Botany Municipal Council v Federal Airports Corporation

1. See the definition of Schedule airport in s. 3(1) of the Act.

The area of land upon which the proposed runway is to be built extends approximately 3,000 m. into Botany Bay. The dredging work to be undertaken is for the purpose of obtaining fill from the bed of the bay for use in the construction of the runway. Dredging will take place to depths ranging from 10 to 22.5 m. below lowest astronomical tide. The dredging activity will involve the extraction from the bed of the bay of approximately 15,300,000 m.3 of sand and/or other material. The Commonwealth has acquired under the Lands Acquisition Act 1989 Cth an unencumbered estate in fee simple in the construction site and identified interests in the dredging site (which is adjacent to the construction site) sufficient to enable dredging activities to be undertaken for the purpose of securing the appropriate amount of fill for the construction site.

The dredging activity is an "activity" as defined in Pt 5 of the State Act and is likely significantly to affect the environment. The F.A.C. has not obtained an environmental impact statement in relation to the dredging activity pursuant to s. 112 of the State Act or Pt VII of the State Regulation.

The questions reserved for the consideration of the Full Court are:

Whether the proposed dredging activity is within the powers of the F.A.C. under the Federal Airports Corporation Act 1986 Cth.

Whether the F.A.C. is a determining authority within the meaning of Pt 5 of the Environmental Planning and Assessment Act 1979 NSW.

Whether the Federal Airports Corporation Regulations (Cth) are valid exercises of the power to make regulations conferred by the Federal Airports Corporation Act.

Whether Pt 5 of the Environmental Planning and Assessment Act and Pt VII of the Environmental Planning and Assessment Regulation 1980 (NSW) in their application to the proposed dredging are inconsistent with: -

(iii) The Environment Protection (Impact of Proposals) Act 1974 Cth

and invalid by reason of s. 109 of the Constitution.

Whether the F.A.C., in carrying out the proposed dredging activity by its contractors, is entitled to an immunity of the Crown in right of the Commonwealth which prevents Pt 5 of the Environmental Planning and Assessment Act and Pt VII of the Environmental Planning and Assessment Regulation applying in the manner claimed in the application.

Argument on question 5 was deferred on the footing that it would not arise for decision if the earlier questions were resolved in favour of the F.A.C.

Question 1: Whether the proposed dredging activity is within the powers of the F.A.C. under the Federal Airports Corporation Act.

The primary functions of the F.A.C. under s. 6(a) of the Act - "to operate Federal airports, and participate in the operation of jointly used areas, in Australia" - extend to a series of matters listed in s. 8(1). They include:

(a) reviewing the use and capacity of existing Federal airports, determining the necessity or desirability of extending or otherwise altering Federal airports and carrying out necessary or desirable extensions to, or alterations of, Federal airports;

(b) carrying on commercial activities at, or in relation to, Federal airports (including carrying on such activities in co-operation, or as joint ventures, with other persons);

(ba) providing, or arranging for the provision of, airport security at, or in relation to, Federal airports;

(c) providing, or arranging for the provision of, facilities and services at, or in relation to, Federal airports;

(da) carrying out activities to protect the environment from the effects of, and the effects associated with, the operation and use of aircraft (other than state aircraft within the meaning of the Civil Aviation Act 1988) operating to or from Federal airports.

However, s. 8(2) provides that the functions of the F.A.C. do not extend to other matters listed in that sub-section. These matters include Air Traffic Control; matters relating to the control, by persons engaged in Air Traffic Control, of vehicles on manoeuvring areas (which include runways but exclude aprons) at Federal airports; the provision of non-visual navigational aids, communication services, or meteorological services and facilities, relating to aircraft; Flight Service and associated facilities; the provision of rescue, fire-fighting or search and rescue services relating to aircraft or of facilities for those services; the investigation of the need for additional Federal airports and the desirability of replacing existing Federal airports with new Federal airports; and the preparation of plans for, and the establishment of, airports that are to be Federal airports. None of these excluded functions touches the function of extending or altering Federal airports which, by virtue of s. 8(1)(a), falls squarely within the functions set out in s. 6(a).

In addition to any other power conferred on it by the Act, the F.A.C. has, subject to the Act, power to do all things "necessary or convenient to be done for or in connection with the performance of its functions" (s. 9(1)). Without limiting the generality of that grant of power, the Act authorizes the F.A.C. to enter various classes of transactions and to do particular acts (s. 9(2)).

Section 7(1) of the Act permits the F.A.C. to perform its functions to the extent only that they are not in excess of the functions that may be conferred on it by virtue of any of the legislative powers of the Parliament and, in particular, permits it to perform its functions in relation to:

(a) trade and commerce with other countries, or among the States;

(d) a Commonwealth place within the meaning of the Commonwealth Places (Application of Laws) Act 1970.

Section 7(2) requires the F.A.C. to endeavour to perform its functions in a manner that:

(c) ensures that, as far as is practicable, the level of noise at airports is not such as to be detrimental to the communities near airports;

(ca) ensures that, as far as is practicable, the environment is protected from the effects of, and the effects associated with, the operation and use of aircraft (other than state aircraft within the meaning of the Civil Aviation Act 1988) operating to or from Federal airports.

The applicant seeks to emphasize the limitations placed by the Act on the functions of the F.A.C. The applicant characterizes the F.A.C. as a "title holder and property manager" and draws attention to the fact that the control of vehicles on runways stands outside its functions, with a view to indicating that its role in relation to the aviation aspects of the review of runway capacity is subsidiary to that of the Civil Aviation Authority. The applicant then submits that the proposed extension to the existing airport is so massive in scale as to lie outside the concept of extension or alteration. The applicant goes so far as to suggest that what is proposed constitutes not an extension to or alteration of the existing airport but a new and additional airport. The submission must be rejected. Although the proposed extension is large, costly and involves a very substantial intrusion into Botany Bay with significant consequences for the environment, it does not amount to the construction of a new airport. What the proposed extension does is to add a third runway to all the existing facilities of Sydney Airport. The proposal clearly constitutes an extension to or alteration of the airport and falls within the primary functions of the F.A.C. under s. 6(a) of the Act as extended by s. 8(1)(a). The fact that the bed of the proposed runway is presently under the sea does not affect the character of the work to be undertaken as the provision of a runway by way of extension to or alteration of Sydney Airport. And the dredging activities to be undertaken in the bay adjacent to the construction site come within the power to do all things "necessary or convenient to be done for or in connection with the performance of [the F.A.C.'s] functions" [2] .

Before proceeding to question 2, it is convenient to deal with question 3.

Question 3: Whether the Federal Airports Corporation Regulations are valid exercises of the power to make regulations conferred by the Federal Airports Corporation Act.

Section 74 of the Act authorizes the making of regulations, not inconsistent with the Act, prescribing matters:

(a) required or permitted by this Act to be prescribed by the regulations; or

(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.

The applicant's principal challenge to the validity of the Regulations rests on the submission that the sole object of the making of the Regulations was to displace the operation of State law upon the dredging and construction activities involved in the proposal for the extension to the airport. The applicant points to the fact that it is s. 109 of the Constitution, not the particular Commonwealth statute or regulation which is inconsistent with State legislation, that renders that State legislation inoperative. Consequently, the applicant argues, if all the Regulations seek to do is to render the State legislation inoperative, they are invalid.

The most obvious answer to this argument is that the Regulations have a wider purpose. They establish a licensing regime regulating the engagement of contractors who are to carry out any part of the works or exercise any of the rights within or over either or both the airport or the dredging site. The objects of the Regulations are (reg. 5):

(a) to ensure that the works are carried out and the rights are exercised in accordance with the environmental standards; and

(b) to remove doubt about the extent to which the laws of the State of New South Wales apply to the carrying out of the works or the exercise of the rights; and

(c) to remove doubt about the extent to which the provisions of laws of the State of New South Wales applied in and in relation to Commonwealth places in that State under the Commonwealth Places (Application of Laws) Act 1970 apply to the carrying out of the works or the exercise of the rights.

In conformity with object (a), the Chief Executive Officer of the F.A.C. may grant licences to applicants who satisfy him or her that they, their employees and their minor contractors will act in accordance with the relevant environmental standards and will not interfere with the implementation by any other person of any of those standards (reg. 8(2)). The Chief Executive Officer is authorized to direct a licensee to carry out works or exercise rights in a particular manner so as to ensure compliance with the environmental standards and the licensee is bound to comply with such a direction (reg. 10(1)(a), (3)). The environmental standards are the measures for monitoring, preventing and mitigating the adverse environmental effects of carrying out the works and exercising the rights comprised in the Botany Bay Environmental Management Plan Stage 1 (published by the F.A.C. on 20 July 1992), the Environmental Impact Statement published by the F.A.C. in accordance with the Environment Protection Act and the environmental recommendations made by the Minister in accordance with the administrative procedures (reg. 3). The Regulations make provision for the cancellation and suspension of a licence (reg. 11). The grounds include non-compliance with the environmental standards or interference with implementation of them (reg. 11(4)).

The applicant's challenge to validity is based principally on reg. 9(2) which provides:

A licensee is authorised to carry out the part of the works and exercise those of the rights referred to in the licence in spite of a law, or a provision of a law, of the State of New South Wales that:

(i) environmental assessment, including, as examples only, sections 76 and 112 of [the State Act].

There then follow fifteen further sub-paragraphs, each of which mentions a particular activity or activities or consequence of activities associated with the proposed extension to the airport with a reference, by way of example only, to a particular provision or provisions of a New South Wales statute. The formula "a law, or a provision of a law, of the State of New South Wales" is designed to comprehend two different situations: first, where State law applies of its own force and, secondly, in the case of a Commonwealth place (i.e., the construction site), where State law does not apply of its own force and a provision of State law will apply by virtue of the Commonwealth Places (Application of Laws) Act 1970 Cth ("the Application of Laws Act") (reg. 3(2)).

Regulation 9(2) is designed to ensure that the carrying out of the works and the exercise of the rights is governed by, and is in accordance with, the environmental standards as defined by the Regulations, that is, the Commonwealth standards, and to ensure that the work authorized by Commonwealth law is neither prevented nor hindered by State law. To attain those two objects, reg. 9(2) confers upon a contractor an immunity from liability under State law in respect of what he or she does in accordance with a licence granted by the Chief Executive Officer. Legislation which attains those objects and confers that immunity is necessarily inconsistent with State law and therefore becomes inoperative by operation of s. 109 of the Constitution. Viewed in this way, reg. 9(2) is plainly valid. This is not a case in which the Commonwealth law is aimed at preventing or controlling State legislative action rather than dealing with a subject matter assigned to the Commonwealth Parliament [3] . Nor is it a case in which the Commonwealth law invalidly seeks to displace or expand the operation of s. 109.

1. Wenn v Attorney-General (Vic) (1948), 77 C.L.R. 84, at p. 120, per Dixon J.

There can be no objection to a Commonwealth law on a subject which falls within a head of Commonwealth legislative power providing that a person is authorized to undertake an activity despite a State law prohibiting, restricting, qualifying or regulating that activity. Indeed, unless the law expresses itself directly in that way, there is the possibility that it may not be understood as manifesting an intention to occupy the relevant field to the exclusion of State law. It is sufficient to refer to the remarks of Dixon C.J. in Australian Coastal Shipping Commission v O'Reilly where his Honour said [4] :

The argument that under a legislative power of the Commonwealth the operation of State laws cannot be directly and expressly excluded has been used without effect in a succession of cases beginning with The Commonwealth v Queensland [5] . The Court has interpreted s. 109 as operating to exclude State law not only when there is a more direct collision between federal and State law but also when there is found in federal law the manifestation of an intention on the part of the federal Parliament to "occupy the field": see Hume v Palmer [6] ; Ex parte Nelson [No. 2] [7] ; Ex parte McLean [8] . Surely, consistency with that doctrine demands that a legislative power, such as that given by s. 51(i) together with s. 98, must extend to a direct enactment which expressly excludes the operation of State law provided the enactment is within the subject matter of the federal power. Indeed there can really be no other way of expressing the intention and accomplishing the federal legislative purpose. 1. (1962) 107 C.L.R. 46, at pp. 56-57; see also at p. 70. See further Wenn v Attorney-General (Vic) (1948), 77 C.L.R., at pp. 108-110, 119-120. 2. (1920) 29 C.L.R. 1. 3. (1926) 38 C.L.R. 441. 4. (1929) 42 C.L.R. 258. 5. (1930) 43 C.L.R. 472.

The applicant also suggested that the Regulations are invalid because they are inconsistent with the Application of Laws Act. That Act applies to the construction site but not to the dredging site. Section 4(7) of that Act provides that regulations under that Act shall not be made modifying the applied law except in so far as is necessary or convenient to enable the applied provisions to operate in or in relation to the Commonwealth place. The regulation-making power in s. 74 of the Act, it is argued, should be read down to accord with s. 4(7). But s. 4(7) is confined in its operation to regulations made under the Application of Laws Act and s. 4(2) expressly provides that s. 4 does not apply any provisions of the law of a State which would have been invalid or inoperative otherwise than by reason of s. 52 of the Constitution in relation to Commonwealth places [9] . Accordingly, there is no inconsistency between the Regulations and the Application of Laws Act.

1. See Reg. v Loewenthal; Ex parte Blacklock (1974), 131 C.L.R. 338, at pp. 339-340, 342, 346.

Question 2: Whether the F.A.C. is a determining authority within the meaning of Pt 5 of the Environmental Planning and Assessment Act.

It is common ground that Pt 5 of the State Act does not apply to the F.A.C. unless the F.A.C. is a "determining authority" as defined by s. 110 of that Act. That is because the operative provisions in Pt 5 which impose relevant obligations as part of the regulatory scheme governing the carrying out of an activity, particularly s. 112, impose those obligations on a "determining authority". That expression is defined by s. 110 in these terms:

"determining authority" means a Minister or public authority and, in relation to any activity, means the Minister or public authority by or on whose behalf the activity is or is to be carried out or any Minister or public authority whose approval is required in order to enable the activity to be carried out. This definition must be read in the light of both the definition of public authority in s. 4(1) and the provision contained in s. 6. Section 4(1) defines "public authority" as meaning: a public or local authority constituted by or under any Act, a government Department or a statutory body representing the Crown, and includes a person exercising functions on behalf of that authority, Department or body. Section 6 provides: This Act binds the Crown, not only in right of New South Wales but also, so far as the legislative power of Parliament permits, the Crown in all its other capacities. This section would, in appropriate circumstances, enable the State Act to be construed as having an operation in relation to the Crown in right of the Commonwealth. But it is not contended that the F.A.C. is the Crown in right of the Commonwealth. Section 6 might, but for s. 12(1)(a) of the Interpretation Act 1987 NSW, also be availed of to support an argument that a statutory body representing the Crown in right of the Commonwealth falls within the definition of "public authority". But the applicant does not argue that the F.A.C. is a statutory body representing the Crown.

We are left then with the other elements in the definition of "public authority". As to them, it is relevant to look to definitions in the Interpretation Act. Section 12(1) provides that, in any Act or instrument:

(a) a reference to an officer, office or statutory body is a reference to such an officer, office or statutory body in and for New South Wales.

Section 15(1) provides that, in any Act or instrument:

(a) a reference to a Minister is a reference to a Minister of the Crown.

Section 65 provides: An Act passed by Parliament, or by an earlier legislature of New South Wales, may be referred to by the word "Act" alone. And s. 66(2) provides: A Commonwealth Act may be cited -

(b) in such other manner as is sufficient in a Commonwealth Act,

together with a reference to the Commonwealth. In addition, s. 19(3) of the State Act, which confers on the Director of Planning power "to co-opt or invite representatives of other departments and authorities, Commonwealth Government departments and authorities and private utility undertakings to participate in the proceedings and deliberations of the Committee", draws a clear distinction between the two, making specific reference to Commonwealth departments and authorities on the footing that they are not included in the reference to "other departments and authorities".

In view of these provisions it is impossible to bring the F.A.C. within the statutory concept of "public authority" in the State Act. Although the applicant contends that the object of the State Act, manifested by the reach of its provisions, is to regulate all things done in New South Wales so far as they may significantly affect the environment, it is plain that the State Act applies to authorities and Ministers of the State of New South Wales and not to Commonwealth authorities or Ministers. Within that framework, the purpose of the State Act is to provide an environmental code governing State works. Section 6 may have a limited operation in that context but it is not necessary in this case to determine what the extent of that operation is. All that matters is that the F.A.C. is not a "determining authority" and that therefore the State Act has no application to the F.A.C.

The consequence of this conclusion is that an instrument entitled State Environmental Planning Policy No. 31, purportedly made under s. 39(4) of the State Act, has no application to the F.A.C. The instrument bears the name "Sydney (Kingsford Smith) Airport". The instrument declares that the primary aim of the Policy is to ensure that the environmental assessment of any proposal to construct a third runway at the airport is carried out in accordance with Pt 5 of the State Act. The Policy is ineffective to achieve that object and does not bind the F.A.C.

Question 4: Whether Pt 5 of the Environmental Planning and Assessment Act and Pt VII of the Environmental Planning and Assessment Regulation, in their application to the proposed dredging, are inconsistent with:

(ii) the Federal Airports Corporation Regulations; and/or

(iii) the Environment Protection (Impact of Proposals) Act

and invalid by reason of s. 109 of the Constitution.

The consequence of the negative answer given to question 2 is that there can be no relevant inconsistency between the Commonwealth legislation and the State Act so far as the F.A.C. is concerned. The State Act does not apply to the F.A.C. But, having had the benefit of argument upon the question, we should shortly indicate our reasons for concluding that, if the F.A.C. were a "determining authority" within the meaning of s. 110 of the State Act, Pt 5 of that Act would be inconsistent with the Act and the Regulations.

As pointed out earlier in these reasons, s. 8(1)(a) of the Act entrusts the F.A.C. with the functions, inter alia, of " determining the necessity or desirability of extending or otherwise altering Federal airports and carrying out necessary or desirable extensions to, or alterations of, Federal airports" (emphasis added). In other words, under the Act it is the F.A.C. which determines that an extension to, or an alteration of, a Federal airport is necessary or desirable and, once it has made that determination, it is for the F.A.C. to carry out the extension or alteration. The terms in which the functions are expressed leave no scope for the operation of State laws protecting the environment, a matter recognized in s. 8(1)(da) which entrusts the F.A.C. with the protection of the environment from the effects of, and associated with, the operation and use of aircraft operating to or from Federal airports. Even more significant is the requirement in s. 7(2)(a) that the F.A.C. shall endeavour to perform its functions in a manner that "is in accordance with the policies of the Commonwealth Government". Those policies include Commonwealth environmental policies as expressed in and under the Environment Protection Act. In other words, the F.A.C. is an authority to which the Environment Protection Act applies and, as such, the F.A.C. must endeavour to perform its functions in accordance with the policies expressed in and under that Act. Indeed, it would be quite remarkable if the Act were to contemplate that the F.A.C., which holds title to airport land and airport development sites for and on behalf of the Commonwealth [10] , should abide by State law environmental requirements rather than the environmental requirements prescribed by the Environment Protection Act. That statement is subject to the qualification that, where particular land at a Federal airport or at a Federal airport development site is to be used for a purpose not directly related to aviation, the use of the land must be allowed by the law of a State or Territory [11] . But the circumstance that limited provision is made for recognition of the requirements of State law emphasizes the fact that, in general, they do not apply.

1. ss. 28, 29(1) and (1A) of the Act. 2. see s. 7(2)(d), (da) of the Act; see also s. 7(2)(e) and (ea) dealing with the erection of a building at a Federal airport or Federal airport development site for a purpose that is not directly related to aviation.

The long title to the Environment Protection Act describes it as:

An Act to make provision for Protection of the Environment in relation to Projects and Decisions of, or under the control of, the Australian Government, and for related purposes. The object of the statute is to ensure to the greatest extent practicable that matters affecting the environment to a significant extent are fully examined and taken into account by, or on behalf of, the Australian Government and authorities of Australia - the term "authority of Australia" being very widely defined - in relation to the formulation of proposals, the carrying out of works, the making of agreements and arrangements, the making of decisions and recommendations and the incurring of expenditure (s. 5(1)). The Governor-General is authorized to approve administrative procedures for the purpose of achieving the object of the statute (s. 6(1)). The administrative procedures relevant in this case were approved pursuant to this authority. Ministers are required to give directions to ensure that approved procedures are given effect by Departments and authorities and to ensure that any final environmental impact statement or public environment report formulated in accordance with those procedures, and any suggestions or recommendations made in accordance with those procedures, are taken into account by the relevant Department or authority (s. 8). The relevant Minister is empowered to direct that an inquiry be conducted in respect of the environmental aspects of a matter (s. 11) and the procedure at such inquiries is regulated (ss. 14-22).

The Environment Protection Act therefore constitutes a comprehensive code governing environmental aspects of actions and decisions made by or on behalf of the Australian Government and authorities of Australia. Part 5 of the State Act is likewise a comprehensive code governing environmental aspects of actions and decisions made by government and public authorities though, in our view, it is directed to actions and decisions made by or on behalf of the State. The regime of regulation for which the State Act makes provision is similar in substance and procedure to that prescribed by the Environment Protection Act but not identical to it.

Because the F.A.C. is not a "determining authority" within the meaning of s. 110 of the State Act, there is no inconsistency between that Act and the Commonwealth legislation - the Act, the Regulations under the Act and the Environment Protection Act. If, however, the F.A.C. were a "determining authority" within the meaning of s. 110, then, in our view, Pt 5 of the State Act would be clearly inconsistent with both the Act and the Regulations made under the Act and, for that matter, with the Environment Protection Act in its application to the F.A.C.

In the result, we answer the questions asked as follows:

4. In the light of the answer to question 2, to the effect that the F.A.C. is not a determining authority within the meaning of Pt 5 of the Environmental Planning and Assessment Act, no.