Equity - Equitable remedies - Injunctions - Interlocutory injunctions - Balance of convenience - Sought in defence of claimed public harm - A question of money.

Judicial Review Act 2000 (Tas), s26(2)(a).

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3] [1998] HCA 30; (1998) 195 CLR 1, applied.

Judgment Number: [2007] TASSC 12

1 At its meeting on 16 January 2007, the respondent conditionally approved development applications 246/2005 and 247/2005. These applications concerned two blocks of land near Mole Creek. One is owned by Mr Gerald W Richards and the other is jointly owned by Mr Gerald W Richards and his brother, Mr Gregory Richards. Each application sought a permit to engage in clear felling logging and subsequent hardwood re-aforestation in accordance with an approved forest practice plan.

2 The applicant is the owner of adjoining land which his affidavit described as "a private sanctuary, ... covenanted to conservation in perpetuity". The applicant is also a member of the Western Rivers Preservation Trust which he deposed, "was established in 2006 to protect the Mole Creek and Lobster Rivulet water systems". The applicant opposed the grant of the two permits. He deposed that water runs off the lands which are the subject of the development applications onto his land. From there the water drains below the surface into sinkholes. The applicant's concern is that clear felling and subsequent re-aforestation will alter the natural flow of this water, carry soil and other matter underground and into the sinkholes and caves, thereby causing environmental damage.

3 On 1 March 2007, the applicant filed an application for a judicial review of the respondent's decision to conditionally grant the two applications for a permit. At the same time, the applicant filed an interlocutory application seeking an order pursuant to the Judicial Review Act 2000, s26(2)(a), which empowers the Court or a judge to "suspend the operation of the decision".

4 The originating application, the interlocutory application, and two affidavits by the applicant, were served on the respondent. It has entered an appearance. Mr Gerald Richards was also served with those documents. Service on him was effected on the morning of Friday 2 March, but no appearance has yet been entered on his behalf. Mr Gregory Richards has not been served with any papers. It appears that he is presently in outback Australia and his brother does not know where he is at the moment. However, it is believed that he is due to return to Tasmania in May this year.

5 The application for the interlocutory order suspending the operation of the respondent's decision came on for hearing yesterday, 6 March 2007. Mr Tree SC and Mr Browne were heard on behalf of the applicant and Mr O'Farrell on behalf of the respondent.

6 The applicant's contentions, both on the originating application and in support of interlocutory relief, are as follows:

(1) The respondent erred in law in that it took into account an irrelevant consideration, viz, that the cost of hydrogeological studies was beyond the resources of either the respondent or the applicants for the permits.

(2) The respondent erred in law in failing to take into account a relevant consideration, viz, an expert recommendation that further investigations be undertaken to determine the likely hydrogeological impact of granting the development applications.

(3) The respondent erred in law in that it assumed that if cl 4.10.3 of the Meander Valley Planning Scheme 1995 ("the Scheme") was satisfied, the proposed use was a permitted use and accordingly, erred in failing to consider the provisions of the Scheme, cl 4.

(4) The respondent erred in law in that it made the decision to grant the development applications when there was no evidence to satisfy the provisions of the Scheme, cl 4.10.3, concerning hydrogeological impact.

(5) The respondent erred in law in that there was a breach of the rules of natural justice and/or a breach of the law required to be observed in making the decision to grant the development applications because Councillor Kelly participated in the decision while he had an interest in it within the meaning of the Local Government Act 1993, s48.

Principles guiding the interlocutory application

7 Generally speaking, the object of interlocutory injunctive relief is to equitably control the interests of the parties to the litigation pending final disposition of the ultimate issues. Obviously, an applicant is not entitled to interlocutory relief unless he or she demonstrates that there is a serious question to be tried in the principal proceedings. See American Cynamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 at 407. This decision has been approved many times in Australia. See, for example, Re The Minister for Immigration and Multicultural Affairs; Ex parte Fejzullahu (2000) 74 ALJR 830. Further, the applicant must show that the balance of justice in all the circumstances of the case requires interlocutory intervention. Principally, this requires a weighing of the consequences if the applicant ultimately succeeds but there is no interlocutory intervention, and the consequences to the respondent if the applicant ultimately fails but an interlocutory order is made. See Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 at 216.

8 In many applications for an interlocutory injunction, an issue arises as to whether damages would be an adequate remedy if the applicant ultimately succeeds. This is not an issue in these proceedings as the applicant does not seek, nor would be entitled to, damages. His interest is in the nature of a public interest, namely the protection of a sensitive environment from degradation.

9 In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3] [1998] HCA 30; (1998) 195 CLR 1, the High Court adopted the following statement from Spry on the Principles of Equitable Remedies: Specific Injunctions, Rectification and Equitable Damages (5 edn) at 402 - 403:

"The interests of the public and of third persons are relevant and have more or less weight according to the other material circumstances. So it has been said that courts of equity 'upon principle, will not ordinarily and without special necessity interfere by injunction, where the injunction will have the effect of very materially injuring the rights of third persons not before the courts'. Regard must be had 'not only to the dry strict rights of the plaintiff and the defendant, but also the surrounding circumstances, to the rights or interests of other persons which may be more or less involved'."

10 That observation is pertinent here because obviously the grant of interlocutory injunctive relief will affect Mr Gerald and Mr Gregory Richards as land owners, Gunns Ltd, who are shown on the forest practices plan as the applicant and principal processor of the harvest, as well, perhaps, as the contractors employed to harvest the timber and the contractors who are employed to cart it away.

11 It is common ground that the land which is the subject of the development applications is located in an area designated by the Scheme as Rural. The Scheme, cl 2.5.1 provides:

"2.5.1 A use or development for land in a zone which is depicted in the Table of Use and Development as 'P' shall not be undertaken without a permit, which Council shall grant with or without conditions, provided that use or development complies with all relevant Scheme standards without invoking the provisions of clause 2.6.1 (b)."

12 The Scheme, Pt8, sets out the Table of Uses and provides that where a use is marked "P", it means "permitted (with permit) use or development in accordance with cl 4". On land in the Rural zone, forestry is marked "P".

13 The Scheme, cl 4, is correctly entitled "General Provisions", and a direction is given that "[t]he following development requirements and standards shall apply unless otherwise stated elsewhere in the Scheme." The Part then sets out 13 headings such as "Sullage & Sewage Disposal Restriction On Use And Development In Unsewered Areas", "Minor Subdivision", "Watercourse Protection", "Contaminated Land", and so on, not all of which are relevant considerations on every development application.

14 Clause 4.10 is central to this impugned decision. It is headed "Karst Areas". A Karst landscape is described by Dr Kiernan of the University of Tasmania in his affidavit at par6 as follows:

"A karst landscape is one that is shaped when surface water or groundwater becomes weakly acidic due to chemical interaction with atmospheric or soil carbon dioxide. The dissolving actions of water on limestone bedrock result in a distinctive landscape defined by depressions, such as sinkholes, caves, holes and solution pipes. A sinkhole is an area where water gathers and drains vertically into the ground. A cave is the product of long-term water movement through limestone rock and forms part of a karst aquifer, a zone of strata capable of containing and transmitting groundwater."

15 Clause 4.10.3 comprises four subclauses as follows:

"4.10.3 A use or development in the karst area shall be prohibited if that use or development is likely to:

(a) induce unacceptable levels of soil erosion and subsequent sedimentation within the Karst system;

(b) adversely alter the hydrology of the Karst system, or may potentially lead to ground surface instability;

(d) adversely affect land stability or create a safety hazard."

16 Upon its proper construction, the terms of the Scheme required the respondent in this case to firstly consider the matters set out in cl 4.10.3. If the respondent did so and determined that the proposed use was likely to produce any of the results specified in pars(a) - (d) of cl 4.10.3, the development applications had to be refused as the proposed used was a prohibited one.

17 If the respondent determined that none of the proscribed results was likely to occur, it then had to consider, in obedience to cls 2.5.1 and 4, whether the proposed use met the relevant requirements set out in cl 4. If yes, the respondent had to grant the applications.

18 The minutes of the meeting of 16 January 2007 show that a number of people, including the applicant, addressed the meeting and were opposed to a grant of the development applications. The minutes also contain a 71 page report on the development applications written by the respondent's officers. With respect to the applicant's contentions concerning cl 4.10.3, the report notes that actions that could result in an adverse impact on the Karst include:

* Inappropriate protection of stream sides and Karst features."

19 The report noted that the following works might result in one or more of the above adverse impacts:

"* Clearance of vegetation in close proximity to watercourses and Karst features

* Creek crossings constructed without appropriate erosion controls

* Chemical application where these chemicals may enter the watercourses or Karst system."

20 The report goes on to advise that the original material supplied by the applicant for the permits was insufficient for an assessment to be made and more information was required. Reference is then made to the approved forest practices plans, but noted that the plans did not identify the exact location of Karst features and therefore did not allow assessment of the potential impact of the proposed use on the Karst system. The report then advised the respondent that in order to assess the proposal, it needed to know how the operations were actually going to be managed on site and accordingly referred the application to the Department of Primary Industries, Water and Environment (Earth Science Section) seeking advice on the matters raised by the Scheme, cl 4.10.3.

21 The report advised the respondent that an independent assessment was undertaken by Mr Grant Pearce, Senior Environmental Scientist with experience in both forestry and Karst geology. The report says that the following comments were received from the Earth Science Section of the department:

"Whilst there remains some uncertainty about the exact location of the intake of the Mole Creek water supply, the proposed buffer and reserve as proposed by the plan should be sufficient to protect the stream from sediment inputs resulting from logging an [sic] plantation establishment. Potential effects on the conservation values of the Karst System are also adequately covered by this proposal."

22 With respect to that statement, the respondent's officers advised in the report that they did not consider it sufficiently detailed to make the appropriate assessment, and because of the "particular site sensitivities", the council engaged Grant Pearce of GHT as an independent expert consultant. The report then contained this advice to the respondent:

"The consultant considered and assessed the application against the matters raised in clause 4.10. Recommendations were made that, if adopted, mitigate adverse impacts of the proposal on the karst system. It is therefore concluded that under clause 4.10 of the Planning Scheme, if the proposal incorporates the recommendations above, it is unlikely to induce unacceptable levels of soil erosion and subsequent sedimentation within the Karst system; adversely alter the hydrology of the Karst system, or potentially lead to ground surface instability; pollute surface and sub surface waterways; or adversely affect land stability or create a safety hazard. Therefore the works proposed are NOT considered to be a prohibited use and development under this clause of the Planning Scheme. The application must therefore be considered as a permitted use and development, in accordance with the provisions of the Rural zone and other applicable sections of the Scheme ." [emphasis added]

23 In the Introduction, Mr Pearce's report to the respondent states that the respondent engaged his company to "undertake a review" of the two forest practices plans as they formed the basis of the development applications. That is exactly what the report does and at pages 31 - 33, under the heading "Conclusions and Recommendations", makes a series of criticisms of the forest practices plans and makes recommendations. The last page of the report includes this paragraph:

"In regards to the drying of sub-surface flows, it is recommended that a study be conducted to determine the likely hydrogeological impact should the proposed coupes proceed. Of particular focus should be the potential impact of threatened Sphagnum swamp communities."

24 Mr Tree submitted that as a result of that criticism of the forest practices plans, the respondent was told that without the recommended study, the respondent could not make the determination it was required to make, pursuant to the Scheme, cl 4.10.3. Consequently, so the submission ran, in making the determination it did, the respondent erred by failing to take into account a relevant consideration (Mr Pearce's advice), or erred by failing to take into account that further study was required, or by making a decision on cl 4.10.3 when there was no evidence upon which to make that decision.

25 The officer's report to the respondent advised that while hydrogeological studies for sub-surface flows were supported by the council, such a study was beyond the resources of the applicants for the development permits and the respondent. The respondent was further advised that such studies were "extremely resource hungry and long term exercises". Mr Tree submitted that the respondent, in taking into account that advice, took into account an irrelevant consideration and thereby error was committed.

26 In my view, the applicant has failed to show that he has a sufficiently strong prima facie case based upon the foregoing, being grounds 3, 4 and 5 in the originating application, to warrant the grant of injunctive relief. It is trite law that this Court will not engage in a merits based review of the respondent's decision. It is confined to determining if legal error attended the making of the decision. If there is any evidence to support the decision, then it cannot be said that error occurred in making a decision without evidence. As Mason J (as he then was) pointed out in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 355, a question of whether there is any evidence to support a decision is a question of law. His Honour went on to say at 356:

"But it is said that '(t)here is no error of law simply in making a wrong finding of fact': Waterford v The Commonwealth [1987] HCA 25; (1987) 163 CLR 54; per Brennan J at p 77. Similarly, Menzies J observed in Reg v The District Court; Ex parte White [1966] HCA 69; (1966) 116 CLR 644, at p 654: 'Even if the reasoning whereby the Court reached its conclusion of fact were demonstrably unsound, this would not amount to an error of law on the face of the record. To establish some faulty (eg illogical) inference of fact would not disclose an error of law'.

Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place."

27 If the respondent failed to heed the advice of Mr Pearce it would commit no error of law. If the respondent took into account the cost of getting a hydrogeological study, it would commit no error of law. The respondent was entitled to reject Mr Pearce's advice if it wanted to. It was the decision maker and provided there was evidence of factual matter upon which the decision was based, no error was committed.

28 There was ample evidence set out in the officer's report to justify the making of a decision on the matters referred to in the Scheme, cl 4.10.3. I have summarised the substance of it above. It is not to the point to say that there might have been more or better evidence. To take into account the cost of obtaining more evidence is not to commit legal error by taking into account an irrelevant consideration. Such an error would occur if the decision was based on something wholly irrelevant to the issue such as the religious beliefs of the applicants. Mr Tree relied upon an opinion expressed by Dr Kiernan in his affidavit that "it is simply not possible to determine whether the proposed forestry operations will not be likely to cause any of the consequences identified in clause 4.3.1" unless a study is done. That opinion was not before the respondent when it made the decision, but even if it had been, the respondent would have been entitled to disagree with it.

29 I am also of the view that there is no serious question to be tried warranting the grant of injunctive relief with respect to the claim that the respondent interpreted the Scheme incorrectly and acted in error by proceeding on the basis that the permit had to be granted once cl 4.3.1 was satisfied. The officer's report advises that the first step is to consider whether the use is prohibited as provided by cl 4.3.1. There follows the parts of the report to which I have made reference together with discussion about a number of recommendations made by Mr Pearce with respect to matters relevant to cl 4.3.1. The report then sets out cl 2.10.1 and the need to consider the relevant provisions of the Scheme. There follows discussion about the relevant parts of cl 4. In the course of that discussion, reference is made again to cl 4.3.1, albeit briefly, as it had previously been discussed in detail. Finally, there is the officer's recommendation that led to the decision. No error in that process is detectible.

30 The issue concerning Councillor Kelly's interest is a different matter. There is material tending to prove that Councillor Kelly owns a logging contractor's business and that the respondent has granted his mother, Mrs Kelly, a permit to log on her land. The relevant forest practices plan shows Councillor Kelly as the logging contractor. There is also evidence that tends to prove the following assertions in ground 1 of the originating application, namely:

* Mrs Kelly's land is accessed by the same road as that accessing the land owned by the applicants for the permits and forestry operations on Mrs Kelly's land require access through the applicant's land.

* Approval of forestry operations and associated work on the land owned by the applicants for the permit will facilitate access to Mrs Kelly's land. The cost of upgrading the road will be borne by those associated with the forestry operations on the lands of the applicants for the permit, saving Councillor Kelly or his mother the cost of upgrading the access road to Mrs Kelly's land.

31 The Local Government Act, s48(1), provides:

"(1) A councillor must not participate at any meeting of a council, council committee, special committee, controlling authority, single authority or joint authority in any discussion, nor vote on any matter, in respect of which the councillor -

(b) is aware or ought to be aware that a close associate has an interest.

32 Section 49(1) defines an interest in these terms:

"(1) A councillor or member has an interest in a matter if the councillor or member or a close associate would, if the matter were decided in a particular manner, receive, have an expectation of receiving or be likely to receive a pecuniary benefit or pecuniary detriment."

33 Section 51(i) provides that a councillor's mother is an associate for the purposes of ss48 and 49. So it follows that there is a serious question to be tried as to whether the impugned decision was tainted with legal procedural error and should be quashed. It is arguable that if the developments applications were approved, Councillor Kelly and his mother would have an expectation of receiving profits from operating logging operations on Mrs Kelly's land because road access to that land would be facilitated and/or Mrs Kelly would have an expectation that the value of her land would improve, because the access to it would be improved.

34 There was evidence that leads to an inference that logging on one or both pieces of land has commenced. There was no direct evidence of how long it will take to clear fell both pieces of land, but each forest practices plan makes a reference to a logging period of six months.

35 If injunctive relief is not granted and the applicant succeeds at trial, there arises a risk that between now and trial the environment he says needs protection will suffer irreparable harm. On the other side of the coin, if injunctive relief is granted, but the applicant fails at trial, the land owners, the loggers, the cartage contractors, the processors and perhaps others, are all likely to suffer financial loss.

36 In essence then, the balance of convenience requires weighing the risk of environmental harm and the risk of financial loss. If the applicant is right, the risk of environmental harm pending trial will be eliminated by making the order sought. However, those who may be adversely affected by the making of such order are also entitled to be protected in the event that permanent injunctive relief is not granted. The applicant must be prepared to acknowledge this by entering into undertakings that are suitably backed by resources, to pay any damages that the Court thinks he ought to pay to those persons whom the Court determines are entitled to damages by reason of the making of an interlocutory order pursuant to the Judicial Review Act, s26.

37 I will hear counsel with respect to the terms of the order, the terms of the undertaking, and directions to get this case to trial as quickly as possible.