Ashton Coal Operations Pty Ltd v Hunter Environment Lobby Inc

HEADNOTE [This headnote is not to be read as part of the judgment] On 4 October 2012 the Minister for Planning and Infrastructure, through a delegate, approved the appellant's ("Ashton's") South-East Open-Cut coal mine project, subject to conditions. The project is for the extraction of 16.5 million tonnes of coal from land in the Hunter Valley, New South Wales, approximately 12 kilometres north-west of Singleton and near to Camberwell village. Hunter Environment Lobby Inc, the first respondent in the Court of Appeal and an opponent of the project, subsequently appealed against the approval to the Land and Environment Court under (the now repealed) s 75L of the Environmental Planning and Assessment Act 1979 (NSW). On 27 August 2014 the Land and Environment Court held that approval should be granted subject to conditions to be determined ([2014] NSWLEC 129). After a further hearing, the Court determined what conditions should be imposed upon the approval ([2014] NSWLEC 200). These included the following condition as stated in the Court's formal order of 17 April 2015: "10A The Proponent [Ashton] must not carry out any development work on the Project site until it has: (a) Purchased, leased or licensed property 129 from the owner of property 129." Property 129 is integral to both the mining and remediation aspects of the project. It is agricultural land upon which there are significant improvements. The primary judge described the current owner as "steadfastly opposed" to the project. Ashton appealed pursuant to s 57 of the Land and Environment Court Act 1979 (NSW) against the imposition of condition 10A(a). An appeal under that section is confined to questions of law. Ashton relied upon the following grounds identified in its written submissions: "(a) The decision to impose the Condition was an unreasonable exercise of power within the meaning of the term as used in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 in that it was inconsistent with the Principal Judgment; (b) The trial judge's decision to impose the Condition was further unreasonable within the meaning of that term in Li as it was inconsistent with the operation and purpose of clause 8F(1)(c) of the EP&A Regulation, which enabled a major project approval to be given without landowners' consent; and (c) The trial judge's decision to impose the Condition in finding that it was required in the public interest misconceived and misunderstood the concept of the public interest under Part 3A and the EP&A Act, which was to be inferred from the legislation itself, and was not a freestanding concept of fairness to a selected private land owner and (apparently) her successors in title (in which sense it was conceived of and understood by the trial judge)." Held (per Macfarlan JA, Beazley P and Gleeson JA agreeing) dismissing the appeal: (1) The primary judge's imposition of condition 10A(a) was not an unreasonable exercise of power on the basis of inconsistency between the primary judge's two judgments because the two judgments dealt with different issues ([21]). (2) Condition 10A(a) is not inconsistent with clause 8F(1)(c) of the EP&A Regulation. The power of the relevant Minister (and on appeal, the Land and Environment Court) under s 75J to impose conditions on an approval is not relevantly confined by that clause ([23]). (3) The primary judge's principal reason for imposing condition 10A(a) was to ensure that the project as assessed and approved proceeded in its entirety. In the circumstances of the project this was a proper and reasonable planning purpose that fairly related to the development approved. It thus conformed with the Newbury test ([31]). Newbury District Council v Secretary of State for the Environment [1981] AC 578, considered. Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [31], cited. (4) The primary judge did not err in law in imposing a condition concerning the ownership of property integral to the project, assuming, as was the case, that her Honour reasonably considered that the particular planning circumstances required it ([35]).

Judgment

1. BEAZLEY P: I have had the advantage of reading in draft the reasons of Macfarlan JA. I agree with his Honour's reasons and with the order he proposes.
2. MACFARLAN JA: On 4 October 2012 the Minister for Planning and Infrastructure, through a delegate, approved the appellant's ("Ashton's") South-East Open-Cut coal mine project, subject to conditions. The project is for the extraction of 16.5 million tonnes of coal from land in the Hunter Valley, New South Wales, approximately 12 kilometres north-west of Singleton and near to Camberwell village. Hunter Environment Lobby Inc, the first respondent in this Court and an opponent of the project, subsequently appealed against the approval to the Land and Environment Court under (the now repealed) s 75L of the Environmental Planning and Assessment Act 1979 (NSW) ("EPA Act").
3. After a hearing in the Land and Environment Court, Pain J, by judgment of 27 August 2014, held that approval should be granted subject to conditions to be determined ([2014] NSWLEC 129, "First Judgment"). After a further hearing, her Honour determined what conditions should be imposed upon the approval ([2014] NSWLEC 200, "Second Judgment"). These included the following condition as stated in the Court's formal order of 17 April 2015: "10A The Proponent [Ashton] must not carry out any development work on the Project site until it has: (a) Purchased, leased or licensed property 129 from the owner of property 129."
4. Property 129 is integral to both the mining and remediation aspects of the project. It is agricultural land upon which there are significant improvements. The owner is Mrs Wendy Bowman, whom the primary judge described as "steadfastly opposed" to the project (First Judgment [382]).
5. Ashton appeals pursuant to s 57 of the Land and Environment Court Act 1979 (NSW) against the imposition of condition 10A(a). An appeal under that section is confined to questions of law. Ashton relies upon the following grounds identified in its written submissions: "(a) The decision to impose the Condition was an unreasonable exercise of power within the meaning of the term as used in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 in that it was inconsistent with the Principal Judgment; (b) The trial judge's decision to impose the Condition was further unreasonable within the meaning of that term in Li as it was inconsistent with the operation and purpose of clause 8F(1)(c) of the EP&A Regulation, which enabled a major project approval to be given without landowners' consent; and (c) The trial judge's decision to impose the Condition in finding that it was required in the public interest misconceived and misunderstood the concept of the public interest under Part 3A and the EP&A Act, which was to be inferred from the legislation itself, and was not a freestanding concept of fairness to a selected private land owner and (apparently) her successors in title (in which sense it was conceived of and understood by the trial judge)."
6. For reasons that appear below, I consider that each of these grounds of appeal should be rejected and that the appeal to this Court should be dismissed with costs.

ASHTON'S MINING PROJECT

1. The project as approved will involve seven years of active mining, seven years of reject emplacement and four years of site rehabilitation. It has been designed to proceed in stages, with mining commencing in the north of the area to be mined and continuing towards the south of that area. Property 129 constitutes a significant part of the southern portion of the area and, once mined, will be the site of the final pit void.
2. Plans in evidence showing the mining progression indicate that mining will not occur on Property 129 for a period of years. The Environmental Assessment Report of the Director-General of the Department of Planning and Infrastructure, prepared pursuant to (the now repealed) s 75I of the EPA Act, contemplated that mining operations would proceed for two years without the use of Property 129 but that the property would be required in subsequent years.

THE LEGISLATIVE CONTEXT

1. The Director-General approved Ashton's project under the (now repealed) Part 3A of the EPA Act which related to "Major infrastructure and other projects." The terms of that Part were summarised in Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc [2014] NSWCA 105; 86 NSWLR 527 at [22]-[32]. By reason of transitional provisions it continues to apply to the project the subject of these proceedings. Of present relevance is the Minister's power under (the new repealed) s 75J(4) to approve a project on such conditions as the Minister may determine.
2. Section 75Z(b), which fell within Part 3A of the EPA Act, authorised the making of regulations with respect to approval of projects under that Part, including regulations: "(b) requiring owners of land on which projects are proposed to be carried out to consent to applications for approvals under this Part …".
3. Clause 8F of the Environmental Planning and Assessment Regulation 2000 ("EP&A Regulation"), made pursuant to (the now repealed) s 75Z, provided: "8F Owner's consent or notification (1) The consent of the owner of land on which a project is to be carried out is required for a project application or modification application unless: … (c) the application relates to a mining or petroleum production project, or … (3) If the consent of the owner of the land is not required for a project application under this clause, then the proponent is required to give notice of the application: … (b) in the case of a project that comprises mining or petroleum production (other than a project that also comprises a linear infrastructure project) - to the public by advertisement published in a newspaper circulating in the area of the project before the end of the period of 14 days after the application is made … ".

THE JUDGMENTS AT FIRST INSTANCE

1. In her First Judgment, the primary judge summarised the issues to be determined as follows: "22 … (1) Whether the SEOC project will have a significant impact on Aboriginal cultural heritage on the SEOC project site and in the vicinity, and whether this is contrary to the public interest and the principle of intergenerational equity (Aboriginal cultural heritage); (2) Whether the SEOC project will have an adverse impact on the potential for sustained agricultural production on the SEOC project site, and whether this is contrary to the principle of intergenerational equity (land rehabilitation); (3) Whether the SEOC project fails to address medium to long term risks to landscape functionality (including water quantity, water quality and land quality) and whether this is contrary to the precautionary principle and the principle of intergenerational equity (groundwater). Whether the SEOC project fails to adequately protect the health of the Hunter River and associated tributaries downstream of the SEOC project site, and the communities and environments that depend on that system and whether this is contrary to the precautionary principle, intergenerational equity and the principle of conservation of biological diversity and ecological integrity (water licensing and the Hunter River Salinity Trading Scheme (HRSTS)); (4) Whether the SEOC project will have a significant impact on the health and wellbeing of the residents of Camberwell and other residents in the vicinity of the SEOC project site, and whether this is contrary to the public interest, the precautionary principle and the principle of intergenerational equity (health and air quality); (5) Whether noise and dust conditions and mitigation strategies under the project approval will result in unacceptable social impacts, and whether this is contrary to the public interest and to the principle of intergenerational equity (social); (6) Whether the SEOC project will result in significant social, environmental and economic costs that have not been adequately addressed for the project, contrary to ecologically sustainable development (ESD) and the public interest (economic); (7) Whether the Court would be slow to grant approval due to the need to acquire some of the land on which the SEOC project is to be carried out by reason of the uncertainty this will cause landowners (landholder uncertainty); (8) Whether the SEOC project will have a significant impact on the historic and social values of the common at property 167L, contrary to the principle of intergenerational equity (the Commons issue); and (9) Whether the actual or potential environmental harm of the SEOC project, and the consequential economic and social harm, outweighs the social and economic benefits of the SEOC project and whether this is contrary to ESD and the public interest (proportionality)".
2. Her Honour addressed these issues as well as Hunter Environment Lobby Inc's specific contention that "the Court would be slow to grant approval" when Ashton does not own or control Property 129 and that without that control "the project cannot be implemented as environmentally assessed."
3. Her Honour concluded that the absence of such control was not a bar to the project's approval, referring to EP&A Regulation clause 8F(1)(c) which she described as allowing "lodgement, consideration and grant of a major project application for mining while land is in other ownership" (First Judgment [385]).
4. Later, the primary judge said: "520 The Applicant submitted that approval is not in the public interest because the SEOC project in effect requires Mrs Bowman's land to be acquired. Mrs Bowman has stated she has no intention of selling her property to Ashton. I have already held that is not a matter that is determinative of this appeal except that I must determine whether to accept the Applicant's proposed condition that no mining should commence before a mining licence is granted and/or Mrs Bowman's property is purchased. The Court needs to better understand the operational impacts of this approach before determining a final condition of approval."
5. Having weighed the project's economic benefits against its negative impacts, her Honour concluded that approval should be granted but "subject to adequate conditions about which a number of issues of clarification and possible alteration remain" (First Judgment [530]).
6. In her Second Judgment, the primary judge stated that she did not consider that the imposition of a condition that Ashton acquire Property 129 before commencing the project was inconsistent with her First Judgment. Her Honour said that the issues in the two judgments were different, that in the first being whether approval should be given at all, not whether approval should be subject to a relevant condition. Her Honour also rejected the submission that such a condition would be inconsistent with clause 8F(1)(c) of the EP&A Regulation.
7. Her Honour referred to the agreed position of Ashton and the relevant Minister that if Mrs Bowman objected to a mining lease over her land, the mining lease would not be granted. She noted that Ashton had obtained a mining lease over part of the proposed project area (not including Property 129) and continued: "8 … That process suggests that the Applicant's submission that Ashton can potentially seek multiple mining leases over different parts of the mine pit area not including property 129 enabling mining up to Mrs Bowman's property boundary with substantial environmental consequences for that property, placing pressure on Mrs Bowman to sell her land, is correct."
8. Her Honour gave the following reasons for concluding that condition 10A(a) (previously numbered 10A(b)) should be imposed: "9 The issue for the Court is whether condition 10A(b) or an amended form satisfies the Newbury test (Newbury District Council v Secretary of State for the Environment [1981] AC 578). That requires that conditions of approval must be for a planning purpose, must reasonably and fairly relate to the development permitted and not be so unreasonable that no reasonable planning authority could have imposed it. The project which I have assessed requires the utilisation of property 129 to win the resource and locate the proposed final void, an important part of site remediation at the end of the project as this will accept saline water from the mining project on a permanent basis. Until Ashton has control of property 129 it will not be able to implement the project as assessed by the Court. 10 Unlike any other property in Table 1 Condition 1 Sch 3, the owners of which can choose to exercise acquisition rights, Mrs Bowman's property falls within the mine footprint. That the owner of that property has the option of acquisition rights under Table 1 is not to the point. If the owner chooses not to sell, lease or licence property 129 to Ashton then the project as I have assessed and approved it cannot proceed. Some form of condition 10A is appropriate in these circumstances. It is necessary and appropriate to impose a variation of condition 10A(b) to the effect that property 129 must be purchased, leased or licensed by Ashton. 11 I do not agree with Ashton that such a condition is contrary to the Newbury test. It does have a planning purpose, relates to the development the subject of this approval and is not unreasonable in the circumstances of this case. Ashton submitted the condition is infected by an ulterior purpose of strengthening Mrs Bowman's commercial negotiating position. There is no evidence to support that submission. I also do not agree with the Respondents' submissions that the accepted planning resolution of this issue in this jurisdiction is the acquisition rights in Sch 3 Condition 1 Table 1 which includes property 129. I am not aware of any jurisprudence in this Court that confirms that submission in relation to the Court exercising its discretion in imposing appropriate conditions of consent. 12 Ashton complains that its development plans can be potentially thwarted by Mrs Bowman refusing to sell, lease or license her land. Ashton accepts that it requires Mrs Bowman's consent to mine on her land. It also requires her land whether purchased, leased or licensed, as reflected in Ashton's submissions that there are management options it may wish to pursue other than purchasing property 129. This can be reflected in a condition. The Court's role is to assess the environmental and planning impacts of the proposed project. The Court can and should impose conditions which ensure that the project it has assessed in its entirety will be carried out in a way which addresses all aspects of the public interest. That includes consideration of fairness to the current or future owners of property 129. 13 The substantial reason for imposing the condition is that there is an unassessed environmental impact that potentially arises if I do not impose an amended condition 10A(b), namely what is the impact on the environment of the SEOC project if property 129 is not able to be purchased, leased or licensed by Ashton from Mrs Bowman or later owners. An amended condition 10A arguably creates certainty, which is otherwise lacking, that the project in its entirety will be carried out. The project which I have assessed as a whole requires utilisation of property 129 both to win the resource and to implement the final landform including importantly the final void. If that cannot be achieved a new project application will be necessary regardless of whether I impose this condition or not."

Ground (a): inconsistency between the judgments

1. Ashton submitted that the primary judge's First and Second Judgments were inconsistent because the first treated the private ownership of Property 129 as irrelevant to the project's approval, whilst the second contradicted that by treating it as relevant in determining what condition to impose.
2. I reject that submission. As her Honour pointed out in the Second Judgment, and indeed as [520] of the First Judgment made clear, the judgments dealt with different issues. In the first, the question was whether non-control of Property 129 was a bar to approving the project. In the second, the question was whether the approval should be subject to a condition concerning that property. Accordingly, there was no inconsistency.
3. I therefore reject Ground (a).

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

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

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

1. As framed in Ashton's written submissions, Ground (c) assumed that the primary judge imposed condition 10A(a) for reasons of fairness to the owner (and future owners) of Property 129. In oral argument, Ashton's senior counsel however implicitly accepted that her Honour's reason, or at least her primary reason, for taking this course was different, namely, that the condition was effectively required to ensure that the whole of the project as assessed and approved by her Honour would proceed, rather than just some part of it. Ashton argued that imposing a condition for this reason conflicted with the test for determining the validity of conditions stated in Newbury District Council v Secretary of State for the Environment [1981] AC 578 (at 599-600), being that conditions must be for a planning purpose, must reasonably and fairly relate to the development permitted and must not be so unreasonable that no reasonable planning authority could have imposed them.
2. The primary judge described her "substantial reason" for imposing condition 10A(a) as the "unassessed environmental impact" that would arise if the condition were not imposed (Second Judgment [13] quoted in [19] above). Her Honour explained that she had assessed the project as a whole and had not assessed its environmental impact were it to be only partially completed.
3. An inability to access and control Property 129 would undoubtedly have considerable significance for the project's performance and environmental impact. First, the property constitutes a large part of the area to be mined. If it is not mined, but other parts of the project area around it are mined, the economic benefits of the project will be different from those assessed by her Honour. Secondly, the property is required, as her Honour described, "to implement the final landform including importantly the final void" (Second Judgment [13]). If the property is not available for this purpose, the project's environmental impact will likely be significantly different from that which her Honour assessed.
4. Moreover, this is a project that is likely, if condition 10A(a) is not imposed, to commence without control over all of the property that it is to be affected being obtained. It is a staged project, not requiring the use of Property 129 in at least its first two years (see the relevant Department's Environmental Assessment Report referred to in [8] above). Ashton's written submissions on appeal to this Court recognised the inevitability of mining proceeding prior to Ashton obtaining control over Property 129. They stated that Property 129 "would not be reached by active mining until around Year 3 of the mine's life …" and that the mine "only encroached on Property 129 at and after around Year 3 of the mine life."
5. In oral argument, Ashton's senior counsel submitted that there was no basis for the primary judge to conclude that there was a real prospect that Ashton would undertake significant mining operations before obtaining control of Property 129. He submitted, without contradiction, that this Court should assume that Ashton would at all times act honestly and in accordance with the law and said that a quia timet injunction and criminal law sanctions would be available to prevent or deter it from acting otherwise.
6. If Ashton embarked on the project without a reasonable expectation of obtaining control over Property 129 such remedies might indeed be available. However, there is no reason to think that it would so act. Rather, it should be assumed, as Ashton argued, that Ashton would act lawfully. Absent condition 10A(a), there is no reason why Ashton should not, and would not, commence and continue the project until the time (two or so years later) that it requires Property 129, so long as Ashton has a reasonable basis for believing that it can obtain that control when required. Ashton's written submissions referred to in [28] above indicate that it is possible, and indeed probable, that this would occur.
7. Considering this, the force of the primary judge's reasoning becomes apparent. If Ashton mines the project area for a substantial period but, contrary to its expectations, does not obtain control of Property 129, it will not be able to complete the project that her Honour has assessed. Ashton did not seek to contradict her Honour's statement that it was only the entire project, and not a partial or staged version of it, that she had been asked to, and did, assess. As noted above, without Property 129's economic contribution (through mining) and its role in remediation, the project would be significantly different both economically and environmentally. The primary judge's purpose in imposing condition 10A(a) was to ensure that the project proceeded in its entirety. This was a proper and reasonable planning purpose that fairly related to the development approved. It thus conformed with the Newbury test. To use the language adopted in Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [31] it was not "definitely extraneous to any objects the legislature could have had in view."
8. Whilst these conclusions address what her Honour described as her "substantial reason" for imposing the relevant condition, it appears that her Honour also took into account the adverse effect that mining in the project area (before Property 129 was reached) might have on Property 129. The primary judge referred in this context to the possibility, absent the imposition of clause 10A(a), of "mining up to Mrs Bowman's property boundary with substantial environmental consequences" (Second Judgment [8]). This appears to be what her Honour had in mind in considering "fairness to the current or future owners of Property 129" as relevant to her decision (Second Judgment [12]).
9. Whilst a generalised, unspecified, concept of "fairness" to affected property owners is not of itself relevant, that term might (perhaps loosely) be used, as seems to have been the case here, to refer to the environmental impact of a proposed project on adjoining owners. This is a proper consideration.
10. Her Honour did not assess the environmental impact of the project on Property 129 in the period before mining reached its boundaries and it was therefore not included as one of the factors she weighed when considering whether to approve the project. Similarly, the relevant Department's Environment Assessment Report stated that noise impacts on Property 129 in the first two years of mining were not assessed because Property 129 was within the area proposed to be mined (albeit not within the first two years). An assumption was therefore made that Property 129 would be controlled by Ashton from the outset of the project. Condition 10A(a) was designed to ensure that that assumption was made good.
11. Ashton's written submissions on appeal contended that clause 8F(1)(c) of the EP&A Regulation evinced a policy that the absence of the consent of owners of land on which a project was to be carried out was not relevant to whether it was in the public interest that that project be approved or to the terms upon which approval should depend. In my view, such a broad policy is not evident from the terms of clause 8F(1)(c). As I have said earlier, it deals with applications for project approval. I can see nothing in it that precludes an approval authority imposing such conditions as it considers appropriate in the particular circumstances before it. There was therefore no error of law involved in her Honour's imposition of a condition concerning the ownership of property integral to the project, assuming, as was the case, that her Honour considered that the particular planning circumstances required it.
12. For these reasons, I also reject Ground (c).

ORDERS

1. As each ground of Ashton's appeal should be rejected, its appeal should be dismissed with costs.
2. GLEESON JA: I agree with Macfarlan JA.

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: 20 November 2015