The site of the former Pyrmont Power Station was determined by the NSW government in 1993 to be the site for the permanent casino. It is relevant to note how that determination came about.

The licensing and control of casinos in New South Wales is subject to the provisions of the Casino Control Act 1992 ("the CC Act"). Part 10 of the CC Act establishes a body known as the New South Wales Casino Control Authority ("the Authority"). Its objects and functions involve generally the control of the operations of a casino, the review of all matters connected with casinos, and the furnishing of advice to the minister responsible for the CC Act, who at all relevant times was the Chief Secretary and Minister for Administrative Services ("the Chief Secretary").

For the purposes of these proceedings, s 7 of CC Act is pertinent. That section relevantly provides as follows:

"7(1) The Minister may from time to time give a direction in writing to the Authority as to any of the following matters:

(c) the development required to take place in conjunction with the establishment of a casino, such as the development of a hotel or other complex of which a casino is to form a part;

(d) any other prescribed matter concerning the establishment of a casino.

(2) Before giving a direction on any matter to the Authority, the Minister is to call for a report on the matter from the Authority and is to consider the Authority's report."

A report on the location, size and style of the Sydney casino was prepared by the Authority pursuant to s 7(2) in January 1993. In that report, the Authority considered 19 potential casino sites in the Sydney area and shortlisted eight of these, all of which were in the vicinity of Darling Harbour. Of the sites shortlisted, the Authority stated in the executive summary to its report:

"that the Pyrmont Power Station site is the only site which meets all assessment criteria and is clearly the best site for the Sydney casino."

Page 69 of the report contains a map (a copy of which is annexed and marked "A") which indicates the various sites considered. The map demonstrates that the Pyrmont Power Station site does not include any of the areas identified as Darling Island Wharves 12 - 16.

The Chief Secretary made a direction under s 7(1) of the CC Act that "the permissible location for a casino is the Pyrmont Power Station site".

There had also been steps taken in relation to a temporary casino site. On 8 October 1993, the Authority advised applicants for casino licences that an acceptable site for a proposed temporary casino would be Sydney's reserve overseas passenger terminal at wharves 12 and 13 Pyrmont Bay, an area in front of the permanent casino site. A development application was lodged with the Minister by the Authority on 23 November 1993 seeking consent for the conversion of an existing building for use as a temporary casino with related restaurant/bar/entertainment facilities and adjacent temporary parking. Stage one of that development application, DA 29/93, was determined by the Minister on 1 February 1994 by the granting of consent subject to conditions pursuant to s 91AB of the Environmental Planning and Assessment Act 1979 ("the EP&A Act").

The land to which SEPP 41 applies is an area of land shown in heavy black edging on a map marked "State Environmental Planning Policy No. 41 - Casino Entertainment Complex" (a copy of which is annexed and marked "B"). The black edged area comprises the site of the permanent casino, the temporary casino and associated car parking and public recreation area. For convenience I will refer to this site as the "SEPP 41 site".

The land which was the subject of the development application for a permanent casino and which, in the applicant's claim, was the subject of the consultation, is, as I have said, the site of the former Pyrmont Power Station. This is an area smaller than the SEPP 41 site but comprises part of it. I will refer to this smaller area as the "Pyrmont Power Station site".

SEPP 41 was purportedly made under pt 3 of the EP&A Act. That part is entitled "Environmental Planning Instruments" and deals generally with the making of state environmental planning policies, regional environmental plans and local environmental plans. The making of a state environmental planning policy ("SEPP") is dealt with in div 2 of pt 3, which comprises only three sections, ss 37, 38 and 39. Section 37 deals with the decision or direction by the Minister to prepare a draft SEPP; s 38 relates to the format of a SEPP; and s 39 contains provisions relating to the making of a SEPP. I shall return to consider these sections in more detail later.

SEPP 41 applies specifically to development for a casino entertainment complex and complementary development on land to which it applies. The terms "casino", "casino entertainment complex" and "complementary development" are each defined in cl 3 of SEPP 41 as follows:

"'casino' means a casino operated or proposed to be operated under the Casino Control Act 1992;

'casino entertainment complex' means a facility or set of facilities having a casino (whether permanent or temporary) as its principal feature and including complementary development;

'complementary development' means development for any of the following purposes:

public transport purposes and interchange facilities

sporting and recreational facilities (such as a health centre, gymnasium, swimming pool and tennis courts)

and any other purposes that are ancillary to development for the purpose of a casino."

Clause 5 makes the Minister the consent authority for any development for which consent may be granted under SEPP 41.

Clause 7 deals with the relationship of SEPP 41 with other environmental planning instruments but, in particular, with the relationship between SEPP 41 and SREP 26. It provides that:

"7(1) In the event of an inconsistency between this Policy and another environmental planning instrument, this Policy prevails to the extent of that inconsistency.

(2) Sydney Regional Environmental Plan No. 26 - City West applies to development on the land to which this Policy applies for any purpose other than a casino entertainment complex or complementary development."

SREP 26 was gazetted on 16 October 1992. According to the aims set out in cl 4, SREP 26 was intended to develop planning principles of regional significance for the "City West" area as a whole and more specifically for each of four precincts delineated by certain maps which formed part of SREP 26. These precincts are defined in cl 3, the first being described as the "Ultimo-Pyrmont Precinct". It is uncontested that the both the SEPP 41 site and the Pyrmont Power Station site fall within this precinct. Part 1 of cl 15 contains the planning principles for the Ultimo-Pyrmont precinct.

Clause 14 of SREP 26 provides that Sydney City Council is the consent authority for the Ultimo-Pyrmont precinct with the exception of land indicated in map 5. The Minister is the consent authority for land delineated in map 5 and there is a requirement that a master plan be developed in relation to that area of the precinct. Again, it is uncontested that both the SEPP 41 site and the Pyrmont Power Station fall within the area delineated by map 5.

Division 7 of SREP 26 provides for the creation of urban development plans which are instruments that make "more detailed provisions relating to development within a Precinct" than SREP 26 itself. An urban development plan was created for the Ultimo-Pyrmont precinct pursuant to cl 35 and adopted by the Minister pursuant to cl 38. A master plan for the area shown in map 5 was also created pursuant to div 8 and adopted by the Minister on 30 April 1993.

Consultation, in relation to the formulation of a SEPP, is envisaged by s 37(2) which is in the following terms:

"37(2) The Minister may, after consultation with such Ministers as he determines, cause to be prepared by the Director for submission to the Minister a draft State environmental planning policy with respect to any matter specified by the Minister, being a matter which is, in the opinion of the Minister, of significance for environmental planning for the State."

Following a minute prepared by the Director of the Department of Planning ("the Director") on 11 August 1994, a cabinet discussion paper about a proposed SEPP for the casino complex was prepared. In that discussion paper a number of options, designed to "remove the complications besetting the planning process and development application process", were outlined. The ultimate conclusion of the paper was a recommendation that a SEPP be prepared "to permit a casino in Sydney subject to the consent of the Minister for Planning". The discussion paper contained the following statement in relation to consultation with other ministers:

"Prior to formally deciding to prepare the SEPP the Minister for Planning will consult with the Ministers for Tourism, Transport, and Local Government, the Treasurer and the Chief Secretary and Minister for Administrative Services under s 37(2) of the [EP&A] Act."

Following a meeting between the Premier of New South Wales, the Chief Secretary and the Minister on 17 August 1994, the Director issued a departmental minute recommending that the Minister determine to consult certain ministers pursuant to s 37(2). In that minute, the proposed SEPP was outlined as follows:

"The main aim of the proposed SEPP will be to permit the establishment of a Casino for the State of New South Wales on the site chosen for the Casino by the Casino Control Authority and adopted by the Government. Consequently the SEPP will apply to the proposed site of both the temporary and permanent casino and will only affect the carrying out of development for the purposes of the casino and its associated facilities. In this way, Sydney Regional Environmental Plan No.26 - City West will continue to apply to the site and regulate any other proposed development (such as the light rail development) which is not part of the Casino proposal."

Letters, each dated 26 August 1994, were then sent to the Ministers for Tourism, Transport, Local Government, the Treasurer and the Chief Secretary. The letters ("the consultation letters") were all in much the same terms as the letter which was sent to the Minister for Tourism, which, omitting formal parts, was as follows:

"Following a meeting between the Premier, Mrs Cohen and myself on 17 August 1994, I am writing to you pursuant to s37(2) of the Environmental Planning and Assessment Act to consult you about a proposal to prepare a State Environmental Planning Policy (SEPP). The proposed SEPP will permit the establishment of the Casino for New South Wales on the site in Pyrmont chosen for the Casino by the Casino Control Authority and adopted by the Government. I am writing to you as the Minister for Tourism because of the importance of the Casino proposal for tourism in the State.

As you are aware some uncertainties have arisen concerning my consideration of the proposed Casino under the current planning controls. Some of these uncertainties relate to the status of the Master Plan in place in respect of the Casino site. Concerns have been raised that the Master Plan currently applying to the site is inconsistent with the Regional Environmental Plan for City West and that this impacts on my power to determine the development application for the Casino development.

After considering the available options and discussing them with the Premier I believe that the planning controls applicable to the Casino development should be subject to a State Environmental Planning Policy. The SEPP will apply to the proposed site of the Casino and will only affect the carrying out of development for the purposes of the Casino and its associated facilities. In this way the Regional Environmental Plan for City West will continue to apply to the site and regulate other proposed development (such as stage 2 of the light rail development) which is not part of the Casino proposal.

I propose that the SEPP will specifically provide for a Casino (including the temporary Casino) and associated development to be carried out on the site with my consent.

In my view it is most desirable that the planning controls affecting the Casino development be clarified without delay, and I would therefore request any comments you may wish to make on the proposal by close of business on Wednesday, 7 September 1994."

The Ministers all replied to the letters sent to them.

The Minister for Tourism responded on 30 August 1994 thanking the Minister for Planning for "the opportunity to be consulted under the provisions of s 37(2)" on the proposal to prepare a SEPP "to permit the establishment of the Casino for New South Wales on the site in Pyrmont chosen by the Casino Control Authority and adopted by the Government". The Minister explained the benefits of a casino to tourism in the State and then went on to say that she endorsed the view "that planning controls applicable to the development of the Casino and associated activities should be subject to a State Environmental Planning Policy ...".

The Minister for Local Government replied on 1 September 1994 in terms relating to "the site in Pyrmont chosen by the Casino Control Authority and adopted by the Government" and stated that he fully supported the policy proposed.

The Treasurer responded on the same day stating his belief in the appropriateness of the proposal that "the planning controls applicable to the Casino development should be subject to a State Environmental Planning Policy", in the interests of State revenue.

The Chief Secretary on the same day indicated her support for the preparation of a SEPP to "permit the establishment of the Casino (including the temporary Casino) and associated development on the Pyrmont site adopted by the Government", outlining her appraisal of the significance of the project for the State.

Similarly, the Minister for Transport, whilst indicating his support for the making of the SEPP, referred in his letter of 2 September 1994 to the "site in Pyrmont chosen for the Casino by the Casino Control Authority and endorsed by the Government" and went on to make the following statement:

"You indicate in your letter that the SEPP will specifically provide for a Casino, including the temporary Casino and associated development to be carried out on the site with your consent."

The Premier wrote on 6 September 1994 referring to discussions "about the planning and development process for the casino at Pyrmont Bay" and agreeing with the decision to prepare a SEPP.

On 8 September 1994, the Minister issued a request pursuant to s 37(2). The Minister requested the Director to prepare and submit to him a draft SEPP "which permits the establishment of a Casino Entertainment Complex and associated development with the consent of the Minister for Planning on the site in Pyrmont specified by Ministerial direction under section 7(1) of the Casino Control Act 1992 as the permissible location for a Casino".

On 12 September 1994, a departmental submission was made to the Minister by the Director, furnishing a draft SEPP and recommending that the Minister determine its format, structure and subject matter pursuant to s 38, that the Minister recommend to the Governor under s 39(1) that he make the SEPP under s 39(4), and that the Minister determine not to publicise the draft SEPP.

In that submission the area of land to which the SEPP was to apply was identified in an attachment and described in the following way:

"It comprises the sites of the permanent casino, the temporary casino, and associated car parking, and the public recreation area bounded by Pyrmont Bay, Edward Street, the Australian National Maritime Museum and Foreshore Road."

The SEPP was made in its final form on 21 September 1994.

Was there consultation for the purposes of the EP&A Act?

The applicant's case is that there was a failure to consult in respect of the SEPP 41 site or complementary development, and that failure fundamentally flawed the consultation process, with the consequence that SEPP 41 was made in breach of the EP&A Act. Factually, the applicant's attack in this respect rests primarily upon the consultation letters.

The consultation letters refer to the proposed SEPP as permitting the establishment of the casino "on the site in Pyrmont chosen for the Casino by the Casino Control Authority and adopted by the Government."

It is the submission of Mr Craig QC, for the applicant, that that reference can only be to the site identified in the s 7(1) direction as the location for the casino, that is, the Pyrmont Power Station site. When the consultation letters refer later in their text to the SEPP specifically providing for a casino (including the temporary casino) and associated development "on the site", they can only be read as referring to the site earlier identified in them, that is, the Pyrmont Power Station site.

That conclusion is supported, according to this submission, by the documents which were in existence when the consultation letters were prepared and sent. There was, of course, the s 7(1) direction itself, which directed that the permissible location for the casino was the Pyrmont Power Station site. That direction affirmed the conclusion of the Authority in its earlier report pursuant to s 7(2) that the Pyrmont Power Station site was the only location which met all assessment criteria. There was, in addition, the brief to applicants for the casino licence. The parts of that document which were in evidence referred to the existing and proposed ownership of the casino site and its site boundary by reference to maps and a cadastral survey plan, each of which made it clear that the site was the Pyrmont Power Station site, being a site which did not include the wharves into Pyrmont Bay.

The inescapable conclusion, according to Mr Craig's submission, is that the Minister consulted about the preparation of a SEPP in relation to the Pyrmont Power Station site only, and it was understood in this manner by the ministers with whom he consulted, as evidenced by their respective replies. That site was different to the SEPP 41 site - it formed part of it, but was not identical to it.

In addition, so Mr Craig submitted, there was factually no conformity between what was consulted about as "associated development" and what SEPP 41 actually included as "complementary development".

The consultation letters did not explain what was meant by "associated development" but, according to this submission, that could be inferred by reference to the s 7(1) direction. Part of the s 7(1) direction was in the following terms:

"The development required to take place in conjunction with the establishment of a casino should encompass the following:

The complex must be developed on the basis that it will be regarded as a landmark building and, in this context:

- should be developed as a component of an integrated international resort style complex;

- an international hotel of approximately 600 rooms, suites or a combination of equivalent accommodation facilities which would cater adequately for international and domestic tourists and which might be developed on a staged basis;

- a variety of food and beverage facilities designed to meet the needs of expected visitors to the complex;

- sporting and recreational facilities such as swimming pools, health centres, gymnasium, tennis courts, etc; and

- retail facilities of a standard and size to cater for the likely market."

It is the applicant's case that the "complementary development" which was made permissible under SEPP 41 includes two purposes which were not contemplated by the s 7(1) direction, namely, "residential development" and "serviced apartments". It is said that the definition of "residential development" in SREP 26 would fortify a conclusion that those two purposes were not contemplated by the s 7(1) direction nor implicitly included in the expression "associated development" used in the consultation letters. That definition is as follows:

"'Residential development' means use of land for any form of housing, including that leased on a short term basis, but does not include a hotel, an apartment hotel (being a building consisting of suites of rooms rented or hired out without leases on a short term basis) or a motel."

It follows, therefore, according to this submission, that there was no conformity between that which was encompassed by the expression "associated development" in the consultation letters and that which was encompassed by the expression "complementary development" in SEPP 41.

The consequence of the lack of correspondence between the subject of the consultation letters and the subject of SEPP 41 means, according to Mr Craig's submission, that the consultation process required by s 37(2) was fatally flawed.

In order to understand the competing arguments on this aspect of the case it is necessary to set out in full ss 37(2), 38 and 39. They provide as follows:

"37(2) The Minister may, after consultation with such Ministers as he determines, cause to be prepared by the Director for submission to the Minister a draft State environmental planning policy with respect to any matter specified by the Minister, being a matter which is, in the opinion of the Minister, of significance for environmental planning for the State.

38 Subject to this Act and the regulations, the format, structure and subject-matter of a State environmental planning policy or draft State environmental planning policy shall be as determined by the Minister.

39 (1) The Minister may, on the submission to him by the Director of a draft State environmental planning policy, recommend to the Governor the making of a State environmental planning policy -

(a) in accordance with that draft State environmental planning policy submitted to the Minister; or

(b) in accordance with that draft State environmental planning policy with such alterations as the Minister thinks fit,

(2) The Minister shall take such steps, if any, as he considers appropriate or necessary to publicise a draft State environmental policy and to seek and consider submissions from the public before he makes such a recommendation.

(3) The Minister may not make such a recommendation except with respect to such matters as are, in his opinion, of significance for environmental planning for the State.

(4) The Governor may make a State environmental planning policy in accordance with a recommendation made under this section.

(5) A State environmental planning policy shall apply to the State or such part of the State as is described in the policy."

The proposition that the consultation process was fatally flawed depends upon an analysis of what is required by s 37(2) read in combination with s 39(5). In this analysis, s 37(2) obliges the Minister to determine which ministers should be consulted prior to causing the Director to prepare a draft SEPP with respect to any matter which is of significance for environmental planning for the State. It is said that it must follow from cl 37(2) that the subject matter of that consultation must properly be the matter of significance for environmental planning for the State, that is, the subject matter of the proposed SEPP. The subject matter of the proposed SEPP includes, by virtue of s 39(5), a reference to the land to which it is intended to apply, because s 39(5) requires that, if the proposed SEPP applies to part only of the State, that part must be described in it. In summary, so this argument goes, the consultation must be about the subject matter of the proposed SEPP, including the land to which it is intended to apply.

In submitting that the failure to accurately describe the SEPP 41 site and the complementary development in the consultation process fatally flawed that process, Mr Craig relied not only on the statutory provisions, but on applicable authorities.

Rollo & Anor v Minister of Town and Country Planning [1948] 1 All ER 13 was a case which concerned the right of the Minister to make an order designating an area as the site of a new town. The Minister could make that order "after consultation with any local authorities who appear to him to be concerned". There was a question as to whether consultation had taken place. The question of what "consultation" meant in the context of the particular statute under consideration was adverted to by Bucknill LJ at p 17 where his Lordship said:

"A certain amount has been said as to what consultation means ... it means that, on the one side, the Minister must supply sufficient information to the local authority to enable them to tender advice, and, on the other hand, a sufficient opportunity must be given to the local authority to tender that advice."

In Port Louis Corporation v Attorney-General of Mauritius [1965] AC 1111, the statute in question permitted the Governor in Council to alter the boundaries of any town "after consultation with the local authority concerned." Once again, the question was whether consultation had taken place. In giving the judgment of the Privy Council, Lord Morris of Borth-Y-Gest at p 1124 said:

"Section 73(1) of the Local Government Ordinance, 1962, does not prescribe any set machinery for consultation. No formalities are laid down which must be followed ... [T]he nature and the object of consultation must be related to the circumstances which call for it. The situation to which section 73(1) relates is clear. If there is a proposal to alter the boundaries of a town ... such alteration must not be made until after consultation with the local authority concerned. It follows that the local authority must know what is proposed before they can be expected to give their views ... The requirement of consultation is never to be treated perfunctorily or as a mere formality."

Both Rollo and Port Louis were cited with approval by Sheller JA in giving the decision of the Court of Appeal in Leichhardt Municipal Council v Minister for Planning and Anor (1992) 78 LGERA 306 at p 336. That was a case which concerned the validity of a SEPP and a regional environmental plan. One of the grounds for challenge to the regional environmental plan was that no consultation had taken place as required by s 45 of the EP&A Act. In holding that no consultation had taken place, Sheller JA, with whom the other members of the Court agreed, applied the principles enunciated in both Rollo and Port Louis.

I think that, in respect to the issue of consultation in this case, the decision of the Court of Appeal in Leichhardt can be distinguished. The basis for the Court's decision in that case that there was a failure to consult was that questions were raised by the applicant council, as one of the consultees, about the criteria forming the basis of the policy underlying the environmental instrument, and questions as to what the instrument was to include. Those questions were not answered, and the Court held, at p 337, that "consultation required that these questions be addressed either at a meeting or by correspondence". That was not the case here.

The Court's attention was also drawn by Mr Craig to an unrevised Times report of a judgment of Latham J delivered on 20 December 1994 in the High Court of the United Kingdom, The Queen v The Secretary of State for Transport; Ex parte The London Borough of Richmond Upon Thames & Ors. That case involved a challenge to the decision of the respondent in relation to night flying restrictions at Heathrow and two other airports. The relevant statute required the respondent to consult with bodies representative of aircraft operators. However, the respondent had followed a practice of consulting wider groups. The challenge was primarily based upon a legitimate expectation by those wider groups that they would be consulted fully and fairly. It was argued that the consultation which was required was flawed in that it inaccurately calculated its proposals upon quota figures for flight movements rather than the actual number of movements. At p 24 his Honour said:

"The consultation was materially misleading in this respect. I do not consider that it is sufficient answer to say that it was a document intended for a sophisticated audience. The Applicants say, and I accept, that they were misled. This deprived them of the opportunity of making, in respect of Heathrow, the important point which is not in my view a merely forensic point that on the Respondent's own calculations, his proposals would not only not achieve, but would be contrary to, his expressed policy objective. I do not consider that consultation based upon a document which can mislead in this way can be described as full and fair consultation in the sense that these Applicants could legitimately expect."

I have dealt with this decision at a little length because it was raised by the applicant in this case as a contemporary application of the relevant principle. I note that neither Rollo nor Port Louis were cited in the judgment. However, it is not an authority of great weight in these present proceedings because it is a case chiefly about the principle of legitimate expectation and because of the important factual difference between that case and these proceedings, namely, that in that case the applicants were in fact those with whom consultation was to be held and they could, and did, assert that they had been misled. No such assertion is made in these proceedings by the ministers who were consulted, and none of them are parties to this application.

Mr Walker SC, for the Minister (the first respondent), who was supported in his submissions by Mr Heydon QC for the second respondent, put a competing argument as to the process which is required by div 2 of pt 3. He said that s 37(2) in its terms cannot be read as casting a duty upon the Minister to consult with other ministers on the final form of a SEPP. I agree with this submission. It follows from the way in which div 2 of pt 3 is framed.

It is to be noted, firstly, that any consultation takes place before the Minister requests the Director to prepare a draft SEPP. At that point, the idea for a SEPP is embryonic and need not be conceived in any particular form. The word "may" in relation to the Minister's request to the Director is instructive in this connection, because it implies that the Minister has no obligation, after consultation, to make that request. Indeed, that may be the very point of consultation with other ministers of the Crown - the Minister may abandon the idea.

It is also clear from the relevant sections that the Minister might change the scope of the draft SEPP during the process envisaged by div 2 of pt 3. The process that arises is that the Minister makes a request to the Director to prepare a draft SEPP (s 37(2)), and then he determines its format, structure and subject matter under s 38. Section 38 implies that the Minister can alter the draft even in respect to the subject matter from that prepared by the Director.

But the possibility of alteration does not stop at s 38. Section 39(1)(b) expressly recognises that the Minister may make alterations to the draft before recommending its making to the Governor or he may decide not to proceed at all with making the SEPP. Furthermore, it is implicit in s 39(2) that the Minister may make alterations to the draft following upon his consideration of submissions made in response to the public exhibition of the draft. These matters show that the process is a developmental process. Changes may take place, but, in the final stage, they must result in a SEPP which deals with a matter which is of significance for environmental planning for the State (s 39(3)), and which must describe that part of the State to which it applies (s 39(5)).

In my opinion, div 2 of pt 3 does not require that the final form of SEPP 41 be comprehensively or specifically the subject of consultation. Rather, the subject of consultation is the matter of significance for environmental planning for the State about which the Minister may or may not request the preparation of a draft SEPP. That "matter" is a concept, a notion or an idea about which the Minister seeks the views of other ministers. It is largely unspecific, because the details of the SEPP, if a draft is requested by the Minister, will be contained in the draft and may, in any event, be the subject of alteration.

The respondents' counsel submit that, if the subject matter of consultation under s 37(2) is properly the concept or idea that the Minister contemplates as a matter of significance for environmental planning for the State, then the consultation required by s 37(2) did, as a matter of fact, take place. Their submission is that the concept about which the Minister consulted was the idea of a casino for Sydney, both a permanent casino and a temporary casino. That follows, they submitted, from the reality of the temporary casino, the public knowledge about the temporary casino, and government action with respect to it, as well as the s 7(1) direction and related documents.

The respondents pointed to the Authority's report under s 7(2) of the CC Act. That report, as I have earlier noted, recommended the Pyrmont Power Station site as the site for the proposed permanent casino, but it went on also to recommend that a temporary casino be developed and asked that it be directed to report on the location, size and style of such a temporary casino. No person could be under any illusion, either from this report, or from the s 7(1) direction, that the site of the permanent casino was other than the Pyrmont Power Station site, or that the location of the temporary casino was other than a different site. Furthermore, as the documentation unfolded, it was quite clear which was to be the site of the temporary casino. In an addendum to the brief to applicants for the casino licence, dated 12 October 1993, the Authority advised that the acceptable site for the temporary casino was to be wharves 12 and 13, Pyrmont Bay. That site for the temporary casino became public knowledge. It was the subject of a press release issued by the Authority in October 1993, and extracts from the press reports about the site of the temporary casino were in evidence in these proceedings. The decision to locate the temporary casino upon wharves 12 and 13 became further enshrined in a development consent issued by the Minister to the Authority on 1 February 1994 to convert the existing building at those wharves into a temporary casino with related facilities.

It is also necessary to bear in mind the identity of those with whom the Minister was consulting. They were ministers of the Crown. One of them was the Chief Secretary, the responsible minister under the CC Act, and two of them, the Treasurer and the Minister for Transport, were members, as their respective letters stated, of the City West Urban Strategy Cabinet Sub-committee. All of them were cabinet members. They were a small group of government ministers who, as consultees, can be regarded as well-informed, knowledgeable and sophisticated in contrast, for example, to the public generally or even local councils.

In the light of the identity of the ministers with whom the Minister was consulting, and the documentation and public knowledge about the temporary casino and its site, and the fact that development consent had already been granted to develop the temporary casino on wharves 12 and 13, I do not think it can be said that the ministers, as a group of consultees, were, by reference in the consultation letters to the chosen site adopted by the government or by reference to a temporary casino "on the site", deprived of an opportunity to state their views, or misled as to what was proposed, so as to prevent them from giving their views (see Rollo and Port Louis). I conclude that in this respect consultation did take place as required by the statute.

Nor do I think that the consultation process in this case was flawed by an alleged lack of correspondence between the expression "associated development" used in the letters of consultation, and the words "complementary facilities" as they were used and defined in SEPP 41. As I have said, the applicant says that these expressions fail to correspond, because "residential development" and "serviced apartments" were included in the expression "complementary facilities" in SEPP 41, and that as a consequence the ministers who were consulted were not provided with adequate information as to what was proposed. That argument cannot, in my opinion, be sustained. In the first place, reference to the definition of "residential development" in SREP 26 is of no assistance in determining what it was that was being stated in the consultation letters. The consultation letters had nothing to do with SREP 26 and definitions in that instrument were irrelevant. A much more satisfactory source of understanding of the expression "associated development" is to be found in the s 7(2) report of the Authority which, in its recommendations, dealt with "Size and Style of Associated Development". The list of "associated development" in that report is clearly, in its terms, not meant to be exhaustive. That report refers to the Sydney casino complex as "a component of an integrated international resort style complex" and goes on to state that it "should include" various specified types of development. I do not think that the report contained, or was meant to contain, an exhaustive list of what development was permissible as "associated development". That report was directed to the Chief Secretary, and it can be inferred, I think, that it was a report which could be called to mind by government ministers when consulted about the development of the Sydney casino and its associated development. I do not think that the expression "associated development" in the letters of consultation can be read as a reference to some exhaustive list of development which did not include residential development or serviced apartments.

In any event, as I have earlier set out, the subject matter of consultation required under s 37(2) is the concept or idea of the matter of significance for environmental planning for the State, rather than the specific detail of what is to be included in the draft SEPP. Applying this construction of the consultation process envisaged by s 37(2), I conclude that there was no fatal lack of correspondence between the subject matter of consultation and the subject matter of SEPP 41 simply by inclusion of a reference in the latter to "residential development" or "serviced apartments". The consultation letters dwelt on "associated", referring at one point to "associated facilities" and at another to "associated development". These references could be understood, in my opinion, as facilities or development which were ancillary to, combined with or related to the casino development. That meaning found expression in cl 6(3) of SEPP 41, which provides as follows:

"(3) The consent authority must not grant consent to a development application to carry out complementary development unless the consent authority is of the opinion that the complementary development will comprise a part of or addition to a casino entertainment complex."

For Mr Craig's argument to hold good, it would be necessary to conclude that "residential development" and "serviced apartments" could never be "associated" with the casino complex in the sense in which the word "associated" is plainly understood, or in the sense arising out of cl 6(3). As a matter of common sense, that cannot be the case and hence I conclude that the consultation process was not flawed in this respect.

My overall conclusion, for the reasons which I have set out, is that the consultation process envisaged by s 37(2) of the EP&A Act was undertaken by the Minister and was properly carried out.

It would follow from this conclusion that the application must fail, and so I propose to order, but lest I am wrong in the conclusion I have reached, I turn to consider the consequences of a failure to consult.

The applicant's case is that the failure to consult had the consequence that SEPP 41 is invalid, and it seeks a declaration accordingly.

That issue brings into consideration the question as to whether the particular statutory provision, in this case, s 37(2), is directory or mandatory. Those terms, often used, really describe an examination of whether or not the statute discloses an intention that compliance with its terms, whether exact or substantial, is a precondition to the validity of the particular action taken, or whether compliance is not a precondition to the action taken (Tasker & Ors v Fullwood & Ors [1978] 1 NSWLR 20 and Leichhardt at 338-40). To carry out that task, it is necessary to determine the intention of the legislature from the statute itself (Tasker v Fullwood at p 23 - 24).

Mr Craig submitted that the consultation envisaged by s 37(2) went to the very heart of one of the elements of the planning process, namely, the making of statutory instruments. He relied principally upon the decision in Leichhardt as authority for the proposition that failure to comply exactly or substantially with the obligation to consult in s 37(2) renders the consequential SEPP invalid. He referred in particular to the passage in the judgment of Sheller JA at p 340 where his Honour expressed his conclusion thus:

"In this case the public duty which has not been performed is not related to the grant to a citizen of a right but to the Minister of a power. It is a stage in a process which may and in this case did effect the Council and residents of a municipality. Nor is the consultation envisaged private. The duty to consult is not only a public one but one which the legislature itself recognises as of importance to the bodies to be consulted. That is the very reason for consultation. Further as I have indicated, the language here is unusual. It fortifies my conclusion that consultation in accordance with s 45 is a precondition to the validity of a regional environmental plan."

The difficulty, however, in applying the decision in Leichhardt to the circumstances of this case is the significant difference in the words used. In Leichhardt, the obligation to consult found in s 45 (as it was then enacted) was couched in the words "... the Director shall ensure that consultations are held ...". Sheller JA regarded this language as "striking" (at p 336) and "unusual" (at p 340). In this case, however, the words are different. There is no language of an obligatory flavour, and certainly no language of the strength which Sheller JA found to be expressed in the old s 45. I agree, in this respect, with Mr Walker's submission that, accordingly, the decision in Leichhardt cannot be said to lay down a principle which is applicable generally to questions of consultation.

The correct approach is to endeavour to ascertain the intention of the legislature from the statute itself. Section 37 falls, as I have said, within div 2 of pt 3 of the EP&A Act, which is a division dealing generally with state environmental planning policies. Section 37 is headed "Decision or direction to prepare draft state environmental planning policy". Under subs (1), the Director is empowered to prepare a draft SEPP, but it is subs (2) which is relevant in this case, as already explained. The wording of s 37(2) makes it clear, in my opinion, that the Minister has a number of discretions. He "may" cause a SEPP to be prepared by the Director, and he may determine the matter which is of significance for environmental planning for the State. More importantly, for present purposes, the Minister's discretion extends to determining those ministers with whom he wishes to consult. The only relevant obligation which s 37(2) casts upon the Minister is to make that determination, that is, to determine which ministers, and he may determine that there be no minister with whom he wishes to consult. There are no words of obligation in s 37(2) in relation to the consultation itself; there is no language such as "shall consult" or "may consult", or, as in Leichhardt, "shall ensure that consultations are held".

There are other important matters to note about s 37(2). It is, as I have already indicated, a preliminary step in a process. It relates to the "decision or direction" to prepare a draft SEPP, and the Minister may or may not decide to request the Director to prepare a draft SEPP. Even if the Minister exercises his discretion to make such a request, the terms of the draft are not finalised by s 37. There remains the necessity for the Minister to settle the format, structure and subject matter of the SEPP under s 38, and even then, the draft may be amended under s 39(1)(b) or, implicitly, as a result of the consideration of submissions made in response to any public exhibition of the draft, under s 39(2).

In summary, there are four critical factors to take into account in considering the intention of the legislature. There is, first, the limited extent of the Minister's obligation under s 37(2), second, the fact that he may determine to consult with no minister at all, third, the absence of language of obligation, and fourth, the fact that consultation if any will take place at a preliminary or conceptual stage of the process with no certainty that a SEPP will ultimately be promulgated or be promulgated in any particular form. I conclude, in the light of these factors, that consultation with ministers is not an essential or imperative part of the process of making a SEPP; it is not a precondition of the validity of the SEPP that consultation under s 37(2) does in fact take place.

I note for completeness an additional submission made by Mr Walker as to the directory nature of s 37(2). He contended that the effect of a SEPP is to impact upon the rights and obligations of private persons who are not parties to the consultation envisaged by s 37(2), and who, in this case, are private parties who would wish to carry out the development which SEPP 41 contemplates. Taken in conjunction with the fact that the consultation envisaged in s 37(2) is a preliminary part in a process, the fact that it affects private persons who are not involved in the consultation makes clear, in this submission, the directory nature of s 37(2).

In respect to this submission, Mr Walker relied upon the decision of Myers J in Attorney-General v J N Perry Constructions Pty Ltd (1961) 6 LGRA 385. That was a case concerning cl 43(1) of the County of Cumberland Planning Scheme Ordinance which required the responsible authority "to consult" with the Cumberland County Council in relation to a proposed development. In holding that the clause was "directory" only and did not result in the invalidity of the development consent in question, Myers J had regard to

"... the grave injustice to all owners of land ... if every consent to development is to be held invalid, unless it has been preceded by a consultation ... I cannot believe that ... it was intended that an owner who had secured a consent was not to be entitled to accept it as valid, but must make an independent investigation and form his own opinion of the private proceedings of the council, which might in any event be denied to him." (at 392)

That decision was noted with approval in the Court of Appeal in Attorney-General (N.S.W) ex rel Franklins Stores Pty Ltd v Lizelle Pty Ltd & Ors [1977] 2 NSWLR 955, a case which concerned a similar provision requiring consultation in the determination of interim development applications. I do not, however, find either decision of assistance in this case. Both Lizelle and Perry were cases where the lack of consultation might have worked an injustice or inconvenience to holders of development consents, whose consents would thereby be struck down in circumstances where they had no control over or knowledge about the consultation process (cf Hatton v Beaumont & Ors [1977] 2 NSWLR 211 at 215 - 216). The circumstances of this case are very different. Here the consultation process goes to the making of a SEPP. True it is that a development consent has been granted to the second respondent pursuant to powers contained in the SEPP, but that is an action one step away from the making of the SEPP itself. The invalidity of the SEPP would not work an injustice or inconvenience to a private person; it would strike down an enabling instrument and a statement of policy. Were it not for the taking of a consequential step, that is, the grant of development consent to the second respondent, no direct private rights would be affected if it were found to be invalid.

But those matters are by the way. As I have said, it can be gleaned from the statute itself that the legislature did not intend that exact or substantial compliance with the consultation process envisaged by s 37(2) was to be a precondition to the validity of a SEPP, and hence, if it were the case that there was a failure by the Minister to consult in accordance with s 37(2), no adverse consequence will flow, and SEPP 41 is not thereby rendered invalid.

Before I leave a discussion of the requirement of consultation and the consequences of non-compliance, I should deal with a number of general observations which Mr Walker raised as background and which, as I understood him to assert, should influence the conclusions which I might draw on the issue. He stressed the fact that these proceedings involve a challenge by a commercial entity to the grant of development consent to its commercial competitor. He drew attention to the fact that this is not a case where there is a complaint by anyone deprived of the right to be consulted (as there was in Leichhardt). Nor is it a case where the applicant has itself been deprived of any administrative law right; it has suffered no personal consequences in the events which have happened. But in my opinion, all those matters are irrelevant. Section 123 of the EP&A Act permits "any person" to bring proceedings in this Court to remedy or restrain a breach of the EP&A Act, and those words are to be widely interpreted and applied (Sydney City Council v Building Owners and Managers' Association of Australia Ltd (1985) 55 LGRA 444; F Hannan Pty Ltd v Electricity Commission of New South Wales [No 3] (1985) 66 LGRA 306). It matters not that the applicant is a commercial competitor of the second respondent, nor that its personal rights have not been infringed.

I turn now, however, to consider the position were I to be wrong about the consequences of a failure to consult under s 37(2) and were it to be the case that SEPP 41 was thereby invalid. Two matters arise in such circumstances. The first concerns an argument that the doctrine of severance applies to preserve SEPP 41 so far as it applies to the Pyrmont Power Station site. The second concerns an argument as to whether, SEPP 41 being invalid, the Minister had available to him a power to grant development consent to the second respondent under SREP 26 which could justify the grant of consent.

Counsel for the respondents submitted that, if SEPP 41 were invalid by reason of the failure to consult in respect of that part of the SEPP 41 site which is outside the Pyrmont Power Station site, then the provisions in SEPP 41 referring to that part are severable from the remainder of the instrument. The Court should, so this submission went, endeavour to preserve SEPP 41 so far as is possible by confining its terms to the Pyrmont Power Station site, and by declaring that it affects only the Pyrmont Power Station site. In that way, so it is said, the impugned administrative act is prevented from having any effect, but the instrument is preserved.

For these propositions, Mr Walker relied on s 32(2) of the Interpretation Act 1987 which advocates a doctrine of severability, and also on a number of authorities which deal with the "blue pencil" test.

Section 32(2) of the Interpretation Act provides generally that if any provision in an instrument would be construed as being in excess of power, it shall be a valid provision to the extent to which it is not in excess of power and the remainder of the instrument shall remain unaffected.

The three authorities which Mr Walker cited were Dunkley v Evans & Anor [1981] WLR 1522, Thames Water Authority v Elmbridge Borough Council [1983] 1 QB 570 and Reg v Secretary of State for Transport; Ex parte Greater London Council [1986] 1 QB 556. Since I think, for the reasons which I shall presently explain, that the "blue pencil" test is not applicable to the circumstances of this case, it is sufficient if I refer only to two of these authorities which set out the relevant principle.

Dunkely v Evans was a case where the defendants admitted to fishing in an area which had been prohibited by order, but contended that the order was invalid because it referred to an area of Northern Irish waters for which the relevant minister had no power. The prosecutor contended that the invalid area could be severed from the remainder of the order, and any offence committed in the remaining area should result in conviction. In delivering the judgment of the court, Ormrod LJ referred with approval to a formulation of the principle by Cussen J in the Victorian Supreme Court in Olsen v City of Camberwell [1926] VicLawRp 9; [1926] VLR 58 at 68 which was in the following terms:

"'If the enactment, with the invalid portion omitted, is so radically or substantially different a law as to the subject-matter dealt with by what remains from what it would be with the omitted portions forming part of it as to warrant a belief that the legislative body intended it as a whole only, or in other words, to warrant a belief that if all could not be carried into effect the legislative body would not have enacted the remainder independently, then the whole must fail.'" (at 1524-5)

Ormrod LJ went on to say, at p 1525, that, whilst the "blue pencil test" had been applied mainly to covenants in restraint of trade, the court could see no reason why it should not apply to sever an invalid portion of a piece of subordinate legislation from the valid portion.

The doctrine was applied in Thames Water Authority v Elmbridge Borough Council. A local authority purported, by resolution, to appropriate certain land for planning purposes. On the relevant map, the land was coloured blue, except for a portion coloured green, in respect of which it became apparent that the local authority had no power to make the appropriation. The court held that the resolution was valid as to the blue land, but invalid as to the green land. At p 580, Dunn LJ said:

"In this case [the court] finds an easily identifiable part, namely the green land, which the urban district council had no power to appropriate. There is no more difficulty in deciding whether the resolution was invalid in respect of that part and valid in respect of the remainder than if the green land had been identified in the resolution itself, and no difficulty in the court declaring that the resolution is invalid in respect of the green land and valid in respect of the remainder.

It does not seem to me to matter whether one calls that process severance or whether one calls it modification of the resolution, or whether one uses some other word, or expression, to describe it. In the realm of judicial review it could be dealt with by declarations that the purported appropriation of the green land was ultra vires and of the remainder intra vires."

It will be apparent from these decisions (and from s 32(2) of the Interpretation Act) that the question of severance involves a question of excess of power. One part of an instrument is intra vires, and another part is ultra vires. The doctrine operates, in the particular circumstances which the authorities lay down, so that the ultra vires portion can be severed and the intra vires portion preserved. But that is not the question here. Rather, the question here is an alleged lack of power to make the whole instrument by reason of a failure to comply with the consultation provision in the statute. It is not the case that the Minister could have made SEPP 41 with respect to the Pyrmont Power Station site, and could not have made it with respect to any land outside that land. Properly exercised, he could have exercised the power with respect to both portions of land, but, if improperly exercised, he lacked power in respect of both. For that reason, I am of the opinion that, if it be the case that SEPP 41 is invalid, it is invalid in total and no part of it can be severed from the remainder.

There are two aspects to this issue. First, did SREP 26 operate as a source of power to the Minister to grant development consent to the second respondent in the circumstances where SEPP 41 is invalid? Secondly, if so, was the grant of development consent a proper exercise of power under SREP 26?

In amended points of defence filed on behalf of the Minister, it was claimed that even if SEPP 41 were invalid, the Minister was empowered to grant development consent for the permanent casino pursuant to SREP 26.

In addressing this claim, Mr Craig drew attention to the fact that the actual development consent granted to the second respondent, which was signed by the Minister and dated 2 December 1994, expressly stated that the Minister was acting pursuant to cl 6(1) of SEPP 41 to determine the development application by granting consent. That was, Mr Craig said, a clear identification of the power under which the Minister was purporting to act.

Next, Mr Craig pointed to cl 7(2) of SEPP 41 which provides that SREP 26 "... applies to development on land to which this Policy applies for any purpose other than a casino entertainment complex or complementary development". The effect of this provision, he said, is to make SEPP 41 the only source of power pursuant to which development consent could be granted for a casino entertainment complex or complementary development at the time that that power was purported to be exercised. It follows in this submission that if that one source of power is struck down, then the development consent falls with it.

In Mr Craig's submission, it is no answer to the proposition I have just stated that, although SEPP 41 is found wanting, there was an alternate source of power in SREP 26 which is said to justify the grant of consent and therefore the grant of consent is preserved. That is because, so Mr Craig said, the alternate source of power can only found the exercise of power if the two heads of power co-existed in a temporal sense when the action was taken. For this submission, Mr Craig relied upon a passage in the judgment of Brennan J in Johns v Australian Securities Commission & Ors [1993] HCA 56; (1992-3) 178 CLR 408, where his Honour said:

"When a power is exercised, a mistake in the source of the power works no invalidity ... Validity depends simply on whether a relevant power existed."

The principle enunciated by Brennan J stems from the High Court decision of Lockwood v The Commonwealth & Ors [1954] HCA 31; (1953) 90 CLR 177. That case involved, inter alia, a challenge to the appointment of three commissioners by letters patent under the Royal Commission Act 1954 to inquire into and report upon espionage in Australia. Fullagar J found that the 1954 Act (which was passed specifically for the purpose of establishing the particular royal commission) allowed for the appointment of only one commissioner, but that the appointment of three commissioners was authorised by the Royal Commissions Act 1902-1933 an Act conferring a general power to establish royal commissions. At p 184, his Honour said:

"Mr Laurie's other contention on this point was that the Act of 1954 was intended to be, and was enacted as, an exclusive charter for the appointment of the present Royal Commission. The special enactment, he said, in effect overrode and excluded the general enactment, even if the latter were wholly or partly valid. Again, I am unable to accept this argument. It is, I think, a settled principle that an act purporting to be done under one statutory power may be supported under another statutory power ... In my opinion, the special Act (like a number of similar Acts in the past) was enacted for no other reason than that it was doubted whether the general Act would suffice to support the proposed appointment. This abundans cautela was doubtless wise, but I am of opinion that it was unnecessary."

Mr Craig also cited in support of his argument the following passage in the judgment of the High Court in Brown v West & Anor (1990) 169 CLR 195 at 203 where, by reference to the Remuneration Tribunal Act 1973, their Honours said:

"In response to a request by the Minister for Industrial Relations, expressed to be made pursuant to s. 7(4)(b), to inquire into and determine or report on matters including 'Postage', the Tribunal purported to make its determinations under s. 7(4)(a) and (b). If the postage allowance as determined is truly 'an allowance' ... the power to determine the postage allowance flowed not from sub-s. (4)(b) but from sub-s. (1). However, the validity of the Tribunal's determinations is unaffected by mistaking the source of the power to make them: Moore v Attorney-General (Irish Free State) ... Whether the power be found in sub-s. (1) or in sub-s. (4)(b), the power is 'to determine' a postage allowance and that is the power which the Tribunal exercised ..."

These cases establish the proposition, Mr Craig contended, that two sources of power are required to be co-existing in a temporal sense in order that an act purporting to be done under one of them may be supported under the other. That, he said, is not the case here, because of the effect of cl 7(2) of SEPP 41. SREP 26 did not apply to the proposed development at the time at which consent was granted, and it would need to spring back into existence retrospectively or revive in order to found the power to grant consent in respect of that development.

In Moore & Ors v The Attorney-General for the Irish Free State & Ors [1935] AC 484, the owners of a fishery had brought proceedings to restrain local fishermen from trespassing. They succeeded in their claim at first instance, but on appeal to the Supreme Court of the Irish Free State, that decision was reversed. They then sought and were granted leave to appeal to the Privy Council. Whilst their appeal was pending, the Parliament of the Irish Free State passed an Act amending the Constitution of the Irish Free State by providing that no appeal should lie to the Privy Council from any court in the Irish Free State, and that Act was expressed to apply to pending appeals. The owners then sought a declaration that that Act was void and did not bar their appeal. Their Lordships found that the Constitution of the Irish Free State derived its validity from an Act of the Imperial Parliament and there was no power in the Parliament of the Irish Free State to amend an Act of the Imperial Parliament except as provided in the Statute of Westminster. The Irish Parliament purported to make the amendment, however, under Irish law, not under the Statute of Westminster. Their Lordships held that what the Irish Parliament did must be "deemed to have been done in the way in which alone it could legally be done" (at 498), that is, under the Statute of Westminster, and hence the Constitution had been validly amended and appeals to the Privy Council were prohibited.

The decision in Moore's case was cited as authority for the passages in John's case and in Brown v West, to which I have already referred, and in The King v Bevan & Ors; Ex parte Elias & Anor [1942] HCA 12; (1942) 66 CLR 452 at 487 as authority for a similar pronouncement.

The difficulty with Mr Craig's proposition, however, arises as a consequence of a finding that SEPP 41 is void. If it is void, it is void from the beginning, and cl 7(2) could never have operated to exclude the application of SREP 26. In those circumstances, at the time when the Minister purported to exercise a power to grant development consent under SEPP 41, SEPP 41 was void, but SREP 26 was in operation, and, in accordance with the authorities to which I have referred, would operate as the source of power for the Minister's action.

In all those authorities (Lockwood, Brown v West, Johns and Moore), the administrator purported to act pursuant to a power which was unavailable, and hence the act would have been ultra vires except for the fact that an alternative source of power was available which could justify the administrator's act. What is crucial in all these cases is that there was an alternative source of power. It does not matter that the alternative source of power was not specifically adverted to by the administrator. In the present case, although the Minister purported to act under SEPP 41, if it were to be void, there was an alternative source of power in SREP 26 which would justify the grant of consent. It is not a case of applying a legal fiction to revive SREP 26; the consequence of the invalidity of SEPP 41 is that SREP 26 applied all the time.

Mr Craig's alternative argument as to the inability of relying upon SREP 26 as a source of power for the grant of consent was that SREP 26 is an entirely different instrument, calling into consideration different matters and applying a different focus, in comparison to the requirements specified in SEPP 41. As a consequence, so he said, it falls within an exception to the Lockwood principle which was recognised by Wilcox J in an obiter passage in Australian Broadcasting Tribunal & Anor v Saatchi & Saatchi Compton (Vic) Pty Ltd (1985) 10 FCR 1 at 23 as follows:

"It follows ... that there is not here a situation in which the Tribunal seeks to rely upon a power other than the one expressly specified when its decision was made. Under those circumstances, it is not necessary to resort to what Fullagar J, in Lockwood v Commonwealth ..., called the 'settled principle that an act purporting to be done under one statutory power may be supported under another statutory power.' But, had it been necessary to do so, it seems to me that the principle would have applied to this case. No doubt there exist exceptions to that principle. One exception is the case where the exercise of the alternative power depends upon the fulfillment of some condition precedent, such as the formation by the statutory authority of a particular opinion, and that event has not yet occurred ..."

It was Mr Craig's contention that SREP 26 involves the application of different considerations in the exercise of the Minister's discretion to grant development consent than those considerations relevant to the exercise of power under SEPP 41. For example, cl 15 of SREP 26 provides that before granting consent, the consent authority must take into consideration "... the aim of this plan that development within the Precinct should be consistent with the planning principles set out for the Precinct in the Table to this clause". In that Table, principles relating to "Role and Land Use Activities", "Urban Design" and "Public Domain" are enunciated. Furthermore, cl 23 of SREP 26 (to which reference will be made later) establishes maximum building height limits. Similarly, a master plan and urban development plan had been made pursuant to SREP 26, and needed to be taken into account. None of the principles or controls contained in the Table, or the master plan, or the urban development plan, are specified in SEPP 41.

There are two difficulties with Mr Craig's argument on this point. First, it is to be noticed that Justice Wilcox's remarks in Saatchi were obiter. As Mr Heydon pointed out, the decision of Bowen CJ in the same case was framed in more cautious terms, where he said, at p 10, that "... it would generally be wrong for a court to uphold the rule as if it had been made under the unstated head of power, particularly where the consequences for the citizen of each exercise of power are different". In this case, as Mr Heydon noted, the consequences for the second respondent are entirely the same, whether the power is exercised under SEPP 41 or under SREP 26. That is, the ultimate outcome, a development consent, is the same.

But even if the exception noted by Wilcox J were to be applied, the facts of this case do not support a finding that there was a condition precedent and that that "event has not yet occurred". The evidence shows that all the matters which SREP 26 requires to be considered by a consent authority in making a determination under its provisions were in fact considered. There was in evidence a planning report prepared by the Department of Planning for the Minister in relation to the development application by the second respondent for development of the permanent casino. That document refers, at p 4, to the considerations under SREP 26 which the Minister could take into account as relevant to making a determination under SEPP 41, and furthermore, that those considerations would fall within the ambit of relevant matters to be considered under s 90 of the EP&A Act. There are throughout the document express references to the planning principles which SREP 26 brings into consideration as well as to the master plan and the urban development plan.

For all these reasons, I conclude that SREP 26 was available as a source of power to justify the grant of development consent to the second respondent by the Minister and its provisions were specifically adverted to in the considerations which related to that grant of consent. As I have indicated, however, the requirements of SREP 26 are alleged not to be complied with by the proposed development, and I turn now to consider whether that Minister's grant of development consent was improperly exercised on that account.

It was the applicant's case that the grant of development consent by the Minister, if it be said that he was enabled under SREP 26, was improper because the proposed development fails to comply with SREP 26. Initially, it was said that that failure arose by reason of the controls relating to three matters, namely, building height, open space, and through-link access. In the course of the proceedings, Mr Craig expressly disclaimed any reliance upon the last two matters, and hence submissions were confined to the issue of height control.

The issue arises in this way. Clause 15 of SREP 26 requires the consent authority (here, the Minister), before granting consent, to have regard to certain planning principles which are set out in a table to the instrument. In that table, under the heading "Urban Design" there appear a number of principles directed to building height. It is unnecessary in this case to consider them in detail; suffice it to say that they are directed to achieving environmental amenity, appropriate scale, and compatibility with the locality generally. More specifically, cl 23 provides that the height of any building must not exceed the building height limits shown on map 3, an accompanying map. On that map, the permissible building height for the land comprising the Pyrmont Power Station site is shown as 28 metres. However, that map also shows, upon the Pyrmont Power Station site, an asterisk which is specified as denoting a "landmark location", and in respect of that location, the permissible building height is noted as 66 metres. In relation to that matter, cl 25 is relevant, which is in the following terms:

"25 Map 3 shows specific building height limits for places referred to on the map as 'landmark locations'. The place to which such a limit relates may, with the agreement of the Minister, be varied, but only if the consent authority is satisfied that the height of the building to be erected at that place will be consistent with the relevant urban design planning principles."

In relation to this aspect, expert evidence was given by Ms S Lyneham, a consultant urban planner. Her evidence was that the proposal involved two towers, one proposed to be used for the purpose of serviced apartments/residential flats, and the other to be used for the purpose of a hotel associated with the permanent casino. Taking into account the design and configuration functions of the two towers, and that fact that the serviced apartments/residential flats tower was to be subdivided from the balance of the casino complex, Ms Lyneham came to the opinion that the two towers should be characterised as separate and distinct buildings. There was no issue that the towers exceeded a height of 28 metres.

It was the applicant's case, as I understood it to be put, that if there were to be two separate buildings each in excess of 28 metres in height, then there would, on the face of it, be a breach of the height controls specified in SREP 26, unless those controls had been relaxed by the Minister making a determination following an objection under State Environmental Planning Policy No 1 ("SEPP 1"). (SEPP 1 permits an applicant for development consent to object to a development standard on the grounds that it is unreasonable or unnecessary in the circumstances of the case. If the consent authority determines that the objection was well founded development consent may be granted despite the non-compliance with the development standard). The Departmental planning report which was tendered in evidence indicates that a SEPP 1 objection had been lodged, but no determination in respect of it was made by the Minister, it not being a relevant matter to determine under SEPP 41.

Upon this basis, Mr Craig contended that the grant of development consent under SREP 26 was an improper exercise of power by the Minister. But I think that that argument cannot, in the circumstances of this case, be sustained.

The question of whether the development proposed one building or two buildings was a matter for the determination of the Minister as the consent authority under SREP 26. In proceedings for judicial review, it is not for the Court to substitute its own opinion for that of the decision-maker (Minister for Aboriginal Affairs & Anor v Peko-Wallsend Ltd & Ors [1986] HCA 40; (1985-6) 162 CLR 24 at 40-41). The only basis for challenging the Minister's decision that there was one building and not two buildings would be on the ground that such a decision was manifestly unreasonable. Put more precisely, the Minister's determination to grant development consent could be challenged on the ground of Wednesbury unreasonableness, that is, that the determination that there was only one building was a determination so unreasonable that no reasonable minister could have come to it (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223). But a challenge on the grounds of Wednesbury unreasonableness was not pleaded in the applicant's amended points of claim. In the discussion which took place when leave to amend the points of claim was sought, Mr Craig expressly confirmed that the challenge to the grant of consent under SREP 26 was made on the basis of non-compliance with the three matters of building height, open space and through-link access (later limited to only the former). No issue of manifest unreasonableness was raised.

In those circumstances, the evidence of Ms Lyneham is largely irrelevant and it is not to the point to dwell on the fact that her credit was sought to be tested in a lengthy cross-examination by Mr Walker. Ms Lyneham was reluctant to concede that different minds might hold different views about whether the development proposed one building or two buildings, but it matters not that her opinion was that two buildings were proposed, in the absence of a challenge on the grounds of manifest unreasonableness. The determination that there was only one building was a decision for the Minister as the consent authority to make, and it is not one in which the Court, in these proceedings, can intervene.

I conclude therefore that, in the circumstances of this case, the Minister was empowered to grant development consent under SREP 26, and there are no grounds for holding that his determination to grant consent was an improper exercise of that power.

It follows from the conclusions I have reached that the applications in both matters must be dismissed. My formal orders are as follows:

1. In proceedings No 40227 of 1994 the application is dismissed.

2. In proceedings No 40230 of 1994 the application is dismissed.

3. The applicant must pay the costs of the first respondent and the second respondent in relation to both proceedings.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 37 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE M L PEARLMAN AM.