ACM Landmark Pty Limited v Cessnock City Council

Environmental Planning and Assessment Act 1979 s 79C, s 79C(1), s 96(1A), s 96(3), s 96(6) LEGISLATION CITED: Environmental Planning and Assessment Regulation 2000 cl 115 Land and Environment Court Rules 1996 Pt 13 r 14 Protection of the Environment Operations Act 1997

ACM Landmark Pty Ltd v Cessnock City Council [2005] NSWLEC 645 (17 November 2005); Belgiorno-Nettis v Mosman Municipal Council [2004] NSWLEC 731 (24 December 2004); Broad v Brisbane City Council (1986) 59 LGRA 296; Broadwater Action Group v Richmond Valley Council (No 2) (2003) 129 LGRA 401; Grant v Kiama Municipal Council [2006] NSWLEC 70 (22 February 2006); CASES CITED: Ireland v Cessnock City Council (1999) 103 LGERA 285: (1999) 110 LGERA 311; Jonah Pty Ltd v Pittwater Council [2006] NSWLEC 99 (2 March 2006); Krivanek v Blue Mountains City Council (No 2) [2004] NSWLEC 732 (24 December 2004); Kouflidis and Jenquin Pty Ltd v Corporation of the City of Salisbury (1982) 29 SASR 321: 49 LGRA 17; M Dubock Pty Limited v Maroondah City Council (1996) AAT of Vic (1995/33602, W. Barr, member); McCaldin v Newcastle City Council (1983) 10 APA 143

APPLICANT P W Larkin (barrister) SOLICITORS LEGAL REPRESENTATIVES: Thompson Norrie RESPONDENT J B Maston (barrister) SOLICITORS Sparke Helmore

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

1 HIS HONOUR : The applicant, ACM Landmark Pty Limited, has been successful in concluded class 1 proceedings being an appeal under s 96(6) of the Environmental Planning and Assessment Act 1979 ("EPA Act") against the deemed refusal and later actual refusal, by the respondent, Cessnock City Council ("the Council"), of the applicant's application under s 96(1A) of the EPA Act to modify a development consent for a crematorium on land at Nulkaba. 2 The application sought to modify three conditions of the original development consent, namely conditions 2, 4 and 44. These conditions are: "2. The proposed cremation facility shall process a maximum of four hundred (400) bodies per annum.

4. The temperature in the primary combustion chamber shall be maintained above 900°C under oxidising conditions whenever a body is being cremated.

44. Following commencement of occupation, the premises shall operate or trade only between the time stated as follows:

3 The application proposed to modify condition 2 to substitute a figure of 800 bodies for the existing figure of 400. The applicant had originally sought, by letter dated 3 November 2003, a figure of 1600 bodies. This was reduced to 1000 by letter dated 20 October 2004. Then by letter dated 3 June 2005, the applicant further amended the modification application to fix the maximum number of bodies cremated at 800. This number was made after the appeal had been lodged on 20 April 2005. 4 The application proposed to modify condition 4 by substituting for the specific temperature of 900 degrees Celsius, a phrase requiring compliance with the manufacturer's specifications. The proposed modified condition 4 was: "The temperature within the primary combustion chamber shall be maintained at or above the manufacturer's specifications to achieve oxidised conditions whenever a body is cremated." 5 The application proposed to amend condition 44 to extend the trading hours of the crematorium as follows:

". Monday to Friday - 8am to 5pm . Monday to Friday (daylight saving) - 8am to 6pm . Saturday - 8am to 1pm."

The Council's determination of the development application 6 After receipt of the modification application, the Council commissioned an independent air quality expert, Mr John Court, to report on the modification application. Mr Court had been commissioned by the Council to report on air quality impacts of the original development, the subject of the original development application that was determined by the Council by the grant of consent in 2001. 7 At the time that Mr Court originally considered the modification application, the application was still proposing 1600 bodies to be cremated. Mr Court reported to the Council on 30 April 2004 on a risk assessment that had been carried out by air quality consultants engaged by the applicant, Holmes Air Services, and concluded: "The testing undertaken and the consent reports provided indicate that the current operation of the Nulkaba facility is without significant risk to public health, in agreement with the assessment at the consent stage. The facility complies with regulatory emission requirements for non-scheduled premises and would also comply with those for scheduled premises." 8 The reference to "scheduled premises" is a reference to scheduled premises under the Protection of the Environment Operations Act 1997 and the relevant regulations. 9 Mr Court subsequently reported on the modification application in a more detailed report on 19 October 2004. In the executive summary, which is a fair summary of the text of Mr Court's report, Mr Court states: "The cremator is a modern two-stage combustion unit, which has operated for about two years. No gas cleaning equipment is installed. Emissions to the atmosphere have been tested and reported to Council. The premises are in the non-scheduled category under the Protection of the Environment Operations Act 1997.

A review of the emission results indicates that the cremator complies with the Clean Air Plant and Equipment Regulations 1997, for solid particles and soot for non-scheduled premises. Reports by Council officers and observations indicate general compliance with the black smoke regulation. The testing also indicates the cremator would comply with the emission regulations for scheduled premises for mercury, dioxins and hydrogen sulphide, although this is not legally required.

The emission results have also been reviewed against the rates of emission assumed for the health impact study undertaken at the time of consent assessment. Measured emission rates for mercury, dioxins and fine particulate matter (PM10) were less than assumed for the assessment. Consequently the margins of safety for health protection in the vicinity of the cremator are larger than the substantial margins originally assessed, on the basis of this testing.

The proposed fourfold increase in cremations [remembering at this stage the proposal was for 1600 bodies up from the original 400] would result in a fourfold increase in emissions. Exposure to pollutants is proportional to the rates of emission. The safety factors for health protection are far larger than four (4). The health protection levels used in the assessment derive from international bodies, which rely on expert health advice in formulation of the levels.

Consequently, on the basis of the original considerations and assumptions and subsequent testing, no adverse health impacts in the vicinity of the cremator are predicted by the requested fourfold increase in cremation rate from 400 to 1600 per year. The concentrations of pollutants in the emissions would not change and would continue to comply with regulations …

The revised hours of operation would not cause any significant change in impacts of the cremator, other than those addressed due to the increased rate of cremation.

A review of cremation capacity in the Hunter region indicates that the demand for cremation to reach 1600 per year at Nulkaba is likely to be some years away.

If Council were to consider changing the consent conditions for this cremator on planning and legal grounds, it would be prudent to restrict any variation to 800 cremations per year at this time. This exercise of prudence would be on the grounds that emissions of toxic materials from cremators is currently being considered internationally. The situation could then be re-assessed in the future, if another application to extend operation of the cremator beyond 800 per year were to be lodged. The assessment could take account of developments in the management of mercury and dioxins in the environment at that time, as well as the performance of the Nulkaba facility up to 800 cremations per year rate.

Council might also consider a change to condition 4 of the current consent allowing a variation in temperature in the primary chamber": pp. 1-2. 10 In the text of the report Mr Court concluded: "There does not appear to be any sound basis for refusing the application to expand the cremator at Nulkaba at this time, based on the impacts of emissions locally": p. 17. 11 Mr Court recommended that: "(S)hould Council elect to approve the modification of the conditions of a consent, the following matters be incorporated into any approval:

1. Approval to operate up to a rate of 800 cremations per year; 2. Continued requirement to report in the terms of condition 11 of the original consent at yearly intervals; 3. Condition 4 of the original consent be modified to read: 'The temperature in the primary combustion chamber shall be maintained as high as possible, but not less than 700°C, under oxidising conditions, whenever a body is being cremated.' 4. Hours of operation be allowed from 8.30am to 4.30pm Mondays to Fridays, 8.30am to 6pm Mondays to Fridays during daylight saving and 8.30am to 1.00pm Saturdays": p. 18.

12 On 8 December 2004, the Director of Corporate and Regulatory Services of the Council reported on the modification application to the council meeting. The report referred to legal advice that had been obtained by the Council as to whether the proposed modification could be accommodated by an application under s 96(1A) of the EPA Act. The Director summarised the legal advice provided as follows: "The legal advice provided indicated that Council must be satisfied that the proposed amendments are of ' minimum environmental impact ' and that the ' development to which the consent as modified relates is substantially the same development .'

In terms of the environmental impact of the development it is concluded that these will remain relatively unchanged with the only exception being the increase in the number of vehicles drawn to the site due to the increase in the number of bodies to be cremated. The emission levels of the cremation facility will remain below the accepted standards based on the test results and their analysis and there are no other environmental impacts that will arise from an increase in the number of cremations.

With regard to traffic generation any increase in bodies to be cremated will have to be sourced from outside the local area. In these circumstances bodies will be delivered in a single vehicle. As the only traffic generated will be that of single vehicles accessing the site during the course of a day, these movements will have minimal impact on the local road network and therefore the amenity of residents in the nearby village of Nulkaba.

In so far as the amendments are concerned the legal advice obtained provides that it is reasonably open for Council to conclude that as long as the proposed amendments would not change the development in an ' essential or material ' way the development remains the same as that approved. In this case it would be reasonably open for Council to conclude that a comparison between the approved development and that modified would not alter the inherent character of the development - namely the use of the site as a cremation facility."

13 The Director evaluated the modification application having regard to the matters in s 79C of the EPA Act of relevance to the development the subject of the modification application. The Director concluded: "Consideration of the proposed amendments to the consent for the cremation facility has resulted in Council again needing to seek legal and technical advice on matters where it does not have the relevant expertise.

The legal advice provided indicates that it is open for Council to consider the proposed amendments pursuant to Section 96 (1A) of the Environmental Planning and Assessment Act 1979 provided it is satisfied that the amendments are of minimum environmental impact and the development to which the consent as modified relates is substantially the same development.

The technical advice provided concludes that the rates of emission will not change, that the revised hours of operation of the cremator will not cause significant change in impacts of the cremator and that a reduction of the temperature in the primary combustion chamber to a minimum of 700 degrees Celsius will still maintain an efficient and complete combustion during the cremation process.

The technical advice provided also contains precautionary advice based on information from international sources which indicates that tighter controls on toxic emissions from crematoria may be introduced in the future and as a result greater control may also be introduced in Australia.

On the basis of the advice provided and the recommendations available to Council it is recommended that Council accept the advice provided and consent to the amendments:" p 95 of the Agenda.

14 The Director then recommended that the consent be modified by amendments to conditions 2, 3, 4, 11 and 44. The amendment to condition 2 was to accept the recommendation of Mr Court that the maximum bodies be fixed at 800. The amendment to condition 3 was to add further words to deal with the operation of the cremation facility. The amendment to condition 4 was to accept the recommendation of Mr Court that the temperature in the primary combustion chamber shall be maintained as high as possible, but not less than 700 degrees Celsius under oxidising conditions whenever a body is being cremated. The amendment to condition 11 was to substitute for the original recommendation of 6, 12 and 24 monthly reports a requirement that there be a 12 monthly report. The amendment to condition 44 was to accept the proposal by the applicant to extend the hours to 8am to 4.30pm Monday to Friday, 8am to 6pm Monday to Friday when daylight saving is in force and 8am to 1pm on Saturdays. It also clarified that the times referred to did include the times for starting and stopping the cremation unit but did not include a reference to the arrival and departure of staff.

15 On 20 April 2005, the applicant lodged its appeal under s 96(6) of the EPA Act against the deemed refusal of the Council.

16 On 3 June 2005, the applicant amended its modification application to substitute the maximum figure of 800 bodies instead of the original figure of 1600 and the subsequently amended figure of 1000. This brought the application into accordance with the recommendations of Mr Court and of the Director of Corporate and Regulatory Services of the Council.

17 On 6 July 2005, the matter came back before the Council. The Director of Corporate and Regulatory Services reported to the council meeting on 6 July 2005. The Director dealt with the proposal on pages 86 to 88 of the Agenda. The Director noted that the applicant had modified its application to now seek a maximum of 800 bodies. The Director also noted that the applicant sought to clarify that the extended hours of operation did not include the heating up and cooling down phase when bodies are not being cremated.

18 The Director noted the fact that the modification application, including as amended, had been referred to the Council's consultant, Mr Court. The report set out both Mr Court's original assessment on 30 April 2004 and his subsequent assessment on 19 October 2004. The report also referred to the legal advice that had been summarised in the earlier report. The Director dealt with the heads of consideration under s 79C of the EPA Act of relevance to the development, the subject of the modification application. The Director also dealt with the submissions of the residents that had been made in response to public advertisement.

19 In conclusion, the Director set forth the same conclusion that I have set out from his earlier report. This was that the modification should be approved. The Director recommended modifications to condition 2, 3, 4, 11 and 44. The suggested modifications were the same as I have set out from the previous report in relation to conditions 2, 3, 4. There was a variation to the time of reporting for condition 11, still substituting a 12 monthly reporting period for the original 6, 12 and 24 monthly reporting period but clarifying the precise time when the 12 monthly report should be commenced and the time in each year it should be submitted. There was also a variation to condition 44, accepting the applicant's submission that the times referred to in condition 44 do not include a reference to the heating up or cooling down times for the cremation unit or the arrival and departure of staff. There was a further requirement that fan assisted cool down of the cremation unit is to be completed within two hours of the cremation finish time as indicated above.

20 That recommendation was dealt with at the meeting of the Council on 6 July 2005. The Council by majority resolved to refuse the modification application. Five reasons were given for the Council's resolution:

"1. The Development is not substantially the same development as DA8/2000/433/1 and therefore should not have been considered as a S96.1(A)[sic] amendment of the EP & A Act. 2. The size of the operation is not in keeping with the village atmosphere of Nulkaba and that Air Testing was not conducted strictly in accordance with Council's conditions of consent and therefore it is uncertain if there are health risks posed by the operation of the crematorium. 3. There will be an adverse impact on the environment from increased traffic. 4. The proposal conflicts with DCP12 - Nulkaba Small Holdings - and will not be conducive to further development in Nulkaba. 5. The proposal does not take into account the form of existing development and/or development likely to occur in the adjoining zones 2(a) to southern [sic], 1(c) to the west and 5(a) to the south."

21 On 14 July 2005, the notice of determination by refusal was issued.

The Council's statement of issues 22 On 22 July 2005, the Council filed its amended statement of issues in the Court. The issues are quoted in full in paragraph 40 of Commissioner Watts' judgment in ACM Landmark Pty Ltd v Cessnock City Council [2005] NSWLEC 645 (17 November 2005).

23 Issues 1 and 2 go to the power of the Court, exercising the functions of a consent authority, to approve the modification application. Issue 1 was whether the proposed modification was substantially the same development as the development for which the consent was originally granted. Issue 2 was whether the modification proposed in the application is of minimal environmental impact such that the development consent can be validly modified pursuant to s 96(1A) of the EPA Act.

24 Issues 1 and 2 were threshold or jurisdictional issues. If either of these issues were to have been answered in the negative by the Court, there would have been no power in the Court exercising the functions of a consent authority to modify the development consent as originally granted. The Court would never have been able to determine the modification application on the merits.

25 Issue 3 was articulated as being "whether the proposed development will have an unacceptable impact on the character and amenity of the locality and sense of place of the local community?" However, this issue needs to be understood in the context of the particulars that were given for the issue. The particulars were as follows:

"(a) The proposed modified development will lead to a significant increase in the environmental impacts from gaseous emissions from the cremation facility; (b) There will be an increase in traffic in the locality due to the transportation of an increased number of bodies to the cremation facility; (c) There will be an increase in noise generation from the cremation facility as a result of the proposed increase in the amount of cremations and the extended hours of operation over which those cremations will take place; and (d) There will be an increase in odour to surrounding residents as a result of the increase in cremations and the reduction in furnace temperature."

26 That is to say, the Council's case was that the four matters stated in the particulars, if established by the evidence, would result in there being an unacceptable impact on the character and amenity of the locality and the sense of place of the local community.

27 Issue 4 was whether the proposed amendments were consistent with the character of the development in the locality. Again the particulars assist in understanding what was meant by this issue raised by the Council. The particulars were: "(a) The size of the amended operation is not in keeping with the 'village atmosphere' of Nulkaba. (b) The proposed amendments are not consistent with 'Development Control Plan 12 - Nulkaba Small Holdings' and are not conducive to further development in Nulkaba. (c) The proposed amendments do not take into account the form of existing development and/or development likely to occur in the adjoining Zone 2(a) to the south, Zone 1(c) to the west and Zone 5(a) to the south."

So particularised, issue 4 was a straight planning issue.

28 Issue 5 was whether the proposed amendments to the development consent were likely to create an unreasonable and unsatisfactory increase in gaseous emissions from the cremation facility. Yet again the particulars assist in understanding the scope of this issue. Two particulars were given. The first refers only to the emissions of mercury and dioxin. It provides:

"(a) Mercury emissions from crematoria derive primarily from mercury amalgams in dental restorations, which are almost completely volatilised in the combustion process. Any increase in cremation numbers will lead to an increase in mercury and dioxin emissions from the cremation facility."

29 It is to be noted that it is not asserted in this articulation of the particular that there would be an increase of mercury and dioxide emissions beyond acceptable health standards, merely that there will be an increase of mercury and dioxide emissions concomitant with an increase in cremation numbers.

30 The second particular of issue 5 concerning gaseous emissions was as follows:

"(b) Air testing was not conducted by the Applicant strictly in accordance with Council's development consent and therefore it is uncertain if there are any health risks posed by the operation of the cremation facility."

31 This is somewhat of a curious issue having regard to the fact that, by this time, not only had there been submitted with the modification application a further report by Holmes Air Services prepared on behalf of the applicant, but also there had been two reports prepared by the Council's own air quality expert, Mr Court, which had assessed the air testing and the health risk posed and had concluded that both were satisfactory.

32 Issue 6 was whether the proposed development was likely to create adverse traffic impacts for the area and whether those impacts are so unreasonable that the proposed amendment to the development should be refused. The particularisation of this issue was as follows:

"(a) The proposed development will increase the vehicle movements to and from the site due to the increase in the number of cremations. The applicant has not adequately assessed traffic issues associated with the increased volume of traffic in the vicinity of the site."

It is to be noted that there is no articulation in the particular about the route that traffic, including hearses, might take. This subsequently became a matter which was addressed by a condition of consent. However, it was not articulated as an issue at this stage.

33 Issue 7 dealt with the issues raised by objectors. Fourteen issues were enumerated by the Council. The formulation of these issues suffers from a number of defects.

34 Firstly, a number of the issues raised in issue 7 as being issues raised by objectors, are repetitive of issues that had already been raised by the Council in earlier issues. For example, issues 7.2 and 7.3 raised the threshold or jurisdictional issues under s 96(1A) of the EPA Act raised by the Council in its issues 1.1 and 2.1. Issue 7.4 concerning traffic was similar to that raised more generally by the Council in issue 6.1. Issue 7.5 raised an issue of compatibility with locality which might be thought to fall within issues 3.1 and 4.1 of the Council's issues.

35 Secondly, the Council in issue 7 raised issues that may not properly be raised in a merits review hearing. For example, issue 7.6 refers to past breaches of conditions of consent by the existing development. It is well accepted that past unlawful use is not a relevant issue in determining whether prospective consent should be granted or a modification should be allowed: see Kouflidis and Jenquin Pty Ltd v Corporation of the City of Salisbury (1982) 29 SASR 321; 49 LGRA 17; Ireland v the Cessnock City Council (1999) 103 LGERA 285 and the subsequent decision (1999) 110 LGERA 311; and Jonah Pty Ltd v Pittwater Council [2006] NSWLEC 99 (2 March 2006).

36 Issue 7.10 did not raise an issue that can be raised on a modification application. In any modification application there will be different evidence to that which was put in the original application. If the issue as formulated were taken literally, modification applications would never be able to be made because applicants would be bound by their conduct at the original development application stage. 37 Issue 7.14 did not raise any sensible issue. Obviously any monitoring of the existing development had to be on the basis of the capacity that was then approved, namely 400 bodies. It can be no answer to say that because monitoring was done on the basis of 400 bodies, the results of the monitoring can never be applied to predict the impacts of the proposed development which involves an expansion of the facility. One can extrapolate sensibly from the monitoring data for the existing development. 38 Thirdly, some of the issues raised might be understood as more properly relating to whether development consent should have been granted to the original development rather than to whether the modification proposed should be approved. Issue 7.9 may fall into this category. This issue, as I will explain further, was the issue upon which Mr Maston, counsel for the Council, particularly relied in support of his argument that there was a social impact associated with morbidity by reason of the operation of the existing development and hence any expansion of that development. 39 Fourthly, insofar as the issues raised by objectors supplemented the Council's issues, there was no indication as to whether the Council supported those issues or not, or whether those issues go to matters of condition or not. For example, issue 7.1 raises on its face a question of power, that is that the modification application is invalid by reason of non-compliance with Clause 115 of the Environmental Planning and Assessment Regulation 2000. 40 Issues 7.7 and 7.8 dealt with the temperature of the primary combustion chamber. Issue 7.11 dealt with the impact on tourism by the proposed modification. Issue 7.12 dealt with non-compliance with crematorium guidelines in relation to buffer zones and the height of the emission stack. Issue 7.13 dealt with the alleged inconsistency of the proposed modification with certain planning principles expounded in decisions of the Land and Environment Court, particularly in relation to intensification of use and its impact on residential amenity and its relationship to adjoining zones. 41 As I will explain later, it is no answer to say that ultimately the Council did not press these issues. They were raised as issues that the applicant needed to meet. However, it is not clear on the face on the amended statement of issues whether the Council supported the issues or whether the Council was merely recording the fact that the residents had raised those issues. 42 It can be seen that the articulation of the issues by the Council in its amended statement of issues dated 22 July 2005 goes far further than the Council's reasons for refusal given only a couple of weeks beforehand. The issues also are inconsistent with the evidence that had been provided to the Council by its own air quality expert, Mr Court, and its Director of Corporate and Regulatory Services. This is not to say that the Council cannot take a different stance but it is notable that the issues had been framed at a point when there was not any professional or expert evidence which would support the articulation of the issues made in the amended statement of issues. As I will explain, as the case unfolded, there was never any expert evidence which supported the Council's articulation of those issues. In the end, the Council was forced to rely almost solely on the evidence of the non-expert residents to make its case that there should be a refusal of the modification application.

Council is invited to submit to consent orders 43 On 31 August 2005, the applicant's solicitors, Thompson Norrie, wrote to the Council's solicitors, Sparke Helmore. The applicant's solicitors referred to the Council's refusal of the modification application. As the applicant's solicitors pointed out, such refusal was inconsistent with the professional advice of both the air quality expert, Mr Court, and the Council's Director of Corporate and Regulatory Services. The applicant's solicitors concluded: "The Council's refusal of the modification application can only be regarded as perverse in the circumstances of the provision of these expert reports."

44 The applicant's solicitors then invited the Council to submit to consent orders rather than continuing to oppose the appeal. The applicant's solicitors stated: "If this invitation is rejected and the Council pursues its opposition to the appeal we advise the Applicant will, in the event the appeal is successful on these grounds, seek orders for its costs of the appeal. This letter will be tendered in support of an application for those costs."

45 The Council did not accept the invitation and continued to contest or oppose the appeal. This necessitated the filing and serving of expert evidence.

Expert evidence on appeal 46 For the applicant, there were expert reports by Mr McLean, Mr Welbourne and Dr Holmes. For the Council there were expert reports by Mr Court and Mr Davies. Two court appointed experts were also engaged, Mr Sneddon and Mr Keating. I will deal with each of the expert's evidence. 47 Mr McLean was an engineer who was the manager of sales and technology of a company which was the manufacturer of the cremator. Mr McLean dealt with the engineering aspects of the cremator and concluded that: "An increase in cremations from 400 to 800 per annum as sought is well within the capability of the equipment installed at Nulkaba and would comply with Australian emission standards."

48 Mr McLean accepted Mr Court's earlier recommended modification to condition 4 that the primary combustion chamber be maintained as high as possible but not less than 700 degrees Celsius. He also recommended a further condition to deal with the secondary combustion chamber, namely that the temperature in the secondary combustion chamber be maintained above 850 degrees Celsius. Finally, he recommended a condition dealing with oxidisation to the effect that overall oxidising conditions should exist, as measured at the exit of the cremator: p. 5 of Mr McLean's report of 13 October 2005.

49 Mr Welbourne was an acoustic engineer who prepared a report dated 20 September 2005. Mr Welbourne concluded: "The proposed approval modifications to allow increased annual throughput do not change daytime operating noise levels other than to allow a longer duration in the same period. This is considered an insignificant change in that relatively high levels of road traffic noise dominate the local acoustic environment and because of this cremator noise (full combustion) was difficult to measure at the nearest boundary.

Noise from cooling down of the cremator during the evening period is calculated to be quite low at the nearest residence and compliant with the lowest possible DEC criterion. It is our opinion this activity would be mostly inaudible at all residences ... The proposed increase in operating hours for the existing cremation facility at Saint Patrick's, Nulkaba, does not result in a change to existing daytime noise emissions and, provided cremation ceases at 6:00pm, should comply with an evening criterion derived in accordance with DEC guidelines."

50 Dr Nigel Holmes is an air quality consultant. Dr Holmes had been involved with the earlier proposal for the original development consent and had prepared in October 2000 an air quality and health risk assessment for the original cremator. Dr Holmes was then engaged to deal with the proposal to increase the capacity of the cremator, ultimately from 400 to 800 bodies per year and to increase the operating times. Dr Holmes prepared a number of reports, notably one of September 2005 and a subsequent report of 10 October 2005. 51 It will be sufficient if I turn to the last report of Dr Holmes, namely that of 10 October 2005, because that brings together all of the considerations from the earlier reports. The conclusions expressed in the 10 October 2005 report are the same as had been expressed in earlier reports including the September 2005 report. Dr Holmes concluded as follows: "The modelling assessment has been redone using the emission rates appropriate for the modified consent which would allow up to 800 cremations per year assuming that the cremator could operate between the hours of 8 am and 6 pm. In redoing the modelling I have revised the assumptions so that the appropriate maximum hour emission rate has been assumed to apply for 10 hours per day for 365 days per year. The predicted values for 1-hour averages are not changed significantly from the original predictions because there would never be more than one cremation in an hour, but the modelling assumes that there are 8.6 cremations in a day and that this level of cremation applies for every day of the year. This would allow 3,139 cremations per year. For annual average predictions the values based on 8.6 cremation/day have been reduced by a factor of 3.9 to reflect the limit of 800 cremations per year.

The model results are presented in Figure 3 to 8. None of the predicted concentrations exceed the DEC's current (2005) assessment criteria. The prediction for 24-hour average PM10 concentrations is particularly conservative because it is based on the theoretical emission rate rather than the measured rate which is approximately 1/10th of the theoretical value and it assumes 8.6 cremation in the day, which is the theoretical maximum and the highest predicted concentration lies on land that might reasonably be said to be part of the cremator.

The Council has also objected to the way in which stack emissions testing were undertaken. In my opinion the non-conformance with the testing procedures, which relate to the lack of NATA registration of the tester for some of the tests is not a significant matter. The firm that undertook the testing is experienced in these types of tests and lack of formal registration would not invalidate the results.

This report has reassessed the potential impacts of the Nulkaba Cremator operating under assumed modified conditions of consent and has tested the impacts against new assessment criteria that have been published by the NSW DEC. The model results show that the modified operations would comply with the DEC's assessment criteria for ambient air quality": pp. 6-7.

52 I have dealt with Mr Court's reports earlier in these reasons. As I have indicated, Mr Court advised that there was no sound basis upon which the modification could be refused. He made various recommendations, including that the number of bodies be reduced to 800. By this time, the applicant had accepted that modification. Otherwise there is agreement by Mr Court with the proposal of the applicant.

53 Mr Davies of Sinclair Knight Merz, was also called by the Council. Mr Davies in a report dated 30 September 2005 concluded, from a review of information relevant to air quality impact and health risk associated with increased operations of the Nulkaba cremator as follows: "The initial air quality and health risk assessment provided by Holmes Air Services (HAS, October 2000) which related to 400 cremations per year generally assessed there to be large margins of safety between predicted impacts and relevant criteria with no exceedances of the criteria. While it is expected that increasing the operations to 800 cremations per year would not result in any exceedance either, this expectation cannot be quantified based on the information available.

As such it is recommended that HAS October 2000 air quality assessment be updated to reflect the proposed increased operations at the Nulkaba Cremator:" p. 3.

54 As I have indicated, in quoting from the Holmes Air Services report of 10 October 2005, Mr Davies' recommendation of updating the Holmes Air Services October 2000 air quality assessment was undertaken. As Mr Davies had expected, there still was no exceedance by increasing the operations to 800 cremations per year. So although Mr Davies was being prudent in requesting that there be an updated assessment, he anticipated that the updated assessment would show compliance by considerable margins of safety with relevant criteria, and this is what happened.

55 It can be seen from this summary of the expert evidence that each of the air quality experts spoke along the same lines, namely that the proposed modification would comply with relevant criteria. 56 The air quality experts undertook a number of rounds of joint conferencing in accordance with the Court's Expert Witness Practice Direction. In a joint statement of Mr Davies and Dr Holmes dated 12 October 2005, those experts concluded: "Both Mr Davies and Dr Holmes agree that air quality and health risk impacts of relevant air pollutants have been adequately addressed with respect to up to 800 cremations per year and up to 8.6 cremations per day, and that impacts are considered acceptable."

57 In a joint statement of evidence dated 18 October 2005, Mr Davies, Dr Holmes and Mr Court dealt with the issue surrounding dioxin emissions. They concluded: "The air quality and health risks predicted by Dr Holmes using a dioxin and furan emission concentrations 10 times higher than that measured by ERM is shown to be acceptable when compared with the Department Environment and Conservation (DEC) criteria (2005)."

58 In a joint report dated 18 October 2005, Mr McLean, Dr Holmes and Mr Court made recommendations as to the proposed conditions to reflect their evidence in relation to the combustion process. Finally, in a report by Mr McLean, Dr Holmes, Mr Davies, that does not seem to be dated, they proposed a modified consent condition for testing of the Nulkaba cremator. 59 I now turn to the two court appointed experts, firstly Mr Keating, a traffic engineer and Mr Sneddon, a planner. Mr Keating concluded: "The increased traffic generations, purely associated with the proposal to increase cremations at the subject site from 400 per year to 800 per year has not been assessed as having potential for adverse impact on the road network.

The assessment by TPK has concluded that matters of community concern reviewed for this statement of evidence may relate largely to traffic demands created by events at the nearby land use activity [namely a chapel] rather than the crematorium itself:" p. 9.

60 Mr Sneddon provided a report dated 23 September 2005. Mr Sneddon concluded:

"7.1 In my opinion: . a consent authority could be satisfied, pursuant to section 96(1A)(b) of the Environmental Planning and Assessment Act 1979 (the Act), that the development to which the consent as modified relates, is substantially the same development for which consent was originally granted;

. a consent authority could be satisfied pursuant to section 96(1A)(a) of the Act that the proposed modifications are of minimal environmental impact;

. the proposed modifications will not have an unacceptable impact on the character and amenity of the locality in the sense of place in the local community;

. the proposed modifications are consistent with the character of development within the locality;

. the application contains a description of the proposed modifications such as to satisfy clause 115(1)(d) of the Environmental Planning and Assessment Regulations 2000 (the Regulation);

. the application does not contain a description of the expected impacts of the modifications such as to satisfy clause 115(1)(f) of the Regulation;

. the proposed modifications do not change the physical scale of the facility to 'a large scale crematorium facility';

. the proposal will not result in significant social impacts on the surrounding residential area;

. the proposal will not have an adverse impact on tourism in the locality;

. issues relating to buffer zones and the height of the emission stack have no relevance to the proposed modifications; and

. the proposed modifications are not contrary to 'planning principles handed down by the Land and Environment Court.' 7.2 In summary, I consider that the proposed modifications would result in substantially the same development for which consent was originally granted and that the proposed modifications are of minimal environmental impact and accordingly the development consent could be validly modified pursuant to section 96(1A) of the Environmental Planning and Assessment Act 1979."

61 That is the sum of the expert evidence tendered in this case. As can be seen from the summary above, the expert evidence was all one way and that was in support of the modification application.

Commissioner Watts' judgment 62 Commissioner Watts delivered judgment on 17 November 2005, upholding the appeal and granting the modification application, subject to conditions. Every issue that had been raised by the Council in its statement of issues was resolved in favour of the applicant and against the Council. 63 Commissioner Watts rejected the Council's issues that the jurisdictional or threshold requirements in s 96(1A) of the EPA Act had not been satisfied: see paragraphs 45 and 52. Further, Commissioner Watts rejected the submission made by the Council that the adverse effect on the amenity of the proposed modification, the so called morbidity issue, caused there to be more than a minimal environmental impact: see paragraph 51. 64 Commissioner Watts rejected the Council's argument that there would be an unacceptable impact on the character and amenity of the locality and sense of place of the local community: see paragraphs 51, 52, 59, 84 and 86. Once each of the particulars of impact to issue 3.1 were resolved against the Council, it must logically follow that there would not be an unacceptable impact on the character and amenity of the locality and sense of place of the local community. 65 Commissioner Watts rejected the planning issue of inconsistency with the character of the development in the locality: see paragraphs 87-89. 66 Commissioner Watts rejected the Council's submission that there was an unreasonable and unsatisfactory increase in gaseous emissions from the cremation facility: see paragraphs 57-59. 67 Commissioner Watts rejected the Council's submission that there would be adverse traffic impacts for the area or is there were, that these would be unreasonable: see paragraph 86. 68 In relation to each of these issues raised by the Council, there really was no other decision reasonably open to the Commissioner having regard to the expert evidence that had been adduced. 69 In relation to the issues raised by the residents, Commissioner Watts dealt with these concerns in paragraphs 60 to 86 of the judgment. Commissioner Watts noted, correctly, that many of the residents' concern related to the development as originally approved and not to the modifications: see paragraph 83. The Commissioner rejected the residents' concerns. In particular, Commissioner Watts found the residents' concerns did not have a real or sufficient basis in fact: see paragraphs 51, 83 and 85-86. 70 Commissioner Watts determined that the modification should be approved subject to conditions. Many of these conditions had been recommended by the experts, including Mr Court, right back in 2004. The applicant by and large accepted those suggested conditions. There was one issue that the applicant took issue with in relation to giving directions to drivers as to the route that hearses should access and leave the crematorium. The applicant was concerned that it was not able to control the drivers of the hearses because they were employed by other companies. The applicant was prepared to give a direction to the drivers, but was concerned it could not guarantee compliance. Nevertheless, Commissioner Watts decided to require that the operator should direct the drivers as well as require that the hearses access and leave the premises by a particular route. Other than that, the conditions were largely what had been proposed by others and agreed to by the applicant.

The parties' submissions on costs 71 The Court has benefited from each of the parties preparing and providing to the Court detailed written submissions on costs. I have carefully considered these written submissions. In addition, both Mr Larkin, counsel for the applicant, and Mr Maston, counsel for the Council, have made oral submissions. I have taken those oral submissions into account as well. I do not wish to do disservice to their detailed arguments that have been set out in the written submissions and in the oral arguments. Nevertheless, the arguments can be encapsulated by the following summary. 72 The applicant submitted essentially that the evidence was all one way. Certainly this is true in relation to the expert evidence. None of the expert evidence supported the Court, exercising the functions of the consent authority, refusing the modification application. Insofar as the residents' evidence was opposed to the modification application, the applicant submitted that that evidence was without a rational evidentiary foundation. 73 The applicant acknowledged that councils, when acting as consent authorities under the EPA Act, play an important role in protecting the environment and the public interest. It is important that councils pay due regard to objections raised. However, the applicant submitted that it is the duty of councils, when assessing applications, to be guided by rational evidence, rather than unsubstantiated fears. The applicant submitted that in this case the evidence of the residents fell into the latter category, not the former. The applicant submitted that it is inappropriate for a council to accept concerns of objectors which are without a rational foundation, thereby requiring an applicant to incur the substantial costs of prosecuting a class 1 appeal. It is unreasonable for a council to persist in pressing issues in the face of overwhelming evidence that concerns are not soundly based. To do so represents a dereliction of duty on the part of the council and may demonstrate the council is not acting in good faith. 74 The applicant referred to a number of cases including Grant v Kiama Municipal Council [2006] NSWLEC 70 (22 February 2006); McCaldin v Newcastle City Council (1983) 10 APA 143; Broadwater Action Group v Richmond Valley Council (No 2) (2003) 129 LGERA 401; Krivanek v Blue Mountains City Council (No 2) [2004] NSWLEC 732 (24 December 2004); and Belgiorno-Nettis v Mosman Municipal Council [2004] NSWLEC 731 (24 December 2004).

75 In these circumstances, the applicant submitted that the Council had acted unreasonably in not making proper concessions, acted unreasonably in continuing to defend the case where it had poor prospects of success, and acted unreasonably in pursuing the case other than on a rational basis. 76 The Council contested these arguments of the applicant. The Council acknowledged that the expert evidence, as it transpired, was not in support of the issues that had been raised by the Council. Nevertheless, the Council submitted that the residents' concerns were honestly and sincerely held and it was reasonable for the Council to give voice to those concerns by maintaining its opposition to the modification application and to the appeal. The Council submitted that it was not contested by the applicant and that Commissioner Watts did not find that the residents' concerns were not genuine. 77 The Council also submitted that the residents' concerns, particularly in relation to morbidity and being surrounded by death, were not unreasonable for persons to hold. At the hearing before Commissioner Watts, many cases were cited by the Council describing the intangible, social or psychological amenity impact that uses of land such as crematoria can have. Those cases included Broad v Brisbane City Council (1986) 59 LGRA 296, as well as other specific cases dealing with crematoria, but in particular M Dubock Pty Limited v Maroondah City Council (1996) AAT of Vic (1995/33602, W. Barr, Member). 78 Although the residents' concerns sprang from the existing development, the Council submitted that the residents were concerned that any increase in the use of the crematoria would heighten their existing sense of morbidity. This was, it was submitted, a reasonable basis on which the Council could put its case. 79 The Council also submitted that it was reasonable for the Council to continue to oppose the appeal in order to secure modifications to the conditions of consent or new conditions of consent.

Finding 80 Whilst I accept that the issue of the residents having a sense of morbidity associated with a use of land for a crematorium is a matter which could fall within the wide consideration of potential impact on the amenity of a locality, the problem with the Council's argument is that this issue was not stated explicitly in the issues articulated by the Council. I have set out above the issues that were raised by the Council in its amended statement of issues. Nowhere in those issues is the issue of morbidity starkly and plainly articulated. At best, it could be seen to fall obliquely under one or more of the other issues. 81 However, it should not be for an applicant, nor for that matter a court which is trying to determine an application, to have to read between the lines. If the Council wishes to raise an issue then it should do so explicitly. This is clear from the Land and Environment Court Rules 1996 and the Pre-hearing Practice Direction. In Part 13 r 14 of the Land and Environment Court Rules 1996 it is stated: "Issues, including questions of law, are to be identified with precision and settled at the first callover before the court. They cannot later be added to or expanded without leave" (emphasis added).

82 It cannot be said that the issue of heightening the sense of morbidity relied upon by the Council in defending this application for costs was identified "with precision" in the amended statement of issues. It should also be noted that no leave was ever sought to amend further the amended statement of issues to delete the 20 or more issues that are articulated in the amended statement of issues and to add precisely this issue relating to morbidity.

83 In the Pre-hearing Practice Direction, paragraph 8, the statement of issues is required to be expressed "in a manner which enables the other party to know the case it has to meet." Again, the manner in which the issues were articulated does not enable the applicant in this case to know that the primary issue that it had to meet on this appeal was the issue of morbidity and not the 20 or more other issues that had been articulated in the amended statement of issues. 84 Paragraph 8(c) of the Pre-hearing Practice Direction further requires: "Where an adverse environmental impact upon amenity is alleged, the nature and extent of each impact must be clearly identified and, where practicable, quantified."

85 The issue relating to morbidity was said to be an issue falling under the heading of the amenity of a locality. It was an intangible, social or psychological amenity impact. As such, in accordance with paragraph 8(c) of the Pre-hearing Practice Direction, the Council was required to clearly identify the nature and extent of each impact and, where practicable, quantify that impact. Here, of course, there was no articulation that this was an amenity impact. There were vague references to amenity in issue 3.1 of the issues, however, that was explained by the very specific particulars in paragraphs (a) to (d) of that issue. Nowhere in that particularisation is there any statement of this amenity impact of heightening the sense of morbidity in the local community. The articulation in issue 7.9 that there would be significant social impacts is of course a different issue to one of an impact on amenity and in particular the heightening of a sense of morbidity. It is possible that such an issue could lead to a social impact but it is by no means clear from the articulation in issue 7.9 that that is what is being stated. 86 It is also important to recall that this was an application to modify a development consent that had been granted by the Council for the existing crematorium. Section 96(3) of the EPA Act requires that the consent authority, including the Court on appeal, take into consideration such of the matters referred to in s 79C(1) as are of relevance to the development, the subject of the application. The development, the subject of the application, is of course the modifications proposed by the applicant in this case. It is not the original development of the crematorium. It is the modification to that crematorium. In these circumstances, in order for the Council to properly articulate an impact upon amenity, it would have needed to "clearly identify" and "where practicable quantify" each impact on amenity caused by the modification of the development, and not by the development as originally approved. Nowhere in the amended statement of issues is this done. 87 In paragraph 8(e) of the Pre-hearing Practice Direction there is a requirement that if a matter is relevant only to the imposition of a condition, then that should be stated. Nowhere in the Council's articulation of the issues in the amended statement of issues is any one of the issues stated to only go to the question of conditions. This causes difficulties to the Council's argument that the Council was justified in maintaining its opposition to the appeal by the applicant so as to effect modifications to the conditions or the insertion of new conditions to the development consent. If that had been the Council's goal then it was required, pursuant to paragraph 8(e), to have articulated that certain of the issues went to matters relevant to conditions only and, of course, to have proffered earlier rather than later, a form of the conditions which the Council said ought to have been imposed. 88 Finally, paragraph 8(g) of the Pre-hearing Practice Direction states: "A failure to adequately particularise issues, or the inclusion of issues which are not relevant to the assessment of the application or which are raised without reasonable grounds, may justify an order for costs."

89 This poses a problem for the Council because the way in which the Council has put its case in opposition to the applicant's argument that it should have an order for costs in its favour, has been to focus upon the issue of the intangible effect on amenity, that is, the issue relating to morbidity. This is an issue that was not adequately particularised in the issues or indeed which, upon a fair reading of the amended statement of issues, was an issue that was not squarely raised by the Council in the amended statement of issues.

90 Having regard to the findings of Commissioner Watts on the evidence, which findings, having looked at the evidence, were really the only ones which were reasonably available, there was only one result which could have occurred in this case and that was that the modification application be approved. Having regard to the cases to which I referred in Grant v Kiama Council [2006] NSWLEC 70 (22 February 2006) at paragraph 15, I am of the opinion that in the circumstances of this case it is fair and reasonable that there be an order for costs, namely that the Council pay the applicant's costs of these proceedings. 91 Issues 1 and 2 were issues which related to the power of the Court to grant the approval. Having regard to the evidence, there was not a reasonable argument contrary to the proposition that the development was substantially the same development and had only minimal environmental impact. 92 The evidence that the Council had in its possession at the time of refusing the modification application and that was subsequently provided to it, was all one way and that was in favour of the modification application. That had been the advice that had been given to it by its Director. It was also the advice given to it by its independent expert, Mr Court. Subsequent experts, including court appointed experts, all came to the same conclusion. The fact that there was some fine-tuning of conditions does not take away from the central proposition that at no time had any expert recommended against granting the modification. 93 Accordingly, the Council acted unreasonably in the face of this evidence in favour of the modification application in persisting with defending the appeal. 94 Certainly, the Council acted unreasonably in raising over 20 issues, many of which had no evidentiary foundation and many of which were ill conceived. The Council acted unreasonably in raising these issues without reasonable grounds. At no time did the Council seek leave to amend those issues or to articulate those issues as only going to matters of conditions. 95 The fact that the Council relied upon the residents' evidence does not assist the Council for the reasons I have already given. They include that there was no real factual foundation for the residents' objections, and that the issue of a heightened sense of morbidity had not been squarely raised in the issues and was not put forward as being the only real issue in these proceedings. 96 In these circumstances, I consider that it is appropriate that the Council pay the applicant's costs. Order 97 The Council submitted that if the Court were minded to make an order for costs against the Council, any order be limited to after the date upon which the applicant modified its application to reduce the number of bodies to be cremated per annum from the already reduced figure of 1,000 to a further reduced figure of 800. This occurred about a month and a half after the application had been filed. I do not consider that the further reduction from 1,000 to 800 had any material effect upon the Council's conduct of the case. At no time did the Council put forward that if the applicant were to agree to a figure of 800 rather than the first sought 1,600 or the later sought 1,000, the Council would agree to grant consent to the modification. The Council always took the view that any increase beyond the 400 was unacceptable for the reasons that I have given. In these circumstances, although the applicant modified its application after the appeal had been filed in Court, that does not seem to be causative of any change in attitude by the Council. In the circumstances, I do not consider it is necessary to limit the costs order to the period after the applicant modified its application. 98 Accordingly, I order the Council to pay the applicant's costs of the appeal as agreed or assessed. 99 I order that the Council pay the applicant's costs of the application for costs, as agreed or assessed. **********

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