Darley Australia Pty Ltd v Walfertan Processors Pty Ltd

Court of Appeal (NSW)|2011-05-17|Before: McColl JA, Macfarlan JA, Whealy JA

Background 4Walfertan owns and operates a tannery in Aberdeen, New South Wales in the Upper Hunter Valley. It has done so since about 1990. The tannery was established in 1973. Effluent is discharged as part of the tanning process. In 1992, the Upper Hunter Shire Council (the "Council") consented to Walfertan's application to upgrade the effluent treatment facilities on its land (the "1992 consent"). The 1992 consent did not quantify the volume of effluent which Walfertan could treat on a daily basis or at all. In 2001, Walfertan acquired land adjacent to the tannery land on which an abattoir had previously been operated. 5On 28 August 2008, Walfertan lodged the DA with the Council which relevantly stated: "Description of Proposed Development The use of the existing waste water treatment facility and associated irrigation infrastructure on Lot 53 DP739487 and Lot 159 DP712988 for the treatment of waste water from Aberdeen Tannery. The installation of above ground Effluent and Freshwater Pipes between the Tannery and the waste water treatment system on Lot 53 DP739487. The replacement of the existing open channel that connects the waste water system on Lot 53 DP739487 to the Eastern Irrigation Area with an Irrigation Pipe." 6The DA proposed the treatment of tannery effluent on both tannery land and land previously used for the abattoir. The Council formed the view that it did not have power to approve the DA because it related to more extensive land than that covered by the 1992 consent. As the DA was not determined within the period prescribed by cl 113 of the 2000 Regulation, the Council was taken to have determined it by refusing consent: s 82(1), EPA Act. 7Walfertan appealed to the Land and Environment Court pursuant to s 97 of the EPA Act against the Council's deemed refusal of the DA. The appeal fell within the Court's Class 1 jurisdiction: s 17(d), Land and Environment Court Act 1979. For the purposes of hearing and disposing of the appeal, which was by way of rehearing, the Commissioners had all the functions and discretions which the Council had in respect of the DA: s 39, Land and Environment Court Act. The hearing before the Commissioners was, in effect, a full merits review: s 39, Land and Environment Court Act; Alinta LGA Limited (formerly The Australian Gas Light Company) v Mine Subsidence Board [2008] HCA 17; (2008) 82 ALJR 826 (at [13]). 8The Council was originally the only respondent to the appeal. Darley and Mr Bourke own land adjacent to Walfertan's property. They were joined as parties to the appeal pursuant to s 39A of the Land and Environment Court Act to ensure there was an effective contradictor on the waste water issues in light of the fact that those issues were the subject of an agreement between the experts retained by Walfertan and the Council: Commissioners' judgment (at [13]). 9Darley and Mr Bourke were jointly represented both at first instance and on appeal. For ease of reference I shall refer to them collectively as "Darley". 10A number of issues arose in the hearing before the Commissioners. The first, which was advanced by Darley and, as I have said, is effectively the only issue on the present appeal, was whether Walfertan had to prepare and submit an EIS before the Council could consider the merits of the DA. The Council has not supported this contention at any stage of the proceedings. 11Walfertan accepted that the DA related to "designated development", but contended that the development proposed did not significantly increase the environmental impacts of the total development within the meaning of cl 35, Pt 2, Sch 3 of the 2000 Regulation because it was for the improved environmental performance of an existing operation being the treatment and disposal of effluent. Darley argued that an EIS was required because the DA related to the use of the land as a tannery, that there was no evidence of consent to the lawful commencement or operation of the tannery and that, in any event, absent a limit on the volume of effluent Walfertan could treat under the 1992 consent, the comparative exercise for which cl 35 called could not be undertaken. Darley was unsuccessful on this issue both before the Commissioners and before the primary judge. 12Both the appeal to the primary judge and the appeal to this Court, being from Class 1 proceedings, lie only against an order or decision on a question of law and, in the case of the appeal to this Court, only by leave: s 56A(1), s 57(1), Land and Environment Court Act. 13The Council did not take an active role in the appeal to this Court. It submitted to such order as the Court may make other than one as to costs. 14In my view the issues arising on the application for leave to appeal raise serious questions warranting a grant of leave to appeal. There appears to be little authority touching on the construction of cl 35, which is a significant provision for dealing with developments with potential environmental impacts.

Legislative framework 15The following provisions of the EPA Act, as in force at the date of the development application, are relevant to the question whether the DA was in respect of "designated development": "4 Definitions (1) In this Act, except in so far as the context or subject-matter otherwise indicates or requires: designated development has the meaning given by section 77A development means: (a) the use of land, and ... (d) the carrying out of a work ... , 77A Designated development Designated development is development that is declared to be designated development by an environmental planning instrument or the regulations. 78A Application (1) A person may, subject to the regulations, apply to a consent authority for consent to carry out development. .... (8) A development application must be accompanied by: (a) if the application is in respect of designated development - an environmental impact statement prepared by or on behalf of the applicant in the form prescribed by the regulations ... ." (Emphasis added) 16The definition of "development" in s 4 of the EPA Act is relevant to the word "development" in the 2000 Regulation by virtue of s 11 of the Interpretation Act 1987. 17The question whether the development fell within s 77A turned on the 2000 Regulation which relevantly provided: "4. What is designated development? (cf clause 53C of EPA Regulation 1994) (1) Development described in Part 1 of Schedule 3 is declared to be designated development for the purposes of the Act unless it is declared not to be designated development by a provision of Part 2 or 3 of that Schedule. ... (4) Schedule 3, as in force when a development application is made, continues to apply to and in respect of the development application regardless of any subsequent substitution or amendment of that Schedule, and the application is unaffected by any such substitution or amendment. (5) References in subclause (4) to Schedule 3 include references to Schedule 3 to the Environmental Planning and Assessment Regulation 1994." 18Part 1, Sch 3 of the 2000 Regulation sets out a number of clauses declaring certain developments to be "designated development" for the purposes of cl 4. It was common ground that, prima facie, the DA related to "designated development", although the parties did not agree as to into which category it fell. Darley contended that the DA related to livestock processing industries (Pt 1, Sch 3, cl 22) because the substance of their contention was that the development application was for the tannery as a whole, in which respect cl 22 would be appropriately descriptive. Walfertan contended that the DA related to waste management facilities or works (Pt 1, Sch 3, cl 32) because it submitted that the development was the treatment of effluent from the tannery and not the tannery as such. 19Clause 35, Pt 2, Sch 3 of the 2000 Regulation provides: "Part 2. Are alterations or additions designated development? 35 Is there a significant increase in the environmental impacts of the total development? Development involving alterations or additions to development (whether existing or approved) is not designated development if, in the opinion of the consent authority, the alterations or additions do not significantly increase the environmental impacts of the total development (that is the development together with the additions or alterations) compared with the existing or approved development." 20Clause 36, Pt 2, Sch 3 of the 2000 Regulation sets out a number of factors a consent authority is required to take into consideration in forming its opinion as to whether or not development is "designated development". Neither party submitted that any of those factors were relevant to determining the critical issue.

Statement of the case 21The essential facts can be taken from the Agreed Statement of Facts ("ASOF") relied upon before the Commissioners which, it should be noted, referred to the Council both in terms and as the "Respondent". The ASOF relevantly stated: "The Abattoir Effluent Disposal System 5.5 The Aberdeen Abattoir was operated by Australian Meat Holdings Pty Ltd ('AMH') from 1991 until the abattoir ceased operations in 1999. [The agreed facts then recited the history of the Abattoir obtaining Council approval for a new waste water treatment facility in 1993] 5.11 The Abattoir's new waste water treatment plant was completed in 1993 - 4 in accordance with the Abattoir Consent. 5.12 Environment Protection Licence 875 ('the Abattoir EPL') was issued to AMH to operate the waste water treatment plant. ... 5.14 The abattoir new waste water treatment plant (including the irrigation disposal area) has been designed to treat approximately 1.8ML of organic effluent per day. 5.15 The irrigation area was used from about 29 March 1995 until the abattoir closed in 1999. 5.16 In late 2001, after the abattoir closed Walfertan purchased the Abattoir Land from AMH and took over the Abattoir EPL. The Tannery Effluent Disposal System 5.17 In 1973 the Aberdeen Tannery ('the Tannery') was established on the Tannery Land and has been operated by the Applicant since about 1990. 5.18 The Tannery was first established to utilise hides generated by the Aberdeen abattoir which is immediately adjacent to the Tannery Land. 5.19 After taking over the Tannery operation, the Applicant lodged development application DA 26/92 to upgrade the effluent treatment facilities on the Tannery land. Council granted consent to this application on 27 May 1992. 5.20 The Tannery currently produces approximately 550 kL of effluent per day and has its own Environment Protection licence 4449 ('the Tannery EPL'). The resulting effluent is broadly divided into effluent from 'salted hides' (also known as washed back hides) and effluent from 'green hides'. 5.21 Under the Tannery EPL, the Applicant has a licence to process more than 10,000 hides per year, and to discharge by irrigation up to 250 kL of effluent per day onto its existing irrigation area. The remaining 300 kL of effluent is evaporated from the Tannery's Rouchel Road dams and 'salt sacrifice area'. The storage, evaporation and irrigation areas for the Tannery wastewater are all located on Lot 55 of DP 739487. The Applicant's Proposal 5.22 On or about 4 April 2004, the Applicant lodged ... 'Application to Modify a Development Consent: Section 96 Environmental Planning and Assessment Act 1979' ('the Application'). 5.23 The Applicant contends that the Application was both an application under s 96(2) of the EPA Act 1979 and a new development application under s 78A of the EPA Act 1979. 5.24 The Respondent contends that that the Application was only an application under s 96(2) of the EPA Act 1979. ... 5.26 On 26 May 2008, at an Ordinary Meeting of the Council, the Council resolved that it did not have power to approve a Section 96 modification application in this circumstance because the application sought to incorporate land that was not the subject of the original grant of development consent. 5.27 On 4 July 2008, the Applicant lodged the following Class 1 Applications: (a)Proceedings No. 10657/08 for the deemed refusal of a s 96 modification application; and (b)Proceedings No. 10658/08 for the deemed refusal of a new development application. ... 5.30 On 28 August 2008, the Applicant lodged a new development application DA 226/08 with the Respondent ('the New DA 226/08'). Accompanying DA 227/08 was a Statement of Environmental Effects dated August 2008, prepared by Umwelt Environmental Consultants and titled 'Statement of Environmental Effects for Modifications and Alterations to Aberdeen Abattoir (DA 86/92)' ('the August SEE'). The August SEE describes the proposed development." 22It is unnecessary to set out the detail of the changes to the tannery's effluent disposal practices proposed in the DA. They are set out in the Commissioners' judgment (at [31] - [45]) and, to the extent necessary to provide context, also in what follows.

Previous development consents 23Four development consents relating to the tannery's operations that had been granted since it commenced operation in 1973 were before the Commissioners. One building application, lodged in 1973, in relation to the Tannery Building was also before them. Its approval date was unknown: Commissioners' judgment (at [27]). The details of the development consents are uncontroversial and can be taken from the Commissioners' judgment. All the development consents and the building application were granted/made when Scone Shire Council was the relevant consent authority. 24On 21 December 1983, Scone Shire Council granted approval for a factory for "fleshing treatment and water treatment" and for a tree-planting program on the tannery land. A specification from the applicant relating to the waste water treatment plant did not contain details of any limit proposed for the volume, composition or concentration of effluent to be produced by the waste water treatment plant. Nothing in the documents dealt with the disposal or the composition of such effluent: Commissioners' judgment [62] - [68]). 25In 1989, Scone Shire Council granted approval for the erection of a concrete block wall to enclose two sides of an existing building and to install plant and equipment. The proposed use of the building was to produce "crust leather". The undated EIS attached to the development consent appeared to indicate that the waste was confined to discharge to the sewer and to the Council's treatment system: Commissioners' judgment (at [69] - [72]). 26In 1990, Scone Shire Council granted approval for the operation of a leather finishing plant in the building being used for the crust leather operation. Nothing in this development consent appeared to relate to effluent disposal or its composition: Commissioners' judgment (at [73] - 76]). 27After taking over the tannery operations, Walfertan lodged the development application which led to the 1992 consent. It was to upgrade the effluent treatment facilities on the tannery land (see also above at [21] (5.17 - 5.21)). The application was for a progressive phase by phase development program including a sedimentation upgrade, provision of effluent recycling and re-use facilities, upgrade of disposal facilities, and the construction of a new treatment plant. It was accompanied by a document prepared by engineering consultants, entitled "Statement of Environmental Effects: Upgraded Effluent Treatment Facilities: Walfertan Processors Pty Ltd". Scone Shire Council consented to the application on the condition that there be a firm proposal to reduce the waste water nutrient loads to an acceptable level such that further degeneration of the irrigation area would be prevented: Commissioners' judgment (at [77] - [86]). 28An extract apparently from Scone Shire Council's records dealing with the approval of the 1992 development application recorded: "Statutory Provisions The land is zoned Special Uses "A" and Rural "B" under the provisions of the Scone Local Environmental Plan 1986. The tannery functions as an 'existing use' in these zones..." 29The documents from which the foregoing details were extracted were made available in the following circumstances. On the sixth day of the hearing before the Commissioners, counsel for the Council tendered a list of development consents and building approvals for the tannery. At that time, he asked whether tendering the documents was "going to be of any interest". He also remarked that if anybody wished to explore the matter further, inquiries should be made of his instructing solicitor or Council officer. The following day, Darley raised the issue whether Walfertan had established lawful commencement for the tannery: primary judgment (at [29]). 30No party has been able to produce a document from a relevant consent authority which in terms consented to the commencement, or authorised the operation, of the tannery.

The Commissioners' judgment 31The Commissioners described the subject of the application as "[t]he present and proposed future effluent disposal practices of the tannery" (at [7]). They continued: "8 As part of the proposal, the tannery proposes to separate its effluent stream into a high concentration stream and a low concentration stream. In this context, the degrees of concentration are merely relative and both future effluent streams may have significant potential environmental impacts if they are not disposed of in an appropriately manner - controlled, by way of a scientifically designed and systematically monitored process. 9 The method of disposal of each of the two future effluent streams is discussed in the context of the relevant present and future elements of the effluent disposal process that is described in more detail later in this decision. 10 As the abattoir is no longer in use and its effluent processing facilities are thus no longer required for abattoir effluent treatment and disposal, the tannery lodged a development application with the Upper Hunter Shire Council (the council) seeking approval for modifications to its current effluent disposal system. These modifications involve utilising portions of the tannery's existing system as well as renovation, refinement and use of elements of the old abattoir effluent disposal system. 11 A number of elements of the present tannery effluent stream will cease to be used and will be rehabilitated and the operations of other elements will be upgraded in a fashion intended to eliminate past unsatisfactory environmental impacts caused by them." 32The first question the Commissioners considered (at [16], [22] ff) was "whether or not, as a necessary statutory precursor to considering the merits of the application, there needs to be preparation and assessment of an environmental impact statement." 33The Commissioners accepted (at [25]) that the reference to "existing or approved development" in cl 35 must be to an "existing development that is lawfully existing - that is that it is development which is operating subject to an approval granted by the relevant consent authority." They further noted (at [26]) that "there was nothing in the terms of cl 35 that requires that the geographic location of the existing development and that of the proposed development be entirely corresponding." I interpolate that this conclusion would appear to follow from Timbarra Protection Coalition v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55 (at 75 - 76). Accordingly they also accepted that "the proposed total development over the whole of the tannery lands now subject to this application can be compared with the total development that might be existing or approved over the whole of the tannery lands but may also be compared with the existing or approved development confined to the activities of the tannery." 34In order to be able to undertake the comparative assessment cl 35 required, the Commissioners first examined the activities then taking place on the tannery lands, whether approved otherwise, and how it was proposed those activities would be changed: Commissioners' judgment (at [30]). As I have said, it is unnecessary to recount the detail of the Commissioners' examination of these activities although two matters should be noted. First, the focus of their examination was "the present effluent disposal practices of the tannery and how they are proposed to be changed": Commissioners' judgment (at [31] ff). Secondly, they concluded that: "55 ...[T]he entire range of changes proposed to be undertaken to the tannery's effluent disposal processes will lead to significant environmental benefits to the residents of Aberdeen and the resolution of what had hitherto been a number of apparently intractable adverse environmental impacts on the local community." 35After setting out the detail of the previous development consents, the Commissioners concluded: "87 As a consequence of all this development application and related material, we are of the view that a number of factual observations should be made. These are as follows: With respect to all of the development consents relating to on-site disposal of effluent, there is no specific condition of consent that incorporates conditions relating to the composition of the waste whether solid or liquid; With respect to all of the development consents relating to on-site disposal of effluent, there is no specific condition of consent that incorporates conditions relating to dilutions rates of whatever might be within the waste; With respect to all of the development consents relating to on-site disposal of effluent, there is no specific condition of consent that incorporates conditions precluding on-site disposal of solid waste and such on-site disposal of solids is, in fact, specifically diagrammatically depicted in the flow chart appended to the 1992 Statement of Environmental Effects; The document entitled Volumes Requiring Irrigation in appendix 2 to the Statement of Environmental Effects accompanying the 1992 development application does not propose any limit on the volume of liquid effluent to be disposed of but, if it were read to be proposing a limit, postulates that the volume of liquid effluent capable of being disposed of safely on the site under then average rainfall conditions would be 2.75 times the volume proposed to be permitted under the present application. 88 As a consequence of these factual observations and what we have earlier discussed concerning the present operation of the tannery's effluent disposal process (ignoring Mantons), we are of the view that a number of conclusions can be drawn. These are: First, the disposal of waste, solid and liquid, other than discharge of effluent to the sewer (at its most restrictive for the applicant and expressing no view as to whether this restriction actually applies or not) is unregulated by any relevant condition of development consent except for requirements contained in: condition 2 of the 1983 consent concerning the amenity of the neighbourhood; condition 3 of the 1983 consent requiring compliance with Department of Industrial Relations and Technology conditions (if imposed); conditions 4 of the 1983 consent requiring a Clean Air Act licence and that any conditions of such a licence would form part of the consent; condition 2 of the 1992 consent requiring submission of quarterly review statements on the operation of the effluent treatment system; and condition 4 [of the] the 1992 consent requiring, in effect, a pollution reduction program acceptable to the EPA to be aimed at prevention of further degeneration of the irrigation area. EPA approval of this pollution reduction program was to be obtained prior to the release of the building application arising from this development consent. Second, as a consequence of what is set out above, it is not possible to determine what would be the permitted environmental impacts of the existing or approved development except that the comparatively unrestricted nature of these conditions, to the extent that they might be valid, means that those environmental impacts are potentially significantly high as the degree of regulation and control provided by the conditions of development consent is very permissive. Third, the absence of any certain relevant concentration, composition or volumetric restriction coupled with the limited present monitoring regime required by the EPA licence reinforces the second conclusion we have drawn above. Fourth, if there is some volumetric restriction to be imputed from the 1992 development consent, this volumetric limit is at least 2.75 times the limit proposed to be conditioned for this application. Fifth, the regime proposed by the conditions of consent as agreed to by the parties and as determined by us as discussed below is a significantly restrictive regime. Sixth, the present effluent disposal activities of the applicant (ignoring Mantons) are unsatisfactory both in their impact on the surrounding community and their likely impact on the tannery's own land to the extent that this impact can be assumed given the unsatisfactory monitoring regime currently applying. Finally, the regime proposed by the conditions to attach to a development consent arising from this application, although applying to different land areas to those subject of the presently approved effluent disposal activities of the applicant, is one that inevitably lead[s] to a position where the development together with the additions or alterations will not only not significantly increase the environmental impacts of the total development that is presently approved but must, in our view, in fact, decrease the maximum potential environmental impacts necessarily inherent from the present approved development. 89 As a consequence, we have concluded that the applicant has the benefit of the exception in cl 35 without the need to rely on any development consent or entitlement of the abattoir. It therefore follows that an environmental impact statement is not required." (Emphasis added) 36The Commissioners dealt with the remaining issues, then granted development consent to the DA (at [111]) subject to conditions it is unnecessary to recount.

The primary judgment 37The primary judge identified ([19] - [22]) six grounds of appeal as requiring consideration, the detail of which appears in the following discussion. Her Honour referred to Darley as the "Second Respondents" (their status before the Commissioners) in her reasons.

Primary judgment: appeal ground 2(b) 38Darley submitted that ground 2(b) should be considered first. That raised the following issues: "Whether the Commissioners erred in incorrectly applying cl 35 of Sch 3 of the Environmental Planning and Assessment Regulation 2000 ('the EPA Regulation'), (b) [in that they] failed to apply ss 106, 107 and 109(2) of the Environmental Planning and Assessment Act 1979 and make the comparison required by cl 35 of Sch 3 of the EPA Regulation on the basis that either: (i) There was no 'existing or approved development', or (ii) Alternatively, if there was 'existing or approved development' that that development was not unlimited, and thus failed to take into account relevant matters." 39Darley's complaints in this respect were first, that the Commissioners failed to consider whether the tannery use had lawfully commenced and accordingly, Darley contended there was no existing or approved development for the purposes of cl 35; or secondly, that the Commissioners failed to consider whether the use had intensified beyond what was lawful when amendments were made to the EPA Act commencing in February 1986 which prohibited the expansion of existing use rights without development consent: primary judgment (at [23]). 40The primary judge (at [25]) outlined Darley's submission on this ground of appeal as follows: "The Second Respondents submitted that according to the SOAF at 5.17 ... filed by the Council and Walfertan the tannery commenced operation in 1973. The Shire of Scone Interim Development Order No 1 (the IDO) then in force specified that certain industries including a tannery could not operate in zone 1(a) without development consent. This omission meant the Commissioners failed to properly consider cl 35 Sch 3 of the Regulation because it requires comparison with lawful existing or approved development and the Commissioners did not identify this." 41Walfertan raised as a preliminary question whether the issues underlying this ground of appeal had been raised at all or sufficiently before the Commissioners: primary judgment (at [27]). The primary judge concluded (at [27] - [37]) that they had been raised by Darley in oral submissions on the seventh day of the hearing, but not by the Council which accepted that the tannery development was lawful (see [33]). 42The primary judge (at [38]) considered that this question was "more accurately characterised as whether the Commissioners should have considered lawful commencement for the tannery on the basis that the onus of proof of the existence of lawful commencement and/or existing use rights under the EPA Act had shifted to Walfertan in the circumstances of the hearing." She concluded (at [40]) that "[i]t was open to the Commissioners to consider the issue of lawful commencement did not require their determination, given the issues they had to address in relation to cl 35 Sch 3 ... the evidence before them and the inferences that they could draw from that." Her Honour also said: "40... They were entitled to consider that the onus of proof identified in Vines v Djordjevitch submitted by the Second Respondents as falling on Walfertan was satisfied by the production of the 1983 consent which was for the redevelopment of an existing activity in the tannery building as that is what that consent sought to vary. That there was existing activity was further confirmed by subsequent development consents. A presumption of regularity referred to in the submissions of Walfertan at par 34 and 35 above could apply in these circumstances to the Commissioners' consideration of the matters before them. There were references in the evidence to the tannery operating and having existing use rights. In addition to the SOAF and the planners' joint report prepared before the hearing which raised no issue, the Council officer's report for the assessment of the 1992 DA refers to the tannery as an 'existing use' in the relevant zone. The SEE prepared for the 1992 DA also refers to an existing waste water treatment plant. 41 I do not consider the formal consideration of the presumption of regularity as applied in Dosan [Dosan Pty Ltd v Rockdale City Council [2001] NSWLEC 252; (2001) 117 LGERA 363] was required. The existence of a development consent in 1983 which was intended to amend an existing situation suggests as a practical matter that the use was continuing in 1983." 43Her Honour concluded (at [43]) that the Commissioners were not required to consider the absence of a development consent earlier than those referred to in the judgment as part of the cl 35 analysis. 44The primary judge also considered (at [44] ff) whether, if there was an error of law because the Commissioners failed to consider whether the tannery had lawfully commenced, that error was material to their decision. This required her Honour (at [47]) "to determine whether the approach by the Commissioners to the comparison of impacts required by cl 35 Sch 3 was correct." She observed (at [47]) that "[i]t is implicit in the Commissioners' findings that they accepted the submissions of Walfertan that the comparison did not require consideration of the existing tannery building operation as that was unaltered and was not part of the development application". She rejected Darley's submission that the relevant development for the purposes of cl 35 was the tannery, concluding (at [48]) that "the development the subject of the DA is entirely alterations and additions to an existing effluent disposal system". 45She held that the Commissioners had correctly approached the cl 35 exercise, saying: "49 The Commissioners undertook that comparison based on the existing and proposed changes in the area of tannery land utilised for treatment of the effluent, ... The Commissioners found the existing effluent disposal was generally unrestricted in [88] on the areas that were in use and that was the comparison of the total development they applied to the proposed alterations and additions. There is no mistake in their approach to cl 35 in the context of the DA before them." (Emphasis added) 46Accordingly her Honour concluded (at [50]) that "[e]ven if the Second Respondents' argument that Walfertan had failed to show that the tannery had not commenced lawfully was upheld, it is not a material error which vitiates the Commissioners' decision in relation to the application of cl 35 to the proposed development before them". 47The primary judge then considered (at [51] ff) Darley's alternative argument that: "[A]ssuming there were existing use rights or lawful commencement from 1973 for what was proposed, s 107(2) and s 109(2) of the EPA Act prevented any expansion or intensification of the use from 2 February 1986 levels when amendments to the EPA Act prevented any further intensification of an existing use without development consent [and that] ... the Commissioners erred in regarding the use as unlimited, as they did in several places in the judgment." 48Her Honour was not convinced (at [57]) that this issue had been raised before the Commissioners or (at [58]), that if it had been, Darley was raising a question of law rather than fact. However, in the event that a point of law was raised her Honour briefly considered (at [60]) evidence relating to volumes of effluent disposal at various dates and concluded: "This material does not suggest the Commissioners failed to properly identify that there was any unlawful intensification of use at the time the 1992 consent was granted or thereafter." 49The primary judge also noted (at [61]) a submission Darley made about "Salt Sacrifice area activities [being] unlawful under the [Protection of the Environment Operations] Act" but concluded that had not been raised before the Commissioners and could not be raised before her. 50Accordingly her Honour rejected appeal ground 2(b).

Primary judgment: appeal ground 2(a) 51Ground 2(a) raised the question whether the Commissioners erred in incorrectly applying cl 35: "...in that they misconstrued and wrongly applied the following consents: DA 64/83 granted 21 December 1983 (the 1983 Consent); DA 57/89 granted 20 November 1989 (the 1989 Consent); DA 57/90 granted 15 October 1990 (the 1990 Consent); and DA 26/92 granted 18 May 1992 (the 1992 Consent); and thus failed to identify the 'existing or approved development' and its impacts." 52The gist of the complaint raised by ground 2(a) was that because the Commissioners failed to identify the existing or approved development and its impacts correctly, they erred in undertaking the comparison required by cl 35. The primary judge determined (at [64]) that despite its drafting, the ground only related to the 1992 and 1983 consents as those granted in 1989 and 1990 did not deal with effluent control and were not, in any event, the subject of any relevant submissions. 53Darley took issue with the way the Commissioners had analysed the 1983 and 1992 consents, contending, in substance, that neither relevantly related to the sort of effluent disposal contemplated by the DA, so that presumably, neither could be considered for the purposes of the cl 35 exercise either to define the existing or approved development or undertake the cl 35 comparison: primary judgment (at [69] - [74], [84]). 54The primary judge concluded (at [94]) that ground 2(a) did not raise a construction issue but, rather was in substance, a challenge to findings of primary fact based on the development consents which were not reviewable in an appeal confined to questions of law. In the event she was in error in this respect, her Honour held (at [95]) that Darley had not established an error of fact giving rise to an error of law in relation to the 1983 or the 1992 consent. She also held (at [98]) that Darley had failed to establish that the Commissioners had misconstrued the 1992 consent. Darley does not challenge this aspect of the primary judgment, at least insofar as the primary judge rejected the challenge to the proposition that the existing waste water system was an approved development.

Primary judgment: appeal ground 2(c) 55Ground 2(c) raised the question whether the Commissioners incorrectly applied cl 35 in that they took into account irrelevant matters. 56This ground of appeal overlapped with ground 2(b), although Darley contended it was a specific attack on paragraphs [30] and [39] of the Commissioners' judgment. The gist of the complaint appeared to be that by using the expression "whether approved [or] otherwise" in [30], the Commissioners had failed to direct themselves only to existing lawful developments: primary judgment (at [100], [102]). The primary judge concluded (at [102]) that that statement had not been material to the Commissioners' decision given that they had "recognised and accepted [Darley's] submission that the analysis of cl 35 ... requires that the existing development means development that is lawfully existing", and (at [104]) that no relevant legal error had been established.

Primary judgment: appeal grounds 2(d) and 2(e) 57Ground 2(d) raised the question whether "having found (at [88]) that it was 'not possible to determine what would be the permitted environmental impacts of the existing or approved development' [the Commissioners] erred in finding that they was [sic] satisfied of the matters in cl 35 in the absence of evidence enabling the comparison required by cl 35 to be made". 58Once again, there was a measure of overlap between this ground and grounds 2(b) and (c) (primary judgment at [106]) and ground 2(e) (primary judgment at [112]). It accordingly failed (primary judgment at [110]) insofar as the primary judge had earlier held in relation to ground 2(b) that there was no failure by the Commissioners to consider s 106, s 107 and s 109 of the EPA Act. Her Honour also accepted (at [110]) that "the Commissioners' reasoning in the judgment as a whole considered the evidence before them and did enable the Commissioners to make the necessary comparison required by cl 35." Accordingly (at [111]), "it was open to the Commissioners to find as they did in relation to the operation of the development consents and reach the conclusions that they did in [88]." 59As to that part of ground 2(d) which overlapped with ground 2(e) raising substantially the same complaint, namely that "the Commissioners could not be rationally satisfied that the impacts of the proposed development would not be a significant increase", the primary judge concluded (at [112]) that it was "clear from the judgment when viewed as a whole that [the Commissioners] were so satisfied and provide[d] reasons for their conclusion based on an analysis of the evidence" so that there was no basis for this ground of appeal. Further, to the extent these grounds raised an "irrationality of decision-making" complaint, Darley appears to have accepted they were not open in the light of Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139, a proposition her Honour accepted (at [119]).

Primary judgment: appeal ground 4 60The fourth ground of appeal raised the question whether "the Commissioners failed to give reasons for concluding that there was an 'absence of any certain relevant concentration, composition or volumetric restriction' (Commissioners' judgment, [88]) on the operation of the tannery, despite the provisions of ss 76A and 109 of the EPA Act." 61The primary judge rejected this complaint partly on the basis that (at [126]) the Commissioners' analysis of the 1983 and 1992 development consents were adequate when considered as a whole because she had earlier held (at [127]) that there was no obligation on the Commissioners to consider the issue of lawful commencement, (at [128]) that the Commissioners had not erred in analysing the 1992 consent and (at [129]) that the Commissioners had not failed to address the issues Darley had raised.

Primary judge's conclusion 62The consequence of these conclusions was that Darley failed to establish that the Commissioners erred in not finding that the development application related to "designated development": primary judgment (at [130]).

Issues on appeal 63The grounds of appeal can be summarised as follows: (1)The primary judge erred in failing to find that the Commissioners erred in applying cl 35 in failing to hold that the DA was for a designated development (grounds 1, 2 and 3) (2)The primary judge erred in failing to find that the Commissioners, in applying cl 35 failed to take into account relevant matters, namely that there was no "existing or approved development", or that if there was an "existing or approved development" that the development was not unlimited and took into account irrelevant matters, namely the impacts of present activities which were not impacts of "existing or approved development"; (grounds 5 and 6) (3)The primary judge erred in failing to find that the Commissioners erred in finding that they were satisfied of the matter in cl 35 of Sch 3 of the Regulation in the absence of evidence enabling the comparison under cl 35 to be made; (grounds 7 and 8) (4)The primary judge erred in failing to find that it was not open to the Commissioners to hold otherwise than that it had been established that there was no "existing or approved" tannery; (ground 11) (5)The primary judge erred in failing to hold that Walfertan bore the onus of proving the existence of any existing use rights and/or development consent relied upon to authorise the tannery and in failing to find the Commissioners failed to give reasons in relation to who bore the onus of establishing the existence of existing use rights; (grounds 10 and 12) (6)The primary judge erred in failing to find that the Commissioners failed to give reasons for concluding that there was an "an absence of any certain concentration, composition or volumetric restriction" on the operation of the tannery, despite s 76A and s 109 of the EPA Act; (ground 9); (7)The primary judge erred in failing to find that if the Commissioners erred in any of the respects identified in Darley's grounds of appeal, that error was not material to their decision (ground 13).

Submissions 64Darley's primary contention is that the proper application of cl 35 involves the identification of the environmental impacts of the "existing or approved development", of the proposed alterations and additions and of the "total development" (being the "existing or approved development" together with the proposed alterations and additions) and, based on the comparison of each, the formation of the opinion as to whether "the alterations or additions do not significantly increase the environmental impacts of the total development ... compared with the existing or approved development." It emphasises that as cl 35 focuses on impacts, the comparative exercise can only be undertaken, at the outset, if an "existing or approved development" is identified and its impacts are identified. 65Darley accepted that Walfertan's development application related to the treatment of waste water produced by the tannery. However it contended that the "existing or approved development" for the purposes of cl 35 was the tannery, not merely the waste water treatment process. Darley argued that as no waste water was produced on the tannery site other than that produced by the tannery's operations, there was no way of understanding the environmental impacts of the changes proposed to the waste water treatment system without understanding the environmental impacts of the tannery. It also argued that attention had to be paid to the tannery's environmental impacts as a whole because the development application proposed treatment of waste water on the abattoir land which had not hitherto been used for treatment of tannery waste water. 66Darley argued that because Walfertan did not discharge its burden of proving that the tannery had development approval and was, accordingly, an "existing or approved development", the cl 35 comparative exercise could not take be undertaken. While Darley appeared to accept that the primary judge's decision did not turn on her application of the presumption of regularity, it contended that her Honour's application of that principle in concluding the tannery did have such approval was misplaced - so characterised because development approval for the tannery could not be inferred from consents given subsequent to the commencement of its operations in 1973 given that it was not shown that those consents depended for their validity upon there having been development consent for the tannery. Further, and in any event, Darley submitted that any prima facie presumption of regularity was rebutted by the Council's failure to produce any development approval or any explanation as to why such approval was not forthcoming. 67Darley submitted that the extract from Scone Shire Council's records dealing with the 1992 development application referring to the tannery as an "existing use" (see above at [28]), could not be correct as a matter of law because the tannery commenced operations when the Shire of Scone Interim Development Order No 1 (the "IDO") requiring development approval was in force. Accordingly there could be no question of existing use rights. It also contended that that entry supported the proposition that the author of the document could not locate a development consent for the tannery in Scone Shire Council's records, hence the recourse to existing uses. As such, the document could also be used to rebut any presumption of regularity that might otherwise arise. Finally, in this respect, it complained that the primary judge erred insofar as she appeared to suggest (at [42]) that because the issue of lawful commencement arose in Class 1 proceedings Walfertan did not bear the burden of having to prove that the tannery had development approval. It accepted that the rules of evidence did not apply to such proceeding, but contended that the obligation of the party relying on existing use rights to establish that fact arose from the construction of the EPA Act. 68Darley complained that although the Commissioners understood the operations of the tannery were integral to the DA and the cl 35 issue, they failed to address the issue of its lawful commencement. It challenged the primary judge's conclusion that the Commissioners were not required to rule on the tannery's lawfulness and that, even if they were, their failure to do so was not material to their decision. It argued that where a development involves two discrete parts, the first of which produces an output and the second of which receives and processes that output, the cl 35 requirement that the "total development" be considered required an evaluation of the impacts of both parts. It contended that if all or any part of the tannery's operations had not received development approval, it could not be considered for the purposes of the cl 35 exercise. This argument also embraced one of the absence of reasons complaints. It submitted that the Commissioners erred in law in failing to give adequate, or any, reasons addressing this aspect of its case, as demonstrated by what it described as the primary judge having to speculate as to their reasoning process: cf Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 (at [56] - [57]). 69Alternatively, Darley submitted that if the relevant "existing or approved development" was the waste water treatment system approved by the 1992 consent, the cl 35 comparative exercise could not be undertaken because there was no limit under that consent on the volume of effluent Walfertan could treat. It complained that there was an underlying fallacy in the process of reasoning the Commissioners adopted in saying, in essence, that there was no limit to the existing volume of waste water disposition so that any development which imposed a restriction must not "significantly increase the environmental impacts of the total development" (Commissioners' judgment at [88]). That fallacy lay in the premise that something which was unlimited in quantity could be a comparator for the cl 35 exercise. Adoption of that premise meant the Commissioners failed to undertake the comparison of impacts cl 35 required, but rather, formed the cl 35 opinion by a "process of logic" which was said to be wrong in law. 70Walfertan's primary submission was that the expression "total development" in cl 35 as defined by the parenthetical statement "(that is the development together with the additions or alterations)" placed the focus on the DA and what it proposed to change. Accordingly the Commissioners correctly identified the environmental impacts of the waste water treatment system and, because the DA was for an improved environmental performance of that system, it was self-evident that the Commissioners would answer the cl 35 question as they did. 71Walfertan submitted that the tannery involved two operations: the tannery manufacturing process and the disposal of waste water from that process. It contended that the DA related only to an improved environmental regime for its treatment of the waste water, and did not involve any change to the tannery's operations. It argued that cl 35 focused on what was to be changed and accordingly, the Commissioners did not err in identifying the use of the land for the treatment of waste water as set out in the DA as the basis for the cl 35 exercise. Their approach was consistent with them accepting, albeit not expressly, that the DA related to waste management facilities or works: Pt 1, Sch 3, cl 32 of the 2000 Regulation. Walfertan submitted accordingly, that Darley's focus on the tannery and its existing use rights was irrelevant. 72Walfertan further submitted that, having regard to the nature of the proceedings (which concerned the cl 35 issue, not establishing whether existing use rights existed for the tannery), it did not bear the legal onus of establishing that the tannery operated with lawful authority. 73In any event, Walfertan contended that if the tannery was the relevant "existing or approved development", there was substantial material supporting the proposition that it was operated under lawful authority. It pointed to the fact that its ability to establish that proposition was constrained by the fact it had only operated the tannery since 1991. While it appeared to accept the Council's assertion that the tannery commenced in 1973 after the commencement of the IDO which would have required development consent, it did not abandon the proposition that it may have been an existing use. It pointed to the fact that the tannery evolved from and adjacent to a pre-existing abattoir which pre-dated the commencement of the IDO. It relied on the fact that subsequent consents were granted as modifications of an existing operation, which it could be reasonably inferred was lawful, and that the Council raised no issue about lawful authority for its current operation: primary judgment (at [33], [40]). It also pointed to the fact that in April 1973 a building application was lodged, albeit that the Council recorded against the note of that application "Approval date not known", when it produced the list of development consents and building approvals before the Commissioners. It also relied on the reference to the tannery as an "existing use" in the Council officer's report for the assessment of the 1992 development application (see [28] above). 74Finally, Walfertan argued that the findings of the Commissioners involved various findings of fact in relation to the operation of two development consents, in particular the 1992 consent, as well as a finding that the presumption of regularity had not been rebutted. Accordingly it contended the primary judge correctly held (at [95]) that Darley had not established that an error of fact giving rise to an error of law had arisen in relation to the 1992 or the 1993 consent. It submitted that both consents authorised "the irrigation activity" (by which I take it to mean the waste water treatment system), albeit without constraints, but sufficient to enable a comparison with the DA proposal.

Parameters of the appeal 75Before turning to the issues particular to cl 35, some observations should be made about the parameters of the appeal. As already noted, an appeal to this Court in Class 1 proceedings lies only against an order or decision (including an interlocutory order or decision) of the Court on a question of law: s 57, Land and Environment Court Act. It is necessary, therefore, that Darley identify a relevant question of law decided (expressly or at least implicitly) in the primary judgment, from which the appeal is brought, even though the proceedings in this Court are "ultimately concerned with the propriety of the decision made by the Commissioners": Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council [2009] NSWCA 300; (2009) 170 LGERA 162 (at [37]) per Basten JA (Macfarlan JA agreeing). 76Darley's fundamental complaint is that the Commissioners misapplied cl 35. That provision required the Commissioners to form an opinion, in short, as to the effect of the alterations or additions on the existing development. Use of statutory language requiring the decision-maker to form an opinion reflects a legislative intention to prevent litigation on questions of jurisdictional fact: see Bankstown Municipal Council v Fripp [1919] HCA 41; (1919) 26 CLR 385 (at 403) per Isaacs and Rich JJ; Minister for Immigration v Eshetu [1999] HCA 21; (1999) 197 CLR 611 (at [130] ff); Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2009] NSWCA 151 (at [33]) per Basten JA (Beazley and Tobias JJA agreeing). 77However, as Walfertan accepted, such a decision is nevertheless open to consideration on an appeal confined to error (question) of law if, in this case, the Commissioners (and, in turn, the primary judge) asked the wrong question: see Avon Downs Pty Ltd v Federal Commissioner of Taxation (Cth) [1949] HCA 26; (1949) 78 CLR 353 (at 360) per Dixon J. I do not understand the High Court's reference to Dixon J's statement in Tasty Chicks Pty Limited v Chief Commissioner of State Revenue [2011] HCA 41; (2011) 85 ALJR 1183 (at [11]) and the subsequent discussion to undermine its continuing force. It has frequently been cited with approval in the High Court: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 (at 275 - 276) per Brennan CJ, Toohey, McHugh and Gummow JJ and the numerous authorities to which their Honours referred in footnote 52. 78Finally, by way of introduction, I note that in order to demonstrate legal error attracting relief, the question of law complained of must be one on which the impugned decision depended, so as to vitiate the ultimate decision. The authorities are too numerous to cite. It is sufficient to refer to Moffitt P's statement in Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409 (at 419) to that effect and observe that it has been cited with approval ever since, recent examples in this Court being Sydney Water Corporation v Caruso and Ors [2009] NSWCA 391; (2009) 170 LGERA 298 and Trazivuk v Motor Accidents Authority of New South Wales [2010] NSWCA 287; (2010) 57 MVR 9.

Designated development 79The developments described in Pt 1, Sch 3 of the 2000 Regulation are the "types of development generally with a serious potential to cause harm to the environment": Penrith City Council v Waste Management Authority (1990) 71 LGRA 376 (at 381) per Kirby P, Meagher and Handley JJA. The significance of this description was explained as being, in such cases, "to require that the public interest be protected by the necessity to support the application to the relevant local authority ... with an Environmental Impact Statement as required by the Act": Penrith City Council v Waste Management Authority (at 382). 80Schedule 3 of the Environmental Planning and Assessment Regulation 1980, the legislation under consideration in Penrith City Council v Waste Management Authority, sets out "a list of categories defined in terms somewhat narrower than those now to be found in Pt 1, Sch 3 of the 2000 Regulation": Residents Against Improper Development Incorporated v Chase Property Investments Pty Ltd [2006] NSWCA 323; (2006) 149 LGERA 360 (at [117]) per Tobias JA (Giles JA and McClellan CJ at CL agreeing). However, the characterisation of "designated developments" in Penrith City Council v Waste Management Authority remains relevant, in my view, as generally, an apposite description of the types of development referred to in Pt 1, Sch 3 of the 2000 Regulation. All but two categories (cl 23 and cl 30) have, as either a primary or alternative criterion, the proximity of the proposed development to "a natural waterbody" as well, in some cases, to other environmentally sensitive areas. Several, including cl 22 and cl 32, include proximity to a residential zone and a concern for the proposed development's effect on the "amenity of the neighbourhood" as criteria. 81The first step in determining whether development is "designated development" involves the classification of the development the subject of the development application by reference to the developments referred to in Pt 1, Sch 3 of the 2000 Regulation. It is accepted that even that exercise is one which "will inescapably result in decisions which are partly impressionistic, upon which different minds may entertain genuine differences": Penrith City Council v Waste Management Authority (at 383). However, relevantly, the exercise focuses on whether the development application is "in respect of designated development" because that is "the question posed under s 78A(8) of the EPA Act": Residents Against Improper Development Incorporated v Chase Property Investments Pty Ltd (at [93]). 82Once it is recognised that the question whether a development application is in respect of "designated development" turns on identifying the subject of the application, it must also follow that the cl 35 inquiry is directed to the same subject. 83It was accordingly, the development described in the DA which framed the cl 35 inquiry. The DA described the application as being for "[t]he use of the existing waste water treatment facility and associated irrigation infrastructure...for the treatment of waste water...". Such a use was a "development" for the purposes of the EPA Act and the 2000 Regulation (see [15] - [16] above). Waste management facilities or works disposing of or treating, among other matters, liquid waste is a recognised category (cl 32) in the list of "designated developments" in Pt 1, Sch 3 of the 2000 Regulation. It was that aspect of Walfertan's use of the land which was the relevant development for the purposes of cl 35. 84In my view, accordingly, the Commissioners did not err in identifying the use of the tannery land for the treatment and/or disposal of waste water from the tannery's operations as the relevant development: Commissioners' judgment (at [7] - [11]). That development had been approved in the 1992 consent, the application for which, it should be noted, was accompanied by a Statement of Environmental Effects to which the Commissioners paid substantial attention: Commissioners' judgment (at [80] - [86]). The primary judge did not err (at [49]) in upholding the Commissioners' judgment in this respect. 85The next question is to determine whether the evidence before the Commissioners enabled them to carry out the cl 35 comparative exercise. 86Clause 35 is not happily framed. Indeed, Talbot J substantially embraced the proposition that "the provision, when strictly read, makes no sense": Timbarra Protection Coalition Inc v Ross Mining NL [1998] NSWLEC 19; (1998) 99 LGERA 345 (at 354) (partly reversed on appeal, but not on this point). 87On a textual analysis cl 35 involves an element of circularity or, as Talbot J said (at 354): "It refers to an increase to the environmental impacts of the total development compared with the existing or approved development, whereas the real test is any increase of environmental impacts of the existing or approved development brought about by the alterations or additions. The intention of Item 1 is to require the consent authority to compare the environmental impacts of the existing or approved development with the environmental impacts of the total development, including the additions or alterations." At the time his Honour wrote, cl 35 (expressed in identical terms) was Item 1 in Pt 2, Sch 3 of the Environmental Planning and Assessment Regulation 1994. 88Talbot J's interpretation of cl 35 is clearly correct. The purpose of cl 35 is to identify situations where an EIS will be required to accompany a development application in respect of "designated development". An EIS would be appropriate if the effect of alterations or additions would be to increase significantly the environmental impacts of an existing development. 89I am also of the view that the Commissioners did not err in law in concluding that they could undertake the cl 35 comparison. It might be accepted that, taken literally, the Commissioners said (at [88]) that the "environmental impacts of the existing or approved development" could not be determined. However that remark was merely the introduction to the comparative process on which they then embarked. Next they referred to "the comparatively unrestricted nature of ... conditions [in previous consents] ... [as] mean[ing] that those environmental impacts are potentially significantly high as the degree of regulation and control provided by the conditions of development consent is very permissive". 90The Commissioners took into account (at [88]) the analysis they had undertaken (at [85]) of Appendix 2 of the SEE which accompanied the application for the 1992 consent which they had concluded postulated "in excess of 275 mega litres "as the maximum irrigated effluent "capable of being irrigated on the area of the then tannery land ... approaching three times the volume of effluent proposed to be permitted under the present application". They also considered the effect of the conditions of consent to which the parties had agreed coupled with the unsatisfactory nature of the "present effluent disposal ... both in their impact on the surrounding community and their likely impact on the tannery's own land to the extent that this impact can be assumed given the unsatisfactory monitoring regime currently applying". All these matters led to their conclusion (at [88]) that: "[T]he development together with the additions or alterations will not only not significantly increase the environmental impacts of the total development that is presently approved but must, in our view, in fact, decrease the maximum potential environmental impacts necessarily inherent from the present approved development." 91Each step in this process of reasoning qualified the Commissioners' opening remarks as to indeterminacy. Each was an available finding of fact, none of which Darley could, or sought to, challenge on the review permissible on this appeal. Although each step was not mathematically quantified (save as to the maximum irrigated effluent) it was able to be compared with the DA proposal. To say the environmental impacts of the existing development were "significantly high" and that the effect of the DA would be "to decrease the maximum potential environmental impacts necessarily inherent from the present approved development" is to undertake a comparative exercise capable of supporting the ultimate cl 35 opinion. The Commissioners did not say, as, with respect, Darley's submissions at times appeared to suggest, that the environmental impacts of the existing development was "infinite in faculties": cf William Shakespeare, "The Tragedy of Hamlet, Prince of Denmark" (Act II, Scene ii, 285-300). Nor, for the foregoing reasons, is it necessary to embark upon the philosophical debate into which, at times, Darley's submissions also appeared to stray as to whether nothing can be something. 92In my view, accordingly, the Commissioners did not err in concluding that the DA was not in respect of "designated development".

Identification of comparators: reasons complaint 93This aspect of Darley's appeal also comprehended its complaint that the primary judge erred in failing to conclude the Commissioners failed to give reasons for concluding that there was an "an absence of any certain concentration, composition or volumetric restriction" on the operation of the tannery, despite s 76A and s 109 of the EPA Act. 94The reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (at 272). 95In my view the primary judge did not err (at [126] - [129]) in concluding the Commissioners' reasons were adequate when "the entirety of [their] analysis of the 1983 and 1992 development consents and their conclusions in [87] - [88] are considered as a whole." Darley's submissions in this respect invite the Court to trespass into the scrutiny eschewed by Minister for Immigration and Ethnic Affairs v Wu Shan Liang. 96That conclusion is sufficient to dispose of the appeal, however I will also consider the issue whether, had the tannery been the subject of the DA, It could have been identified as the "existing or approved development" for the purposes of cl 35.

The tannery: burden of proof 97Darley complains that the primary judge erred in failing to hold that Walfertan bore the onus of proving the existence of any existing use rights and/or development consent relied upon to authorise the tannery and in failing to find the Commissioners failed to give reasons in relation to who bore the onus of establishing the existence of existing use rights. Walfertan's response was, to the effect that the case before the Commissioners did not involve a declaration of whether or not it had existing use rights, but, rather involved a merit appeal to determine a development application in respect of which, it contended, the "relevant question was whether, in the opinion of the Commissioners, the alterations do not significantly increase the environmental impacts of the total development". 98Clause 35 is, prima facie, the type of statutory provision of which the High Court said in Vines v Djordjevitch [1955] HCA 19; (1955) 91 CLR 512 (at 519 - 520): "...in whatever form the enactment is cast, if it expresses an exculpation, justification, excuse, ground of defeasance or exclusion which assumes the existence of the general or primary grounds from which the liability or right arises but denies the right or liability in a particular case by reason of additional or special facts, then it is evident that such an enactment supplies considerations of substance for placing the burden of proof on the party seeking to rely upon the additional or special matter." (Emphasis added) 99The question whether cl 35 can be so characterised is to be determined as a matter of statutory construction: Chugg v Pacific Dunlop Ltd [1990] HCA 41; (1990) 170 CLR 249 (at 257) per Dawson, Toohey and Gaudron JJ. It is one of substance: Avel Pty Ltd v Multicoin Amusements Pty Ltd [1990] HCA 58; (1990) 171 CLR 88 (at 119) per McHugh J. 100The general rule (the requirement to have an EIS for "designated development") arises from the combination of s 77A and s 78A(8) of the EPA Act and cl 4 and Pt 1, Sch 3 of the 2000 Regulation. Clause 35 takes an applicant for development approval outside that general rule and, accordingly, in my view creates an exception to it within the meaning of Vines v Djordjevitch: see Chugg v Pacific Dunlop Ltd (at 257). 101Thus, subject to what appears below, I would conclude that an applicant for development consent seeking to rely on cl 35 to establish that a development was not "designated development", had to demonstrate the elements of that clause to the relevant decision-maker. The first step in that process required identification of an "existing or approved development". 102Walfertan did not challenge the proposition that, despite "the characteristics of the exercise by Commissioners of their statutory functions" being "of an administrative, rather than judicial, decision-making nature", as explained by Basten JA (Macfarlan JA and Sackville AJA agreeing) in Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council (at [35] - [36] (cf Segal v Waverley Council [2005] NSWCA 310; (2005) 64 NSWLR 177 (at [42])) questions of burden (or onus) of proof were germane: cf Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 [2006] HCA 53; (2006) 231 CLR 1 (at [40]) and the line of authority referred to in the footnotes to that paragraph; Minister for Immigration and Ethnic Affairs v Wu Shan Liang (at 282 - 283). However, the primary judge appeared to express the view (at [42]) (challenged by Darley) that in Class 1 the proceedings, the approach to determining the issue as to presumption of regularity would differ somehow from the approach to that issue in Class 4 proceedings. Quite how was not, with respect, explained. 103The question of how the Commissioners were required to exercise their powers turns on the statutory framework in which they functioned. I have already referred to that briefly. In short, proceedings before them were to be "conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and as the proper consideration of the matters before the Court permit" and they were "not bound by the rules of evidence but [might] inform [themselves] on any matter in such manner as [they thought] appropriate and as the proper consideration of the matters before [them] permit[ted]": s 38(1) and (2), Land and Environment Court Act. They also had "all the functions and discretions" of the Council for the purposes of hearing and disposing of the appeal, which was by way of rehearing: s 39(1) and (2), Land and Environment Court Act. 104It has long been held that provisions such as s 38 of the Land and Environment Court Act mean that "[t]he use outside courts of law of the legal rules governing [the onus (or burden) of proof] should be approached with great caution": McDonald v Director-General of Social Security [1984] FCA 59; (1984) 1 FCR 354 (at 356) per Woodward J; see also (at 365 - 366) per Northrop J; (at 368 - 369) per Jenkinson J. Woodward J continued (at 356): "Such a tribunal will still have to determine practical problems such as the sequence of receiving evidence and what to do if it is unable to reach a clear conclusion on an issue, but it is more likely to find the answer to such questions in the statutes under which it is operating, or in considerations of natural justice or common sense, than in the technical rules relating to onus of proof developed by the courts. However these may be of assistance in some cases where the legislation is silent." See also Huang v Minister for Immigration and Multicultural Affairs [2001] FCA 901 (at [18] - [26]) per Drummond J and the discussion of that case by Weinberg J in Ejueyitsi v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 328; (2006) 151 FCR 289. 105However, it has also been held that a provision such as s 38(2) is intended to be "facultative, not restrictive" and "to free tribunals, at least to some degree, from constraints otherwise applicable to courts of law, and regarded as inappropriate to tribunals": Minister for Immigration and Multicultural Affairs v Eshetu (at [49]) per Gleeson CJ and McHugh J; referring to Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 (at 29). In the latter case, Gleeson CJ and Handley JA held (at 29) that a similar provision would not release the relevant administrative body from the obligation to apply rules of law in arriving at their decisions. 106Darley submitted that it was the EPA Act rather than s 38 which dictated that Walfertan bore the burden of proof in respect of cl 35 issues. That submission was not developed. However, as I have said, prima facie, s 77, s 78A(8) and cl 35 dictate that outcome. Whether or not it is appropriate to refer to that exercise as imposing a "burden of proof" is a different question, resolution of which may be significant on an appeal confined to a question of law. Recognising that the extent to which provisions such as s 38 free an administrative body "from obligations applicable to courts of law may give rise to disputes in particular cases" (Minister for Immigration and Multicultural Affairs v Eshetu (at [48]) per Gleeson CJ and McHugh J), resolution of that question should await final determination after full argument. It may be relevant to such determination, for example, that "the functions exercised by the Commissioners were part of the jurisdiction of the Court, and that their decisions were decisions of the Court and were thus made within the institutional structure of the Court": see Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council (at [36]). 107If the question whether the tannery was an "existing or approved" development was material, then it was necessary for the Commissioners to reach a conclusion of fact on that issue by reference to the materials before them. At the very least, as a matter of practical reality, it might be concluded that as the applicant for development consent, Walfertan needed to satisfy the Commissioners of that fact - whether or not it is appropriate to refer to the exercise in which it undertook that task as involving discharging the burden of proof. 108On the hypothesis the parties accepted as to the relevance of the "burden of proof" issue, I also note that Walfertan did not challenge the proposition that if the Commissioners and/or Pain J erred in determining where the burden of proving the tannery was an "existing or approved" development lay, that was capable of raising a question of law. That would appear to be the case accepting that "the rules relating to the burden of proof are largely rules of substantive law, especially those allocating the burden of proof": Cross on Evidence, LexisNexis Butterworths (at [7001]) and see Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26. 109The primary judge appears to have implicitly accepted that Darley bore the burden of proof on whether or not the tannery was an "existing or approved development" in her statement (at [38]) that, had it been relevant, the Commissioners should have considered whether "the onus of proof of the existence of lawful commencement and/or existing use rights under the EP&A Act had shifted to Walfertan in the circumstances of the hearing". On the other hand, her Honour also referred (at [40]), to the proposition that, insofar as the tannery was concerned, the Commissioners "were entitled to consider that the onus of proof identified in Vines v Djordjevitch submitted by [Darley] as falling on Walfertan was satisfied by the production of the 1983 consent which was for the redevelopment of an existing activity in the tannery building as that is what that consent sought to vary" - a statement which appeared to accept Walfertan bore the burden of proof. 110It is sufficient to state, in my view, that to the extent the primary judge's statement (at [38]) assumed Darley bore the burden of proof (however the task of demonstrating a cl 35 fact in Class 1 proceedings might appropriately be described) on any cl 35 issue, her Honour erred on a question of law.

Presumption of regularity 111The primary judge concluded (at [40]) that if the Commissioners had been required to consider the issue of lawful commencement of the tannery, a presumption of regularity arose in the circumstances for which Walfertan contended, summarised by her Honour as follows: "34 .... There was evidence of four development consents which clearly relied on the existing situation at the time of the applications being made. The presumption of regularity must apply to these, see Dosan Pty Ltd v Rockdale City Council [2001] NSWLEC 252; (2001) 117 LGERA 363 per Lloyd J at [138]-[151] and the Court of Appeal in Ashfield Council v Armstrong [2002] NSWCA 269; (2002) 112 LGERA 105 per Davies AJA (Mason P and Handley JA agreeing) at [40]. There was also in evidence a building application dated 1971 [sic, 1973] which the Commissioners could have regard to. While there was no evidence that was granted, the fact that it existed on the Council's files is suggestive that there was an earlier development consent. 35 Development consents granted by the Council in 1983, 1989, 1990, 1992 were amending an existing situation and did not stand on their own. The 1983 consent relied on the existence of a tannery building for example." 112It might be doubted whether it was open to the primary judge to make a finding that the presumption of regularity applied on an appeal confined to a question of law. However Darley did not complain about her Honour undertaking that task. Its complaint was confined to the conclusion she reached. 113The question whether development consent has been given is one of fact that is capable of proof by evidence of express consent by the responsible authority (or a duly authorised delegate) or by conduct evidencing consent: Brickworks Ltd v Warringah Corporation (1963) 108 CLR 568 (at 576 - 577) per Windeyer J; Baiada v Waste Recycling and Processing Service of NSW [1999] NSWCA 139; (1999) 130 LGERA 52 (at [38]) per Mason P (Sheller JA agreeing). The latter method of proof invokes the presumption of regularity. 114The presumption of regularity has been described as both a "rebuttable presumption of law" (Cross on Evidence, LexisNexis Butterworths, at [1175]) and "a presumption of fact, associated with a reasonable inference based on what ordinarily happens in the ordinary course of human affairs" (Hill v Woollahra Municipal Council [2003] NSWCA 106; (2003) 127 LGERA 7 (at [52]) per Hodgson JA (Ipp JA and Davies AJA agreeing)), whose "natural home...is public law": Minister for Natural Resources v NSW Aboriginal Land Council (1987) 9 NSWLR 154 (at 164) per McHugh JA. 115The presumption of regularity has also been described as one which "arises from the ordinary course of business", being "a rule of very general application, that where an act is done which can be done legally only after the performance of some prior act, proof of the later carries with it a presumption of the due performance of the prior act": McLean Bros & Rigg Ltd v Grice [1906] HCA 1; (1906) 4 CLR 835 (at 850) per Griffith CJ (Barton and O'Connor JJ agreeing), citing Knox County v Ninth National Bank 147 US 91 (1893). In Minister for Natural Resources v NSW Aboriginal Land Council (at 164) McHugh JA explained its operation in the public law context as follows: "Where a public official or authority purports to exercise a power or to do an act in the course of his duties, a presumption arises that all conditions necessary to the exercise of that power or the doing of that act have been fulfilled." 116In deciding whether the presumption of regularity is rebutted, the inference from the ordinary course of human affairs carries some weight which may vary according to the proved circumstances: Hill v Woollahra Municipal Council (at [52]). In this respect, in my view, Windeyer J's remarks in Brickworks Ltd v Warringah Corporation remain cogent: "The giving or refusing of a consent, as required by the Ordinance, was an important discretion entrusted to the Council as the 'responsible authority'. It is not to be assumed that the Council and its officers neglected their duties or discharged them in a perfunctory manner." 117There is authority to the effect that the presumption of regularity applies "only to matters of form, rather than of substance", a proposition which may not be consistent with earlier decisions of this Court: see the discussion in GPT RE Limited v Belmorgan Property Development Pty Limited [2008] NSWCA 256; (2007) 72 NSWLR 647 (at [82]) per Basten JA (Bell JA and Young CJ in Eq agreeing). Such authority would also be inconsistent with Brickworks Ltd v Warringah Corporation in which the presumption of regularity was applied to conclude that a council had given consent for land to be used to extract minerals. 118The presumption of regularity was considered capable of applying to the issue whether development consent had been given, or its validity, in Baiada and Ashfield Municipal Council v Armstrong [2002] NSWCA 269; (2002) 122 LGERA 105. Indeed, Powell JA, who dissented in Baida, held (at [97] - [117]) that the presumption could be invoked to demonstrate development consent had been given. I proceed accordingly on the basis that Walfertan was entitled to call the presumption of regularity in aid. 119In my view the primary judge did not err in concluding that the tannery could have been considered as an "existing or approved development". All the development consents which were produced had been given by Scone Shire Council, which appears from the title of the then relevant IDO (the "The Shire of Scone Interim Development Order No 1") also to have been the relevant consent authority at the time the tannery commenced operations in 1973. The primary judge accepted (at [40] in adopting Walfertan's submissions set out at [34] -[35]), that the subsequent development consents "relied on the existing situation at the time the application was made", that being a reference, to my mind, to each development consent having been given on the premise that the tannery itself had development consent. 120This was, in my view, an appropriate case for application of the presumption of regularity. It should not be assumed that Scone Shire Council and its officers so neglected their duties as to have granted four development consents and apparently given building approval for the construction of the tannery building without there having been development consent for the operation of the tannery itself: Brickworks Ltd v Warringah Corporation (at 577). The fact that one officer of the Council referred to the tannery as an "existing use" reflects the lack of a formal record and/or an inability to locate one - precisely the circumstance application of the presumption is intended to cure. That reference did not however, in my view, rebut the presumption that the Council as a whole would only have granted subsequent development consents and apparently approved the construction of the tannery building if original approval for the tannery's operations had been given.

Onus of proof: reasons complaint 121Darley also complained that the primary judge erred in failing to find the Commissioners failed to give reasons in relation to who bore the onus of establishing the existence of existing use rights. This complaint is somewhat artificial, in my view, the Commissioners' focus properly having been on the waste water system as the relevant development. In any event, the question as to who bore the onus of proving such rights was not, in my view, one of the "principal contested issues ... joined between the parties": Segal v Waverley Council (at [44]). It was the ultimate conclusion as to whether there was an "existing or approved development" on which cl 35 could operate which fell into that category.

Orders 122I propose the following orders: 1.Grant leave to appeal. 2.Appellants to file the Notice of Appeal in the form of the draft amended notice of appeal in the White Book within seven days. 3.Appeal dismissed with costs. 123MACFARLAN JA:I agree with McColl JA. 124WHEALY JA: I agree with the reasons of McColl JA and with the order proposed by her Honour.

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: 27 August 2012

Environmental Planning and Assessment Regulation 2000(NSW)

Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409 McDonald v Director-General of Social Security [1984] FCA 59; (1984) 1 FCR 354 McLean Bros & Rigg Ltd v Grice [1906] HCA 1; (1906) 4 CLR 835 Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2009] NSWCA 151 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 [2006] HCA 53; (2006) 231 CLR 1 Minister for Immigration v Eshetu [1999] HCA 21; (1999)197 CLR 611 Minister for Natural Resources v NSW Aboriginal Land Council (1987) 9 NSWLR 154 Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council [2009] NSWCA 300; (2009) 170 LGERA 162 Penrith City Council v Waste Management Authority (1990) 71 LGRA 376 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 Residents Against Improper Development Incorporated v Chase Property Investments Pty Ltd [2006] NSWCA 323; (2006) 149 LGERA 360 Segal v Waverley Council [2005] NSWCA 310; (2005) 64 NSWLR 177 Sydney Water Corporation v Caruso and Ors [2009] NSWCA 391; (2009) 170 LGERA 298 Tasty Chicks Pty Limited v Chief Commissioner of State Revenue [2011] HCA 41; (2011) 85 ALJR 1183 Timbarra Protection Coalition Inc v Ross Mining NL [1998] NSWLEC 19; (1998) 99 LGERA 345 Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55 Trazivuk v Motor Accidents Authority of New South Wales [2010] NSWCA 287; (2010) 57 MVR 9 Vines v Djordjevitch [1955] HCA 19; (1955) 91 CLR 512 Walfertan Processors v Upper Hunter Shire Council (No 4) [2010] NSWLEC 108 Walfertan Processors v Upper Hunter Shire Council [2009] NSWLEC 1134 Texts Cited: Cross on Evidence, LexisNexis Butterworths William Shakespeare, "The Tragedy of Hamlet, Prince of Denmark" Category: Principal judgment Parties: Darley Australia Pty Ltd - First Appellant William John Bourke - Second Appellant Walferton Processors Pty Ltd - First Respondent Upper Hunter Shire Council - Second Respondent Representation: Counsel: B W Walker SC with P W Larkin for the Applicants A Galasso SC for the First Respondent P Jayne for the Second Respondent (Submitting Appearance) Solicitors: Equilaw Solicitors - Appellant Wotton & Kearney - First Respondent Sparke Helmore - Second Respondent File Number(s): 2010/316566 Publication restriction: No Decision under appeal Citation: [2009] NSWLEC 1260 Date of Decision: 2010-08-31 00:00:00 Before: Pain J File Number(s): 11319 of 2008

1McCOLL JA: Darley Australia Pty Ltd and William John Bourke, the applicants, seek leave to appeal from a decision of Pain J approving a decision of Commissioners of the Land and Environment Court to grant development consent to a Development Application (the "DA") lodged by Walfertan Processors Pty Ltd, the first respondent, relating to the treatment of waste water on a property in Aberdeen in the Upper Hunter Valley: Walfertan Processors v Upper Hunter Shire Council (No 4) [2010] NSWLEC 108 (the "primary judgment"); Walfertan Processors v Upper Hunter Shire Council [2009] NSWLEC 1134 (the "Commissioners' judgment"). The application for leave to appeal was heard concurrently with the appeal so that if leave was granted another hearing was not required. 2The central issue is whether the DA was in respect of "designated development" for the purposes of s 77A of the Environmental Planning and Assessment Act 1979 (the "EPA Act"). If it was, it was required to be accompanied by an environmental impact statement ("EIS") which would have to be considered before development consent could be granted: s 78A, EPA Act. The development the subject of the DA was "designated development" if it "significantly increase[d] the environmental impacts of the total development (that is the development together with the additions or alterations) compared with the existing or approved development": cl 35, Pt 2, Sch 3, Environmental Planning and Assessment Regulation 2000 (the "2000 Regulation"). The controversy between the parties turned on correctly identifying the "existing or approved development" and the correct comparators for the purpose of cl 35. 3For the reasons which follow, I am of the view that the DA was not in respect of "designated development".

(2002) 122 LGERA 105

(2009) 170 LGERA 162

(2006) 149 LGERA 360

(2009) 170 LGERA 298

(2001) 117 LGERA 363

(2002) 112 LGERA 105

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