Broadwater Action Group Inc v Richmond Valley Council & Anor

Introduction 1 On 11 September 2003 I determined two questions raised by the appellant, Broadwater Action Group Inc, separately from the other issues in the proceedings (Broadwater Action Group Inc v Richmond Valley Council & Anor [2003] NSWLEC 202). The first respondent, Richmond Valley Council ("the council"), now seeks an order that the appellant pay its costs of that hearing, the questions having been determined against the appellant. 2 The council had granted development consent to the second respondent, New South Wales Sugar Milling Co-operative Limited, for a co-generation facility, by which sugar cane waste from the Broadwater sugar mill is utilised in the production of electricity for use in the mill, with surplus electricity returned to the grid. The proposal includes a generating plant next to the mill, a stockpile of sugar cane waste (known as bagasse) on a grazing property nearby, and an overhead conveyor about 1.3 kilometres in length between the stockpile and the mill. The Broadwater Action Group, an objector to the development, appealed to the Court against the grant of development consent, as allowed by s 98(1) of the Environmental Planning and Assessment Act ("the EP&A Act"). Costs in Class 1 of the Court's jurisdiction 3 Section 69(2) of the Land and Environment Court Act 1979 ("the Court Act") states: (2) Subject to the rules and subject to any other Act: (a) costs are in the discretion of the Court, (b) the Court may determine by whom and to what extent costs are to be paid, and … 4 In Oshlack v Richmond River Council (1998) 193 CLR 72 at 81, 96 LGERA 173, Gaudron and Gummow JJ said (at 180 [22]): The terms of s 69(2) [of the Land and Environment Court Act] contain no positive indication of the considerations upon which the Court is to determine by whom and to what extent costs are to be paid. The power conferred by the section is to be exercised judicially, that is to say, not arbitrarily, capriciously or so as to frustrate the legislative intent. 5 The parties have argued the question of costs on the common assumption that orders for costs are not generally made in proceedings in Class 1 of the Court's jurisdiction unless the circumstances are exceptional. This common assumption is derived from par 10 of the Land and Environment Court Practice Direction 1993: [t]he practice of the Court is that no order for costs is made in planning and building appeals unless the circumstances are exceptional. 6 The validity of such a practice direction is questionable (Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673, 114 LGERA 376). Nevertheless, par 10 of the Practice Direction is merely declaratory of a long-standing practice of the Court and its predecessors (Rio Pioneer Gravel Co Pty Ltd v Warringah Shire Council (1969) 17 LGRA 153 at 174; McDonald Industries Pty Limited v Sydney City Council (1980) 43 LGERA 428 at 445; Berk v Woollahra Municipal Council (1992) 78 LGERA 180; Prince v North Sydney Municipal Council (2001) 115 LGERA 65 at 69 [10] and Wilson on behalf of Gurrungar Environment group v Bourke Shire Council & Ors (2001) 116 LGERA 287 at [4]). The reason for the practice explained in the Court's decisions is to encourage dissatisfied parties to seek review of planning decisions made by local councils rather than discourage them by burdening them, if unsuccessful, with the risk of an adverse order for costs. 7 The parties have also argued the question of costs on the common assumption that the practice of the Court as to costs in proceedings in Class 1 of its jurisdiction extends to the hearing and determination of questions separately from the other issues. This assumption is consistent with the prevailing approach followed by judges of the Court (Cadonia Pty Ltd v Leichhardt Council, NSWLEC, Bignold J, 5 August 1994, unreported; Outdoor Australia Pty Ltd v Auburn Council (1996) 89 LGERA 365; CSR Ltd v Fairfield City Council [2001] NSWLEC 221 per Pearlman J; Nazero Constructions Pty Ltd v North Sydney Council [No. 2] [2002] NSWLEC 194 per Lloyd J; NSI Group Ltd v Parramatta Council [2002] NSWLEC 76 per Lloyd J; Mansfield v Wyong Shire Council (2000) 111 LGERA 403 per Talbot J; Foboco Pty Ltd v Kiama Municipal Council (1998) 109 LGERA 160 per Sheahan J; and Scott Revay and Unn v Warringah Council (1996) 90 LGERA 78 per Pearlman J. 8 Contrary to the prevailing approach, however, and subsequently to the Court of Appeal's decision in Maurici, in Gibson v Mosman Municipal Council (2001) 116 LGERA 397, Talbot J disregarded par 10 of the Practice Direction in making an order for costs following the separate determination of a preliminary question of law in a planning appeal. In that case, however, as appears from the reasons of Talbot J, the question raised the jurisdiction of the Court. Further, McClellan J, in his recent decision in Gee v Port Stephens Council [2003] NSWLEC 260, also disregarded par 10 of the Practice direction in making an order for the costs of the determination of a preliminary question of law in a planning appeal. McClellan J, having considered several decisions of the Court, adopted the reasoning of Stein J and Talbot J in their respective judgments in Nahum v North Sydney Municipal Council (1994) 83 LGERA 200 and Gibson. In disregarding the line of authority set out above, his Honour stated (at [56]) that where a preliminary question purely involves law or a combination of fact and law, the usual approach to costs in Class 1 appeals is inappropriate: [t]here will be many cases in class 1 and 2 where it is appropriate that there be no order as to costs. In my opinion this is likely to be the case where the issues in dispute are confined to merit considerations. However, a different approach may be required where a preliminary question is raised. If it happens that determination of the preliminary question will assist the commissioner who hears the merits of the matter by defining the content of limits on his or her discretion it is likely that no order for costs should be made. For example, the interpretation of [a] provision of a local environmental plan containing height or floor space control may be a circumstance where no order should be made. There will be others. However, where the preliminary point raised is said to preclude consent at all, the proceedings cease to have the character of [a] merits review and different considerations arise. 9 This appears to be a departure from the prevailing approach to costs in Class 1 proceedings. If orders were made for the costs of the separate determination of preliminary questions of law in planning appeals, it would defeat the purpose (described in par [6] above) of not making costs orders for ordinary merits appeals in Class 1 (see Nazero Constructions Pty Ltd v North Sydney Council [No.2] [2002] NSWLEC 194 at [4]). Such orders would necessitate the consideration by applicants, in instituting Class 1 proceedings, of costs implications in the event that the result of the separate determination of a question required to resolve their merit appeal is adverse to their cause. 10 The distinction between the determination of merit issues on discretionary planning grounds and determination of questions of pure law was not the foundation for the practice. Rather, it was that the parties were free to seek review of planning decisions without the threat of a costs order if unsuccessful (Outdoor, applied in Mansfield v Wyong Shire Council per Talbot J at 405). Notwithstanding Maurici, Gibson and Gee this remains the prevailing approach of the Court, as demonstrated by the long line of authority set out above. Those cases show that five judges of the Court have applied the practice of making no order for costs in the separate determination of preliminary questions in appeals in Class 1 of the Court's jurisdiction (Pearlman, Bignold, Talbot, Lloyd and Sheahan JJ). Considerations of judicial comity suggest that I should follow and apply the prevailing practice 11 Further, the present application for costs, in contrast to Gee, is in relation to the determination of questions purely of fact. Evidence was heard on all the issues determined by the Court and no interpretation of the law was required. Further, the question determined in Gee related to the capacity of the council to grant an approval. Such a question is akin to the preliminary question posed in Gibson, which was, as noted above, one of the jurisdiction of the Court. Neither of these cases considered the merits of the application, unlike the matter the subject of the present application. 12 It is appropriate, therefore, that I adopt the parties' common assumption, consistently with the prevailing practice in the Court, which was affirmed by Pearlman J in CSR subsequently to, and in consideration of, the decisions in Gibson and Maurici. That is, that costs in the separate determination of preliminary questions in planning and building appeals will not generally be ordered unless the circumstances are exceptional. The determination of the separate questions 13 In the present case, the two questions which were separately determined were: (1) whether the development application and the environmental impact statement ("the EIS") should have been accompanied by a species impact statement prepared in accordance with Div 2 Pt 6 of the Threatened Species Conservation Act 1995 ("the TSC Act"). Such a species impact statement is required if the application is in respect of development of land that is or is likely to significantly affect threatened species, populations or ecological communities, or their habitats; and (2) the related issue of whether the flora and fauna assessment of the proposal was inadequate in measuring the impact of the proposal on a number of endangered species and whether the proposal should be refused on the ground of its impact on endangered species and their habitat. 14 I need not repeat the evidence on these questions, which is summarised in my previous judgment. After applying the so-called "eight-part" test required by s 5A of the EP&A Act to determine whether or not a species impact statement is required, I found it overwhelmingly clear that the proposed development is unlikely to have a significant effect on threatened species, populations or ecological communities connected with the subject site, or their habitat. Therefore, the submission of a species impact statement for the proposal was not required. The same finding also resolved the second question: the impact upon any species or their habitat will be so insignificant and so marginal that the development application could not be refused on that ground. The parties' submissions 15 Mr D P Wilson, appearing on behalf of the council, relies upon the following submissions in support of the application for costs: (a) The case is unusual, giving rise to exceptional circumstances and warranting an order for costs. There is no indication that the EIS was read or understood in formulating the critique of it. In their expert reports, neither Mr Fitzgerald nor Dr Phillips (who gave evidence for the Broadwater Action Group) listed the EIS as a reference upon which they based their opinions, as required by par 3(d) of the Schedule to the Court's Consolidated Expert Witness Practice Direction. Further, Dr Phillips only participated in the flora and fauna experts' joint report: he did not prepare an independent evaluation of the proposal. According to the submission, Mr Fitzgerald and Dr Phillips thus exhibited little understanding of the impact of the proposal. (b) In relation to the first question for determination, the Broadwater Action Group elicited no positive evidence in support of its claim that it was necessary for the development application to be accompanied by a species impact statement. In particular, no survey analysis was undertaken by its expert witnesses to demonstrate that it was likely that any threatened species would be significantly affected by the proposal. (c) In relation to the second question for determination: (i) the species claimed to be at risk were not identified as being present at the site, and long before the hearing commenced it was established that no off-site impact would be attributable to the proposal; (ii) Mr Fitzgerald concurred with the second respondent's experts in relation to the expected impact upon koala habitat, and Dr Phillips, albeit disagreeing, gave no contradictory evidence in support of the Broadwater Action Group's claim; (iii) if the Broadwater Action Group's witnesses had directed their minds to the proposal, the issue of possible detrimental effects on drainage patterns and faunal habitats would have been resolved before the hearing; (iv) Mr A Oshlack, the agent representing Broadwater Action Group, ignored the eight part test annexed to the EIS and which had been expressly carried out by Mr Parker in his report in reply; (v) contrary to the Mr Oshlack's assertion, there is no reference in the evidence to a twenty-kilometre radius encompassing the area within which the impact of the development is to be examined: the closest reference is that of Mr Fitzgerald where he refers to an "ecological footprint", without defining it. 16 Mr A Oshlack, appearing as agent for Broadwater Action Group, relies upon the following submissions: (a) No exceptional circumstances exist in these proceedings, which would provide justification for an order for costs. (b) The case is part heard and this complex part of the matter was completed within the allocated time. (c) The council is a public authority which has not fully participated in the proceedings, relying upon the evidence adduced by the proponent of the development who, at this stage, has not applied for costs. Mr Oshlack cited the judgment of Gaudron and Gummow JJ in Oshlack v Richmond River Council (1998) 193 CLR 72. He did not, however, identify the particular principle in that decision upon which he relies. (d) The proponent's impression that the Broadwater Action Group's expert witnesses misunderstood the development proposal is unfounded. Those witnesses were not cross- examined as to their supposed lack of understanding, nor as to whether or not they had considered the EIS in formulating their opinions. (e) Dr Phillips and Mr Fitzgerald are well qualified, they gave their evidence succinctly, and had visited the site of the proposed development. (f) A costs order against Broadwater Action Group may stifle the litigation. The conduct of the proceedings 17 The EIS exhibited by the council before it determined the development application had attached as appendices, inter alia, Mr Parker's flora and fauna survey reports of May 2000 and June 2001. These reports contain site surveys of vegetation and fauna and discussion of their results, as well as consideration of the relevant legislation, culminating in an eight-part test required by s 5A of the EP&A Act. Mr Parker's reasoned conclusion was that no threatened species, populations or ecological community or their habitat is likely to be significantly affected as a result of the proposal. Given this conclusion, no species impact statement is required for the development. The Broadwater Action Group, or those advising it, would thus have been aware, or ought to have been aware of this evidence well in advance of the commencement of the proceedings. 18 If Broadwater Action Group had been competently advised, such a key piece of evidence in favour of the proponent of the development would have ordinarily been duly considered in determining whether or not to raise the issue of flora and fauna impact in an appeal under s 98 of the EP&A Act. Further, prior to raising the issue, the Broadwater Action Group, if properly advised, would have obtained sufficient evidence to seriously challenge the findings and conclusions in the EIS, thereby necessarily addressing the eight-part test described in the legislation. In the absence of any such evidence, as was the case, the Broadwater Action Group would have been properly advised to withdraw the two issues from those to be dealt with in the appeal. 19 Instead, the Broadwater Action Group instituted the proceedings without first properly considering the evidentiary material in the EIS and the relevant statutory provisions. Further, it neglected to undertake any field surveys of the site, an omission greatly contributing to its poor command of the proposal's potential impact. This ignorance of the impact permeated the entirety of the Broadwater Action Group's conduct of this part of the appeal. 20 In relation to the question of whether a species impact statement was required, the Broadwater Action Group, whilst claiming that Mr Parker's eight-part test was incomplete, seemed to ignore the evidentiary obstacles it had to overcome in order to be successful in its claim. It failed to adduce sufficient evidence to satisfy a single head under s 5A of the EP&A Act. Firstly, it neglected to identify a "viable local population" of any of the threatened species that it claimed to be disrupted by the proposal such as to be likely to be placed at risk of extinction: an integral pre-condition to the analysis under s 5A(a) of the EP&A Act. Further, where a "viable local population" was identified, there was no evidence of there being a likelihood that it would be significantly affected by the development. 21 Likewise, the Broadwater Action Group failed to establish the existence of any "endangered population" located on the site or in the surrounding area. Of course, this must be done in order to determine whether or not such a collectivity is likely to be disrupted so that the viability of the population is likely to be significantly compromised (see s 5A(b) of the EP&A Act). 22 Consistently with Mr Parker's conclusion in the EIS, the evidence clearly demonstrated that very little known habitat of threatened species, populations or ecological communities would be modified or removed. Indeed, Mr Fitzgerald concurred with Mr Fanning (an expert witness for the proponent) in concluding that "the overwhelming majority of the area to be affected by the proposed activity is of no value as habitat for the [k]oala". Dr Phillips disagreed with this assessment, but produced no evidence to the contrary. It is clear, therefore, that there was never any suggestion that a significant area of known habitat would be modified or removed - the threshold test the Broadwater Action Group had to satisfy under s 5A(c) of the EP&A Act. It necessarily follows, then, that there was no evidence whatsoever that any known habitat of a threatened species, population or ecological community could become isolated from currently interconnecting habitat as a result of the proposal (s 5A(d) of the EP&A Act). 23 Again, no "critical habitat" as defined in Pt 3 of the TSC Act is involved in or impacted upon by the development proposal. There was no evidence that the Minister has made any declaration in relation thereto to the land affected by or in the vicinity of the proposed development. Therefore, it was foreseeable from the earliest of stages in the litigation that the Broadwater Action Group simply did not have any evidence to demonstrate that "critical habitat" will be affected by the proposal, or to seriously challenge the findings and conclusions in the EIS. 24 Threatened species, populations and ecological communities are adequately represented in conservation reserves in the region (s 5A(f) of the EP&A Act). Mr Parker came to this conclusion in his report of May 2000 which was annexed to the EIS as exhibited by the council. Therefore, again, due to a complete lack of any probative evidence adduced by the Broadwater Action Group, it failed to discredit the evidence, the existence of which it was aware well before it commenced the proceedings. 25 Yet again, an inquisitive analysis of the proposal and perusal of the relevant legislation by the Broadwater Action Group before the hearing would have also disclosed that the proposal does not constitute a "threatening process" as defined in the TSC Act. The evidence was that no part of the proposal would constitute a possible threat to "the survival or evolutionary development" of any species, population of ecological community (s 5A(g) of the EP&A Act); and this evidence was uncontested. 26 Finally, in disputing Mr Parker's finding that there are no threatened species, populations or ecological communities relevant to the proposal which are likely to be at the limit of its known range (s 5A(h) of the EP&A Act), the Broadwater Action Group adduced no evidence at all. Again, notwithstanding assertions from its expert witnesses, in the absence of any positive evidence from the Broadwater Action Group there was little hope of discounting the evidence to the contrary, evidence it knew it had to meet before the case began. 27 In relation to the second and related issue raised by the Broadwater Action Group, in the absence of a challenge of substance, the only authoritative evidence was that there would be no off-site impact at all; in particular, no detrimental effect upon drainage patterns, as was alleged. The state of the evidence resulted in only one possible conclusion: that the flora and fauna assessment for the proposal is adequate and does not form a ground upon which to refuse development consent - a conclusion that at an early stage would have been foreseeable by the Broadwater Action Group if it had been competently advised.