Joly Pty Ltd v Director-General of the Department of Environment, Climate Change and Water

CITATION : Joly Pty Ltd v Director-General of the Department of Environment, Climate Change and Water [2009] NSWLEC 217

Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 Director-General of the Department of Environment and Climate Change v Hudson (2009) 165 LGERA 256 Durham Holdings Pty Limited v The State of New South Wales (2001) 205 CLR 399 Holmes v Director-General of the Department of Infrastructure [2005] NSWLEC 264 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 CASES CITED: Oates v Director General of the Department of Infrastructure, Planning and Natural Resources [2004] NSWLEC 164 PJ Magennis Pty Ltd v The Commonwealth (1949) 80 CLR 382 Pye v Renshaw (1951) 84 CLR 58 Slack-Smith v Department of Land and Water Conservation (2003) 132 LGERA 1 Spencer v Commonwealth of Australia [2009] FCAFC 38 Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1

1 Her Honour: The Applicant is appealing against a direction to remediate an area of cleared land issued under s 38 of the Native Vegetation Act 2003 (the NV Act) on the property "Yarrol" which is in the Moree Plains local government area approximately 60 kilometres west of Moree. This appeal is brought pursuant to s 39 of the NV Act from a decision by Gregory William Roberts (the Second Respondent) to issue a remediation direction under s 38. The Second Respondent is an officer of the First Respondent, the Department of Environment, Climate Change and Water (DECCW). Pursuant to s 17(g) of the Land and Environment Court Act 1979, an appeal under s 39 of the NV Act can be heard and disposed of by this Court in Class 1 proceedings. 3 The DECCW Statement of Facts provides useful background to the proceedings: 1. The Remediation Notice was issued on 4 July 2009 and applies to a defined portion of the land comprising Lots 1, 24 and 27 in DP 750519 and Lot 23 in DP 750465 ("the Property"). 2. At the time that the Remediation Notice was issued, the owner of the Property was Joly Pty Ltd. Joly Pty Ltd holds the Property on trust for Mr John Hudson and Mrs Lynnette Hudson. The Property was previously owned by Mr and Mrs Hudson in their own right. 3. Between about 9 November 2006 and 5 March 2007 inclusive, Mr Hudson committed an offence under section 12 of the Act when he permitted clearing to occur on the Property in contravention of the Act (the "Clearing Offence"). The Clearing Offence was found proven beyond reasonable doubt by his Honour Justice Lloyd in Director-General of the Department of Environment and Climate Change v Hudson [2009] NSWLEC 4. The decision of his Honour Justice Lloyd is the subject of an appeal to the Court of Criminal Appeal fixed for hearing on 12 February 2010. 4. The Clearing Offence has had an adverse effect on the environment - including: a. the substantial destruction of the vegetation cleared; b. loss of wildlife habitat which was dependent upon that vegetation; and c. consequential and adverse impacts upon local wildlife which was reliant on that habitat and upon ecosystems connected to the vegetation cleared. 5. On 28 May 2007, a remedial notice applying to the Property was issued to John and Lynette Hudson. This remedial notice expired on 5 July 2008. 6. On 13 December 2007, a remedial notice applying to the Property was issued to the new landholders Joly Pty Limited. This remedial notice expired on 5 July 2008. 7. On 4 July 2008, a further remedial notice applying to the Property was issued to Joly Pty Limited. This remedial notice operated for a period of one year from 4 July 2008.

40 The prohibition in the Commonwealth Constitution against laws for the acquisition of property other than on just terms does not apply to State legislation, see Durham Holdings Pty Limited v The State of New South Wales (2001) 205 CLR 399. The State was not compelled to enact the NV Act and acquire property without compensation pursuant to the agreements entered into between NSW and the Commonwealth annexed to Mr Longman's affidavit. The Full Federal Court's judgment in Spencer v Commonwealth of Australia [2009] FCAFC 38 should be followed. As in Spencer, PJ Magennis Pty Ltd v The Commonwealth (1949) 80 CLR 382 can be distinguished and Pye v Renshaw (1951) 84 CLR 58 should be applied. Kable is also distinguishable. Clearing was illegal 41 Under the Moree LEP agricultural use is permissible without consent on land zoned Rural 1(a). However under the NV Act, the Minister is the consent authority for the clearing of native vegetation and the LEP cannot provide any defence to the absence of Ministerial consent. There was illegal land clearing which forms the legal basis for a remediation direction. The fact that the Applicant did not own the land at the time of the offence is irrelevant. Oates is authority that the Moree LEP is legislation subordinate to the NV Act and therefore cannot be relied upon to override the provisions against clearing in the NV Act. Remediation plan 42 The Applicant's argument that its proposed undertaking would facilitate the creation of a carbon sink above what will occur by the implementation of the remediation direction is not supported by expert evidence.

46 In respect of allowing stock on the remediation site, all the experts agreed that allowing stock to graze now will lead to the destruction of the remaining mid-storey plants. However, the period of stock exclusion is disputed. The experts agreed in their joint report at par 12 that only when the over-storey and mid-storey have recovered enough to sustain short-term grazing, then rotational (cell) grazing would be the most likely method by which to manage lippia and maintain the native vegetation. The DECCW experts expect that grazing on the property will be progressively reintroduced based on the success of the plan. This will involve both the recovery of the native vegetation and the management of lippia. Scope of remediation notice 47 "Damage" as referred to in s 38 should not be read narrowly in the making of an order as this would be inconsistent with the objects of the NV Act. The damage caused by the clearing that needs to be repaired requires that the vegetation which was removed be replaced. This is necessary for the purposes of restoring the important species and habitats that were destroyed, as identified in the expert evidence of Dr Nadolny. Similarly Mr Foster gave expert evidence about the highly significant bird breeding ground that was damaged. The ground storey, mid-storey and over-storey are all important parts of this ecosystem which needs to be restored. There is no evidence that any regeneration resulting from the Applicant's proposed undertaking would result in the creation of habitats suitable for the threatened species which were affected by the clearing. 48 The order proposed by DECCW is an order for "work" within the meaning of s 38 of the NV Act because it is a series of positive obligations requiring the landholder to do certain things. This includes the positive acts of excluding stock and vehicles from the land. Undertaking not appropriate 49 An undertaking by the Applicant is an inappropriate mechanism for the resolution of this matter. The Applicant commenced these proceedings as an appeal from the remedial direction made by DECCW under s 38 of the NV Act. The proper role of the Court is to decide for itself what the appropriate direction for remediation is. Once a direction is made by the Court, the remediation direction will have to be complied with as if it were a direction of DECCW. This will affect the means by which the direction is enforced and is different from enforcing any undertaking made by the Applicant to the Court. 50 Further, the proposed undertaking of the Applicant involves further clearing of native vegetation which could cause the destruction of any remaining habitats and vegetation that have successfully regenerated. Such clearing would also be inconsistent with the purposes of s 38 of the NV Act and may involve breaches of other legislation including the Environment Protection and Biodiversity Conservation Act 1999 (Cth). Time for remediation direction 51 The timeframe sought in both the remediation direction dated 4 July 2009 and that proposed by DECCW at the hearing is three years despite DECCW's contention of 13 years. Any remediation plan must be flexible in order to deal with changing ecological circumstances on the property. The Applicant's expert agreed that it is difficult to predict how any plan will work, particularly whether regeneration will occur within a period of three years. The experts agreed that success is in part dependent on whether or not good rainfall occurs. After three years DECCW submits that it will be necessary to assess what the next phase of regeneration should be. Finding Nature of appeal 52 There were discussions and submissions made before and at the hearing by the Applicant concerning the scope of the appeal. This is an appeal in Class 1 of the Court's jurisdiction. The Court determines whether a remediation direction ought be made and on what terms. It considers the matter anew on the basis of the evidence before it. The statutory basis for a remediation direction principally that the clearing was illegal must be satisfied. In terms of the content of a remediation direction, which is a determination more in the nature of a merits decision, it is not appropriate to consider that this must be determined on the basis of an onus of proof falling on either party. The Court must determine what it considers is appropriate in the circumstances. Whether s 38 of the NV Act is valid law 53 The Applicant has argued that s 38 has not been made for the "peace, order and good government" of the people of NSW in breach of s 5 of the NSW Government Constitution. Union Steamship held that a court cannot strike down a State law on that basis, as submitted by DECCW, see also A Toomey, The Constitution of New South Wales (2004, Federation Press) at p 170. There is no power (and possibly jurisdiction) for this Court to strike down s 38 of the NV Act on the basis there is a breach of s 5 of the NSW Constitution. 54 The Applicant referred to Kable as an example where a State law was declared invalid by the High Court because the law sought to confer judicial power on a State court in a way that was incompatible with the court's exercise of Commonwealth judicial power. Kable was an unusual matter, raised quite different issues to this case and provides no relevant precedent. Nor do the issues in the Tasmanian Dams Case have any relevance to this matter. 55 The next issue raised by the Applicant is whether a remediation notice issued under s 38 amounts to the taking of property in breach of s 51(xxxi) of the Commonwealth Constitution. The Applicant relied on Spencer v Commonwealth of Australia [2008] FCA 1256 which was the judgment of the Federal Court at first instance. In Spencer, the applicant was challenging two Commonwealth laws because, it was argued, they caused the NSW government to pass the NV Act and its predecessor (the State Acts). He argued the State Acts had the effect of acquiring his property by prohibiting the clearing of native vegetation which he argued effected the acquisition or expropriation of certain interests in his family property. The Commonwealth statutes were laws with respect to the acquisition of property which did not provide for just terms and therefore were in breach of s 51(xxxi) of the Australian Constitution. At first instance the judge granted the Commonwealth's application for summary dismissal of the proceedings because he considered that there was no reasonable prospect of success. Mr Spencer appealed. 56 The Full Federal Court in Spencer (Jagot J, Black CJ and Jacobson J concurring) upheld the decision of the trial judge in holding that the Commonwealth laws the subject of the challenge were not laws with respect to the acquisition of property or effected an acquisition of property of the applicant. A similar conclusion was reached in relation to the effect of the inter-governmental agreements. The Court referred to the relevant Commonwealth statutes, instruments and agreements at [8] - [9] as follows: 8 Section 51(xxxi) of the Constitution provides that the Parliament shall, subject to the Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to "the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws". Section 96 is also relevant. It provides that "[d]uring a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit". 9 In [22] to [98] the primary judge summarised the principal provisions and operation of the Kyoto Protocol, the Commonwealth statutes, four inter-governmental agreements between the Commonwealth and New South Wales, and the State statutes. The primary judge identified the inter-governmental agreements as follows (at [53]): • A bilateral Agreement between the Commonwealth and the State of New South Wales to deliver the Natural Heritage Trust, made on 31 October 1997 (the 1997 Agreement). • The Inter-Governmental Agreement on a National Action Plan for Salinity and Water Quality in Australia (the Salinity Action Plan), made on 3 November 2000 (the 2000 Agreement). • A bilateral Agreement between the Commonwealth of Australia and the State of New South Wales Relating to the Salinity Action Plan, made on 17 May 2002 (the 2002 Agreement). • A bilateral Agreement between the Commonwealth of Australia and the State of New South Wales to deliver the extension of the Natural Heritage Trust, made on 14 August 2003 (the 2003 Agreement).

57 Jagot J set out the facts of Magennis at [16], being that the State Act in issue provided for an agreement between the Commonwealth and NSW governments concerning the acquisition of land by the State at a value which did not exceed a certain amount. The High Court held that the NSW law was a law with respect to the acquisition of property. The State Act was inoperative because it approved an invalid agreement. An amended scheme was considered in Pye whereby the Commonwealth/State agreement applied to land resumed for the purpose of a State Act dealing with soldier settlement. The High Court held that the fact that the State Act provided for land acquisition on unjust terms was of no legal consequence. As stated by the High Court: As has already been pointed out, the legislative power of the State is not affected by s 51(xxxi) of the Constitution. If a State Act provides for the resumption of land on terms which are thought not to be just, that is of no consequence legally: it cannot affect in any way the validity of the Act or of what is done under the Act. And the effect of Act No 14 of 1950 is to make it perfectly clear that all relevant legislation of the Parliament of New South Wales is intended to take effect unconditioned by any Commonwealth legislation and irrespective of the existence of any agreement between the Commonwealth and the State of New South Wales. To adopt the language of Webb J, already quoted, it cannot now be correct to say that, properly construed, the State Acts contemplate the existence of a valid agreement or of any agreement or scheme. There is no possible ground of attack on the validity of this legislation, there is no ground whatever for saying that it is inoperative, and all courts are bound to give effect to it according to its tenor 58 At [19] Jagot J accepted the following propositions of the Commonwealth: Pye v Renshaw, properly analysed, also negates Mr Spencer's submissions based on: - (i) an alleged intent to overreach s 51(xxxi), (ii) the alleged improper use of a "mere device" to circumvent the constitutional guarantee, and (iii) the significance of the terms of the inter-governmental agreements. As the Commonwealth submitted (at [28] of its written submissions), Pye v Renshaw establishes the following relevant propositions: (a) Even if the appellant were in a position to demonstrate that the National Heritage Act or the Financial Assistance Act were enacted for the purpose or object or "motive" of inducing the state to exercise its powers to apply restrictions to the appellant's land, that would not demonstrate invalidity. (b) Nor would it be sufficient to demonstrate that the statutes had the effect of authorising or permitting the Commonwealth to provide financial assistance to New South Wales on terms that such restrictions be applied. Were it otherwise, the appropriation enactment in Pye would have been held invalid. (c) It is irrelevant for present purposes that the appellant claims to have suffered some form of detrimental effect to his property interests or that he claims the Commonwealth receives some form of benefit. In Pye, the detriment to the property holder was clear (potential loss of freehold title) and the Commonwealth received a 'benefit' in that it achieved its aim of settling former members of its defence forces at below market cost. (d) It also follows that the terms of agreements, grants or arrangements made pursuant to the National Heritage Act or the Financial Assistance Act could not have any bearing on the validity of those laws themselves. See also, in support of proposition (a) above, the primary judge's reference at [110] to the decisions in Huddart Parker Ltd v The Commonwealth [1931] HCA 1; (1931) 44 CLR 492 at 515 to 526 and Murphyores Incorporated Pty Ltd v The Commonwealth [1976] HCA 20; (1976) 136 CLR 1 at 20 in support of the observation that "it is not appropriate to characterise a law by reference to the motives that inspire it or the consequences that flow from it".

(1983) 158 CLR 1

(2009) 165 LGERA 256

(2001) 205 CLR 399

(1996) 189 CLR 51

(1949) 80 CLR 382

(1951) 84 CLR 58

(2003) 132 LGERA 1

(1988) 166 CLR 1

(1931) 44 CLR 492

(1976) 136 CLR 1

[2004] NSWLEC 164

[1976] HCA 20