his First Decision and have it replaced with his Second Decision and issued a new instrument. The Minister had done so by way of an Instrument issued under Section 35 of the Interpretation Act, which provides that “[w]here a statutory provision confers a power to make an instrument or decision (other than a decision of a court), the power includes power, exercisable in the same manner and subject to the same conditions (if any) to alter the instrument or decision.”

The Appellant argued (among others) that the Minster is not permitted to revoke his initial decision and issue a fresh notice under section 56B of the?Oil and Gas Act?1998?as amended based on the application of the common law doctrine of?functus officio (which means an official who has performed a function or discharged a duty allocated to him has no further status in the matter). This is because, the Minister’s First Decision was final and conclusive in nature and the Minister had become “functus officio.” ?

The National Court [2] found that the Minister did have the powers by virtue of section 35 of the?Interpretation Act?to retract from his First Decision and replace it with his Second Decision given that the?Oil and Gas Act?is silent on the question of the Minister’s power to retract, recall and or revisit his earlier decisions and vary them by alterations, additions, or revocations. ?His Honour also observed that the doctrine of?functus officio?has no application independent of s. 35 of the?Interpretation Act?and in administrative decisions, the?Interpretation Act applies where there is a doubt or ambiguity as to the use of a term or phrase in a statute, or there is lack of provision in a statute on a particular subject matter.

On appeal, the Supreme Court upheld the decision of the National Court and stated (among others):

• Section 35 of the Interpretation Act is an important statutory provision that gives implied powers to a decision-maker to alter or change an administrative decision in this jurisdiction where the Statute makes no provision.
• The?Oil and Gas Act?makes no provision for the first Respondent to retract his Refusal Notice and issue a second nor does it preclude him from altering his decisions. In the circumstances, Section 35 applied to fill the gap in the Act, so to speak, to validate the decision to retract the Refusal Decision. There is nothing, in the text, context or purpose of?Oil and Gas Act?that expressly precludes the application of Section 35 of the?Interpretation?Act.

While this is not a proper case analysis or critique, the Supreme Court’s decision does not fully resolve the question of the relationship between finality of administrative decision versus the power to vary and alter the same decision at some point in the future. It however, reinforced the position in earlier decided cases that Section 35 of the Interpretation Act is applicable to administrative decisions where there is no specific provision made in a particular statute to alter or retract a decision.

There was an attempt by the Appellant’s lawyer to rely on the principles that an earlier decision of the Supreme Court in?South Seas Tuna Corporation Limited v. Betty Palaso as Commissioner General, Internal Revenue Commission and Anor?(2019) SC 176 had set out (“nullity” and the “contextual” exceptions under the doctrine) , however the Court considered those principles enunciated in the South Seas case to be ‘obiter’ or mere observations and therefore not binding.

[1] See https://www.paclii.org/pg/cases/PGSC/2024/54.html

[2] See https://www.paclii.org/pg/cases/PGNC/2023/108.html