North Parramatta Residents’ Action Group Inc v Infrastructure New South Wales (No 2)

1. [1]

   BATHURST CJ: I agree with the orders proposed by Basten JA and with his Honour’s reasons.

2. [2]

   BASTEN JA: On 11 February 2021 the Minister for Planning and Public Spaces consented to a development application made by Infrastructure NSW (“the proponent”) for the construction of a large cultural and educational facility on the banks of the Nepean River in central Parramatta. The building was to house the Powerhouse Museum at Parramatta, to be known as “Powerhouse Parramatta”.

3. [3]

   On 22 March 2021 the appellant, North Parramatta Residents’ Action Group Inc, commenced proceedings in the Land and Environment Court seeking a declaration that the consent was invalid because an Environmental Impact Statement (“EIS”) which accompanied the application failed to comply with essential requirements prescribed by the Environmental Planning and Assessment Act 1979 (NSW) (“Planning Act”) and the Environmental Planning and Assessment Regulation 2000 (NSW) (“Planning Regulation”). On 16 June 2021 the Land and Environment Court dismissed the appellant’s application. [1] On 22 June 2021 the appellant lodged an appeal from that judgment. The appeal was heard by this Court on 2 July 2021.

4. [4]

   The factual matter at the heart of the dispute was the removal from the development site of a two storey Italianate sandstock house known as “Willow Grove” built in the 1870s. It was common ground that the house had local heritage value as the only remaining building of its type and vintage in the central business district of Parramatta. Although the proponent accepted that a row of terraces identified as St George’s Terrace, which had been slated for demolition, could be preserved without significantly compromising the scope of the proposed development, it considered the retention of Willow Grove was not feasible. It denied that its EIS failed in any material respect to comply with the statutory requirements. The Minister also appeared to defend his decision, although he was not responsible for the form or content of the EIS.

5. [5]

   In order to address the issues raised on the appeal it is necessary to set out the relevant statutory provisions. It should be said at the outset that the Court has no jurisdiction or power to consider the merits of the proposed development, nor the contents of the EIS, except to determine if it complied with the applicable legal standards. Similarly, the Court has no jurisdiction or power to consider the merit of the Minister’s decision to grant consent to the development application. The parameters of the appeal are limited to determining whether the proponent breached any essential legal requirements in the preparation, and publication, of the EIS and, if so, whether that invalidated the Minister’s consent.

Legal principles

1. [6]

   The development application for the construction of Powerhouse Parramatta was characterised as “State significant development” within Sch 1, cl 13 of the State Environmental Planning Policy (State and Regional Development) 2011 (NSW). The relevant qualification was that the development involved “information and education facilities, including museums and art galleries” having a capital investment value in excess of $30 million: cl 13(1)(d); Planning Act, s 4.36(4).

2. [7]

   Part 4 of the Planning Act is headed “Development assessment and consent.” Pursuant to s 4.5, the “consent authority” for State significant development is, relevantly, the Minister allocated pursuant to s 2.1 of the Planning Act, who is the Minister for Planning and Public Spaces. Section 4.38 provides for the consent authority to determine a development application in respect of State significant development by either granting consent, with modifications or on such conditions as the consent authority may determine, or by refusing consent.

3. [8]

   Further, s 4.12 of the Planning Act provides:

4. [9]

   Part 4 of the Planning Act also provides for regulations to be made, both generally for the purposes of giving effect to the Act (s 10.13) and specifically with respect to State significant development in s 4.39, which provides:

5. [10]

   Schedule 2 to the Planning Regulation is concerned with environmental impact statements. Schedule 2, Pt 2 applies to environmental impact statements prepared for the purposes of two provisions of the Act, including, relevantly, s 4.12(8), set out above. It first requires that a “responsible person” obtain from the Planning Secretary a statement of “environmental assessment requirements”, pursuant to cl 3. The term “responsible person” is defined in cl 1 to mean “the applicant or proponent responsible for preparing an environmental impact statement”. Clause 3 states:

6. [11]

   Schedule 2, Pt 3 identifies “General provisions” applicable to an EIS, both as to form and content, relevantly as follows:

7. [12]

   The focus of the applicant’s case was upon cl 7(1)(c) and the requirement for an EIS to include an analysis of “any feasible alternatives” to the carrying out of the development. However, it is also important to have regard to the environmental assessment requirements, to which cl 7(1) is subject, pursuant to cl 7(2).

8. [13]

   The Planning Secretary provided environmental assessment requirements (referred to in the proceedings as the “SEARs”), which relevantly included:

9. [14]

   The reference to “the design process” and “alternative schemes” potentially covered similar territory to that covered by cl 7(1)(c), but without reference to “feasible” alternatives and with specific reference to Willow Grove and St George’s Terrace.

10. [15]

    It is then necessary to turn to the Parramatta Local Environmental Plan (“Parramatta LEP”). At least in this Court, there was no dispute that the development was subject to controls imposed by the Parramatta LEP. Curiously, however, in the judgment below there was no reference to the Parramatta LEP, except as the source of the characterisation of Willow Grove and St George’s Terrace as items of local heritage significance. The LEP was, however, of fundamental importance in another respect. It required that the design of the proposed building be the subject of a competition, to be judged by an independent jury (that is a jury of persons independent of Parramatta City Council, the Minister and the State government) which was to select a winning design. The Powerhouse Parramatta project was the subject of an international design competition, but the winning design did not permit the retention of Willow Grove, nor St George’s Terrace. It was that design which was (subject of a variation with respect to St George’s Terrace which will be considered below) accepted by the Minister as the basis of the development which was approved.

11. [16]

    The key provision in the Parramatta LEP was cl 7.10, which relevantly stated:

12. [17]

    As noted above (and will be discussed further below) a competitive design process was held, so that the prohibition in cl 7.10(5) was not engaged. However, the power to grant consent was also limited by cl 7.10(3) which required the consent authority to form an opinion as to whether the proposed development “exhibits design excellence”. This phrase was defined in sub-cl (9), which has two limbs. It is necessary that each be satisfied. However, the drafting gives rise to numerous difficulties.

13. [18]

    The first difficulty is that the defined phrase is not precisely the phrase which appears in any part of cl 7.10 (other than in the second limb of the definition). The defined phrase should be understood in the following way: “exhibits design excellence, in relation to a building or alteration to a building, means…”. Secondly, the second limb (as to the satisfaction of the consent authority) uses the defined phrase; if the definition were to be read into the second limb, that might literally lead to an infinite set of iterations. Even if that outcome is avoided, it is arguable that reading the definition once into the second limb requires that the consent authority be satisfied as to the two limbs. However, even that approach is unlikely, because the first limb requires that the design be the winner of the competitive process and it would make little sense to require that the consent authority be satisfied as to that fact. Accordingly, the preferred reading is that (i) the design must be the winner and (ii) the consent authority must be satisfied that it exhibits design excellence. Thirdly, when one reads the definition into the substantive provision, namely sub-cl (3), the consent authority is again required to be satisfied that the design was the winner. Fourthly, the consent authority is required to form an opinion as to its own state of satisfaction.

14. [19]

    The poor drafting does not affect the significance of the clause for present purposes. That significance lies in the fact that no design other than the winner of the competitive process could found a valid development consent. This in turn limits the significance of the requirement in the Regulation, and in the Secretary’s requirements, for an analysis of alternatives.

Grounds of appeal

1. [20]

   It is convenient to set out in full the grounds of appeal, which reflected the case run before the primary judge:

2. [21]

   These grounds worked coherently. Thus, the thrust of grounds 1(a) and (b) and 3(a) was that the primary judge treated the “statement of the objectives of the development”, required to be included in the EIS by cl 7(1)(b) as a statement of the proponent’s objectives, as defined by it. Those objectives might be stated with a degree of precision which did not allow for there to be any feasible alternatives to the carrying out of the development, having regard to its objectives, requiring analysis under cl 7(1)(c). The result of applying that construction, in the present case, was to deny the existence of any feasible alternatives, either to the choice of the site upon which the development was to take place, or as to the choice of the design which excluded retention of Willow Grove. That result was reflected in grounds 2 and 3. If, properly understood, the EIS did not comply with either cl 7(1)(c) or the Regulation, or cl 3 of the SEAR, or both, it did not constitute a valid EIS for the purposes of s 4.12(8) of the Planning Act and the consent given by the Minister on 11 February 2021 was therefore invalid: ground 4.

3. [22]

   Infrastructure NSW filed a further amended notice of contention containing two grounds on which it submitted that the judgment below should be upheld, additional to the reasoning relied upon by the primary judge. The first was that any failure of the EIS to meet the requirements of the Planning Act and the Planning Regulation did not result in the invalidity of the consent; the second was that the EIS did in fact comply, or substantially comply, with the requirements of the Regulation and the SEAR “to analyse alternative sites and to outline the design process which informed the proposal.”

Validity of environmental impact statement

1. [23]

   The appellant submitted that the reference in cl 7(1)(c) of the Planning Regulation to “having regard to its objectives” conditioned the required “analysis” and not the existence of “feasible alternatives”. Two implications followed. The first was that alternatives could be hypothesised without having regard to the proponent’s objectives for the development; the second was that the primary judge incorrectly had regard to the proponent’s objectives in determining whether or not there were feasible alternatives to the proposal.

2. [24]

   The language of cl 7(1)(c) does not allow for distinctions of this kind. First, the phrase “having regard to its objectives” does not condition either the concept of “analysis” or that of “alternatives”. Rather, the words “its objectives” refer to the immediately preceding phrase, being “the development, activity or infrastructure”, the objectives of which are required to be stated in the EIS by the immediately preceding clause, cl 7(1)(b). The statement of objectives should provide explanations as to why the proposal took the form it did. Secondly, the concept of “feasible alternatives” is not a term of art. Whether an alternative is “feasible” identifies a standard or measure to be applied to the exercise. It is likely that feasibility will be assessed having regard to the objectives of the proposal. Thirdly, the concept of “alternatives” is generic. In its context, it may refer to any variation in the form of the development, or the manner in which it is proposed to be carried out, which may have a different or more limited effect on the environment. The subclause requires that such variations to the proposed design are to be identified and analysed. Because the proponent may have made a choice in relation to some elements of the proposal, it will commonly be the case that the analysis will constitute an explanation as to why a particular option was adopted and not another, or will seek to justify an environmental impact, or minimise the seriousness of the impact.

3. [25]

   The appellant’s submission that the objectives can only inform the analysis and not the identification of feasible alternatives should not be accepted. A finding that the objectives precluded adoption of a particular alternative cannot, of itself, demonstrate error of law.

4. [26]

   Further, there was a separate question to be addressed, namely whether the construction of cl 7(1) could properly be undertaken without consideration of the Secretary’s requirements to which cl 7(1) is “subject”: see cl 7(2).

5. [27]

   The phrase “subject to” is one of a kind intended to indicate which of one or more provisions should prevail in circumstances where each may apply. The phrase says nothing, however, as to whether a conflict exists, but only which is to prevail in the event of conflict. [2] Further, the phrase “subject to” may be uncertain as to whether one provision may modify another generally, or only by way of subtraction or expansion. The intended effect may be coloured by the fact that a regulation is conceding priority to a departmental “requirement”.

6. [28]

   In the present case, the particular requirement of the Secretary was quite specific, cl 3 requiring that the EIS address (to use a neutral term) “any designs which could have retained Willow Grove and the St George’s Terrace”. Clause 3(8) of the Regulation, Sch 2, requires that the proponent ensure that the EIS complies with any requirement of the Secretary. Accordingly, and relevantly for present purposes, compliance with cl 3 of the EAR may have sufficiently covered the substantive issues which the appellant sought to have addressed in the EIS. Clause 3 provided specificity, thus arguably expanding the requirements of cl 7(1)(c), without conflicting with them. If so, the operation of cl 7(1)(c) will be of limited significance; if, on the other hand, the EAR is seen to modify or vary the obligation under s 7(1)(c), the EAR will prevail.

7. [29]

   Independently of the challenge to the construction of Sch 2, cl 7(1)(c), ground 3(a) asserted error on the part of the primary judge in failing to hold that the EIS was required to include an analysis of any feasible alternative sites for the development, “because there was no feasible alternative site….” However, the finding by the primary judge involved two conclusions namely, first, that there was no obligation to investigate alternative sites and, secondly, if the first conclusion were wrong, then, as a matter of fact, there was no feasible alternative site. [3]

8. [30]

   The first limb of the judge’s conclusion was correct. The short point is that the development application sought planning approval for a proposed development on particular land: the choice of the land was no part of the proposal. As the first respondent observed, the site for a development is fixed prior to the application process. Indeed, the need for consent turns on the identification of specific land which will be zoned in a way which permits certain development only with consent, thus creating the need for the application for consent. The choice of the site was an antecedent step, not subject to review by the consent authority.

9. [31]

   It follows that there was no basis for reading cl 7(1)(c) of Sch 2 to the Planning Regulation as requiring the proponent to identify and address alternative sites. The question for the consent authority was whether a proposal which involved the removal of Willow Grove should or should not be approved. That was the issue (relevantly for present purposes) which was to be considered in the EIS.

10. [32]

    In fairness to the appellant, it should be observed that the first respondent, as the proponent of the development, invited this challenge. Paragraph 1.3 of the EIS identified the objectives of the development; paragraph 1.4 was headed “Analysis of alternatives”. Paragraph 1.3 may be understood as being provided in compliance with Sch 2, cl 7(1)(b) to the Planning Regulation; by the same logic, cl 1.4 may be seen as a response to cl 7(1)(c), requiring an analysis of any feasible alternatives. Paragraph 1.4 identified three options, option 2 being “Alternative location”. It commenced:

11. [33]

    The reader might well find in this description a justification for the choice of the site, but no attempt to consider any actual alternative location. Although par 1.4 identified the fact that the site had already been selected, to a lay person it invited a challenge on the basis that it purported, but failed, to comply with the requirements of cl 7(1)(c) with respect to location.

12. [34]

    Understandable as the challenge may have been, for the reason noted above, it must be rejected.

13. [35]

    There is a final matter to be noted in relation to this ground. In considering whether there was “an obligation to consider alternative sites”, the primary judge stated:

14. [36]

    Ground 3(b) requires an analysis which differs from that for ground 3(a). The complaint is that the EIS contained no consideration of an alternative design which did not involve the removal of Willow Grove. The judge accepted that that there was no such consideration, but found that its absence was justified, because there was no feasible alternative to be considered.

15. [37]

    The appellant contended that the primary judge was factually wrong in stating that there was no feasible alternative. It was known that one of the six designs which were shortlisted for consideration by the jury involved the retention of Willow Grove. Although the detail of the design was not in evidence, and it could not be known whether the alternative design compromised other essential requirements of the development, it was sufficient for the appellant’s purposes that the alternative was not addressed in the EIS.

16. [38]

    However, on one view, there was no alternative design, because the only permissible design was the one selected by the jury as the winner of the competitive process. As noted above, cl 7.10(3) of the Parramatta LEP prohibited consent to any development which did not exhibit design excellence, by being the winner of a competitive design process.

17. [39]

    Whilst correct so far as it goes, that conclusion does not provide a full answer to the appellant’s case. Although the proponent could not put forward a development other than one based on the winning design, there were three courses open to the consent authority in dealing with such an application. First, if the consent authority were not itself satisfied that the proposed development exhibited design excellence, it was required to withhold consent. Secondly, it could grant consent unconditionally. (Whilst that is a theoretical possibility, development consent is never granted unconditionally; in practical terms such a case would constitute complying development which does not require consent.) Thirdly, the consent authority could grant consent but impose conditions. That was the step taken in the present case. It should be accepted that the existence of a feasible alternative to the design proposed by the proponent (even though the proponent could not have proposed a development which included such a design) may inform a decision whether or not to grant consent, having regard to the breadth of the factors to be considered under cl 7.10(4) of the Parramatta LEP, and if granting it, the appropriate conditions to be imposed.

18. [40]

    It may also be accepted that the prohibition on granting a consent for a development proposal, other than one where the design is the winner of a competitive design process, does not preclude the possibility of any variation to the design. In the present case the footprint of the original design precluded the retention of St George’s Terrace. Nevertheless, a reduction in the footprint of the building was negotiated following the expression of public concerns in the course of the public exhibition of the EIS, which led to the retention of St George’s Terrace. However, whatever the limits of permissible variation, there was no evidence before this Court to suggest that a legitimate variation of the winning design could have prevented the removal of Willow Grove. Willow Grove was at the centre of the site and in the path of a “Civic Link” which was to run between the two buildings, which in turn were linked by a second floor overpass which could not have been constructed without interfering with Willow Grove.

19. [41]

    Assuming that a variation to the winning design was not possible, the only courses open to the consent authority were (i) to grant consent, accepting the design with the loss of Willow Grove, or (ii) refuse consent. To take the latter step of refusing consent would no doubt require that the design process be repeated, in effect with a criterion that Willow Grove be preserved. It may be assumed that the consent authority would not readily adopt that course unless there was evidence that an alternative design, which did not unduly compromise the other objectives of the development, was available. Accordingly, despite the requirement of cl 7.10 of the Parramatta LEP, there was a basis, consistently with the planning process, for the identification of any reasonable alternative to the removal of Willow Grove.

20. [42]

    The Secretary’s requirements were consistent with this reasoning. The requirements, issued on 10 February 2020, post-dated the design competition and were thus formulated with knowledge of the elements of the winning design.

21. [43]

    Infrastructure NSW did not resist this approach. Rather it identified in cl 3 of the EAR two elements, which it said were satisfied. The first was that it “outline the design process which informed the proposal”, which merely involved describing the process undertaken in the international design competition. The second step was said to require an analysis of the benefits and impacts of the chosen proposal “and any alternative schemes considered”. It was said that the EIS satisfied each of these requirements.

22. [44]

    These submissions must be dealt with separately. First, the breaking up of the requirement into separate parts was apt to mislead. What was required in outlining the design process included the matters which followed in cl 3. Further, to give some limited effect to a requirement to “outline” the design process was to ignore the contents of the preceding paragraph of the EAR which dealt with the two elements of design excellence in the following terms:

23. [45]

    Given what was required by cl 2, it is clear that the requirement in the first paragraph of cl 3 to “outline the design process which informed the proposal” was not intended to be a mere repetition of what had already been required. Rather, it required an outline which identified the matters which followed, namely a justification and analysis of the benefits and impacts of the proposal and any alternative schemes considered. The latter included “any designs which could have retained Willow Grove and the St George’s Terrace”. If the proponent were contending that it had not “considered” any alternative scheme, perhaps because it was bound by the jury decision, that approach would deny effect to the concluding words in the requirement. An alternative scheme which retained Willow Grove was considered by the jury; it is patent that that was the consideration which the Secretary had in mind.

24. [46]

    The clear intention of these requirements (including cl 2) was that the public be informed of how the competitive design process operated, including the design competition brief so that it would be apparent what weight was to be given to the retention of the local heritage buildings on the site, knowing that the winning design did not include their retention.

25. [47]

    It is necessary then to turn to the reasoning of the primary judge with respect to this issue. That reasoning referred in several sections to Appendix B to the EIS which was entitled “Architectural Plans and Design Report”. This document bore the date 4 May 2020 and described itself as a report supporting the development application and providing an overview of the development proposal. It was based upon the winning design. It included various references to “pedestrian connectivity” and the pathway of the “Civic Link”, being a pedestrian way extending from Phillip Street (with access to public transport) through to the river frontage, which allowed pedestrians to move from one to the other without walking along footpaths on the main roads leading to bridges across the river. It was described as a “north-south pedestrian link, located between Church Street and Wilde Avenue along the alignment of Horwood Place. It provides the future primary access route between Parramatta train station and Powerhouse Parramatta and establishes a strong, physical, visual and symbolic connection between the city and Parramatta River.”

26. [48]

    The Civic Link was identified in a framework plan prepared in 2017 by the City Council. Using this feature as a critical element in the plan, the judge stated:

27. [49]

    With respect, this reasoning assumes its conclusion. It states that the development proposal has a pedestrian thoroughfare running north-south across the site between the two buildings which will house the museum; because the thoroughfare runs across the footprint of Willow Grove, there are “no feasible alternative designs for the project which would permit the retention of ‘Willow Grove’”. That reasoning cannot be accepted, on two grounds. First, it does not appear that there was any essential requirement of the competition brief which required a plan of that kind. Indeed, as at least one alternative which was shortlisted envisaged the retention of Willow Grove, there is no reason to suppose that retention of Willow Grove was inconsistent with the competition brief to which the designs were required to adhere. Further, the competition brief itself, as noted by the primary judge at [315], stated:

28. [50]

    Secondly, the judge did not refer in this aspect of his reasoning to cl 3 of the Secretary’s requirements. As noted above, at the time that document was produced, the design process was complete and the winning entry had been identified. The requirement to include, in outlining the design process, “any designs which could have retained Willow Grove” could have content only if it was referring to possible designs other than the winning design which formed the proposal. As cl 3 implicitly recognised, one adverse impact of the proposal was the removal of Willow Grove; to require reference to designs which could have retained it was self-evidently a requirement to look beyond the proposal itself. Further, the reference to “any designs” in the context in which it appears can best be understood as referring to designs which were the product of the competitive design excellence process. It was significant that the Secretary used the term “designs”, rather than “feasible alternatives”.

29. [51]

    It follows that the judge did not address the question as to whether the Secretary’s requirements were met, as opposed to whether there was compliance with cl 7(1)(c) of Sch 2 of the Planning Regulation. Accordingly, it is necessary for this Court to address that issue. However, before turning to that question, two further matters should be noted.

30. [52]

    It is clear from the foregoing that the primary judge adopted the approach that the objectives of the proposal and what were “feasible alternatives” were to be determined by the proponent, and not by the Court. That issue should now be addressed.

31. [53]

    The bulk of the judgment below involved the setting out of the submissions of the parties: it was not always clear if, or to what extent, the submissions were accepted or rejected. Thus, while noting that the applicant sought to distinguish the use made by the respondent of a particular case, and setting out the submissions of the respondent, there was no express finding as to which was correct. Relevantly for present purposes, the respondent relied, both before the primary judge and on appeal, on the reasoning of this Court in Prineas v Forestry Commission of NSW. [4] The passage relied upon concerned a challenge to an environmental impact statement for non-compliance with cl 57(2)(h) of the Environmental Planning and Assessment Regulation 1980 (NSW), which was the predecessor to Sch 2, cl 7(1)(c) to the Planning Regulation. Hutley JA stated at 164-165:

32. [54]

    It is by no means clear that this reasoning applies with equal force to the current legislative regime. Clause 7 in Sch 2 does not direct what a proponent must “specify”; it directs what an environmental impact statement “must … include”. Further, pursuant to cl 6(f), the statement must include a declaration by the person preparing it to the effect that it “has been prepared in accordance with this Schedule”, and that it contains “all available information that is relevant to the environmental assessment of the development”. This is not the language of an obligation satisfied by honest belief.

33. [55]

    No doubt the analysis to be undertaken must be an analysis which satisfies the public purposes of the statement, having regard to the objectives of the proponent. Nevertheless, even that proposition requires qualification in relation to a proposal subject to the design excellence requirements in the Parramatta LEP. Whereas the proponent can specify the parameters within which the design is to take place, it cannot employ the architect, give specific instructions to the architect, nor require changes to the resulting design. It is bound by the outcome of the competitive process and, if dissatisfied with the winning design, can only withdraw its application. Accordingly, except at a high level of generality, the objectives of the development are a consequence of the accepted design, and not the objectives which created it. Thus, if a civic walk is to be included in the design, the nature of the civic walk and its precise location will be a product of the design: the proponent’s objective will be a civic walk, not the civic walk proposed by the winning design. Further, it is by no means clear that, because a proponent considers an alternative to be infeasible, the alternative can therefore be ignored. The hypothesis contains the assumption that the proponent has identified an alternative means of carrying out the development in order to assess its feasibility. It is at least arguable that cl 7(1)(c) requires the analysis which would demonstrate infeasibility.

34. [56]

    In any event, it is clear that the reasoning in Prineas was not directed to construing the specific requirements imposed by the Secretary in this case.

35. [57]

    The judge’s reasoning with respect to alternative designs relied in part upon information appearing in the proponent’s “Response to Submissions Report”. That raised an issue as to whether the EIS was to be assessed in its original form, when placed on public exhibition, or whether account could be taken of the response prepared to the submissions and objections received from the community, the response itself being made publicly available. Could any deficiency in the original EIS be cured by the later response?

36. [58]

    There are two factors to be taken into account in considering this issue. The first is that the response to submissions was published on 8 October 2020 and further submissions were received up until 21 December 2020. In the meantime, on 2 November 2020 the proponent had provided a response to a request from the Department in relation to the retention of St George’s Terrace. That response was made available on the Department’s website on 16 November 2020. A further request was made by the Department for responses to public submissions, the responses being published in late December and early January 2021. On 21 December 2020 the Department requested that the proponent provide a consolidated response to all the submissions, which it provided to the Department on 19 and 20 January 2021. That material was made publicly available on 21 January 2021. Clearly there was no opportunity for the public to be involved at that stage, as the Departmental Assessment Report was completed shortly thereafter and the Minister made his decision on 11 February 2021.

37. [59]

    The second matter concerns what might be seen as the dual functions of the EIS. An EIS is required for a State significant development in order to allow for an element of public participation in the decision-making process. For that reason the EIS is put on public exhibition, in this case for 42 days. The second purpose is to allow for the consent authority to be informed as to the detail of the proposal and the public response to it. There is no doubt that, for the latter purpose, steps taken after the public exhibition of the EIS may be of significance. However, the appellant’s case was that the validity of the EIS is to be assessed at the earlier stage when the public has a statutorily prescribed minimum period within which to consider the EIS and raise objections to, or make submissions in support of, the proposal.

38. [60]

    Prineas considered the proponent’s obligations as imposed by the Act (now the Schedule to the Regulation). There is an added factor in respect of the Secretary’s requirements. Although the Regulation requires compliance with the Secretary’s requirements, there is every opportunity for the Secretary himself or herself to intervene if not satisfied that the EIS has addressed the requirements adequately. That circumstance gives rise to two possible inferences. The first is that if the Secretary does not intervene prior to the end of the public exhibition period, it should, arguably, be inferred that the Secretary had identified no material failure to comply with his or her requirements. Secondly, it may also be inferred that the drafter of the Schedule to the Regulation did not intend that a failure to comply with the Secretary’s requirements, in the absence of any complaint from the Secretary, would lead to invalidity of the EIS. That is an issue to which it will be necessary to return if the Court is satisfied that there was a breach of the requirements of the Regulation.

Did the EIS comply with the relevant requirements?

1. [61]

   For the reasons set out above, the primary judge was in error in failing to consider whether the EIS complied with the Secretary’s requirements. As those requirements arguably had a broader coverage, although particular to the circumstances of the case, and were mandatory, it is necessary to consider whether the EIS complied with them. One submission made by Infrastructure NSW to the primary judge was that there were hundreds, if not more than a thousand, submissions received in response to the EIS which addressed the heritage issues raised by Willow Grove and St George’s Terrace. It followed, counsel submitted, that the EIS had been highly successful in identifying these issues as matters of public concern.

2. [62]

   The appellant’s answer was, in effect, that the extent of the public concern demonstrated the importance of the public being fully informed as to whether or not there were alternative means of allowing the construction of the museum whilst preserving Willow Grove. If not fully informed as to the real possibilities in that regard, the responses were able to be dismissed by the proponent as a balance between preserving a building of only local heritage significance on one part of the site, as against failing to construct a large modern museum on an ideal location. The consent authority would also have evaluated the submissions in those terms. More information might have allowed a persuasive case in favour of a design which would accommodate both goals, with only minor compromises of the various benefits obtained by the development of the site in the manner proposed.

3. [63]

   It was, of course, true that the jury which judged the design competition had taken those considerations into account; nevertheless, the Parramatta LEP required that the consent authority also make a judgment as to “design excellence”, which needed to take those matters into account. Was the Minister able to answer the question: is there a design which was proposed which might satisfactorily have accommodated the heritage elements? (It might have been thought that there was a mild element of irony in the construction of a museum to house historical and cultural artefacts, the construction of which resulted in the destruction of a locally significant artefact.) As it turned out, St George’s Terrace could be retained, although not by the original design proposal.

4. [64]

   There is no doubt, as the first respondent submitted, that the EIS contained multiple references to the heritage issue. In analysing the options available to the decision-maker, under option 3, being the carrying out of the proposed development, the EIS noted that the consideration of the six shortlisted entries was undertaken by an expert jury whose decision was unanimous, having concluded that “it was not possible to achieve the design ambitions and connectivity while retaining local heritage items”. It was said that “the retention of heritage was considered carefully during the jury process”. [5] As it turned out, those statements should have been qualified in relation to St George’s Terrace. In undertaking a “site analysis” in section 2 of the EIS, the heritage items were noted, as was the “Statement of Heritage Impact” prepared by a consultant which constituted appendix G to the EIS. [6] Willow Grove itself was noted as an item of local significance for historical, aesthetic and representative reasons. Its history and design were noted. It was further stated that “[m]ature trees on the Willow Grove site are also considered to have local heritage significance in association with the building.”

5. [65]

   The Secretary’s requirements were noted in section 5.1 of the EIS, and heritage and archaeology were noted in section 6, headed “Environmental assessment”.

6. [66]

   In section 6.2.2, the onsite heritage involving post-settlement buildings was again addressed, with statements that “it was not possible to deliver on the design ambitions of the brief and deliver connectivity, whilst also retaining local heritage items.” [7]

7. [67]

   Similar statements were to be found in Appendix D, “Design Excellence Report” which included the following statements:

8. [68]

   Appendix G was a detailed “Statement of Heritage Impact”, being a report prepared by consultants. This contained a more detailed response to the Secretary’s requirements. It is not necessary to set out the detail because it is no part of this Court’s function to address the significance of the site, nor whether steps should have been taken to provide for its preservation. However, it may be noted that the report proposed “salvage of significant fabric” of the two heritage buildings, for “re-use and interpretation at the site”. [8] The report provided an assessment of the relative significance of the buildings, both at a local level (significant) [9] , and on a broader level, but their loss was considered to have “a minor cumulative impact on the loss of heritage in the Parramatta area.” [10] The report thus considered the impact of the proposal on the heritage sites, but did not identify any alternative to their destruction, nor did it identify any design which might have permitted their retention.

9. [69]

   With respect to the requirements of cl 7(1)(c) of Sch 2 to the Regulation, the issue in dispute may be viewed in two ways. If viewed from the standpoint of the proponent, there was no “feasible alternative” to the removal of Willow Grove. The proponent was bound to accept the jury verdict as to the winning design, which required the removal of Willow Grove. It ultimately accepted with respect to St George’s Terrace that a setback to the footprint of one of the buildings could allow for the retention of St George’s Terrace. However, there was no evidence to support the view that a variation of similar proportions could have protected Willow Grove.

10. [70]

    Looked at more broadly, there was evidence of a skeletal kind to support the proposition that there may have been a design which, although in some respects compromising the other goals of the project, would have allowed the retention of Willow Grove. That evidence was the bare statement that one of the six shortlisted finalists involved such a proposal. However, no more is known about it. It does not appear on the evidence that any member of the public who took objection to the removal of Willow Grove sought access to the alternative design, nor that any agency, including the Minister’s department sought access to the design. It appears that the Parramatta City Council supported the project, but expressed concerns as to the destruction of Willow Grove. It does not appear on the evidence that the Council sought access to the alternative design. The result is that, if this Court were required to assess whether there was an undisclosed feasible alternative to the winning proposal, there was no evidence before it to demonstrate that there was, in a practical sense, such an alternative, beyond the mere statement that one such design was shortlisted.

11. [71]

    Unless it could be shown that there was a material failure of disclosure in the EIS, the EIS should not be declared to be invalid on that ground. The issue of materiality, in this sense, is not an empty characterisation. The Minister could not have approved the development with an alternative plan; he could only approve the development with the winning design. In circumstances where there was otherwise no significant level of criticism of the winning design, so far as the dispute between the parties in the Court below and in this Court revealed, it might have been unlikely that the Minister would refuse consent with respect to a design which satisfied cl 7.10 of the Parramatta LEP. There was no case presented that there was some constructive failure of duty on the part of the Minister in not obtaining a copy of the alternative design which favoured retention of Willow Grove.

12. [72]

    Finally, as the proponent submitted and the appellant accepted, the authorities support the view that an EIS will not be invalid if there has been substantial compliance with the statutory requirements. Based on a possible failure to comply with the precise requirement of cl 7(1)(c) as discussed above, it could not be said that there was not substantial compliance.

13. [73]

    A different analysis is necessary with respect to cl 3 of the Secretary’s requirements. The Secretary’s requirements were particular and explicit. Where there was known to be a design which included the retention of Willow Grove, it is clear that there was a failure to comply with that requirement. However, as submitted by the proponent, it should not be assumed that such a failure would lead to the invalidity of the EIS. One can assume that the purpose underlying the procedural obligation to request and obtain a statement of environmental assessment requirements from the Secretary (the SEAR) is to ensure that the EIS is not prepared solely by reference to statutory provisions involving a high level of generality; the requirements will include more particular considerations based on the nature of the specific proposal, which the Secretary would have an opportunity to consider.

14. [74]

    There is always a risk that such requirements may prove inappropriate, unnecessary or inadequate. As discussed above, one purpose of the EIS is to provide a basis for public participation in the planning process; another, however, is to ensure informed decision-making by the consent authority. Clause 3(9) of Sch 2 to the Planning Regulation provides that the Secretary may waive the requirement of cl 3(1) that the proponent must apply for a statement of environmental assessment requirements. The effect of such a waiver, where granted conditionally upon other requirements being set out, is that cl 7(1) of Sch 2 does not apply: cl 7(3).

15. [75]

    On one view, whether there has been substantial compliance with the Secretary’s requirements should be assessed before the EIS is put on public exhibition. At that stage, it may not be known precisely what aspects of a development are likely to prove controversial, whether public comment will focus on one or two aspects or will cover a range of issues. Further, there were varying degrees of precision to be found in the 10 pages of the Secretary’s requirements in the present case. Under the heading “Statutory and strategic context”, cl 1 of the requirements stated that the EIS “shall address” statutory provisions applying to the development contained in 11 specified environmental planning instruments, and further required that the EIS address “the relevant planning provisions, goals and strategic planning objectives in the documents listed in attachment 1, as relevant.” Attachment 1 contained some 46 documents of varying kinds but noted that the list was “not exhaustive and not all of these guidelines may be relevant”. Thus, although the obligation in cl 1 was stated in mandatory terms, there was likely to be considerable scope for errors of judgment as to what it required.

16. [76]

    It follows that the invalidity of an EIS, based on non-compliance with the Secretary’s requirements, may have to accommodate significant areas of discretion and omission of detail. Finally, the concept of “substantial compliance” is inherently an evaluative exercise. Whilst it is an exercise which must be undertaken by the Court, in a case such as the present where there has been a degree of interchange between departmental officers and the proponent with respect to significant aspects of the development, prior to the preparation of a departmental assessment report for the consent authority, it may be inferred that the Secretary was ultimately satisfied that there has been substantial compliance with his or her requirements. Whilst that consideration may not be determinative, it is a factor which the Court is entitled to take into account.

17. [77]

    Although there was no evidence filed by the proponent in relation to how it understood the first paragraph of cl 3 of the Secretary’s requirements, it may readily be assumed from the references in the EIS that it did not consider there to be any design which allowed for the retention of Willow Grove. Whether that was a correct reading of the Secretary’s requirement may have been open to doubt. For the reasons set out above, the Secretary must be assumed either to have been referring to the specific design which was shortlisted and known to permit the retention of Willow Grove, or to have had something else less formal in mind. The fact that the Secretary must have known that the shortlisted design was not expressly the subject of consideration in the EIS, and did not require any further issue to be addressed either before the EIS was put on public exhibition, or thereafter, suggested that he or she was satisfied with the way in which the issue had been addressed in the EIS.

18. [78]

    There may well be cases in which the demands of informed public participation provided for in the Planning Act will allow the court to conclude that, whatever the Secretary’s views, there was a substantial non-compliance with a specified requirement. However, that is not this case. The requirement to include any designs that could have retained Willow Grove may be understood as permitting the outline of the design process and the justification and analysis of the benefits and impacts of the proposal to include such issues without identifying how they operated in a specific design. Further, if the Minister had wanted more, that could have been sought. As noted above, there was no challenge to the way the Minister dealt with the granting of consent.

Conclusions

1. [79]

   For reasons which do not conform entirely with those of the primary judge, the dismissal of the application was correct. There was no sufficient basis to declare that the EIS prepared by the proponent and put on public exhibition for the required time was so defective as to be invalid. It must be concluded that it substantially complied with all the varying kinds of requirements it was to address.

2. [80]

   The appeal must be dismissed.

3. [81]

   All parties sought costs in the event of success; none suggested that costs should not follow the event. The appellant must pay the costs of the active opponent, the first respondent. However, the first respondent unsuccessfully opposed the interim and interlocutory injunctions; there should be no order as to the costs of the appellant’s notice of motion seeking interlocutory relief.

4. [82]

   The appellant’s case was squarely based on the invalidity of the first respondent’s EIS; it made no separate challenge to any step taken by the second respondent, the Minister. Indeed, as the consent authority, and in circumstances where the proponent actively defended the case, there is much to be said for the view that the second respondent should have filed a submitting appearance, in accordance with The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman [11] and Oshlack v Richmond River Council [12] . In fact, the second respondent limited himself to a supporting role. As this Court explained in Local Democracy Matters Incorporated v Infrastructure NSW (No 2): [13]

5. [83]

   The Minister should bear his own costs of the proceedings in this Court.

Orders

1. [84]

   The Court should make the following orders:

   1. (1)

      Dismiss the appeal from the judgment of the Land and Environment Court.

   2. (2)

      Order that the appellant pay the first respondent’s costs of the appeal other than its costs of the appellant’s notice of motion of 22 June 2021 seeking interlocutory relief.

   3. (3)

      Note that the interlocutory injunction granted pending determination of the appeal expires on the delivery of this judgment.

2. [85]

   LEEMING JA: I agree with Basten JA.