Hill Top Residents Action Group Inc v Minister for Planning & Anor

FIRST RESPONDENT in proceeding 40619 of 2010 Minister for Planning

SECOND RESPONDENT in proceeding 40619 of 2010 Communities NSW (Sports and Recreation)

JUDICIAL REVIEW :- approval of shooting complex under Part 3A of Environmental Planning and Assessment Act 1979 - project originally prohibited under local environmental plan - State environmental planning policy amended to apply to the land - whether local environmental plan applies to project if approved - whether Minister was precluded from giving approval by operation of s 75J(3) of Environmental Planning and Assessment Act 1979 and cl 8O of Environmental Planning and Assessment Regulation 2000 - local environmental plan does not apply to land - Minister not precluded from giving approval to project KEY ISSUES: COSTS:- whether public interest nature of litigation justifies a departure from the usual costs rule - proceedings brought to uphold and enforce public law obligations - applicants' claims raise issues of general importance - litigation contributed to the proper understanding and administration of Part 3A of the Environmental Planning and Assessment Act 1979 - no countervailing considerations - each party is to pay their own costs of the the proceedings

Civil Procedure Act 2005 ss 11, 98 Environmental Planning and Assessment Act 1979 ss 75J, 75R LEGISLATION CITED: Environmental Planning and Assessment Regulation 2000 cl 8O Land and Environment Court Rules 2007 Uniform Civil Procedure Rules 2005

Caroona Coal Action Group Inc v Coal Mines Australia Pty Limited and Minister for Mineral Resources (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280 CASES CITED: Gray v Macquarie Generation (No 2) [2010] NSWLEC 82 Hill Top Residents Action Group Inc v Minister for Planning [2009] NSWLEC 185; (2009) 171 LGERA 247 Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213

APPLICANTS Mr T F Robertson SC with him Mr J E Lazarus

FIRST RESPONDENT LEGAL REPRESENTATIVES: Mr N J Williams SC with him Ms A M Mitchelmore

SOLICITORS Department of Planning

SECOND RESPONDENT Mr M R Hall

SOLICITORS Crown Solicitor's Office

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

HILL TOP RESIDENTS ACTION GROUP INC V MINISTER FOR PLANNING & ANOR (NO 3); STRANG V MINISTER FOR PLANNING & ANOR

JUDGMENT 1 HIS HONOUR: On 1 March 2010, the Minister for Planning approved the redevelopment of the Hill Top Rifle Range as part of the development of the Southern Highlands Regional Shooting Complex ("the Project"). The applicants, the Hill Top Residents Action Group Inc ("Hill Top Residents Action Group") and Ms Strang, oppose the Project. First, the Hill Top Residents Action Group and then last week, Ms Strang commenced judicial review proceedings challenging the validity of the approval. There is only one ground of challenge. The applicants claim that, by reason of s 75J(3) of the Environmental Planning and Assessment Act 1979 ("the Act") and cl 8O(1)(b) of the Environmental Planning and Assessment Regulation 2000 ("the Regulation"), the Minister was precluded from giving approval to the carrying out of the Project. The Minister and the proponent of the Project, who is the second respondent, contest the applicants' claim. The applicants' claim explained 2 The applicants' claim relies on the operation of three statutory provisions. The first is s 75R(3) of the Act which provides that environmental planning instruments ("EPIs") (other than State Environmental Planning Policies ("SEPPs")) do not apply to or in respect of an approved project. The operation of the next two statutory provisions relied on by the applicants depends on this effect of s 75R(3) rendering non-applicable certain EPIs. 3 Section 75J(3) of the Act deals with the process of the Minister deciding whether or not to approve the carrying out of a project. It is in two parts, comprising one sentence each. The first sentence provides that the Minister may, but is not required to, take into account the provisions of any EPI that would not (because of s 75R) apply to the project if approved. The second sentence imposes a caveat on the Minister's power to approve the carrying out of a project. It provides: "However, the regulations may preclude approval for the carrying out of a class of project (other than a critical infrastructure project) that such an instrument would otherwise prohibit." 4 Clause 8O of the Regulation is the regulation made for the purposes of s 75J(3) of the Act. Clause 8O(1)(b) provides that approval for the carrying out of a project may not be given under Part 3A for a project, or a part of a project, that is prohibited by an EPI that would not (because of s 75R of the Act) apply to the project if approved. 5 So how do the applicants seek to invoke these statutory provisions in their challenge? In order for approval of the Project to be precluded, the applicants need to identify an EPI which, first, prohibits the Project and secondly, would not apply to the Project if approved because of s 75R of the Act.

6 Clearly, State Environmental Planning Policy (Major Development) 2005 ("the Major Development SEPP") is not such an EPI; it is the EPI which makes permissible the carrying out of the Project on the land. Part 33 of Schedule 3 of the Major Development SEPP, titled "Southern Highlands Regional Shooting Complex Site", was inserted by the State Environmental Planning Policy (Major Projects) 2005 (Amendment No 33) ("SEPP Amendment 33") which was gazetted on 17 October 2008. Clause 5 of Part 33 of Schedule 3 of the Major Development SEPP provides that: "The only environmental planning instruments that apply, according to their terms, to land within the Southern Highlands Regional Shooting Complex Site are this Policy and all other State Environmental Planning Policies except State Environmental Planning Policy No 1 - Development Standards ("SEPP 1")." 7 Clause 7 of Part 33 of Schedule 3 of the Major Development SEPP zones land in the Southern Highlands Regional Shooting Site either as Zone SP1 Special Activities or Zone E2 Environmental Conservation. Clauses 9 and 10 of Part 33 specify development that is permitted without consent, permitted with consent and prohibited. 8 When Part 33 of Schedule 3 the Major Development SEPP was originally made, development for the purpose of shooting ranges was permissible with consent in Zone SP1 Special Activities but not in Zone E2 Environmental Conservation. This circumstance led the Hill Top Residents Action Group to bring its first judicial review proceedings and this Court found that part of the Project to be carried out for the purpose of shooting ranges was to be on land zoned E2 Environmental Conservation but that such development was prohibited in that zone: Hill Top Residents Action Group Inc v Minister for Planning [2009] NSWLEC 185; (2009) 171 LGERA 247 at [59], [60]. 9 As a consequence of this decision, on 22 January 2010, the State Environmental Planning Policy (Major Development) Amendment (Southern Highlands Regional Shooting Complex) 2010 was gazetted. It amended cl 10(3) of Part 33 of Schedule 3 of the Major Development SEPP to permit development on the land zoned E2 Environmental Conservation for the purpose of shooting ranges. 10 The applicants, therefore, need to rely on another EPI, the Wingecarribee Local Environmental Plan 1989 ("the WLEP") which zoned the land 1(a) Rural A and prohibited development for the purpose of shooting ranges on land in that zone. But in order for the WLEP to apply to the land, Part 33 of Schedule 3 of the Major Development SEPP must not apply to that land. How could this result occur? The applicants submit it occurs because the Minister, prior to the making of SEPP Amendment 33, had formed the opinion under cl 6(1)(a) of the Major Development SEPP that the Project was a development described in cl 15(3) of Schedule 1 of the Major Development SEPP (namely major sporting facilities) and hence the Project was declared to be a project to which Part 3A of the Act applied for the purposes of s 75B of the Act. The opinion was formed on a number of occasions but the last opinion was formed on 20 August 2007. 11 SEPP Amendment 33 was made on 17 October 2008. As I have noted, SEPP Amendment 33 inserted Part 33 into Schedule 3 of the Major Development SEPP. Clause 5 of Part 33 of Schedule 3 is the provision which excludes the WLEP from applying to the land. 12 The applicants submit, however, that SEPP Amendment 33 (and hence cl 5 of Part 33 of Schedule 3 of the Major Development SEPP) did not apply because of s 75R(2) and (3) of the Act and my decision in Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213. The applicants submit that SEPPs only apply in the particular circumstances specified in s 75R(2) and (3), namely the declaration of a project as a project to which Part 3A applies or as a critical infrastructure project (s 75R(2)(a)); the carrying out of a project, but (in the case of a critical infrastructure project) only to the extent that the provisions of such a policy expressly provide that they apply to and in respect of the particular project (s 75R(2)(b)); and an approved project (s 75R(3)), that is to say, a project to the extent that it is approved by the Minister (s 75A). 13 The applicants submit that at the time of making SEPP Amendment 33 the Minister had already formed the opinion under the Major Development SEPP that the project was a development of a kind described in cl 15(3) and hence Schedule 1 of the Major Development SEPP and it was thus declared to be a project to which Part 3A of the Act applies under cl 6(1)(a) of the Major Development SEPP and s 75B of the Act. 14 The applicants submit, that because the Project had already become a Part 3A project, SEPP Amendment 33 on being made did not apply to the Project. The applicants submit that if SEPP Amendment 33 did not apply to the project, then cl 5 of Part 33 of Schedule 3 of the Major Development SEPP (inserted by SEPP Amendment 33) did not operate to make the Major Development SEPP (and other SEPPs) except for SEPP 1 the only EPIs that apply to the land on which the Project is to be carried out and hence make the WLEP not apply to that land. The result, the applicants submit, is that notwithstanding the making of SEPP Amendment 33, it did not apply to the land or the Project to be carried out on it and the WLEP continued to apply. 15 The applicants submit that this situation continued up to when the Minister decided on whether or not to approve the carrying out of the Project. Relying on my decision in Rivers SOS Inc v Minister for Planning, particularly at [83] and [84], the applicants submit that SEPP Amendment 33 did not apply to the Minister's exercise of power under s 75J(1) of the Act to approve or not approve the Project.

16 Having made SEPP Amendment 33 not applicable, and hence the WLEP applicable, to the Project, the next step in the applicants' argument is to claim that s 75R(3) operates to cause the WLEP not to apply to or in respect of the Project if approved. If that were to be correct, the applicants submit that cl 8O(1)(b) of the Regulation is enlivened because the Project is prohibited by the WLEP which is an EPI that would not (because of s 75R of the Act) apply to the Project if approved. As a consequence, the Minister was precluded from giving approval to the Project by cl 8O(1)(b) and s 75J(3).

The respondents' rebuttal 17 The Minister made the primary submissions rebutting the applicants' claim. The proponent adopted the Minister's submissions. The Minister submitted that the applicants' claim involves three errors: (a) a mischaracterisation of the legal effect of the inclusion of the land of the Project in Schedule 3 of the Major Development SEPP;

(b) a misapplication of ss 75J and 75R of the Act; and

(c) a misapplication of cl 8O of the Regulation. 18 As to the first error, the Minister submits that SEPP Amendment 33 did have legal effect on being made. It expressly applied to the land, rezoned the land and made provision for development on the land under Parts 3A and 4 of the Act. Clause 5 of Part 33 of Schedule 3 of the Major Development SEPP made express what would otherwise be implicit from the structure and terms of Part 33, namely that the "only" EPIs applying to the land are the Major Development SEPP and other SEPPs except SEPP 1. Hence, the WLEP did not apply to the land. 19 The Minister submits that irrespective of whether Part 33 applies at the point of determining whether to approve the carrying out of the Project under Part 3A of the EPA, it is abundantly clear that the provisions of the WLEP no longer have any application to the land. The land has been carved out of the WLEP and is now dealt with as a State significant site under Schedule 3 of the Major Development SEPP. The fact that Part 33 deals not only with projects proceeding under Part 3A of the Act but also development under Part 4 of the Act, indicates a clear intention that, from the point of Part 33's insertion into Schedule 3 of the Major Development SEPP, the Major Development SEPP was to be the only planning instrument that applied to the site. 20 Once it is recognised that Part 33 of Schedule 3 of the Major Development SEPP from its coming into force on 17 October 2008 does apply to the land and to the Project to be carried out on it, then the WLEP cannot apply to the land or to the Project. 21 As to the second error, the respondents submit that s 75R(3) only operates to cause EPIs (other than SEPPs) not to apply to an approved project if the EPIs would otherwise apply. Section 75R(3) has no application where, as here, an EPI such as the WLEP has, before the time for approval arises, been entirely superseded by the inclusion of a particular site in Schedule 3 of the Major Development SEPP. 22 If s 75R(3) of the Act has no operation in relation to the WLEP, the Minister submits that neither s 75J(3) or cl 8O(1)(b) can apply. 23 Applying the terms of s 75J(3), the WLEP does not meet the description of an EPI that would not apply to the Project if approved "because of s 75R" such as to raise for the Minister's consideration whether or not to take it into account in deciding whether to approve the Project. The WLEP does not apply because on and from the making of SEPP Amendment 33 on 17 October 2008, the land was carved out of the WLEP and dealt with instead under Part 33 of Schedule 3 of the Major Development SEPP. The necessary corollary is that the WLEP is not an instrument that "would otherwise prohibit" the carrying out of a particular class of project on the site, but for the operation of s 75R(3) of the Act. 24 The Minister submits that my reasoning in Rivers SOS Inc v Minister for Planning does not impact on this analysis, directed as it was to the different question of whether non-compliance with a requirement in the SEPP concerned operated to preclude the Minister from granting approval under Part 3A of the Act. 25 Similarly, the Minister submits that in cl 8O(1)(b), the WLEP is not an instrument that meets the description of being an EPI that would not (because of s 75R of the Act) apply to the Project if approved. Hence, the preclusion on giving approval to the Project under cl 8O(1)(b) does not apply. 26 In relation to the third error, the Minister submits, in the alternative to his primary argument, that even if the WLEP could be said to be an EPI that would not (because of s 75R of the Act) apply to the Project if approved, the preclusion on giving approval would not apply by reason of the qualification in cl 8O(2). That qualification is: "To avoid doubt, a project is not prohibited for the purposes of subclause (1)(b) if:

(a) it is not permitted because of the application of a development standard under the environmental planning instrument, or

(b) it is prohibited under the environmental planning instrument but is permitted to be carried because of the application of another environmental planning instrument to the environmental planning instrument." 27 The Minister submits that Part 33 of Schedule 3 of the Major Development SEPP is "another" EPI that applies to the WLEP, so as to permit the Project to be carried out. By operation of cl 5 of Part 33 of Schedule 3, the Major Development SEPP applies to the exclusion of other EPIs, other than certain SEPPs, and in particular to the exclusion of the WLEP. Part 33 of Schedule 3 of the Major Development SEPP permits the Project to be carried out, notwithstanding the prohibition in the WLEP. Hence, cl 8O(2)(b) applies and the Project is not prohibited for the purposes of cl 8O(1)(b). The preclusion on approval under cl 8O(1)(b) and s 75J(3) does not operate.

The applicants' claim fails 28 The applicants' claim fails for reasons including those given by the Minister in his submissions. 29 First, from the commencement of SEPP Amendment 33 on 17 October 2008, the WLEP did not apply to the land and hence could not apply to any development or project, including the Project, to be carried out on the land. Clause 5 of Part 33 of Schedule 3 of the Major Development SEPP, inserted by SEPP Amendment 33, expressly provides that the only EPIs that apply to the land are the Major Development SEPP and other SEPPs excluding SEPP 1. The WLEP is thereby excluded from applying to the land. Division 2 of Part 33 of Schedule 3 zones the land and specifies the permissible and prohibited purposes of development and the development controls in terms that are directly inconsistent with the WLEP's zoning, permissible and prohibited development and development controls for the land. As the Minister submits, Part 33 of Schedule 3 of the Major Development SEPP effectively supersedes the WLEP in relation to the land and any development or project to be carried out on the land. 30 I reject the applicants' argument that s 75R(2) and (3) operates to cause Part 33 of Schedule 3 of the Major Development SEPP not to apply to the land or to the Project because of the prior declaration of the Project as a project to which Part 3A of the Act applies. SEPP Amendment 33 was a valid and effective State Environmental Planning Policy. It operated according to its terms. These terms included limiting the EPIs applying to the land, zoning the land and specifying the permissible and prohibited development and the development controls for developments and projects to be carried out on the land. In particular, the terms were not limited to applying only to the Project that had earlier been declared to be a project to which Part 3A applies. 31 Hence, the applicants' argument (that SEPP Amendment 33 did not apply at the stage of the Minister deciding whether or not to approve the Project because s 75R(2) and (3) did not operate to make SEPP Amendment 33 to apply at that stage) does not logically mean that SEPP Amendment 33 did not apply at all or did not have the legal effect of causing the WLEP not to apply to the land. To the contrary, SEPP Amendment 33, from its commencement on 17 October 2008, did cause the WLEP not to apply to the land and hence any prohibition that the WLEP might have otherwise imposed on carrying out of the Project on the land also to cease to apply. 32 My decision in Rivers SOS Inc v Minister for Planning does not assist the applicants. I held that the Minister when deciding whether or not to approve the carrying out of a project under Part 3A was not required to consider certain matters in a particular SEPP because the Act does not make SEPPs apply to the exercise of power to approve a project under Part 3A. However, such a holding does not mean that SEPPs when made do not apply at all or have any legal effect. As I have indicated above, SEPP Amendment 33, for instance, did apply and have legal effect according to its terms. The fact that, at the stage of the Minister deciding whether or not to approve the carrying out of a project under s 75J(1), the Minister is not required to take into account the provisions of Part 33 of Schedule 3 of the Major Development SEPP because the provisions of that SEPP do not apply at that stage does not mean that the SEPP Amendment 33 did not otherwise apply and have legal effect according to its terms. In particular, in this case, SEPP Amendment 33 had the effect of displacing the application of the WLEP to the land and any development or project, including the Project, to be carried out on it. 33 Once it is recognised that the WLEP did not apply to the land and any project on it, then the WLEP could not answer the description in s 75R(3) of being an EPI that does not apply to or in respect of the Project on the land or the description in s 75J(3) and cl 8O(1)(b) of being an EPI that would not (because of 75R of the Act) apply to the Project if approved. As a consequence, s 75J(3) and cl 8O(1)(b) do not preclude the Minister giving approval for the carrying out of the Project. Accordingly, the applicants' claim should be dismissed. 34 It is not necessary for me to decide the Minister's alternative argument relying on cl 8O(2)(b).

Costs 35 As the applicants have been unsuccessful in their claims, the respondents seek an order for the payment of costs against the unsuccessful applicants. The applicants submit that the proper order in the circumstances of these proceedings is that each party should pay their own costs. The applicants rely on the public interest nature of the litigation. However, Hill Top Residents Action Group does seek an order that the proponent, the second respondent, pay Hill Top Resident Action Group's costs in relation to the proponent's defence of estoppel that was not pressed by the proponent at the hearing. The proponent submits that its decision not to press its estoppel defence was a sensible response to the commencement of fresh proceedings by the other applicant, Ms Strang, on the Friday before the hearing so as to render futile the proponent's estoppel defence against Hill Top Residents Action Group. 36 In my opinion, the proper order is that each party pay their own costs of each proceeding. 37 The power of the Court to order costs is in s 98 of the Civil Procedure Act 2005. Section 98(1) provides that, subject to rules of court, costs are in the discretion of the Court. The relevant rules of court include Pt 42 of the Uniform Civil Procedure Rules 2005 ("UCPR"). Part 42 r 42.1 provides that if the Court makes any order as to costs, the Court is to order that the costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs. The Land and Environment Court has adopted specific court rules, including in relation to costs of proceedings in Class 4 of its jurisdiction, which can prevail over r 42.1 of the UCPR to the extent of any inconsistency between them: Civil Procedure Act, s 11 and UCPR, r 1.7 in Schedule 2. Part 4 r 4.2(1) of the Land and Environment Court Rules 2007 provides: "The Court may decide not to make an order as for the payment of costs against an unsuccessful applicant in any proceedings if it satisfied that the proceedings have been brought in the public interest." 38 This rule is applicable to proceedings in Class 4 of the Court's jurisdiction. The present proceedings are in Class 4. 39 In Caroona Coal Action Group Inc v Coal Mines Australia Pty Limited and Minister for Mineral Resources (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280, I reviewed the authorities on the awarding of costs in public interest litigation. That review revealed that courts have used, in effect, a three step approach in determining whether to depart from the usual costs rule: first, can the litigation be characterised as having been brought in the public interest?; secondly, if so, is there "something more" than the mere characterisation of the litigation as being brought in the public interest? and thirdly, are there any countervailing circumstances, including in relation to the conduct of the applicant, which speak against departure from the usual costs rule? 40 Applying this three step approach, first, I find that the proceedings were brought to uphold and enforce public law obligations under the Act and to ensure that the Minister's exercise of power under Part 3A of the Act was lawful. This constitutes a public interest of a sufficient kind so as to allow characterisation of the proceedings as being brought in the public interest. 41 Secondly, I find the nature, extent and other features of the public interest involved in the litigation are significant and constitute something more than the mere characterisation of the proceedings as being brought in the public interest. The applicants' claim, which was identical in the two proceedings, concerned the proper construction and operation of three statutory provisions, s 75J(3) and s 75R(3) of the Act and cl 8O(1)(b) of the Regulation, which are pivotal to the process of deciding an application for approval of a project under Part 3A of the Act. The applicants' claim raised issues of statutory interpretation of general importance and the litigation has contributed, in a material way, to the proper understanding and administration of Part 3A of the Act. These circumstances have been recognised in the authorities as constituting something more than the mere characterisation of litigation as being brought in the public interest: see the authorities cited in 60 and (b) of Caroona (No 3). To these authorities may be added the recent decision in Gray v Macquarie Generation (No 2) [2010] NSWLEC 82. 42 Thirdly, there are no countervailing considerations that would lead the Court to order costs notwithstanding the public interest nature of the litigation. None of the countervailing considerations identified in the cases cited in [61] of Caroona (No 3) are applicable in these proceedings.

43 In the circumstances of these proceedings, therefore, I consider that it is appropriate not to make an order for the payment of costs against the unsuccessful applicants. 44 Turning now to Hill Top Residents Action Group's discrete application that the proponent pay its costs in relation to the estoppel defence that the proponent did not press, I agree with the proponent that the reason for the proponent not pressing this defence was that another applicant, Ms Strang, commenced identical proceedings to those of Hill Top Residents Action Group's proceedings solely for the purpose of rendering futile the proponent's estoppel defence in the earlier proceedings. The parties agreed to Ms Strang's later proceedings being returnable instanter and being heard together with Hill Top Residents Action Group's proceedings. This supervening event rendered further prosecution by the proponent of its estoppel defence in Hill Top Residents Action Group's proceedings futile and the proponent sensibly indicated to the Court it would no longer press its estoppel defence. Such a supervening event and the proponent's appropriate response to that event do not justify that the proponent pay Hill Top Residents Action Group's costs in relation to the estoppel defence.

1. Proceedings No 40407 of 2010 and No 40619 of 2010 are dismissed.

2. Each party in each proceedings are to pay their own costs of the proceedings.

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.