Former federal environment minister Josh Frydenberg has defended setting up a departmental meeting for fellow minister Angus Taylor in March 2017 on laws to protect critically endangered native grasslands when he knew that Taylor had an interest in a company that was under investigation for breaching those very same laws.

Frydenberg backed Taylor’s version of events, namely that Taylor had told the then-environment minister about his personal interest and that of his family when he requested the meeting.

“I became aware when he asked me for a meeting,” Frydenberg told Patricia Karvelas on ABC Radio National on Monday evening.

“He was very upfront. And he said that there was a family company which was subject to a compliance issue. And that he had an indirect interest in that company. But he was seeking a meeting on the technical aspects of the listing and in those circumstances, as is appropriate, would there [not] be any discussion of the compliance issue.”

Asked whether the approach from Taylor “had rung alarm bells”, Frydenberg responded that the “key component was that the meeting itself was only about the technical aspects of the listing”.

Taylor had constituents who had been concerned about the listing of those grasslands as critically endangered and there had been confusion around compliance with that law, he said.

“So it is only relevant and only appropriate that in relation to the technical aspects of that listing, which the officials made very clear, that this was about, that he had that briefing. You would expect him to be advocating on behalf of constituents,” Frydenberg said.

Guardian Australia has revealed that Taylor had sought briefings from Frydenberg’s department the day after compliance officers met with officers of Jam Land Pty Ltd over an alleged contravention involving poisoning of native grasslands near Delegate in southern New South Wales in late 2016.

One of the directors of Jam Land is Richard Taylor, the minister’s brother, and Taylor himself has an interest in the parcel of land, via his family investment company.

Officials have confirmed to the Senate that the only compliance action in relation to clearing of grasslands for agriculture at the time was the Jam Land case.

Taylor said on the weekend that he had disclosed his interest in the Jam Land and the existence of the compliance action to Frydenberg and that by doing had met his ministerial responsibilities.

Frydenberg has now confirmed Taylor’s version of events.

Documents obtained by the Guardian reveal the department was acutely sensitive to the issue of the compliance action when Taylor asked for a briefing, which took place about two weeks later in Taylor’s office in Parliament house. Departmental officials and a compliance officer attended. No notes were taken, the department has said

After the meeting someone in Frydenberg’s office asked for advice about whether the grasslands listing could be changed, but they were advised that any such decision would need to be made public and would go against the recent scientific advice.

Frydenberg insisted that his officials had told the Senate that it “was absolutely appropriate for Angus Taylor to do that [seek the briefing]” and the Labor party was “hyperventilating over this issue”.

“We have seen from subsequent documents released under FOI and in testimony to parliamentary hearings by the Department of Environment officials, that at no stage was the compliance matter discussed. And the last thing I want to make very clear, Patricia, that the grasslands were elevated to critically endangered and they remain at the level” Frydenberg said.

But Labor’s shadow environment minister, Terri Butler, said Taylor had failed in his obligations to properly disclose his interests in accordance with the parliamentary requirements and his obligations under the ministerial standards.

“It’s clear also from the revelations that we’ve had this weekend in relation to this scandal, that both minister Taylor and treasurer Frydenberg have questions to answer,” Butler said.

“Why did minister Frydenberg have his ministerial office arrange a meeting for minister Taylor with environment department officials, including an explicit request for a compliance officer, to talk about how the grasslands could be delisted?

“Why is it that under this government, if you’ve got a mate who is a minister, you get access to the department that is presently investigating the property in which you have a direct and personal interest?”