Ashton Coal Operations Pty Ltd v Hunter Environment Lobby Inc

1. [1]

   BEAZLEY P: I have had the advantage of reading in draft the reasons of Macfarlan JA. I agree with his Honour's reasons and with the order he proposes.

2. [2]

   MACFARLAN JA: On 4 October 2012 the Minister for Planning and Infrastructure, through a delegate, approved the appellant’s (“Ashton’s”) South-East Open-Cut coal mine project, subject to conditions. The project is for the extraction of 16.5 million tonnes of coal from land in the Hunter Valley, New South Wales, approximately 12 kilometres north-west of Singleton and near to Camberwell village. Hunter Environment Lobby Inc, the first respondent in this Court and an opponent of the project, subsequently appealed against the approval to the Land and Environment Court under (the now repealed) s 75L of the Environmental Planning and Assessment Act 1979 (NSW) (“EPA Act”).

3. [3]

   After a hearing in the Land and Environment Court, Pain J, by judgment of 27 August 2014, held that approval should be granted subject to conditions to be determined ([2014] NSWLEC 129, “First Judgment”). After a further hearing, her Honour determined what conditions should be imposed upon the approval ([2014] NSWLEC 200, “Second Judgment”). These included the following condition as stated in the Court’s formal order of 17 April 2015:

4. [4]

   Property 129 is integral to both the mining and remediation aspects of the project. It is agricultural land upon which there are significant improvements. The owner is Mrs Wendy Bowman, whom the primary judge described as “steadfastly opposed” to the project (First Judgment [382]).

5. [5]

   Ashton appeals pursuant to s 57 of the Land and Environment Court Act 1979 (NSW) against the imposition of condition 10A(a). An appeal under that section is confined to questions of law. Ashton relies upon the following grounds identified in its written submissions:

6. [6]

   For reasons that appear below, I consider that each of these grounds of appeal should be rejected and that the appeal to this Court should be dismissed with costs.

ASHTON’S MINING PROJECT

1. [7]

   The project as approved will involve seven years of active mining, seven years of reject emplacement and four years of site rehabilitation. It has been designed to proceed in stages, with mining commencing in the north of the area to be mined and continuing towards the south of that area. Property 129 constitutes a significant part of the southern portion of the area and, once mined, will be the site of the final pit void.

2. [8]

   Plans in evidence showing the mining progression indicate that mining will not occur on Property 129 for a period of years. The Environmental Assessment Report of the Director-General of the Department of Planning and Infrastructure, prepared pursuant to (the now repealed) s 75I of the EPA Act, contemplated that mining operations would proceed for two years without the use of Property 129 but that the property would be required in subsequent years.

THE LEGISLATIVE CONTEXT

1. [9]

   The Director-General approved Ashton’s project under the (now repealed) Part 3A of the EPA Act which related to “Major infrastructure and other projects.” The terms of that Part were summarised in Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc [2014] NSWCA 105; 86 NSWLR 527 at [22]-[32]. By reason of transitional provisions it continues to apply to the project the subject of these proceedings. Of present relevance is the Minister’s power under (the new repealed) s 75J(4) to approve a project on such conditions as the Minister may determine.

2. [10]

   Section 75Z(b), which fell within Part 3A of the EPA Act, authorised the making of regulations with respect to approval of projects under that Part, including regulations:

3. [11]

   Clause 8F of the Environmental Planning and Assessment Regulation 2000 (“EP&A Regulation”), made pursuant to (the now repealed) s 75Z, provided:

THE JUDGMENTS AT FIRST INSTANCE

1. [12]

   In her First Judgment, the primary judge summarised the issues to be determined as follows:

2. [13]

   Her Honour addressed these issues as well as Hunter Environment Lobby Inc’s specific contention that “the Court would be slow to grant approval” when Ashton does not own or control Property 129 and that without that control “the project cannot be implemented as environmentally assessed.”

3. [14]

   Her Honour concluded that the absence of such control was not a bar to the project’s approval, referring to EP&A Regulation clause 8F(1)(c) which she described as allowing “lodgement, consideration and grant of a major project application for mining while land is in other ownership” (First Judgment [385]).

4. [15]

   Later, the primary judge said:

5. [16]

   Having weighed the project’s economic benefits against its negative impacts, her Honour concluded that approval should be granted but “subject to adequate conditions about which a number of issues of clarification and possible alteration remain” (First Judgment [530]).

6. [17]

   In her Second Judgment, the primary judge stated that she did not consider that the imposition of a condition that Ashton acquire Property 129 before commencing the project was inconsistent with her First Judgment. Her Honour said that the issues in the two judgments were different, that in the first being whether approval should be given at all, not whether approval should be subject to a relevant condition. Her Honour also rejected the submission that such a condition would be inconsistent with clause 8F(1)(c) of the EP&A Regulation.

7. [18]

   Her Honour referred to the agreed position of Ashton and the relevant Minister that if Mrs Bowman objected to a mining lease over her land, the mining lease would not be granted. She noted that Ashton had obtained a mining lease over part of the proposed project area (not including Property 129) and continued:

8. [19]

   Her Honour gave the following reasons for concluding that condition 10A(a) (previously numbered 10A(b)) should be imposed:

Ground (a): inconsistency between the judgments

1. [20]

   Ashton submitted that the primary judge’s First and Second Judgments were inconsistent because the first treated the private ownership of Property 129 as irrelevant to the project’s approval, whilst the second contradicted that by treating it as relevant in determining what condition to impose.

2. [21]

   I reject that submission. As her Honour pointed out in the Second Judgment, and indeed as [520] of the First Judgment made clear, the judgments dealt with different issues. In the first, the question was whether non-control of Property 129 was a bar to approving the project. In the second, the question was whether the approval should be subject to a condition concerning that property. Accordingly, there was no inconsistency.

3. [22]

   I therefore reject Ground (a).

Ground (b): inconsistency between the condition and clause 8F(1)(c) of the EP&A Regulation

1. [23]

   Like the primary judge, I find no inconsistency between condition 10A(a) (as it is now numbered) and clause 8F(1)(c) of the EP&A Regulation. That clause excepts mining projects from the requirement that the consent of the owner of land on which a project is to be carried out is required for a project application. This prevents mining project applications that are not supported by such a consent from being refused but in my view does not address the question of whether a condition of the grant of such an approval requires such consent, either at the outset or at some later stage in the project’s life. The power of the relevant Minister (and on appeal, the Land and Environment Court) under s 75J to impose conditions on an approval is unconfined. In the absence of authority in the regulation-making power (here s 75Z(b)) to do so, a provision in the EP&A Regulation cannot detract from the breadth of that power and, in any event, clause 8F(1)(c) does not purport to do so. It is concerned with the approval of a project or its modification, not with the conditions to which any such approval may be subject.

2. [24]

   I therefore also reject Ground (b).

Ground (c): misunderstanding of the concept of public interest

1. [25]

   As framed in Ashton’s written submissions, Ground (c) assumed that the primary judge imposed condition 10A(a) for reasons of fairness to the owner (and future owners) of Property 129. In oral argument, Ashton’s senior counsel however implicitly accepted that her Honour’s reason, or at least her primary reason, for taking this course was different, namely, that the condition was effectively required to ensure that the whole of the project as assessed and approved by her Honour would proceed, rather than just some part of it. Ashton argued that imposing a condition for this reason conflicted with the test for determining the validity of conditions stated in Newbury District Council v Secretary of State for the Environment [1981] AC 578 (at 599-600), being that conditions must be for a planning purpose, must reasonably and fairly relate to the development permitted and must not be so unreasonable that no reasonable planning authority could have imposed them.

2. [26]

   The primary judge described her “substantial reason” for imposing condition 10A(a) as the “unassessed environmental impact” that would arise if the condition were not imposed (Second Judgment [13] quoted in [19] above). Her Honour explained that she had assessed the project as a whole and had not assessed its environmental impact were it to be only partially completed.

3. [27]

   An inability to access and control Property 129 would undoubtedly have considerable significance for the project’s performance and environmental impact. First, the property constitutes a large part of the area to be mined. If it is not mined, but other parts of the project area around it are mined, the economic benefits of the project will be different from those assessed by her Honour. Secondly, the property is required, as her Honour described, “to implement the final landform including importantly the final void” (Second Judgment [13]). If the property is not available for this purpose, the project’s environmental impact will likely be significantly different from that which her Honour assessed.

4. [28]

   Moreover, this is a project that is likely, if condition 10A(a) is not imposed, to commence without control over all of the property that it is to be affected being obtained. It is a staged project, not requiring the use of Property 129 in at least its first two years (see the relevant Department’s Environmental Assessment Report referred to in [8] above). Ashton’s written submissions on appeal to this Court recognised the inevitability of mining proceeding prior to Ashton obtaining control over Property 129. They stated that Property 129 “would not be reached by active mining until around Year 3 of the mine’s life …” and that the mine “only encroached on Property 129 at and after around Year 3 of the mine life.”

5. [29]

   In oral argument, Ashton’s senior counsel submitted that there was no basis for the primary judge to conclude that there was a real prospect that Ashton would undertake significant mining operations before obtaining control of Property 129. He submitted, without contradiction, that this Court should assume that Ashton would at all times act honestly and in accordance with the law and said that a quia timet injunction and criminal law sanctions would be available to prevent or deter it from acting otherwise.

6. [30]

   If Ashton embarked on the project without a reasonable expectation of obtaining control over Property 129 such remedies might indeed be available. However, there is no reason to think that it would so act. Rather, it should be assumed, as Ashton argued, that Ashton would act lawfully. Absent condition 10A(a), there is no reason why Ashton should not, and would not, commence and continue the project until the time (two or so years later) that it requires Property 129, so long as Ashton has a reasonable basis for believing that it can obtain that control when required. Ashton’s written submissions referred to in [28] above indicate that it is possible, and indeed probable, that this would occur.

7. [31]

   Considering this, the force of the primary judge’s reasoning becomes apparent. If Ashton mines the project area for a substantial period but, contrary to its expectations, does not obtain control of Property 129, it will not be able to complete the project that her Honour has assessed. Ashton did not seek to contradict her Honour’s statement that it was only the entire project, and not a partial or staged version of it, that she had been asked to, and did, assess. As noted above, without Property 129’s economic contribution (through mining) and its role in remediation, the project would be significantly different both economically and environmentally. The primary judge’s purpose in imposing condition 10A(a) was to ensure that the project proceeded in its entirety. This was a proper and reasonable planning purpose that fairly related to the development approved. It thus conformed with the Newbury test. To use the language adopted in Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [31] it was not “definitely extraneous to any objects the legislature could have had in view.”

8. [32]

   Whilst these conclusions address what her Honour described as her “substantial reason” for imposing the relevant condition, it appears that her Honour also took into account the adverse effect that mining in the project area (before Property 129 was reached) might have on Property 129. The primary judge referred in this context to the possibility, absent the imposition of clause 10A(a), of “mining up to Mrs Bowman’s property boundary with substantial environmental consequences” (Second Judgment [8]). This appears to be what her Honour had in mind in considering “fairness to the current or future owners of Property 129” as relevant to her decision (Second Judgment [12]).

9. [33]

   Whilst a generalised, unspecified, concept of “fairness” to affected property owners is not of itself relevant, that term might (perhaps loosely) be used, as seems to have been the case here, to refer to the environmental impact of a proposed project on adjoining owners. This is a proper consideration.

10. [34]

    Her Honour did not assess the environmental impact of the project on Property 129 in the period before mining reached its boundaries and it was therefore not included as one of the factors she weighed when considering whether to approve the project. Similarly, the relevant Department’s Environment Assessment Report stated that noise impacts on Property 129 in the first two years of mining were not assessed because Property 129 was within the area proposed to be mined (albeit not within the first two years). An assumption was therefore made that Property 129 would be controlled by Ashton from the outset of the project. Condition 10A(a) was designed to ensure that that assumption was made good.

11. [35]

    Ashton’s written submissions on appeal contended that clause 8F(1)(c) of the EP&A Regulation evinced a policy that the absence of the consent of owners of land on which a project was to be carried out was not relevant to whether it was in the public interest that that project be approved or to the terms upon which approval should depend. In my view, such a broad policy is not evident from the terms of clause 8F(1)(c). As I have said earlier, it deals with applications for project approval. I can see nothing in it that precludes an approval authority imposing such conditions as it considers appropriate in the particular circumstances before it. There was therefore no error of law involved in her Honour’s imposition of a condition concerning the ownership of property integral to the project, assuming, as was the case, that her Honour considered that the particular planning circumstances required it.

12. [36]

    For these reasons, I also reject Ground (c).

ORDERS

1. [37]

   As each ground of Ashton’s appeal should be rejected, its appeal should be dismissed with costs.

2. [38]

   GLEESON JA: I agree with Macfarlan JA.