Land and Environment Court (NSW)|1992-11-12|Before: Pearlman J

The Applicant makes two principal claims. First, he claims that the first respondent (or its predecessor, the State Pollution Control Commission ("SPCC")) was bound to observe the provisions of Part V of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") when granting licences under the PC Act, and that it failed to do so in the case of a licence issued to the second respondent. His second principal claim is that, when granting that licence to the second respondent, the first respondent failed to comply with the requirements of s 17D of the PC Act. Accordingly, the applicant seeks declarations to the effect that the licence in question is void, that the first respondent contravened Part V of the EP&A Act, that in issuing any such licence the first respondent must have regard to matters required by s 17D of the PC Act, and must not have regard to other matters, and injunctive relief.

At the commencement of the proceedings, the applicant sought and was granted leave to amend his application in a number of ways, the significant amendment being the insertion of a claim for an order staying some of the other orders sought for such period of time as the Court should think fit in order to enable compliance with the provisions which the applicant claimed had been contravened. This amendment to his application made it clear that he did not seek to close down the operations of the second respondent, merely to regularise, from his point of view, the grant of licences to it. It was not critical, therefore, that a new licence issued whilst the proceedings were being heard.

The second respondent operates a paper mill on the banks of the Shoalhaven River at Bomaderry near Nowra. It or its predecessors in title have done so for many years. It has constructed two waste disposal outfalls which protrude into the river, one known as the western drain (or weir), the other as the eastern drain (or weir). Through these outfalls the second respondent discharges effluent into the river.

The second respondent over many years had been granted licences by the SPCC so to discharge its effluent (exhibit L). Until 1985, the licences were granted in respect of the western drain only. From 1 June 1985, the licences covered both the eastern and western drains.

As part of its licensing process, the SPCC imposed limits on the discharge of effluent by way of licence conditions. Until 1990, the limits that were set were directed to targets, that is, to what ought to be achieved in order to reduce or control environmental harm, rather than what was currently achievable. Thus, the SPCC (in the licence expiring in 1989) had set a limit on the western drain of biochemical oxygen demand ("BOD") of 50mg/L and non-filtrable residues ("NFR") of 50mg/L. There were no limits on the eastern drain (exhibit L). In February 1990, the SPCC was suggesting a limit, in respect of the western drain, of 100mg/L BOD and 50mg/L NFR, and, in respect of the eastern drain, 200mg/L BOD, and 50mg/L NFR (exhibit G volume A59-60).

In March 1990, the SPCC introduced a policy of "prosecutable reality". By a ministerial memorandum (exhibit G volume B78-81), the Minister for the Environment issued the following direction as to licence conditions:-

"Levels set in licences must reflect an immediately achievable reality and must not .... .... set licence limits which are not capable of being achieved and which, subsequently, are therefore not enforced.

Licence limits must be set and must be enforced. If that means setting licence limits to reflect the current reality with a clearly established timetable for reduction of emissions in an environmentally acceptable timeframe then this should be the case.

Such a reduction program should be sought from the company as part of its application for renewal, reviewed by the Commission and, as reviewed by the Commission, made a condition of the licence.

The letter drawing company's attention to the need to reply to renew their licences should note renewal as not being automatic and that there should be no presumption that even subject to conditions, licences would be renewed".

The SPCC then identified 100 companies whose licences were to be reviewed immediately (exhibit G volume B82-86 incl.). Included amongst them was the second respondent.

Whilst the review was proceeding, two short-term licences were issued (in October 1990, and January 1991), and ultimately, the October licence was issued. The limits it imposed were:

A significant feature of the October licence was a set of "undertakings or works" expressed to be part of a "pollution reduction program". There were five of these conditions, requiring various steps to be taken within specified periods, ranging from several months to approximately four years.

It is against this background that the applicant brings these proceedings, pursuant to leave granted to him by Stein J in this Court on 2 July 1992, under s 25 of the Environmental Offences and Penalties Act 1989.

A private citizen who has no special interest is incapable of bringing proceedings to prevent the violation of a public right or to enforce the performance of a public duty, unless he or she is permitted by statute to do so (see Australian Conservation Foundation Incorporated v The Commonwealth of Australia & Ors (1980) 146 CLR 493 at 526).

The statute which confers upon the applicant a right to bring these proceedings is s 25 of the Environmental Offences and Penalties Act 1989 ("the EO&P Act") (as amended by the Protection of the Environment Administration Act 1991). That section provides so far as relevant as follows:

"25(1) Any person may bring proceedings in the Land and Environment Court for an order to restrain a breach (or a threatened or apprehended breach) of this or any other Act, or any statutory rule under an Act, if the breach (or the threatened or apprehended breach) is causing or is likely to cause harm to the environment.

(2) Any such proceedings may be brought whether or not any right of that person has been or may be infringed by or as a consequence of the breach (or the threatened or apprehended breach).

(3) Any such proceedings may only be brought with the leave of the Court. Before granting leave, the Court must be satisfied that:

(a) the proceedings are not an abuse of the process of the Court; and

(b) there is a real or significant likelihood that the requirements for the making of an order under this section will be satisfied; and

(5) If the Court is satisfied that a breach, or a threatened or apprehended breach, will, unless restrained by order of the Court, be committed or be likely to be committed, it may make such orders as it thinks fit to restrain the breach or other conduct of the person by whom the breach is committed or by whom the threatened or apprehended breach is likely to be committed.

(6) Without limiting the powers of the Court under this section, an order under this section may suspend any pollution control authority.

At the commencement of the hearing, Mr Emmett QC, on behalf of the second respondent, submitted that there was a question of standing which should be dealt with as a preliminary issue. He submitted that the applicant had no standing and that the application should be dismissed on this account. His argument was that s 25 was not intended to be a vehicle for challenging the licensing process. S 25 depends upon there being a breach (or a threatened or apprehended breach) which is causing or likely to cause harm to the environment. It cannot be said, so this argument goes, that the breach (if there is one) by the first respondent in issuing a licence under the PC Act to the second respondent to discharge effluent into the Shoalhaven River is a breach which is causing or likely to cause harm to the environment. There must be, according to this argument, a direct causal connection between the breach which is complained of and harm to the environment. The second respondent applied and was granted a licence, so this argument goes, which is valid on the face of it, and remains valid until the Court declares otherwise. There is no breach therefore by the second respondent of s 16(1) of the Clean Waters Act 1970 which prohibits the pollution of waters. The only breach which could fall within s 25 is the possible breach by the first respondent in issuing the licence.

In the light of the leave granted by Stein J to bring the proceedings, I declined to deal with this argument as a preliminary issue. Accordingly, it became the subject of part of the final submissions of counsel for both respondents.

To hold that the applicant had no standing would, of course, fly in the face of the decision of this Court to grant the applicant leave to bring these proceedings. Subs (3) of s 25 requires the Court to be satisfied of certain matters. If it is now to be said that the applicant has no standing, then the effect of that must be to decide that the Court was wrong in coming to the conclusion that the requirements of subs (3) had been satisfied. I do not think that can be the intention of s 25. The proper place to argue that the applicant has no standing is in the proceedings for leave under that section.

It seems to me that it would be a strange use of the process of the Court that the basis upon which it granted leave could be redetermined in the hearing. The Court has found that the proceedings are not an abuse of the Court's process, that there is a real or significant likelihood that the requirements for the making of an order will be satisfied, and that is in the public interest for the proceedings to be brought, and on that basis, it granted leave.

In my view, once leave is granted, it is granted, the door has been unlocked and the hearing should ensue. This is not to say that a decision to grant leave can never be set aside in any circumstances. I can envisage cases where that might happen, such as some miscarriage of the leave proceedings on the basis of fraud or some fundamental mistake. But the challenge to the applicant's standing now called into question is, in my opinion, properly a matter upon which the Court must satisfy itself when granting leave. It falls within par (b) of subs (3) of s 25, and, insofar as it was raised in the leave application, it has been dealt with. No other basis for setting aside the grant of leave was adduced.

My conclusion in this regard does not mean that the applicant for leave, having been granted it, cannot alter the grounds upon which his or her case is based before the hearing. The purpose of the Court's rules and practice directions and the procedures of discovery and interrogatories is to refine the issues. Facts might emerge which might suggest to the applicant another ground on which to base his or her case or might suggest that a particular ground be abandoned. To hold otherwise would mean that the leave proceedings would amount to a full hearing of all issues, and that would render otiose the preliminary procedures this Court requires prior to hearing.

I should note that the applicant in this case did alter his claim. At the commencement of the hearing, Mr Craig QC announced that the applicant did not press his claim that Part IV of the EP&A Act had been contravened. The applicant's junior counsel, Mr Simpkins, sought to resuscitate this claim on the fifth day of the hearing, but I declined to give him leave to do so, because I considered it would be prejudicial to the respondents, the case having proceeded for four days upon the basis that this claim had been abandoned.

However, in these proceedings which now follow the grant of leave, there is an aspect in which the question of breach is relevant and fundamental. It goes to the finding by the Court of the elements of s 25(1). There has to be a breach (or threatened or apprehended breach) which is causing or likely to cause harm to the environment. If there is no such breach, then the Court cannot make the orders sought. So much is clear from subs(5) of s 25. In this connection, therefore, Mr Emmett's argument (which was shared by the Solicitor-General Mr Mason QC on behalf of the first respondent) that s 25 was not intended to be a vehicle for challenging the licensing process, is relevant. Mr Emmett argued, as I have earlier outlined, that the only breach which could fall within s 25 is the possible breach of the first respondent in issuing the licence, and this could not cause harm or be likely to cause harm to the environment.

"Harm" in this context is defined in s 4 of the EO&P Act as follows:

"harm", in relation to the environment, includes any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the foregoing, includes:

(a) any act or omission that results in air pollution, within the meaning of the Clean Air Act 1961; and

(b) any act or omission that results in the pollution of any waters, within the meaning of the Clean Waters Act 1970".

I do not accept Mr Emmett's argument. The issue of a licence under Part 3A of the PC Act permits the person granted the licence to cause, at least to some extent, harm to the environment within the definition of s 4. It is the very purpose for which the licence is issued. It is the issue of the licence which controls the harm to the environment. If the licence is granted in breach of the provisions of the statute which governs the issue of such a licence, then there has been a breach which permits the pollution of waters, which is clearly likely to cause harm to the environment. The possible breach of statute is the wrongful issue of a licence which empowers the holder of it to carry out, without sanction, actions which cause or are likely to cause harm to the environment.

Both respondents raised another issue in connection with s 25. They submitted that s 25 does not empower this Court to grant declaratory relief or to make orders in the nature of mandamus. S 25 allows any person, with leave, to seek injunctive relief, but that is as far as it extends.

This argument must, in my opinion, fail. I do not think the powers of the Court to make orders as it sees fit are constrained by s 25. The whole purpose of that section is to restrain statutory breaches which are causing or likely to cause harm to the environment. If this Court adopts a purposive interpretation (as s 33 of the Interpretation Act 1987 requires) then the word "restrain" should not be interpreted in a technical and narrow sense, meaning only an order for injunctive relief. Rather, it must be interpreted in its wider and ordinary sense of "to prevent" or to "hold back". It follows from such an interpretation that the Court may make whatever orders it considers appropriate in order that the breach which is causing or likely to cause harm is discontinued. Those orders may be declarations, or injunctions, or orders for mandamus.

I am fortified in this approach to the construction of the section by the words used in subs (5) and the opening words of subs(6). Subs(5), (which subs(6) does not limit) empowers the Court to ".... make such orders as it thinks fit to restrain the breach or other conduct ....". Clearly "restrain" is here used in a wide not technical sense. It would be straining the language of subs(5) to hold that the only orders it permits are orders granting injunctive relief.

I turn then to consider whether there has been a statutory breach by the first respondent in the issue of the licence to the second respondent.

Part V of the EPA Act

The applicant claims that Part V of the EP&A Act applies to the issue of pollution control licences under Part 3A of the PC Act. Accordingly, he seeks a declaration that, in granting the renewal of the October licence, the first respondent contravened Part V, and he seeks orders, first, that the second respondent be restrained from discharging effluent until it has complied with the provisions of Part V, and, secondly, that the first respondent be restrained from purporting to grant any further renewal of the October licence until the provisions of Part V have been complied with.

Part V of the EP&A Act is headed "Environmental Assessment". It contains four sections relevant to the question in issue in this case. S 110 is a definition section. S 111 imposes a duty on a determining authority, in considering an activity which falls within Part V, to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment. S 112 provides for the furnishing of an environmental impact statement, ("EIS") and s 113 provides a mechanism for the public exhibition of the EIS and consideration of any representations made in respect of it.

Both respondents deny that Part V applies to the issue of licences under the PC Act and, as I understand it, their denial rests broadly on the basis that the legislative intention was that Part 3A deals with pollution control, whilst Part V deals with planning, and that, in any event, the discharge of effluent into the Shoalhaven River is not an "activity" as defined in s 110.

The problem which arises here is not new. The Court's task was succinctly stated in Associated Minerals Consolidated Ltd & Anor v Wyong Shire Council [1975] A.C. 538 by Lord Wilberforce at 553 as follows:

"The problem is one of ascertaining the legislative intention: is it to leave the earlier statute intact, with autonomous application to its own subject matter; is it to override the earlier statute in case of any inconsistency between the two; is it to add an additional layer of legislation on top of the pre-existing legislation, so that each may operate within its respective field?".

A starting point is to determine which of Part 3A and Part V was enacted earlier in time. Because both enactments have been subject to amendment, the question of priority of time needs a little unravelling.

The Clean Waters Act 1970 contained provisions for licensing (ss 20-24). By the State Pollution Control Commission (Licences and Approvals) Amendment Act 1983, Part IIIA was introduced into the State Pollution Control Commission Act 1970 and, simultaneously, amendments were made to the Clean Waters Act 1970 by the cognate Clean Waters (Licences and Approvals) Amendment Act 1983. The State Pollution Control Commission Act 1970 became the Pollution Control Act in 1991 (by virtue of sch 3 of the Protection of the Environment Administration Act 1991), with the ultimate effect that licensing is now governed by Part 3A of the PC Act.

The EP&A Act (which includes Part V) was enacted in 1979, and came into force in 1980. Part V was amended in 1985 (by a substantial amendment to s 110) and again in 1987, and 1991, but not in ways relevant to the question in issue here.

When, therefore, Part V came into force in 1980, licensing provisions were already in force, in ss 20-24 of the Clean Waters Act 1970. When they were replaced by Part IIIA in 1983, they were substantially amended, but that has no bearing on the fact that a system of licensing was brought into force in 1970. In the light of this legislative history, how is the apparent contradiction of the two provisions to be reconciled?

The opposing arguments raised by the parties are easily stated. The applicant's case is that the intention of the legislature was, to use the words of Lord Wilberforce, "to add an additional layer of legislation on top of the existing legislation", so that Part 3A and Part V each operates within its respective field, and, in exercising its functions under Part 3A, the first respondent is bound to observe the provisions of Part V. The respondents' case is that the legislative intention was, again in the words of Lord Wilberforce, "to leave the earlier statue intact, with autonomous application to its own subject matter", that of licensing. Does the maxim "generalia specialibus non derogant" apply, so the later enactment, Part V, is presumed not to be intended to interfere with the former enactment, Part 3A?

The application of the maxim has been dealt with at length by Kirby P in Royal Automobile Club of Australia Incorporating Imperial Service Club v The Council of the City of Sydney (27 May 1992, unreported) at 17ff. One principle appears clear -that, for the maxim to apply, there must be an inconsistency between the two provisions.

"It is for the party seeking to confine (general) words to show that this is necessary to avoid an irreconcilable inconsistency or repugnancy between the statutory duties said to be in conflict. See eg Goodwin v Phillips [1908] HCA 55; (1908) 7 CLR 1, 11. There must be such conflict that the words necessarily 'import a contradiction'".

I do not think there is an irreconcilable inconsistency between Part V and Part 3A. They can both be applied in relation to an activity. They have different purposes, each of which can be fulfilled without contradiction. I do not think Mr Emmett put it higher than that the two enactments do not sit comfortably together, but that is not the same as saying that they necessarily import a contradiction.

The only way in which I might initially have perceived an inconsistency was in the contrast between the procedures operating within each enactment. S 112(1) requires the obtaining of an EIS. S 113(1) requires the determining authority to place the EIS on exhibition for at least 30 days. However, under s 17B(2) of the PC Act and under reg 4(2) of the Pollution Control Regulation 1985, an application for renewal of a licence may be made as late as one day before the expiry of the earlier licence. But on analysis such provisions are not inconsistent. If a licence is sought in relation to an activity to which Part V applies, then the applicant would be required to lodge its application (and EIS) within sufficient time to allow compliance with the timeframe adopted by Part V; it is not mandatory to lodge an application for renewal of a licence as late as one day before its expiry. Both statutory procedures are capable of simultaneous compliance.

But the fact that there is no irreconcilable inconsistency or repugnance between the two provisions is not an end to the matter. The task is to ascertain the legislative intention, and both respondents sought to demonstrate factors which showed a legislative intention that Part V and Part 3A are to be regarded as separate and distinct, and that, therefore, Part 3A is left intact by Part V.

This is so, they argued, because the EP&A Act is concerned with the environmental effect of development as a matter of planning, whilst the PC Act is concerned with the environmental effect of the grant of licences to control pollution. Part V can only be applied in its context -namely, as part of a statute dealing with environmental planning and assessment. (See, for example, Rundle v Tweed Shire Council & Anor (1989) 68 LGRA 308 at 323, and Northern Territory Planning Authority v Murray Meats (NT) Pty Ltd & Ors [1983] FCA 105; 48 ALR 188 at 205 - 207).

(a) The definition of "activity" in paras (a) to (d) inclusive of s 110 of the EP&A Act is substantially identical to paras (a) to (d) inclusive of the definition of "development" in s 4(1) of the same Act. This brings the matters with which Part V deals within the context of planning, not licensing.

(b) Part V of the EP&A Act is concerned with the commencement of activities, and requires consideration of their environmental effect, whereas Part 3A of the PC Act is concerned only with the grant of licences to carry out activities which, by definition, affect the environment. It is not a prerequisite that such a licence be given before the commencement of any activity; it only arises if the person carrying out a particular activity chooses to pollute waters in connection with such activity and in such case would contravene the Clean Waters Act 1970 unless a licence had been obtained.

Neither of these factors, in my opinion, lead to the conclusion that the legislature intended that Part 3A should be left intact by Part V, with "autonomous application to its subject matter". These factors merely show that the two statutory provisions are distinct, and that one relates to planning, the other to licensing. They do not negate a conclusion that each statutory enactment can work harmoniously with the other, each in its own field, and in relation to the one activity.

Furthermore, it was argued by the Solicitor-General that the first respondent is not a "determining authority" when granting licences to pollute waters. This is so, he argued, because such a licence acts solely as a defence to a charge of polluting waters under s 16(1) of the Clean Waters Act 1970. The definition of "determining authority" in s 110 refers to a public authority ".... whose approval is required in order to enable the activity to be carried out". It was submitted that the grant of a licence is not the grant of approval to pollute.

I disagree with this submission. As I have earlier said in this judgment (with regard to the breach necessary to found an order under s 25 of the EO&P Act, it is the issue of the licence which controls the harm to the environment. It permits the licence holder to pollute waters. If that pollution of waters is, in a particular case, an "activity" as defined by s 110, then the first respondent's approval is granted to enable the activity to be carried out. The fact that a person in carrying out a particular activity chooses not to pollute waters is beside the point; if he or she obtains a licence to do so, then it amounts to an approval to cause harm to the environment.

Next it was said that if Part V were to apply to the grant of licences under Part 3A an anomalous situation would arise. Part V applies to certain stipulated activities, but not to any act, matter or thing for which development consent under Part IV of the EP&A Act is required or has been obtained (s 110(e)). A new development is likely to have or require development consent but an older development does not, since it is likely to be development which came into existence before planning controls were imposed upon particular land, and is likely to have existing use rights which may be preserved (s 109 of EP&A Act). Accordingly, it is said, in some situations Part V would apply to the grant of licences, in others, by anomaly, it would not. But that is the express language of Part V. It would not apply to every grant of licence, not by reason of anomaly, but by reason of its terms. It applies only to an "activity" within the meaning of s 110. Not every "old" development will be included, because not every "old" development will have the benefit of continued existing use rights. Similarly, not every activity which is the subject of a licence will fall within the definition of the term "activity" in s 110.

It was pointed out that when Part IIIA was inserted in the State Pollution Control Commission Act in 1983, the Minister stated, in the second reading speech, that the purpose of its insertion was to overcome administrative inefficiencies and unnecessary expense. That purpose could hardly be compatible, so it was contended, with the proposition that s 112 of the EP&A Act was intended to operate so as to impose procedural requirements additional to those in Part IIIA. But complying with the provisions of Part V does not, as an inevitable consequence, mean that there will be administrative inefficiencies and unnecessary expense. There will be expense, if an EIS is required, but it can hardly be said that it will be an unnecessary expense if its purpose is to help to control the impact of environmental harm.

A number of sections within Part 3A and Part V were contrasted by the respondents to show that they did not sit together comfortably, and therefore showed an intention that Part 3A was to be left intact. For example, it was said that if an EIS was required under s 112, then the particulars which could be required to be furnished by a licence holder under s 17H would be, in effect, redundant, rendering s 17H otiose. Or again, that a right of appeal under s 17M would be pointless against the refusal of a licence on the ground that no EIS had been furnished.

In my opinion, the contrasting of these or other sections does not indicate any particular legislative intent. They do not show that the sections cannot be complied with simultaneously. An EIS should contain all the information a determining authority would need to know in order to assess environmental effect. It would not derogate from the effect of the EIS to impose conditions under s 17H so that the determining authority is furnished with additional information relevant to the conditions which it might place on the licence when its renewal is granted. Similarly with the right of appeal under s 17M - it is not indicative of a legislative intent that Part V is to be inapplicable, merely because an appeal would be pointless if an EIS was not furnished.

It may appear, at first glance, that the way in which s 112 operates to require the furnishing of an EIS demonstrates a legislative intent that Part V was not intended to apply to the granting of licences under Part 3A. S 112 requires the furnishing of an EIS, when the determining authority proposes to grant "approval" to an activity likely significantly to affect the environment. "Approval" is defined, relevantly, in s 110 as including "consent, licence or permission or any form of authorisation". If Part V were to apply to the granting of licences under Part 3A, it would require the furnishing of an EIS at least annually for each licence (s 17E) or more frequently if a short-term licence is granted (s 17C) and perhaps also when conditions of licences are varied under (s 17D(3). (A revocation or suspension of a licence would not, in my opinion be an "approval" within the definition of s 110). Mr Simpkins, on behalf of the applicant, contended that an EIS would not be required in all those circumstances. He claimed that the EIS would only be required upon a grant of the initial licence, and when it came to renewal or variation, a further EIS would only be required if there had been a significant change in environmental effect. I reject this contention. If s 112 were applicable to the granting of licences under Part 3A of the PC Act, then s 112 could only be applicable in its terms, and there is nothing in that section which suggests that the furnishing of an EIS depends on change in environmental effect. S 112 requires the determining authority to have regard to the question of significant effect each time it grants the approval. If the licence is to be granted or renewed, then, by definition, there is significant effect on the environment, and in each case, an EIS must be obtained and furnished.

It may be that a myriad of EIS's would be required, if Part V applied to the grant of licences under Part 3A. But that alone would not be a reason to hold that Part V was inapplicable. It may be a costly consequence, but that does not make it an indication of the intention that Part V does not apply.

I conclude, therefore, that when granting a licence under Part 3A of the PC Act, the first respondent is bound to comply with Part V of EP&A Act. But it is, of course, bound to comply with Part V only when the licence which it is granting is in respect of an "activity" to which Part V applies. The duty of the determining authority under s 111 relates to its consideration of an "activity", and requires it ".... to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity". Similarly, s 112 refers to a determining authority granting approval to an "activity" that is likely significantly to affect the environment.

The critical question then becomes - is the activity which is the subject of the licence an "activity" within the definition of that term in s 110?

2. Is the discharge of effluent into the Shoalhaven River an "activity"?

The applicant contends that the discharge of effluent into the Shoalhaven River is an activity within Part V, because it falls within par (c) of s 110, in that, contrary to the usual meaning of "land", that term is defined in the EP&A Act to include "a river stream or watercourse, whether tidal or non-tidal". The applicant contends, therefore, that the discharge of effluent into the river is a use of land.

The definition of "activity" in s 110 is as follows:

(b) the carrying out of a work in, on, over or under land;

and includes any act, matter or thing for which provision may be made under section 26 and which is prescribed for the purposes of this definition, but does not include -

(e) any act, matter or thing for which development consent under Part IV is required or has been obtained; or

(f) any act, matter or thing which is prohibited under an environmental planning instrument;".

In response to the applicant's contention, the second respondent asserts that the use of land in this case is properly characterised as that of a paper mill. The discharge of the effluent through the drains is incidental to that use and there is no separate use of the drains. I agree with this submission.

It is necessary, in a planning context, to characterise the use of land. Whilst great care must be taken in relying upon classifications adopted in previous cases (see Penrith City Council v Waste Management Authority & Anor (1990) 71 LGRA 376 at 384) they show that the task of classifying or characterising must be undertaken, and the character, extent and other features of an activity must be examined - see Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 at 309-311 and Vanderwolf & Anor v Warringah Shire Council & Anor [1975] 2 NSWLR 272 at 277.

In carrying out that task, it is possible to derive the principle that one particular use may be so integral and subordinate to another use that the former use is subsumed into the latter use, and the latter use is properly to be regarded as the use of land for a particular planning purpose. ".... the mere existence of subsidiary uses does not necessitate their being separately described" - per Stephen J in Pioneer Concrete (Qld) Pty Ltd v Brisbane City Council & Ors (1979-1980) 145 CLR 485 at 509. This principle may be found in Foodbarn Pty Ltd & Ors v Solicitor-General (1973-76) 32 LGRA 157 at 160-161, and, as an example, in Kindergarten Union of New South Wales v Sydney City Council & Ors (1983) 51 LGRA 381 at 387-388.

Looked at in this way, the discharge of effluent via the drains into the river is not a separate or distinct use of the river. That activity is an integral part of the activity of the paper mill. It is merely ancillary or incidental to the paper mill; if there were no paper mill, there would be no discharge of effluent into the river. It is not an activity which could be carried out independently of the paper mill.

The consequence is that the discharge of effluent is not an "activity" for the purpose of Part V. The first respondent, in granting a licence to the second respondent to discharge effluent into the river is not, to use s 112 as an example, granting approval to an activity within the definition in s 110.

(The use of the land for the purpose of a paper mill may well be an "activity" within the definition in s 110. There was some evidence (for example, the second respondent's press release, exhibit B) that land was used as a paper mill prior to the coming into force of any relevant planning instruments in the Shoalhaven Shire and use as a paper mill may well continue, by virtue of s 109(1), without the necessity for development consent. That would mean that the activity of a paper mill would not be excluded from para (c) of s 110 by the operation of para (e) of that section. But there was no evidence in relation to the actual history of the paper mill, nor should there have been, because that activity is irrelevant - it is not the activity to which the determining authority (in this case, the first respondent) is granting approval by way of licence).

It follows from the conclusion that I have reached that, although these matters were argued before me, it is unnecessary for me to determine whether or not the discharge of effluent had existing use rights within s 109(1), nor to determine when the river began to be used for the discharge of effluent, nor whether and to what effect there was an alteration or intensification of that use within s 109(2).

The applicant claims that the October licence is void and of no effect, because the first respondent failed to comply with the statutory requirements imposed on the grant of licences by s 17D(4) of the PC Act.

There is, of course, some doubt about the utility of considering this issue, because it relates to the October licence, which has expired, and a new licence has issued. But the applicant's claims as to the basis for the issue of licences remain relevant to the issue of restraining the grant of further licences and the findings that I make in relation to the October licence are of general application.

"(4) In exercising its powers under this section, the Authority shall have regard to:

(a) the pollution being or likely to be caused by the applicant and the impact of that pollution on the environment; and

(i) to prevent, control, abate or mitigate that pollution; and

(ii) to protect the environment from defacement, defilement or deterioration as a result of that pollution".

There was no allegation that the first respondent failed to have regard to the first part of par(a) of the section; it was conceded by the applicant that the first respondent did have regard to the pollution being or likely to be caused. The allegation relates to the other elements of s 17D(4), namely, that the first respondent failed to have regard to the impact of that pollution on the environment, and the practical measures which may be taken to prevent or abate or mitigate it. These are matters which the first respondent is bound to take into account by force of s 17D(4): see Minister for Aboriginal Affairs & Anor v Peko-Wallsend Ltd & Ors [1986] HCA 40; 162 CLR 24 at 39.

Additionally, the applicant claims that the grant of the October licence was unreasonable in the "Wednesbury" sense, that is, that it was so unreasonable a decision that no reasonable authority could have come to it: see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223; Minister for Aboriginal Affairs & Anor v Peko-Wallsend Ltd & Ors at 41 and ULV Pty Ltd v Scott & Ors (1990) 69 LGRA 212 at 228.

In support of these claims, the applicant adduced volumes of material which appeared in the first respondent's files, or to which he claimed the first respondent had access. The material consisted, in the main, of correspondence between the first respondent and the second respondent, analyses and data as to the content of the effluent being discharged into and from the western and eastern drains, and various reports of the first respondent and others on the nature and characteristics of the pollution of the Shoalhaven River.

In summary, however, that material was adduced to show that, in the period leading up to the grant of the October licence, the first respondent became so obsessed with the collection of data regarding the nature of the effluent that it failed to have regard to impact of pollution, or practical measures. Moreover, the applicant pointed to the first respondent's adoption of the policy of "prosecutable reality", contending that the first respondent applied that policy in an inflexible way which prevented it from carrying out its statutory duty to have regard the factors specified in s 17D(4).

A few examples of the evidence will show the basis for the applicant's contentions:

(a) By its January 1991 licence (exhibit L), the second respondent was permitted to discharge from the western drain not more than 50mg/L of BOD, nor more than 50mg/L of NFR, and the effluent was not to have a pH value of less than 6.5 nor more than 8.5. In considering amendments to that licence in February 1990, the second respondent was contemplating, in respect of the western drain, an increase of the limit in respect of BOD to 100mg/L (exhibit G volume A58). In the October licence, these limits became, respectively, 475mg/L for BOD, and 130mg/L for NFR, whilst the pH values remained the same. The increased levels resulted from the data furnished by the second respondent, and fell squarely within the notion of "achievable reality"; that is, they were limits which the effluent was achieving on a daily basis. In other words, the limits reflected what the data showed.

(b) Some of the material available to the first respondent pointed out that further and other studies ought to be done in respect of the effluent and the river itself. For example, in an independent critique of the first respondent's 1987 study of the Shoalhaven River, which the second respondent commissioned and which was carried out by Drs Bellair and Wallis, it was suggested that more investigation ought to be done (exhibit G volume C14). Similarly, a review by Consulting Environmental Engineers (exhibit G volume C28) also drew attention to the need for evaluation of additional factors in respect of pollution impact, and a similar plea was made in a study in 1987 by Dr Lea in relation to dissolved oxygen impact (exhibit G volume C190). The applicant's allegation is that these matters were not taken into account by the first respondent when issuing the October licence, because of its preoccupation with the data relating to effluent limits, and it could not be said, therefore, that the first respondent had regard to impact or practical measures.

(c) As I have mentioned above, a pH value of not less than 6.5 nor more than 8.5 was originally set in respect of the western drain. In the October licence, the upper pH value, in respect of the eastern drain, was set at 11.5. That, so the applicant alleges, is an example of the unreasonableness of the decision of the first respondent to grant the October licence. This amounted to an increase in pH value by a factor of 1000, even when the second respondent's results generally showed lower values than this.

The applicant also attacks upon similar grounds the "pollution reduction program" (PRP) in the October licence. He says that, in the context of a twelve months licence (which period is what is required by s 17C), it is unenforceable to insert conditions in futuro, and which conditions, in any event, he alleges to be unenforceable on the grounds of their vague and uncertain nature. In particular, he points to PRP 3, which required investigations to be carried out to determine the efficacy and cost effectiveness of alternative means of treatment for all of the second respondent's effluent to achieve the best practicable discharge quality. What is involved here, so the applicant contends, is the deferment to a future date of a factor which the first respondent was bound, by s 17D(4), to take into account when granting the October licence.

The first respondent meets this claim in a variety of ways. In the first place, Miss Murrell, on its behalf, responded by saying that there is no evidence whatsoever that the first respondent failed to have regard to matters of impact and practical measures. I agree with her submission.

The data which the first respondent collected from the second respondent was necessary in order to characterise the effluent, for without such characterisation it would be impossible to set limits on its components. This proposition was supported by Dr Irvine, an expert called by the applicant, who, in cross-examination, admitted that such characterisation was necessary, and admitted that it would be irresponsible and perhaps impossible to set limits without it. Furthermore, in his affidavit, Dr Irvine said that in order to determine the potential impact of the second respondent's effluent on the environment, and make an informed decision about the licence conditions necessary to protect the environment, the first respondent should have information on a number of things, including the quality and volume of the effluent. I cannot, therefore, draw an inference that preoccupation with data meant a disregard of impact.

Nor can it be said, from the evidence tendered in the proceedings, that the first respondent had no regard to practical measures. That was the point of the PRP conditions. They were designed to achieve measures to control or mitigate the pollution which the licence itself legitimised, as appears from the second paragraph of the ministerial memorandum which I have earlier quoted. So much can be seen, in my view, from, for example, a letter dated 9 April 1991 from Dr Forrest (at the time acting director of the SPCC) (exhibit G volume A103) to the manager of the second respondent's mill, where the following passage appears:

"Where discharge to a waterway is essential, the effluent is to be treated to minimise pollution to a standard consistent with best available technology economically achievable (BATEA). BATEA can be defined as the best technology already in commercial use or available for introduction commercially. That standard is usually prescribed for new industry. For existing industry not yet at that standard, pollution reduction plans are negotiated with a view to eventually achieving that standard.

All of the factors noted above are taken into account in the negotiation of each PRP. Clearly, an effective PRP is most urgent where an industry is contributing to the degradation of a waterway beyond the relevant environmental goal".

Nor does the fact that the PRP conditions were expressed in general terms and to be of future application derogate from the fact that they were designed to achieve measures of control. Whether they were couched in vague or uncertain language is not to the point; their purpose is what is relevant here.

There was other material in evidence from which it could be inferred that the first respondent did not overlook impact or practical measures. For example, an environmental survey of the Lower Shoalhaven River was carried out by the Water Branch of the SPCC in September-October 1990 (exhibit F). Its objective was ".... to typify the sorts of pollution which existed and to suggest the type of control methods or further research which would be warranted ...." (executive summary). It referred specifically to the discharge of effluent by the second respondent. Its recommendations specified operational modifications, monitoring and analysis of those discharges, and said, at pp 72 and 73, that "consideration should be given to licensing and pollution reduction schemes controlling these elements ...." and that ".... the option of long-term disposal of pulp mill effluent to the river must be questioned".

I have carefully considered all the evidence which was tendered. Included in it was other material which went, in my opinion, to impact and practical measures. I am not persuaded that the first respondent ignored that material when granting the October licence.

It may be, as the first respondent contended, that the applicant's claim really was that the limits stipulated in the October licence would not have been set as they were if this material had been examined or considered. But to pursue such a line of inquiry would amount to an impermissible attempt to involve this Court in a review of the merits of the first respondent's administrative decision. The Court's role in this regard was stated by Brennan J in Attorney-General for the State of New South Wales v Quin (1990) 170 CLR 1 at 35 as follows:

"The duty and jurisdiction of the court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository's power. If, in so doing, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone".

See also Australian Broadcasting Tribunal v Bond & Ors [1990] HCA 33; (1990) 170 CLR 321 at 341.

I do not, however, regard the applicant as seeking judicial review of the merits of the first respondent's decision to grant the October licence (notwithstanding the copious amount of material which Mr Craig QC adduced in evidence on his behalf). I think that the applicant has sought to demonstrate no more than the fact that certain criteria were required by statute to be taken into account by the first respondent and it failed to do so. He did not contend that those criteria were exclusive nor that anything more be done than they be taken into account and given weight as fundamental elements, nor, indeed, could he have successfully done so in the light of decisions such as R v Hunt exp. Sean Investments Pty Ltd [1979] HCA 32; (1979) 25 ALR 497 at 504, and Maritime Services Board NSW v Liquor Administration Board; Beetson and O'Neill (1990) 21 NSWLR 180 at 195 and 196.

The applicant did, however, contend that the policy of "prosecutable reality" was applied in an inflexible manner and operated to fetter the first respondent's statutory discretion whether or not to grant the October licence. He relied on Green v Daniels & Ors [1977] HCA 18; (1977) 51 ALJR 463, where the principle was stated by Stephen J at 467 (in connection with decisions to be made under the Social Services Act, 1947 (Cth)) as follows:

"The question is, then, whether this general rule is no more than a permissible instruction by the Director-General to those to whom he has delegated his powers under s. 107(c) as to how they are to determine whether they are satisfied of the matters there referred to; or whether on the contrary it reveals an attempted substitution of inconsistent departmental criteria for those which the Parliament has enacted as appropriate to qualify an applicant for unemployment benefit.

.... it should be remarked that the function of the Director-General under s. 107 is to be distinguished from that of tribunals, such as licensing justices, which, in their exercise of discretionary powers to grant or refuse licences, may give effect to some general policy that they see as desirable so long as in doing so they do not preclude themselves from considering on its merits the exceptional case. The Director-General is not concerned, in his administration of s. 107, with the carrying out of any policy. No general discretion is conferred upon him; instead specific criteria are laid down by the Act and all that is left for him to do is to decide whether or not he attains a state of satisfaction that the circumstances exist to which each of these criteria refer. He must, no doubt, for the benefit of his delegates and in the interests of good and consistent administration, provide guidelines indicating what he regards as justifying such a state of satisfaction. But if, in the course of doing this, he issues instructions as to what will give rise to the requisite state of satisfaction on the part of his delegates and these are inconsistent with a proper observance of the statutory criteria he acts unlawfully; should his delegates then observe those instructions, their conclusions concerning an applicant's compliance with the criteria will be vitiated".

In response to this claim, the first respondent argues that there is no such fetter, because the policy is not inconsistent with the statutory requirement (as it was in Green v Daniels). Furthermore, the first respondent pointed to the fact that, in its terms, the policy was not to be applied uncritically (cf. the last paragraph of the policy which I have quoted) and in fact was not applied uncritically as the negotiations for the grant of the October licence demonstrate (eg. the first respondent declined to relax some limits when so requested by the second respondent (exhibit G volume A108)).

It is not, in my opinion, a question as to whether the policy of "prosecutable reality" led the first respondent into an uncritical imposition of licence limits. The question is, rather, whether its effect was to cause the first respondent to disregard the statutory criteria. I can find nothing in the policy which leads to the inescapable inference that it would have that effect. Indeed, the only inference which could be drawn is to the contrary. To determine "realistic achievability" as a criteria for setting licence limits, and to set a pollution reduction program, regard must be had to environmental impact and practical measures.

Similarly, I do not consider that the adoption by the first respondent of BATEA as a basis for its policy of "prosecutable reality" is impermissible. BATEA is an acronym which describes, as I have already quoted, "best available technology economically achievable". There is nothing in such a policy which, in my judgment, is inconsistent with or necessarily impedes the due regard which the first respondent is bound to give to the criteria specified in s 17D(4). (See Legal Services Commission of New South Wales v Stephens [1981] 2 NSWLR 697).

I turn now to consider the applicant's claim of manifest unreasonableness in the "Wednesbury" sense. The only basis upon which I understand this claim to be put is that the limit conditions in the October licence were exceedingly greater than any limits which had been imposed before, and that therefore the grant of the October licence was unreasonable. I do not accept such a proposition. The range of the increase, large though it was, does not of itself demonstrate a decision so unreasonable that no reasonable authority could have come to it. Something more would need to be shown for this Court to be satisfied that a discretion vested by the legislature in the first respondent miscarried in the "Wednesbury" sense. Nothing in the material in evidence nor in the first respondent's adoption of a policy of "prosecutable reality" would lead to a different conclusion.

For all these reasons, I am not prepared to hold that the first respondent failed to have regard to impact and practical measures.

1. The first respondent is bound, when granting licences under s 17D(4) of the PC Act, to comply with the provisions of Part V of the EP&A Act;

2. However, the discharge of effluent into the Shoalhaven River by the second respondent, which was the subject of the October licence, is not an "activity" within the meaning of s 110, and, accordingly, is not an "activity" to which Part V applies. Hence, in granting the October licence, the first respondent did not contravene Part V.

3. In granting the October licence, the first respondent did not fail to have regard to the matters stipulated in s 17D(4), and its decision to grant the October licence is not vitiated on any other ground.

In the case that was argued before me, the applicant sought an order restraining the grant of any further licence to the second respondent basing his claim on grounds identical to those on which he challenged the grant of the October licence. It follows from the conclusion I have reached that the applicant must fail in this regard.

There is one further matter about which I should comment. There has been much publicity, in the media and elsewhere, about this case, and that is not unusual nor of any concern. But the Solicitor-General has pointed to the fact that, in his

public utterances, the applicant has said he does not wish to close the paper mill down, and he sought, as I have earlier said, to have certain orders suspended whilst the alleged contraventions were rectified. That showed, so the Solicitor-General claimed, that the true motivation of the applicant was to score a political point and the orders he sought should be refused as an abuse of process. In view of the conclusions I have reached, it is not necessary for me to make a finding on this aspect, but because of its seriousness and the fact that it was made by the Solicitor-General, I feel obliged to comment upon it. There was, in my opinion, simply no evidence from which I could draw any real conclusion about applicant's motives in bringing the proceedings. Certainly the case was presented before me by the applicant's solicitor and counsel without in any way raising political issues. Public cases draw political comment. I put it no higher than that in this case, and I do not make any finding on the issue.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 33 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE M L PEARLMAN AM.

Pollution Control Act 1970

Environmental Offences and Penalties Act 1989

Environment Administration Act 1991

20](/cgi-bin/viewdoc/au/legis/nsw/repealed_act/cwa1970131/s20.html)\-24). By the State Pollution Control Commission (Licences and Approvals) Amendment Act 1983

State Pollution Control Commission Act 1970

Clean Waters (Licences and Approvals) Amendment Act 1983

Pollution Control Regulation 1985

ALEXANDER JONATHAN BROWN v. ENVIRONMENT PROTECTION AUTHORITY [1992] NSWLEC 103 (12 November 1992)

ALEXANDER JONATHAN BROWN v. ENVIRONMENT PROTECTION AUTHORITY [1992] NSWLEC 103 (12 November 1992)

At a glance

Court

Decision date

Before

Source

Judgment (128 paragraphs)

Legislation Cited (9)

Cases Cited (8)

ALEXANDER JONATHAN BROWN v. ENVIRONMENT PROTECTION AUTHORITY [1992] NSWLEC 103 (12 November 1992)