Mandalong Progress Inc. v Minister For Planning And Anor.

Land and Environment Court (NSW)|2003-06-18|Before: Bignold J, Ms J

The Applicant's allegation of breach by the Director-General of Condition 67 is that the flood study required to be prepared has not been fully prepared, in that only a part of the required study was prepared whereupon the Director-General decided not to proceed further with the study.

In disputing this allegation, the Respondents contend that the Director-General was entitled to conclude that the required flood study had been prepared, even though its preparation was confined to the Stage 1 Brief, given to the Consultant and did not proceed to Stages 2 and 3 as had been originally contemplated when the study was commissioned by the Director-General.

(i) The Director-General in October 1999 commissioned a consultant, Water Research Laboratory, to undertake the required flood study in three progressive stages - Stage 1 involving consultation and data acquisition, Stage 2 involving the review of hydrologic and hydrodynamic modelling and Stage 3 involving the determination of the one in 100 year flood event;

(ii) Thereafter, the Director-General notified the Consultant that the scope of work had been clarified with a revised flow chart outlining the tasks contemplated in Stages 1, 2 and 3 with the advice that Stage 2 works would be reviewed and revised (where necessary) as a result of the Stage 1 Report and that the Stage 3 scope of works would be reviewed and revised (where necessary) following submission of the Stage 2 Report.

(iii) In June 2000, the Consultant presented his Stage 1 Report to the Director-General.

(iv) In August 2000, the Consultant submitted to the Director-General a detailed submission and quote for undertaking further successive stages of the flood study with Stage 5 involving the determination of the one in 100 year flood event. (iv) On 19 March 2001, the Department's Executive Director wrote to the Chairman of the Community Consultative Commission "outlining the position of this Department in relation to the flood survey conducted in accordance with Condition 67…" The letter, after stating the effect of advice received from the Consultant, continued - The independent consultant clearly advised DUAP that there was evidence to suggest there was an increased flood risk from mining in the Valley. He did, however, recommend improvements to the location of the monitoring sites to improve the predictability of the dataset. DUAP concluded that Powercoal should therefore re-run the model progressively throughout the life of the mine, as and when the specific patterns of longwalls become known, to ensure that the risks were minimised at all times. The emphasis of the review was on verifying the hydrologic and hydrographic impacts of the mine, and did not extend to developing the 1 in 100 year flood level in the Mandalong Valley. This issue was discussed with the Lake Macquarie City Council Floodplain Management Committee in December 2000, which advised that it did not propose to prepare a Floodplain Management Plan for the Manadalong Valley in the foreseeable future. DUAP considers that the intent of Condition 67 is to provide flood information for incorporation into a Floodplain Management Plan by virtue of Condition 111 of the Consent. Given that a Floodplain Management Plan is not currently proposed, the value of developing the 1:100 year flood level at this point in time is considered to be limited. If and when the Committee chooses to proceed with such a plan, then Powercoal will be requested to provide the contemporary stream flow monitoring data it holds at that time together with the most accurate picture of its proposed mining pattern. This will ensure that the most contemporary risk analysis will be conducted.

(vi) On 12 April 2001, the Chairman of the Community Consultative Council responded to the Department's letter of 19 March 2001 noting that the Committee at its most recent meeting had noted with concern that the Department "was seeking to abandon the flood Study required by Condition 67" and calling upon the Department to complete the flood study as a matter of urgency.

(vii) Thereafter sustained protests from the Community Consultative Committee, the Progress Association and the Lake Macquarie Council were directed to the Department and to the Minister calling for the urgent completion of the flood study. The latter's Media Release issued on 4 September 2001 advising of the Minister's decision to modify Conditions 13, 18 and 22 of the development consent included the following statement concerning the flood study: In addition, Dr Refshauge reassured the community about the mine's potential effect on flooding in the Mandalong Valley. I acknowledge that some residents in the Mandalong Valley remain concerned about the potential impacts of subsidence and its effects on flooding, said Dr Refshauge. I have instructed the Department to consider this matter further in consultation with the local community and to commission further studies to characterise the flood risk in the Mandalong Valley, added the Minister.

(viii) It was in these circumstances of ongoing protests against the Department's decision not to proceed any further with the flood study that the Department's Executive Director wrote the memorandum to the Director-General that I have earlier referred to (see par 94). I infer that it was not until this point of time that the Director-General had personally become involved in the Department's decision not to proceed further with the flood study (meaning by that, that the earlier decisions taken in respect of Condition 67 had been taken by the Director-General's subordinates). Thus, the memorandum expressly sought the Director-General's endorsement of the approach that had been followed by the Department in respect of Condition 67. Rather than summarise the contents of the memorandum, I should quote its content in full (noting that I have earlier quoted (par 96) the "Background" component of the memorandum which immediately preceded the following content): DISCUSSION In response, to the Condition, the Department took certain steps in the period February 1999 to July 2000. These, and the manner in which they are considered to satisfy the requirements of the Condition are as follows: 1. Condition No. 67 requires the Applicant to participate in and contribute funds to the preparation of a flood study. Powercoal contributed $30,000 to a flood study and collaborated with the Department during the design of the study. 2. The Condition No. 67 requires the study to be set up to determine the 1:100 year flood, and other such matters considered necessary in consultation with Council and DLWC. The study was designed to determine the 1:100 year flood and to provide information about subsidence effects. Lake Macquarie City Council (the Council in the Condition) and the Department of Land and Water Conservation (DLWC) were consulted in the design and implementation of the study on multiple occasions. Mr Preston emphasised that neither was required to sign off on the stud but merely to be consulted. 3. Condition No. 67 requires the Director-General to select a consultant to conduct the flood study. The Director-General commissioned an independent expert consultancy, Water Research Laboratory (WRL) of the University of New South Wales. The objects of the study were is (sic) accordance with the Condition 4. The study was to be completed within 6 months of the date of consent. This time frame proved to be unrealistic and was not met. Mr Preston has indicated that these time provisions can be considered directory and not mandatory, because action had been clearly initiated through the study. 5. The amount of reasonable funding required from the Applicant was determined as indicated under 1 6. Definition of the flood hazard included an extensive public consultation and submission process that was managed by the consultant, WRL. 7. The study is to include a public consultation and submission process. Public consultation has been extensive and has continued throughout the period since Approval was given. 8. The Condition requires that the results of the study be incorporated into a revision of the Water Management Plan. The Department received a Water Management Sub Plan in September 1999 and this was subsequently approved by the Department. In doing so, the Department determined that the Plan was consistent with the findings of the flood study. 9. The study was undertaken to the satisfaction of the Director-General and its report made available to the DLWC, Council and the Community Consultative Committee in June 2000. In addition, briefing sessions were held by the Department with the Consultative Committee and the Council. 10. It is argued that the requirements of the Condition have been completely satisfied by the steps described above. Advice from Mr Preston confirms that the Director-General has the discretion to decide upon the nature of the studies that are to be carried out, so long as the other tests stipulated by the Conditions are met. 11. During the study by WRL, the consultant indicated that it was unlikely that the modelling conducted for the EIS would be varied by this work unless there had been a major error in the original data processing. Also, in August 2001, modified Consent Conditions were approved and these recognised that the location and configuration of longwalls would not be known with any accuracy until closer to the time mining would commence. Consequently, the Director-General concluded that continuation of this study would be a misuse of public funds and the study was terminated. 12. Following this, a concern was raised by the Mandalong Valley community that all three stages of the proposed study had not been completed. In addressing this concern a separate independent peer review was commenced by Lawson and Treloar on behalf of the Department, but is currently waiting on the transfer of date from Powercoal. However, it is considered unlikely that this study will provide any information which would change the existing understanding of the 1:100 year flood profile. Consequently, the Department now considers that continuation with any flood study is inappropriate at this time but that once the configuration of longwalls is known more accurately, it may be appropriate to recommence the study at that time. RECOMMENDATION That the Director-General form the opinion that the response by the Department the requirements specified in the Conditions of Consent relating to the characterisation of the flood risk for the Mandalong Mine, is appropriate for compliance with the Condition to be considered to have been achieved.

The memorandum bears the endorsement of the Director-General (dated 9 April 2002) approving the recommendation.

It is upon the basis of the foregoing primary facts as disclosed by the documentary evidence that I must determine the Applicant's allegation of breach by the Director-General of Condition 67.

That allegation is that the flood study required to be prepared has not in fact been prepared.

Accordingly, it is first necessary to determine what precisely does Condition 67 require of the flood study. It is clear beyond argument that Condition 67 requires the flood study to achieve the following objects -

(ii) to determine such other matters relating to long term flooding as considered necessary by the Director-General in consultation with Lake Macquarie Council and the Department of Land and Water Conservation to implement the conditions of the consent; and

(iii) to further define the existing flood hazard and the potential flood hazard resulting from mining; and

(iv) to include a public consultation and submission process.

The effect of the "note" to Condition 67 is to distinguish the required flood study from the "flood-plan management study" referred to in Condition 111.

Condition 111 is in the following terms - The Applicant shall assist in the development of a Floodplain Management Plan to council's satisfaction, based on predicted subsidence changes with the aim of reducing flooding impacts, flood hazard and improving general community flood protection.

Having determined, as a matter of construction, the nature and scope of the required flood study, a further potentially important question arises concerning the extent of any relevant discretion that is conferred upon the Director-General by Condition 67.

Clearly, the Condition confers upon the Director-General the following elements of discretion -

(i) to decide, in consultation with other nominated agencies, what matters "relating to long term flooding" (other than (i) the determination of the 1 in 100 year flood; and (ii) the further definition of the existing flood hazard and the potential flood hazard resulting from mining) should also be determined by the flood study;

(ii) to select the Consultant to prepare the flood study;

(iv) to determine the satisfactory amount of reasonable funding towards the flood study required to be contributed the applicant; and

(v) to determine the satisfactory completion of the flood study.

Having determined the nature and extent of the elements of discretion conferred upon the Director-General, the crucial question that arises in the present case is whether the exercise of any aspect of that overall discretion may legitimately result in a reduction or elimination of any of the required stipulated content of the flood study, that has been earlier identified. In particular, does the discretion concerning the Director-General's "satisfaction with the completion" of the Study enable the Director-General to change the required content of the flood study so that it need not determine the 1 in 100 year flood and/or provide the further definition of existing and potential future flood hazards resulting from the mining? Again, does the Director-General's discretion 'to manage the flood study" empower her to determine that "continuation with the flood study is inappropriate at this time" etc or would involve "a misuse of public funds".

These questions arise because it is clear on the basis of the primary facts, and I so find, that the Stage 1 of the flood study undertaken by the Consultant does not satisfy the requirements of the Condition "to determine the 1 in 100 year flood" and "to further define the existing and potential future flood hazards resulting from mining" and that the Director-General had determined not to continue with the flood study (beyond the Stage 1 Report) because in her opinion, to proceed further (eg in accordance with the contemplated stages 2 and 3) would involve either "a misuse of public funds" or otherwise be "inappropriate".

In my judgment, the proper construction of Condition 67 is one that while recognising the elements of discretion conferred upon the Director-General, does not allow those discretions to dispense with, or derogate from, the fundamental requirement that the flood study (i) determine the 1 in 100 year flood; and (ii) further define the existing flood hazard and potential future flood hazard resulting from mining.

In other words, it is clear that the real object and the true effect of Condition 67 is to require the preparation of the flood study to achieve the expressed objectives of that study. This is the obvious and prime effect of Condition 67 and the conferral upon the Director-General of the various elements of discretion are all ancillary and incidental to that fundamental object.

Upon the basis of the foregoing construction of Condition 67 and combined with my aforesaid factual conclusions by way of inferences drawn from the primary facts, the ultimate and inevitable conclusion is that the Director-General has failed to comply with the functions imposed upon her by Condition 67 in respect of the preparation of the required flood study.

This conclusion is simply unaffected by considerations advanced on behalf of the Respondents to the effect that it was reasonably open to the Director-General to determine not to continue with the flood study beyond the Stage 1 Report received from the Consultant because she considered that to proceed further would involve a misuse of public funds or that it would be otherwise inappropriate because of the modifications made to conditions 13, 18 and 22 of the development consent.

The reasons why the Respondents' submissions on this point are unavailing is that in proceedings such as the present proceedings, it must be a question for the Court to determine whether on the available evidence, there has been a breach of the Act, such as is alleged in the present case in respect of the functions imposed upon the Director-General by Condition 67.

In so concluding, I venture to repeat what I said at pars 68 and 69 in Donnelly v Delta Gold Pty Ltd (2001) 113 LGERA 34 at 53: In my respectful opinion, when proceedings brought in this Court (such as the present proceedings) challenging the validity of administrative actions, are truly and rightly conceived to be claims to restrain or remedy a breach or threatened breach of relevant laws , the adjudication that is required of the Court, must invariably and inevitably be whether or not there has been established a relevant breach or threatened breach of the law, as alleged in the proceedings, and where objective facts are crucially or essentially involved in the alleged breach (such as in the present case) this Court obviously must determine for itself the existence or non-existence of such facts, on the basis of the available evidence. In such circumstances, the conclusion must invariably be that the facts are jurisdictional facts. Indeed, it is the very creation, in the same statute, pursuant to which the impugned administrative action is taken, of specialist jurisdiction vested in the Court to restrain or remedy a "breach" (or threatened breach) of the statute that is, in my opinion, a powerful legislative indication that it is intended that this Court must determine for itself, whether or not there has been a relevant breach of the statute, rather than to leave that question to the decision of the very administrative agency whose action (or inaction) is the basis for the allegation of breach of the statute . There is something fundamentally anomalous and unsatisfying in the view that the question of whether an administrative agency has relevantly breached the law, is to be answered according to the opinion held by that agency (subject albeit to the judicial review of that opinion). D. CONCLUSIONS

For all the foregoing reasons I find that the Director-General has breached Condition 67 of the development consent, that that breach is relevantly a breach of the EP&A Act (s 122(b)(iii)) and that breach is capable of being remedied by a order made pursuant to the EP&A Act, s 124(1).

It is appropriate that I invite the parties to bring in draft short minutes within 7 days to give effect to my conclusions so that final orders may be made in the proceedings.

In the meantime the exhibits are to be returned and the question of costs is reserved.

I HEREBY CERTIFY THAT THE PRECEDING 139 PARAGRAPHS ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT OF THE HONOURABLE JUSTICE N R BIGNOLD.

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.

CITATION : Mandalong Progress Inc. v Minister For Planning And Anor. [2003] NSWLEC 141 APPLICANT: Mandalong Progress Inc. PARTIES : RESPONDENTS: Minister For Planning And Anor. FILE NUMBER(S) : 40510 of 2002 CORAM: Bignold J KEY ISSUES: Development Consent :- alleged breach of condition by Director-General-whether claim is justiciable as a breach of the Act. LEGISLATION CITED: Environmental Planning and Assessment Act 1979, s 122, s 124 Building Owners and Managers Association of Australia v Sydney City Council (1984) 53 LGRA 54; Donnelly v Delta Gold Pty Ltd (2001) 113 LGERA 34; Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 144; F Hannan Pty Ltd v Electricity Commission of NSW No (3) (1985) 66 LGRA 306; Port Stephens Council v Fidler (1997) 94 LGERA 298; CASES CITED: Rao v Canterbury City Council (2000) 112 LGERA 360; Sydney City Council v Building Owners and Managers Association (1985) 2 NSWLR 383; Payne v Mosman Municipal Council (2000) NSWLEC 25; Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; Sahade v Mosman Municipal Council (2000) NSWCA 251; Stubbs v NRMA Insurance Ltd (1997) 42 NSWLR 550 DATES OF HEARING: 17-19/02/03, 25/02/03, 04/03/03, 12/03/03 DATE OF JUDGMENT: 06/18/2003

Although the majority judgment concluded at 392 that "…the best interpretation of s 160 is that, while it imposes a legal duty on the ABA, an act done in breach of its provisions is not invalid" the majority judgment concluded with the following statement at 393: Although an act done in contravention of s 160 is not invalid, it is a breach of the Act and therefore unlawful. Failure to comply with a directory provision may in particular cases be punishable Simpson v Attorney-General (NZ) [1955] NZLR 271 at 281; Montreal Street Railway Co v Normandin [917] AC 170 at 175. That being so, a person with sufficient interest is entitled to sue for a declaration that the ABA has acted in breach of the Act and , in an appropriate case, obtain an injunction restraining that body from taking any further action based on its unlawful action.

(2000) 112 LGERA 360

(2002) 121 LGERA 444

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