AQC Dartbrook Management Pty Ltd v Minister for Planning and Public Spaces

Decision

1. For the reasons that follow, I have determined that the modification of this existing Consent as agreed by the parties under s 34(3) be allowed.
2. In reaching that conclusion I have considered the Class 1 application and documents lodged in support of it together with the submissions from the parties and further submissions from the Hunter Thoroughbred Breeders Association Inc (HTBA) which was granted leave by the Court on 16 July 2021 in AQC Dartbrook Management Pty Ltd v Minister for Planning and Public Spaces [2021] NSWLEC 76 (AQC Dartbrook No 3) to make a written submission on the power of the Court to impose conditions 1.1(a)(xi), 1.1(a2), 2.3(c) and 2.4 of the draft s34 agreement at that time.
3. The documents contained in the "share file" or Court Book provided to me at the s34 conciliation conference included: 1. Development Consent (dated 28 August 2001) 2. Modification Application Form (dated 27 February 2018) 3. Environmental Assessment - Main Report (prepared by Hansen Bailey dated June 2018) 4. Statement of Reasons for Decision (dated 9 August 2019) 5. Class 1 Application (filed 4 November 2019) 6. Sealed Statement of Issues and Contentions (filed 16 January 2020) 7. Public submissions 8. Response to Contentions (prepared by Hansen Bailey dated July 2020) 9. HTBA Submissions (dated 23 July 2021) 10. Draft Section 34 Agreement (filed 5 August 2021) 11. Applicant's Submissions (filed 5 August 2021) 12. Minister's Submissions (filed 6 August 2021) 13. Submission addressing the environmental consequences 9 (filed 30 August 2021) 14. Draft (Third) Section 34 Agreement (filed 18 January 2022) 15. Draft (Fourth) Section 34 Agreement (filed 15 February 2022) 16. Further HTBA Submissions (dated 9 November 2021 and 14 February 2022) 17. Further applicant's Submissions (filed 2 February 2022 and 15 February 2022) 18. Dartbrook Mine Modification 7 Updated Response to Contentions (prepared by Hansen Bailey dated November 2021) (Updated RTC) 19. Final executed Section 34 Agreement (filed 25 February 2022) 20. Updated submission from the parties addressing the environmental consequences (dated 25 February 2022) 21. Jurisdictional prerequisite submission (Annexure B to this judgment and referred to in the s34 agreement)

Statutory scheme

1. The power to make the orders sought following agreement between the parties is that found in s 34(3). The provision is in the following terms: (3) If, either at or after a conciliation conference, agreement is reached between the parties or their representatives as to the terms of a decision in the proceedings that would be acceptable to the parties (being a decision that the Court could have made in the proper exercise of its functions), the Commissioner - (a) must dispose of the proceedings in accordance with the decision, and (b) must set out in writing the terms of the decision.
2. Relevantly, the requirement to dispose of the proceedings in accordance with the decision agreed to by the parties is mandatory, but the Court must have jurisdiction to make the decision (Al Maha Pty Ltd v Huajun Investments Pty Ltd (2018) 365 ALR 86 at [16] (per Basten JA), [76] (per Preston CJ); HP Subsidiary Pty Ltd v City of Parramatta Council [2020] NSWLEC 135 at [16] (per Preston CJ)), and must be satisfied that it has such jurisdiction before proceeding to dispose of the proceedings (AQC Dartbrook CA at [9]-[11] (per Meagher and Leeming JJA)). In the present appeal, the entitlement to modify the existing development consent is sought by the applicant.
3. The power that the Court is asked to exercise to modify the existing Consent is that provided by s 75W of the Environmental Planning and Assessment Act 1979 (EPA Act) which provides as follows: 75W Modification of Minister's approval (1) In this section: Minister's approval means an approval to carry out a project under this Part, and includes an approval of a concept plan. modification of approval means changing the terms of a Minister's approval, including: (a) revoking or varying a condition of the approval or imposing an additional condition of the approval, and (b) changing the terms of any determination made by the Minister under Division 3 in connection with the approval. (2) The proponent may request the Minister to modify the Minister's approval for a project. The Minister's approval for a modification is not required if the project as modified will be consistent with the existing approval under this Part. (3) The request for the Minister's approval is to be lodged with the Director-General. The Director-General may notify the proponent of environmental assessment requirements with respect to the proposed modification that the proponent must comply with before the matter will be considered by the Minister. (4) The Minister may modify the approval (with or without conditions) or disapprove of the modification. (5) The proponent of a project to which section 75K applies who is dissatisfied with the determination of a request under this section with respect to the project (or with the failure of the Minister to determine the request within 40 days after it is made) may, within the time prescribed by the regulations, appeal to the Court. The Court may determine any such appeal. …
4. The appeal having been brought by the applicant it is the power of the Minister to modify the Consent in accordance with the section that the Court is now asked to exercise.

Facts

1. The background facts are relatively uncontentious. The following narrative provides context to the position adopted and detailed submissions made by each of the parties and the objector. .
2. The applicant, AQC Dartbrook Management Pty Ltd, is the proprietor of the Dartbrook underground coal mine, located near Aberdeen in the Upper Hunter Valley, some 10km northwest of Muswellbrook (Dartbrook Mine).
3. On 28 August 2001, the applicant was granted development consent DA 231-7-2000 (the Consent) for extended mining operations at the Dartbrook Mine (Annexure A to the s34 agreement). The Consent was modified thereafter six times.
4. As approved, the Consent allows for longwall mining operations in three coal seams, named the Kayuga, Mt Arthur and Piercefield seams, and coal to be extracted at a rate of up to 6Mtpa per annum of run-of-mine (ROM) coal. It also authorises continued use of the facilities at the site including a coal handling and preparation plant (CHPP), rail loop and loading facilities, a reject emplacement area and the Hunter Tunnel.
5. The Consent operates until 5 December 2022.
6. On 27 February 2018, the applicant lodged a written request with the Department of Planning to modify the consent under s 75W of the EPA Act (DA 231-7-2000 (MOD 7)). The proposed modification is described at par 5 of the application in the following terms: "Undertake mining of the Kayuga Seam using the first workings bord and pillar method as an alternative to the approved longwall mining within the Kayuga seam. In addition to the approved operations, ROM coal will also be hauled using road registered trucks on existing private roads to a new shaft facility located between the existing private Western Access Road and New England Highway. The new, enclosed shaft will be used to deliver coal via the existing Hunter Tunnel under the New England Highway to an existing stockpile. Crushed, unbeneficiated raw coal will be delivered to the train loadout facility. Extend the period of DA231-7-2000 for 5 years."
7. The Minister's power to determine the MOD 7 request was delegated to the Independent Planning Commission (IPC), pursuant to a delegation from the Minister for Planning dated 14 September 2011.
8. On 9 August 2019, following public exhibition, public submissions, submissions/advice from relevant authorities, the preparation of a report by the Department and a public meeting at which submissions were made by members of the public including the HTBA, the IPC issued its determination in respect of MOD 7, with a written statement of reasons (Court book item 4).
9. As it happened, the IPC partly approved MOD 7, subject to conditions of consent which permit underground coal mining in the Kayuga Seam using bord and pillar methods and the use of a varied coal clearance and handling system, confined to the coal extracted from the bord and pillar operation. However, the approval only operates until 5 December 2022 (that is, for the duration of the current approval DA 231-7-2000). The IPC did not approve the request in the MOD 7 for the extension of the approval by five years to 2027.
10. In response to that determination, the applicant commenced these Class 1 proceedings on 4 November 2019.
11. The Class 1 application form identifies the decision that is the subject of the appeal as being: "…the determination of the Independent Planning Commission, as delegate of the Minister for Planning and Public Spaces, of a request to modify the development consent for underground coalmining at the Dartbrook Underground Mine (DA231-07-2000) granted by the Minister for Urban Affairs and Planning on 28 August 2001. (DA 231-7-2000 MOD7) made on 27 February 2018 for the modification of development consent DA 231-7-2000 (Dartbrook consent), in the form applied for, subject to conditions, and extending the timeframe of the consent by 5 years to 5 December 2027".
12. The Class 1 application form states that proceedings are brought under repealed s 75W of the EPA Act; cl 12 of Sch 2 and cl 8E of Sch 4 to the Environmental Planning and Assessment (Savings, Transitional and Other Provisions) Regulation 2017.
13. My jurisdiction to deal with this Class 1 application is not at issue. In the decision of AQC Dartbrook CA at [62], Preston CJ of the LEC considered in great detail the transitional schemes which preserves the operation of s 75W in respect to the application before me. Importantly, his Honour decided that the applicant's right to appeal under s 75W(5) was preserved as a distinct right of appeal and that the Court has jurisdiction to hear and dispose of such an appeal in its Class 1 jurisdiction. The Minister submits, and I accept, the conclusions of Preston CJ of the LEC, and the conclusions of the majority in AQC Dartbrook CA - by reference to Prestons CJ's reasons at [2], that the question of jurisdiction is to be approached by reference to the terms of s 75W in this case. To that end, the application of the transitional schemes is agreed and addressed on that basis in the jurisdictional prerequisites' checklist at Annexure B to the s34 Agreement before the Court dated 25 February 2022 (final s34 agreement).
14. I will deal further with my power under s 75W of the EPA Act in detail shortly, but after I set out the chronology of the events following the lodgement of the appeal.

Chronology of events - after the lodgement of the Class 1 appeal

1. On 16 January 2020, the Minister filed a Statement of Facts and Contentions (SOFC) contending that the decision to refuse the five-year extension be maintained. The contentions related solely to a lack of assessment and information in respect of the five-year extension.
2. In response, the applicant provided further assessments and information.
3. The proceedings were then referred to a s34 conciliation conference before me on 19 March 2020, and in the context of the conference, the applicant indicated that it no longer intended to proceed with a modification to the coal clearance system.
4. On 13 August 2020, the IPC placed the applicant's response to contentions on public exhibition and received several submissions including from the HTBA. On 7 and 9 October 2020, the applicant provided a further response and a supplementary response to the submissions received by IPC.
5. On 12 October 2020, the s34 conference was resumed and the parties advised me that they had reached an in-principle agreement. Notice of the agreement was then given to the objectors.
6. On 30 October 2020, the s34 conference resumed and the parties provided the Court with a signed s34 agreement. The terms of the decision included the following orders: "2 Leave is granted to the Applicant to make the minor amendments to the application to modify DA 231-7-2000 reflected in the Dartbrook Mine Modification response to contentions (Hansen Bailey July 2020). ... 2 The application to modify DA 231-7-2000 (MOD 7) is approved, subject to the conditions in Annexure A."
7. Before I had considered the proposed orders, as agreed in the s34 agreement, HTBA applied by Notice of Motion to be joined as the second respondent to the proceedings. The s34 conference was then adjourned pending the outcome of that application.
8. HTBA sought to be joined as a respondent so that it could raise a jurisdictional question as to whether the varied modification request contemplated by order 2 could be considered and determined by the Court. In allowing HTBA to be joined as a party to the proceedings at [51] of Duggan J's decision AQC Dartbrook No 3, her Honour observed that: "… it was open to the Minister to impose conditions on the Modification Request requiring the modification to exclude mining of Piercefield Seam and the removal of the above ground infrastructure, the consequence of which would be that the jurisdictional question would not have arisen".
9. The applicant appealed from the interlocutory decision. In AQC Dartbrook CA, Preston CJ of the LEC after expressly referring to Duggan J's observations at [127], concluded at [227] that there was no power to amend the modification application. Reasoning which was confirmed by Robson J in Duke Developments Australia 4 Pty Limited v Sutherland Shire Council [2021] NSWLEC 69.
10. Having reached his conclusion, Preston CJ of the LEC made the following observations in relation to the conditioning of an approval under s 75W at [277]-[279] in AQC Dartbrook CA: "[277] In the present case, the decision agreed between the parties referred to in paragraph 2(d) of the parties' agreement, is for the approval of the request to modify the development consent on conditions, an exercise of the power in s 75W(4) that is authorised. The conditions include conditions implementing the amendments to the request to modify the development consent that had been agreed between the parties, being the abandonment of the proposal for the alternative coal clearance system and the surrender of the right to mine the Piercefield Seam granted by the development consent. On their face, such conditions are within the scope of the power to condition the approval of the request to modify the development consent. [278] In the language of the parenthetical phase in s 34(3), therefore, the decision to uphold the appeal and to approve the application to modify the development consent on conditions is "a decision that the Court could have made in the proper exercise of its functions." [279] The Court has power to dispose of the proceedings in accordance with the terms of the decision, notwithstanding that it does not have power to allow the amendment of the application to modify the development consent in accordance with the term of the decision in paragraph 2(b) of the agreement. The obligation of the Court imposed by s 34(3)(a) operates only to require it to dispose of the proceedings in accordance with the terms of the decision that the Court could have made in the proper exercise of its functions and not to dispose of the proceedings in accordance with the term of the decision that the Court could not have made in the proper exercise of its functions." (Emphasis added)
11. At [27] of AQC Dartbrook CA, all three Judges of Appeal agreed that: "[27] … Dartbrook and the Minister are free to alter the terms of their agreement if they choose. There is no reason why they are bound to the terms reached, or why they should be precluded from reaching an agreement which avoids the need to resolve some of the issues agitated in the litigation subsequently. The legislative purpose of s34 is, where possible, to avoid litigation."
12. The parties, having taken up the opportunity to reach a new s34 agreement, no longer seek the order previously sought in respect of the previously proposed amendment of the MOD 7 request. To that end, the changes to the Updated RTC remove references to the RTC involving a "revised modification" (to address any suggestion that the MOD 7 application has been amended) and clarifies the scope of the request reflected in the revised conditions in Annexure A of the s34 agreement. It is the parties agreed position that the Court can be satisfied on the evidence submitted that the proposed agreed orders are a decision that the Court could have made in the proper exercise of its functions. As such, they point out that s 34(3)(a) mandates that I dispose of the proceedings in accordance with their agreed orders (AQC Dartbrook CA at [327] per Preston CJ of the LEC).
13. To be clear, the executed s34 agreement under review is dated 25 February 2022 and includes the conditions in Annexure A and refers to the amended RTC dated November 2021. The following points summarise the proposed modifications to the Consent:

• imposition of a new condition 1.1(a)(xi) which requires mining operations to be carried out in accordance with the Dartbrook Mine Modification 7 Environmental Assessment Kayuga Seam Bord and Pillar Mining Operations dated June 2018 prepared by Hansen Baily as modified by the Dartbrook Mine Modification 7 Updated Response to Contentions (Hansen Bailey 2021) dated November 2021 (Updated RTC) and deletes references to the response to submissions;
• amendment of condition 1.2(a) which authorises mining operations until 5 December 2027;
• imposition of condition 2.3(c) which restricts the use of the coal washery at the East Site until the noise mitigation measures described in the Bridges Acoustics Reported dated 20 July 2020 are addressed to the satisfaction of the Secretary;
• imposition of condition 2.4 which effectively refuses the alternative coal clearance system originally proposed in MOD 7; and
• inclusion of sub-paragraphs (vi)-(viii) in condition 3.3(a) to require the applicant to demonstrate additional matters in its extraction plan required to be submitted to and approved by the Secretary in order to carry out longwall mining operations;
• inclusion of amendments to proposed condition 3.3(e) to require additional detail about monitoring and compliance in the extraction plan required by proposed condition 3.3; and measures consistent with the adaptive management requirements in 3.3(k);
• inclusion of a new condition 3.3(k) requiring implementation of an adaptive management regime to address any risks associated with exceedance of the criteria or performance measures within the development consent as modified;
• imposition of condition 11.4 which requires the applicant to enter into voluntary planning agreements within 6 months of the approval of MOD 7 (unless another timeframe is agreed with the Secretary) with the Upper Hunter Shire Council and Muswellbrook Shire Council in accordance with Div 7.1 of Pt 7 of the EPA Act and the terms of the offer in Appendix 5. (Parties' joint email to the Court dated 24 February 2022)

1. Based on the Updated RTC dated November 2021 (referred to in Condition 1.1(a)(xi)), which includes, at Appendices A-F, a contemporary assessment of the potential impacts of the existing approved longwall mining and coal handling operations to support a five-year extension of the approval (assessments identified as outstanding in the Statement of Reasons of the IPC dated 9 August 2019 at par 243, SOFC filed on 16 January 2020 at pars 34-51), the proposed conditions and the applicant's decision to accept refusal of the alternative coal clearance system, the Minister is now satisfied that the concerns forming the basis of the initial partial refusal of MOD 7 (insofar as it sought an extension of the approval under DA 231-7-2000 for a period of five years until 2027) have been addressed. The Minister relies on the assessment of the environmental consequences of MOD 7 by the Department of Planning and Environment, wherein the Department recommended approval of MOD 7 (including the five-year extension) and found that MOD 7: 1. is within the scope of s 75W of the EPA Act (Dartbrook Coal Mine - Modification 7 Assessment Report, p7) 2. would not significantly increase the scale, intensity, or environmental impacts of the already approved project (ibid, p7)
2. The parties are agreed that when compared with the existing approved mining operation, MOD 7 will not have significantly increased environmental consequences because: 1. the applicant will be required to resume mining operations for the additional five-year period in accordance with the original mining sequence approved by the Consent which will be formalised in an extraction plan required to be submitted to, and approved by, the Secretary before longwall mining operations can resume. Until an extraction plan has been approved, only the Kayuga Seam can be mined using only bord and pillar methods (Updated RTC, p ii)); 2. mining operations will remain limited by the maximum annual extraction limit which controls the intensity of the mining operations over the course of the five-year extension; 3. MOD 7 does not seek to alter any aspect of the approved longwall mining operations except for providing the alternative option to mine the Kayuga Seam using bord and pillar method. There will be a condition imposed which will require the applicant to demonstrate, in the extraction plan, that the total vertical subsidence over the additional five-year extension will be within the maximum subsidence predictions approved under the Consent (Condition 3.3(a)(vi)). (Noting, that the applicant has demonstrated that mining operations can occur over the additional five years within the maximum subsidence predictions approved under the Consent using the bord and pillar or longwall method (Updated RTC, Appendix C, p 2, Table 1)). Therefore, on that basis it is submitted that the subsidence impacts during the extension period will be consistent with the impacts already assessed and approved under the Consent. Furthermore, the alterative bord and pillar method will not have any additional subsidence impacts than the approved longwall mining operations (in fact, it will potentially reduce the subsidence impacts (Updated RTC, Appendix C p3)); 4. a condition will be imposed which requires the applicant to demonstrate, in the extraction plan, that there will be no overall cumulative environmental impacts on groundwater sources greater than already approved by the consent (Condition 3.3(k)). The applicant has demonstrated that mining operations can resume in compliance with the condition (Updated RTC, Appendix D, p 27); 5. the applicant will be under an obligation to proactively assess and manage development related risks to ensure that there are no exceedance of the criteria and performance measures approved by the Consent and to take all reasonable and feasible steps to remediate any impacts to ensure future exceedances will not occur (Condition 3.3(k)). The consent now requires the implementation of an adaptive management regime to address any risks associated with exceedance of criteria or performance measures within the development consent as modified. This will ensure that there will be continuing environmental monitoring of the impacts of mining operations over the five-year extension and operates as a means of ensuring there will be no additional environmental impacts than already approved, and if exceedances do occur, any environmental impacts will be appropriately remediated; 6. although mining operations over the additional five years will have a minor contribution to cumulative dust concentrations in the Upper Hunter Valley, it is accepted that the estimated annual average total suspended particulate (Updated RTC, Appendix A p 34 Table 9-1), particulate matter (Updated RTC pp 38-39, Table 9-3), fine particulate dust emissions (Updated RTC p 42, Table 9-3), and dust deposition rates (Updated RTC pp 45-46, Table 9-4) all comply with the EPA impact assessment criterion, both individually and cumulatively. MOD 7 will only contribute less than 1% of the total 24-hour average concentration levels of particulate (Updated RTC pp 50-51, Table 9-5), and fine particulate dust emissions (Updated RTC pp 60-61, Table 9-6), it will result in a minor exceedance of the 24-hour average fine particulate matter concentration levels to one sensitive receiver which is to be mitigated by a condition requiring the affected land to be acquired and a requirement to prepare a detailed air quality management plan prior to the recommencement of mining operations which will mitigate this minor impact (Condition 6.1(c) and (f)); 7. the re-commencement of the CHPP, after application of noise compliance measures, will comply with the intrusive noise criteria set out in Condition 6.4.1a of the Consent during the day and evening periods. MOD 7 is also predicted to comply with the night-time noise criterion at all residential properties except there will be a minor exceedance of 1dBA at two nearby residential receiver under the noise enhancing weather condition modelling. A 1dBA impact is regarded as negligible and not perceptible to the average listener under the DPIE's Voluntary Land Acquisition and Mitigation Policy (RTC, Appendix B, pp 9-10). A condition is proposed requiring the applicant to prepare a Noise Management Plan to actively mitigate noise emissions during adverse meteorological conditions as well us undertake monitoring of its operations which will manage the negligible exceedance (Condition 6.4.2). In addition, whilst cumulative noise levels are predicted to exceed the noise criteria at four residential receivers in the Kayuga Village, those properties are subject of owner-initiated acquisition by the Mt Pleasant Mine; 8. scope 1, 2 and 3 greenhouse gas emissions (GGE) were estimated by ERM (Updated RTC, Appendix A). A large component of the fugitive emissions estimated by ERM during 2022 to 2027 are likely to occur in the absence of active mining, having regard to the GHG emissions reported by the Dartbrook Mine in the 2018 and 2019 financial years, during care and maintenance (Updated RTC, p 24). A condition is proposed which requires the preparation of an Air Quality and Greenhouse Gas Management Plan (Condition 6.1(f)); 9. due to the number of years in care and maintenance and the restriction on the annual production rate there will be an overall reduced mining footprint over the five-year extension than previously approved (Updated RTC, pp 5-6); and 10. MOD 7 is expected to generate an estimate $388m net benefit to NSW including 196 jobs with 80% to be sourced from the local area (Updated RTC, Appendix F, pp 24-25).

HTBA's submissions

1. HTBA have filed three sets of written submissions (WS) dated 23 July 2021 (First WS), 9 November 2021 (Second WS) and 14 February 2022 (Third WS). They address, in accordance with Justice Duggan's orders, particular terms of the agreement proposed by the parties in various draft s34 agreements developed during the conciliation.
2. Because the final executed s34 agreement includes a condition (Condition 1.1(a)(xi)) which refers to the Updated Response to Contentions, HTBA have indicated (at par 8 of HTBA's Third WS) that I need only refer to their First and Third WS, and not to the Second WS.
3. Helpfully, the Third WS sets out under the heading "Summary of the conditions that remain beyond power" the conditions with which they take issue. In essence, the argument is that the identified conditions remain beyond power, having regard to terms of the modification request and the limitations within s 75W. It is submitted that they "significantly alter the modification" relying on observations in Mison v Randwick Municipal Council (1991) 23 NSWLR 734 and Carr v Minister for Land and Water Conservation [2000] NSWLEC 89 - made in the context of the former ss 91(1) and 80(1) of the EPA Act (respectively) (at pars 25-35 of HTBA's First WS), and/or do not fairly and reasonably relate to the development for which permission is being given: HTBA's First WS at pars 36-44; Newbury District Council v Secretary of State for the Environment [1981] AC 578 (Newbury). They rely on the reasons articulated in their First WS namely: 1. on the scope of the power to impose conditions under s 75W (at pars 10-19); 2. that there is no power to significantly alter the modification request by way of conditions under s 75W (at pars 25-34 and 45-48); 3. that conditions that preclude mining in accordance with the modification request do not fairly and reasonably relate to the modification applied for (at pars 36-41); and 4. that conditions cannot prohibit rather than regulate mining in accordance with the modification request and such conditions involve a constructive refusal of the project for which approval was sought (at pars 42-44).
4. While Condition 1.1(a2) is no longer in issue insofar as it purports to allow mining of the Piercefield Seam, and purports to approve the broader five-year extension to mining of the Piercefield Seam, HTBA submits that this condition is of no practical effect in that it is inconsistent with other proposed conditions that preclude mining of the Piercefield Seam. HTBA submits that the changes effected by the final s34 agreement continue to represent material differences to the mining operations for which approval was sought in the 27 February 2018 Modification Request. In short, a constructive refusal to the mining of this substantial 76.2Mtpa of coal reserve (Conditions 1.1(a)(xi) and 3.3(a)(viii) with section 2.2.1 and Tables 1 & 2 of the Updated RTC); and having the effect of, in substance, precluding mining of the Piercefield Seam or otherwise leaving it to the Secretary to prevent any mining of the Piercefield Seam (Conditions 3.3(a)(vi)-(vii) and 1.1(a)(xi)) (HTBA's Third WS at pars 9-12, as expanded upon in pars 17-48).
5. HTBA also contends that the s34 agreement still maintains the conditions that precludes the implementation of the new coal clearance system for which approval was sought (pars 49-53). Specifically, proposed Conditions 2.4 and 1.1(a)(xi) which seek to abandon "refuse" the proposed coal clearance system. This is said to be a material change to the original proposal because the new coal clearance system would have included additional construction works (Notice of Modification dated 9 August 2019 p18 par 54 (delete condition 7.2(e) of Schedule 2 and replace with restriction on road haulage to 1.5Mtpa)).
6. For those reasons, HTBA contends that I should decline to make the orders sought in the final s34 agreement (HTBA's First WS at pars 10-14). Emphasising that s 34(3)(a) operates to require the Court not to dispose of the proceedings in accordance with the terms of a decision that the Court could not have made in the proper exercise of the power: AQC Dartbrook CA at [279].
7. In response, the applicant and the Minister contend that HTBA's submissions pay insufficient regard to the broad terms of s 75W(4), and proceed by reference to observations made in cases concerning statutory provisions and contexts which are distinct from s 75W(4). Additionally, the parties submit that the construction advanced by the HTBA is practically unworkable and, if the contentions advanced were followed through to their logical conclusion, the power to condition a modification under s 75W(4) would be exceedingly narrow. At a factual level, the Minister submits that the conditions contained in the s34 agreement are plainly of a kind that may be imposed by the Court in the exercise of its jurisdiction. The Minister identifies that it is commonplace that conditions would operate to reduce or address certain impacts arising from the activities that were the subject of the original modification request. Rather than transforming the modification request as HTBA contends, the conditions in this case represent reasonable responses to impacts identified in the course of the IPC's consideration of the request.
8. Accepting that the parties' consent to the conditions does not confer power: Thompson Australian Holdings P/L v TPC (1981) 148 CLR 150 at 163 per Gibbs CJ) (HTBA's First WS at par 12), and that a condition is invalid if it falls outside the class of conditions which the statue expressly or impliedly permits and, if a condition is not severable, a condition that falls outside the scope of what the statute permits makes the purported approval no approval at all: Ulan Coal Mines Ltd v Minister for Planning (2008) 160 LGERA 20; [2008] NSWLEC 185 at [50] per Preston CJ, it is necessary to examine and confirm my jurisdiction in this case.

Jurisdiction and power of the Court to make the Section 34 Agreement

1. By operation of s 39(2) of the LEC Act, and in addition to any functions and discretions the Court otherwise has as a Court, I have all the functions and discretions of the Minister in determining the MOD 7 application.
2. The functions of the Minister that I am required to exercise under s 39(2) of the LEC Act are within s 75W of the former Pt 3A of the EPA Act. Relevantly, the text provides that s 75W(2) authorises the proponent to make a request to the Minister to modify the Minister's approval for the project, while s 75W(4) provides the Minister with the power to modify the approval (with or without conditions), in circumstances where the definitions in s 75W(1) make it clear that the modification may change the terms of the approval, including by revoking or varying or adding conditions.
3. The scope and limitations of the power were the subject of consideration of the Court of Appeal in Barrick. In Barrick at [13], Basten J identified the imprecision of the text of s 75W and acknowledged it "…cast doubt on the precise scope of the intended approval mechanism". His Honour also stated that despite the apparent open terms in which it is expressed in that case the parties accepted that subcl (4) did not give the Minister untrammelled power to modify the approval but only to act upon a request by the proponent of the project, pursuant to subs (2).
4. HTBA submits that in Barrick, a judicial review decision, the Court determined, despite some semantic inconsistency, that it is correct to treat the subject matter of the consideration under s 75W as limited to a request by a proponent to modify the approval for a project: subs 75W(2); Barrick at [14]. Accordingly, in this case they argue that the 'modification of approval' referred to in subs (1) is the modification the subject of the request required by subs (2), that is, the type of changes to conditions that are contemplated by the definition in subs (1) are those that are requested. Emphasising that if the terms in subs (1) were contemplating unilateral changes to the existing conditions by the Minister or unilateral modifications by the Minister, there would have been no cause for subs (4) to refer to the Minister modifying the approval "with or without conditions" (HTBA's First WS at par 155). In this case, the abandonment of the coal clearance system via Conditions 2.4 and 1.1(a)(xi) for which approval was sought is said to be a material change to the original proposal. Conditions abandoning the coal clearance system significantly alter the modification request for which approval was sought. Similarly, the constructive preclusion of the mining of the Piercefield Seam via conditions is not the subject of the applicant's request. In short, HTBA argues that if there is no power to amend a request, then there is no power in s 75W or repealed Pt 3A for the Court on appeal to impose conditions on the modification of the approval under subs (4), that have the effect of changing the request for modification before the Minister and the Court, or to approve or refuse only part of a modification request in contrast with Pt 4 of the EPA Act (HTBA's First WS at par 26).
5. Accepting that the starting point in considering the scope of the power to impose conditions under s 75W(4) is the text of the provisions: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47]. I agree with the Minister that the subsection simply provides that the Minister may modify the approval (with or without) conditions or disapprove of the modification. The power to modify an approval is enlivened by the making of a request falling within the scope of s 75W(2): Barrick at [7]. Applying orthodox principles of statutory construction, the power to condition a modification must be exercised in a way that fairly and reasonably relates to the development for which permission is being given: Newbury District Council v Secretary of state for the Environment [1981] AC 578 at 599-600 (Viscount Dilhorne).
6. In light of the broad statutory language in s 75W(4), I do not accept HTBA's submissions which support a narrow interpretation of the provision for the reasons articulated by the Minister and the applicant in their written submissions. In short, if the Court were to accept that the types of changes to conditions that are contemplated by the definition in subs (1) are those that are requested (HTBA's First WS at par 15), and that that circumstance operated to limit the power to impose conditions under s 75W(4), how could the Court ever impose a condition that was not requested by the proponent. In my assessment, the construction advanced by HTBA would limit the condition making power under s 75W(4) in a way that is unlikely to be consistent with the evident object of the condition aspect of the provision and effectively frustrate the management of a potentially broad and diverse range of environmental impacts.
7. I do not accept that the reasoning in Barrick at [13] supports such a restrictive interpretation of the power to impose a condition under s 75W(4). The observations at [16]-[17] support a broader construction. To my thinking, Basten JA's observations in Barrick at [13] were not directed to the imposition of conditions, but rather to the scope of the power to modify an approval under s 75W(4), and the procedural requirements of the provision. In observing that it is "…correct to treat the subject matter of consideration under s 75W as limited to a "request" by a proponent, to modify an existing approval for a project", it does not follow that this reasoning is directed to answering the question as to what conditions may be imposed with the modification. I accept, as the Minister submits, that the construction of s 75W advanced by HTBA is uncertain and conceptionally unstable. It would mean that any condition that is at variance with the terms of the request for modification as submitted could be characterised as a condition that has the "effect of changing the scope of the request for modification before the Minister or the Court". It is difficult to imagine a condition which would not is some way narrow the scope of activities that are the subject of a request for modification under s 75W(2) - putting aside conditions which require the proponent to undertake development in accordance with a request. Furthermore, I agree with the Minister that the submission appears to elide the concept of a "request" with the concept of a "modification" within s 75W. Section 75W(2) contemplates a request by a proponent to modify an approval. Section 75W(4) provides that the Minister may modify "the approval "with conditions. In this case the conditions complained of operate to qualify the approval, as is evident from the terms of the consent itself at Annexure A - which provides consent to an application "subject to the conditions set out in …".
8. Finally, it is my considered opinion that the construction proposed by HTBA would deprive the word "condition" of any real substantive operation. It would also undermine any co-operative negotiation of conditions between proponent and a consent authority as contemplated by the s34 process.
9. For those reasons, HTBA's contention that there is no power to impose certain conditions included in the s34 agreement because they were not the subject of the "request" is not made out on the evidence before me.
10. In that regard, I note that HTBA contend that Conditions 1.1.(a)(xi), 2.4 and 3.3(a)(vi-viii) are beyond power as they either expressly or constructively prohibit mining in the Piercefield Seam. However, this proposition ignores an inherent constraint in the approved annual extraction rate, which the applicant, at no time, has sought to modify. The request made by the applicant was to continue its existing approved mining operations for an additional five years until December 2027 with the option of utilising the bord and pillar method (Class 2 application tab 2, Application form p2) in the Kayuga Seam. The maximum annual extraction limit of 6Mtpa is imposed by Condition 2.3(a). The applicant's request to continue mining for an additional five years has therefore always been constrained by the maximum annual extraction limit. The Environmental Impact Statement dated June 2000 prepared by HLA Environ Sciences Pty Ltd (2000 EIS) anticipated that the Kayuga Seam would be mined following exhaustion of the Wynn Seam. The Consent authorises the applicant to extract 57.2Mt of coal from the Kayuga Seam of which 50.5Mt is still in situ.
11. I accept, as the applicant submits (Applicant's WS at par 17), that the effect of the annual extraction limit and the sequence already required by the Consent means that in practical terms, the Piercefield Seam will not be mined in the five-year extension period. That, however, does not mean that the conditions have in any way prohibited mining in the Piercefield Seam or otherwise impermissibly altered the request.
12. The s34 agreement (like earlier drafts) includes Condition 3.3 which requires the applicant to prepare and submit an extraction plan to the Secretary for approval to resume longwall mining operations. The applicant can satisfy this condition by submitting an extraction plan for each seam or for a combination of seams based on the proposed operations intended to occur during the additional five years. The additional requirements that the applicant is required to address in the extraction plan to carry out longwall mining are: 1. Condition 3.3(a)(vi) requires the applicant to demonstrate that total maximum vertical mining subsidence will not exceed the total vertical mining subsidence assessed and approved under the original determination. This does no more that ensure that the applicant cannot cause more vertical mining subsidence during the additional five years than was already assessed and approved under the Consent. The parameters in the Holt 2000 report can only be exceeded in the Kayuga Seam as estimated in the Byrnes Geotechnical report dated 3 July 2020 (Appendix C Updated RTC) (Byrnes report). This is because the Byrnes report confirms that longwall mining in the Kaygua Seam can occur without exceeding the cumulative parameters assessed in the Holt 2000 report. For that reason, Condition 3.3(a)(vi) provides the applicant the option to prepare an extraction plan to recommence longwall mining operations in the Kaygua Seam for that additional five years without having to address the original parameters in Holt 2000 report. 2. Conditions 3.3(a)(vii) requires the applicant to demonstrate that there will be no overall cumulative increased impacts to groundwater sources over the previously assessed and approved under the original determination which incorporates the Mackie Environmental Research (200) Dartbrook Extended - Underground Coal Mine Water Management Studies. Again, this condition does not more that ensure that the applicant can carry out longwall mining operations without demonstrating that cumulative groundwater impacts will not be greater for the additional five years that previous assessed and authorised by the Consent; and 3. Condition 3.3(a)(viii) requires the applicant to adopt the sequence for extraction of the coal seams in accordance with section 2.2.1 and Tables 1 and 2 of the Updated RTC. Again, the sequence is consistent with the Consent as originally granted.
13. Based on the evidence before me, there can be no complaint that Condition 3(a)(viii) is beyond power because the MOD 7 request simply continues the mining operations under the consent for an additional five years in the same sequence that has always been approved. It is not suggested that the five-year extension would result in the entire available resource being extracted. That was always the case. The original Consent limited the extraction to 126Mt of ROM due to the maximum annual extraction limit whereas there was a total resource of 167.2Mt which was approved for extraction. The total resource approved for extraction was not capable of being mined within the original 21 years without some form of extension. In short, it is the combination of the maximum annual extraction limit and the proposed five-year extension that restricts the coal seams the applicant will be able to mine over the extended period and not the requirement to prepare an extraction plan. The extraction plan is simply managing environmental consequences of mining (Applicant's WS at pars 18-20).
14. Contrary to HTBA's submissions, Condition 3.3(a)(vii) does not constructively prohibit mining of the Piercefield seam. Rather, the condition controls the extent of groundwater impacts that can result over the additional five years from longwall mining. There is an important distinction between a condition that prohibits development altogether and a condition that controls how development is to be carried out. This condition falls into the latter category and is imposed to respond to the applicant's request made to continue mining operations for an additional five years, commencing with mining in the Kayuga Seam which is authorised for longwall mining. Furthermore, the condition is not beyond power because the applicant has demonstrated in the groundwater report that it can recommence longwall mining operations in the Kayuga Seam without breaching the cumulative groundwater impacts assessed and approved in the MERS Report being the only coal mine that can be practically mined during the additional five years. The imposition of Condition 3.3 (a)(vii) to limit the groundwater impact for the addition period to that previously assessed and approved involves an approval of the request made by the applicant and is within power of the Minister (now the Court) under s 75W(4) to impose. All that Condition 3.3(a)(vi) ensures is that the applicant causes no more mine subsistence impacts during the extended period than has already been assessed and approved. That environmental management condition is clearly with in power.
15. HTBA submits at par 43 that the Minister must adopt one of two options - either refuse the request as lodged or grant the request in its entirety. HTBA's submission effectively means that the Minister has no power under s 75W to approve the request to recommence mining operations for an additional five years, where those operations can satisfy the previously assessed and approved groundwater and subsidence impacts if those conditions can restrict the mining of the current approved mining operations for the additional five years. Such a construction cannot be correct. The Minister has accepted that mining operations in the Kayuga Seam can resume by either bord or pillar or longwall methods during the additional five years within the parameters previously assessed and approved in the Holt 2000 report and is now seeking to condition that requirement in Condition 3.3(a)(vi). The Minister (now the Court) in my assessment may impose such a condition as it directly relates to the request made to continue mining operations for an additional five years. If the effect of Condition 3.3(a)(vi) is that not all currently approved mining operations can be completed in the additional five years that cannot mean that the condition is unlawful and outside the scope of the Minister's power for the reasons earlier identified. Condition 3.3(a)(vi) does not leave it to the Secretary to determine whether longwall mining operations in the Piercefield Seam can continue for the additional five years. Rather, the condition requires the applicant to demonstrate to the Secretary that longwall mining can occur without causing cumulatively greater mine subsidence than previously assessed and approved. It applies to longwall mining in any of the approved coal seams. This does not prevent the applicant from submitting an extraction plan for only the Kayuga Seam during the additional five-year period. The applicant has demonstrated through the Byrnes report that such an extraction plan can satisfy the condition. If the Kayuga Seam was mined by bord and pillar methods (which would be authorised under the Consent as modified) and did not give rise to subsidence then it would still be possible to satisfy the condition and longwall mine the Piercefield Seam without exceeding the estimate given in the Holt 2000 report (based on the Byrnes report).
16. As the applicant points out (in its WS dated 15 February 2022 at par 9), the request did not seek to specifically mine both the Piercefield Seam and the Kayuga Seam within the five-year extension. To characterise the request in that way is misleading (par 42 of HTBA's Third WS). The request was to continue all approved mining operations for and in accordance with the mining sequence. This is the context in which the applicant's request must be properly understood and, in that context the imposition of Condition 3.3(a)(vi) clearly falls within the scope of the Minister's power under s 75W(4).
17. Proposed Condition 3.3(e) requires the Secretary to approve the methods of measurement and monitoring of compliance with the performance measures and performance criteria. There has been no suggestion that the previous versions of this condition provided in draft s34 agreements is beyond power and the slightly amended version now proposed in my assessment appropriately regulates the amendment of the environmental impacts of the proposed development authorised by the Consent in the modified form and it is clearly within power under s 75W(4).
18. Proposed Condition 3.3(k) implements an adaptive approach to ensuring the criteria in Condition 3.3 more broadly will be complied with. Adaptive management conditions are consistent with the principles of ecological sustainable development which are included in the objects of the EPA Act and help to manage any residual risk associated with the development authorised by a consent. The principle and its application was explained by Preston CJ in Newcastle & Hunter Valley Speleological Society Inc v Upper Shire Council and Stoneco Pty Limited (2010) 210 LGERA 126 at [181]-[185] and to the extent that the regime established in Condition 3.3 leaves a residual risk, it is appropriate and within power to impose this condition and it is an appropriate application of the precautionary principle and within power under s 75W(4).

The refusal of the coal clearance system: Conditions 1.1(a)(xi) and 2.4

1. The applicant has addressed the lawfulness of Condition 2.4 at pars 48-52 of its written submissions dated 5 August 2021 and I accept those submissions. HTBA submits that the power under s 75W(4) does not provide the Minister with the power to refuse any part of the request because to do so would impermissibly alter the request (Applicant's WS dated 5 August 2021 at par 52).
2. HTBA's submission must be rejected because the terms of s 75W(4) are sufficiently broad to sanction the proposed changes to the application, for the reasons I have given, generally embracing the submissions of the Minister and the applicant.

Contention regarding fair and reasonable relationship between condition and request

1. The contention that the proposed conditions do not fairly and reasonably relate to the development for which permission is being given (HTBA's WS at pars 36-44) must also be rejected at both a factual and legal level.
2. As is noted above, it may be accepted as a result of ordinary principles of statutory construction that Newbury principles apply to the exercise of a condition making power under s 75W(4). The conditions challenged by HTBA do fairly and reasonably relate to both the development as approved and the modification request, for the reasons articulated by the Minister and the applicant and which I accept.
3. This is not a case of the kind referred to in 1643 Pittwater Road Pty Ltd v Pittwater Council [2004] NSWLEC 685 (HS at pars 39-40), where a change to the colour of a building is said to provide a basis for reconsidering the car parking for the development. The existing approval provided for extraction of coal from three seams, among other matters, until 5 December 2022. The impugned condition would result in extraction from one of those seams ceasing in the context of a temporal extension to the remainder of the approved mining activities. Such a condition fairly and reasonably relates to the both the approved development and the modification request.

Conclusion

1. I accept, as the applicant submits, that the "essential characteristics" or underlying elements of the Consent are the extraction of ROM coal from a number of seams within the site at a maximum rate of 6Mtpa; the extent of the mining operations in terms of scale and intensity at the West Site; the transportation and processing at the CHPP, including the use of the associated facilities at the East Site, the treatment and disposal of water into the REA and the transportation of washed or ROM coal to Newcastle Port by rail. All such elements will remain unchanged by an approval of the proposed modifications.
2. The nature of the applicant's request is to modify the Minister's approval. Subsection (1) of s 75W defines Minster's approval as "an approval to carry out a project under this part and includes as approval of a concept plan".
3. The extent of the Minister's power to modify the approval is, as the applicant submits, determined by reference to the defined term "modification approval" in subs (1) which refers to "changing the terms" of the Minister's earlier approval and "revoking or varying a condition of the approval or imposing an additional condition of approval" (Applicant's WS dated 5 August 2021 at par 31).
4. The definition in s 75W(1) of the modification of approval is wide and inclusive and refers to the power to change the conditions of an approval as well as the terms of the approval (Barrick at [23] per Basten JA).
5. I do not accept the submissions of HTBA at par 15 that the text in subss 75W(1) and (4) is focused on the nature of the request made under subs (2). The words of the statute are clear and are focused on the Minister's approval. And, while I accept that the subs (4) is not an "untrammelled power to modify" (Barrick at [58]) and the request is a precondition to the exercise of the Minister's power under subs (4), the Minister's power is not constrained to modifying only the approval as requested by the proponent under subs (2).
6. Once a request has been made which falls within the scope of the power in s 75W(2), the Minister has a discretionary power to modify the approval with or without conditions. The Minister also has a discretion to disapprove of the modification. Conditional approval may amend or vary the modifications sought in the request. Mindful, that the determination of a modification request is an indivisible function, there cannot be separate determination of, first, the grant of approval of modification of the Minister's approval and, second, the imposition of conditions on such approval.
7. The parties agree that the requirement in s 75W(2) has been satisfied by the applicant's written request to the Department on 27 February 2018 (Class 1 application, Tab 2): (Barrick at [13]). I accept that the procedural requirements have been complied with and the request acted upon as described in the earlier chronology. There is no requirement under s 75W for the Director-General to be provided with each condition that is ultimately imposed with approval of a modification request.
8. That said, the Minister reminds me of the implicit obligation within the section, identified by the Court in Barrick at [38] that in my consideration I need to be satisfied that the request falls within the scope of the section. In discharging this obligation, the Minister submits that I must undertake an evaluative judgment as to the scope of the modifications sought to be approved: Barrick at [41] which includes a consideration of both the changes to the project and the environmental consequences Barrick at [51].
9. Having undertaken the consideration and evaluation identified by the Court in Barrick at [38] and [41] for the reasons stated I am satisfied that I have jurisdiction to make the orders as agreed by the parties. In the language of s34(3) the decision to uphold the appeal and to approve the application to modify the development consent "is a decision that the Court could have made in the proper exercise of its functions". As such, s 34(3)(a) of the LEC Act requires me to dispose of the proceedings in accordance with the terms of the agreement.
10. In that regard, the Court notes the applicant has made an offer to enter into a planning agreement on the terms required by condition 11.4 of Schedule 2 and Appendix 5 of Annexure A.
11. The Court orders: 1. The appeal is upheld. 2. The application to modify DA231-7-2000 (MOD 7) is approved, subject to the conditions in Annexure A. ……………………….. S Dixon Senior Commissioner of the Court Annexure A (3027024, pdf) Annexure B (193414, pdf)

Amendments 23 March 2022 - Correction to typographical error at [1]. 24 March 2022 - Correction to cover sheet pursuant to UCPR r 36.17. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 March 2022