Bengalla has proposed the establishment and operation of an open cut coal mine in the Upper Hunter Valley 4kms west of Muswellbrook in New South Wales. The proposal involves the excavation of approximately 147 million tonnes of coal from 8 seams within a lease area of 12.25 square kms over a 21 year period. All coal washing, handling and preparation facilities would be established on site and a rail loop would be constructed for the loading and transportation of coal to the port of Newcastle for export. Also located on site would be a workshop and office facilities.

The estimated development cost of the mine is approximately $370 million. Development of the mine infrastructure and construction of the drag line would take approximately two years. During construction up to 500 jobs would be created. Once operating the mine would require about 300 long term employees. The mine and coal preparation plant would operate 24 hours a day, 7 days a week, with night time operation conducted under extensive lighting. It is estimated that the annual wages paid would be in the vicinity of $25 million. Annual average production would be 5.4 million tonnes of coal which would be expected to generate approximately $300 million per year in gross export revenue resulting in a total in excess of $5 billion in export revenue over the 21 year period of operations.

The mining operations are proposed to commence at the eastern end of the lease area, advancing by a series of strip mining operations running north-south, with mining proceeding westwards. Overburden from the initial strip would be placed on the surface east of the limit of excavation and overburden from subsequent strips would be used to fill the previously mined strip. A new ridge line would be created to the west of Overton Ridge to screen later development from the township of Muswellbrook. Initial revegetation of mined areas would commence within the first two years of mining. The ridge would reach its maximum height by year 4, with the ridge being revegetated with pasture and trees. Overburden would be removed by a combination of a walking drag line, trucks and power shovels. The truck and shovel operation would remove the upper layers of overburden with the drag line working in the void to relocate the lower areas of overburden.

A conveyor would carry coal from the stockpiles in the south west corner of the site to the loading bin on the rail loop. Access would be by a new road linking Denman Road and Wybong Road.

The development proposal involved landscaping and tree planting to ameliorate the visual impacts. Bengalla is in the process of acquiring all properties within the proposed mining lease and has commenced negotiations to purchase on behalf of the Bengalla joint venture those properties designated as suffering impact by the first Commission of Inquiry.

The development was supported by Muswellbrook Shire Council. It was opposed by Rosemount. The primary business of Rosemount Estates Pty Ltd is wine making. It commenced the planting of vines in 1969 and commenced wine making in 1974. In 1977, Rosemount acquired the property "Edinglassie" which then had an area of 300 acres. Subsequently adjoining lands were purchased. Edinglassie now comprises a total area of 800 acres, of which 120 acres have been planted to vines. The Edinglassie vineyards are known as the "Homestead" vineyard and "Whites Creek" vineyard. In 1978 Rosemount acquired land known as the "Roxburgh" vineyard which now comprises 1100 acres. In 1986, Rosemount acquired the property "Balmoral" comprising 208 acres. In 1989, at the insistence of Electricity Commission of New South Wales and under some threat of resumption, Edinglassie was sold to the Electricity Commission but immediately leased back to Rosemount for a term of 25 years. Under the terms of that lease if the property is sold, or further leased, it must first be offered for sale or lease to Rosemount.

The Whites Creek and Homestead vineyards are less than 1km from the proposed mine site. The Roxburgh vineyard is within 4 kms of the mine site. Edinglassie and Balmoral are important historic houses in the Hunter region.

The Muswellbrook Local Environmental Plan (Muswellbrook LEP) was made on 2 August 1985. It was based upon the Muswellbrook Environmental Study ("the Study") prepared in April 1981. After the preparation of the Study it was placed on public exhibition, as was the draft LEP prior to it being proclaimed in August 1985. At the time of the Study in 1981, the proposed Bengalla mining area had been included in an Authorisation to Prospect No.1-2 ("A102") in September 1977. When the Muswellbrook LEP was made in 1985, there was created a zone 7(L1) known as the Environment Protection General (Alluvial Areas) Zone. That zone did not include the proposed Bengalla mining site which was zoned Rural 1(a) under which zoning mining was permitted with consent.

The Study noted that the landscape of the Muswellbrook Shire created a scenic resource. The areas of greatest visual interest and attraction were said to occur "along the Hunter and Goulburn valleys from Jerry's Plains to Sandy Hollow and beyond where contrast between the hills of the Dividing Range in the Wollembi National Park, the green alluvial plain, grazing country and vineyards create perhaps the Hunter Valley's finest scenery". This was identified as "the main tourist area of the shire and an important component of the Region's tourist resources".

A stated aim of the Study was, where possible, "to protect agricultural land and scenic lands from incompatible development". To achieve that aim, it was recommended that provisions be incorporated into a Local Environmental Plan prohibiting open cut mining within Environment Protection Zones, including one in and around the alluvial plain of the Hunter River. The Study identified the Environmental Protection Strategies, including a prohibition on open cut mining, and restricted development within a zone on either side of the Hunter River and on the Muswellbrook to Denman Road. The Study emphasised landscape, views and heritage aspects. In response to the study the Muswellbrook LEP when prepared contained, relevantly, clauses 2, 11 and 17, and Schedule 1, and created the Environment Protection Zone No.7 (L1) previously referred to.

The aims and objectives of the Muswellbrook LEP were expressed in clause 2 as follows:

(a) to provide the council with the means of managing the urban growth of Muswellbrook and Denman resulting from major resource based development projects;

(b) to ensure that growth and development in the Shire of Muswellbrook occurs in a way which preserves existing environmental qualities and minimises adverse environmental impacts;

(c) to retain options for long term land use and transport structural change;

(d) to protect the agricultural production potential of rural land in the Shire of Muswellbrook; and

(e) to ensure that existing and future residents enjoy a range of attractive living environments and have access to the widest possible range of services and amenities.

(2) The particular objectives, policies and strategies adopted by this plan to achieve the aims referred to in subclause (1) are set out in the Table to clause 8 and in Schedule 1."[1]

By definition coal, being a mineral, was not included in the definition of "extractive material". Clause 8 found in Part II headed "General Restrictions on Development of Land" provided for zone No.7 (L1). Clause 8(2) specified the objectives for the various zones. By clause 8(3) there were general provisions regarding the four categories of development namely:

(a) development (which) may be carried out without development consent ;

(i) only with development consent but where that consent cannot be refused; and

(ii) subject to such conditions as may be imposed under section 91 of the Act;

(c) development (which) may be carried out with development consent;

"Except as otherwise provided by this plan, the council shall not grant consent to the carrying out of development on land to which this plan applies unless the council is of the opinion that the carrying out of the development is consistent with the objectives of the zone within which the development is proposed to be carried out."

In the table to clause 8 the objectives of zone No.7 (L1) were specified as:

"(a) to ensure that prime alluvial and irrigable land is preserved for agricultural use;

(b) to ensure that any development of a non agricultural nature is located and designed in such a way that the reduction of productive land is minimised, flooding risks are minimised, and surface or subterranean systems are not adversely affected;

(c) to form part of the urban buffer for the towns of Muswellbrook and Denman and, to this extent, to meet the objectives specified in respect of land within Zone No. 7 (L2);

(d) to enable the future construction of a railway, and to ensure that development does not foreclose this option;

(e) to enable development that is associated with ancillary to or supportive of the primary agricultural uses of the land."

Certain uses were noted in Items 2, 3 and 4 as being permissible without development consent, subject to conditions and only with development consent. Prohibited was:

"Any purpose other than a purpose included in Item 2, 3 or 4 of the matter relating to this zone"

The urban buffer zone was zone No.7 (L2). With development consent, in the buffer zone there could be carried out:

"Any purpose (other than mining referred to in clause 18(2)) which in the opinion of the council is unlikely to have any significant environmental impact on land within a residential, special uses or open space zone in the town of Muswellbrook or on land within this zone, and which is itself unlikely to be subject to any significant environmental impact from mining or other major development outside this zone; ... mining referred to in clause 18(2)"

Part III of the Muswellbrook LEP contained special provisions. Division 3 of Part III related to "Development in Rural and Environment Protection Zones". Certain general principles were specified in clause 11(a). Those provisions were as follows:

(i) whether it is of a type compatible with the maintenance and enhancement, as far as is practicable, of the existing rural and scenic character of the Shire of Muswellbrook;

(ii) whether it will materially reduce the agricultural production potential of the land or of adjoining land;

(iii) its affect on existing or likely future mining proposals and the affect of those proposals on the proposed development;

(iv) whether it will create or worsen soil erosion potential;

(v) whether adequate utility services and community facilities will be available to the land and its future occupants or the land will be capable of accommodating onsite disposal of domestic waste and the provision of a domestic water supply, including a fire fighting capacity;

(vi) whether it will create demands for unreasonable or uneconomic provision or extension of services by the council;

(vii) whether it will generate significant additional traffic or create or increase a condition of ribbon development on any road, relative to the capacity and safety of the road;

(viii) whether the creation of vehicular accesses to main or arterial roads is minimised and, where no alternative access is available, whether the location and treatment of any access will minimise potential traffic hazards;

(ix) whether the development incorporates adequate drainage measures, including sediment and waste control, and prevention of the uncontrolled flow of water across the land or adjoining land; and

(x) whether, on the basis of information available to the council, adequate assessment has been made of the likely impact of the development on identified items of Aboriginal heritage value, and whether reasonable steps have been taken to determine whether any other aboriginal relics are likely to be affected by the development."[2]

In addition to the general principles said to be applicable to the zones referred to in clause 11, there were "special requirements" applicable to zone No.7 (L1). Clause 17(2) provided:

"17(2) Subject to Clauses 34(1)(b) and 35, the council may consent to the carrying out of development on land within Zone No.7(L1) for-

(a) the purposes of an extractive industry or for underground mining (other than surface works associated therewith), where it is satisfied that such development will not-

(i) destroy or impair the agricultural production potential of the land or, in the case of underground, unreasonably restrict or otherwise affect any other development on the surface;

(ii) detrimentally affect in any way the quantity and quality of water in either subterranean or surface water systems; or

(iii) in the case of an extractive industry, visually intrude into its surroundings, except by way of suitable screening; or

(b) a purpose permissible in an adjoining rural or environmental protection zone, where it is satisfied that the land is not physically part of the alluvial plain and the development will not have the affects referred to in paragraph (a)(i), (ii) and (iii)."[3]

Clause 18 related to special requirements in the buffer zone being zone No.7(L2). Clause 18(2) provided:

"(2) Subject to subclause (3) and (4), the council may consent to they (sic) carrying out of development on land within Zone No.7(L2) for-

(a) the purposes of underground or open cut mining pursuant to leases or authorisations within the meaning of the Coal Mining Act 1973, which at the appointed day were held in favour of the Muswellbrook Coal Company; or

(b) the purposes of underground mining pursuant to leases or authorisations within the meaning of the Coal Mining Act 1973, which at the appointed day were held in favour of Mount Sugarloaf Collieries."[4]

Schedule 1, referred to in clause 2(2) of the Muswellbrook LEP specified "the particular objectives of this plan" as being:

(a) URBAN BUFFER- to ensure that the towns of Muswellbrook and Denman are protected from any adverse impacts of future mining.

(b) COMMERCE- to contribute to the continued economic growth of business in the Shire.

(c) AGRICULTURE- to support and maintain the continued economic production of agriculture in rural areas.

(d) TRANSPORT- to maintain and provide for the improvement of the arterial road system and railway network to provide an efficient traffic network for the movement of goods and people.

(e) TOURISM- to encourage tourism as a major contributor to the economy of the Shire.

(f) INDUSTRY- to increase employment opportunities.

(g) PUBLIC FACILITIES AND SERVICES- to more fully utilise existing facilities and services and to support the economic and efficient provision of new public facilities and services by way of equitable cost sharing arrangements.

(h) ADMINISTRATION- to increase the flexibility of zoning provisions and widen the discretion available to the council.

(i) COMMUNITY FACILITIES- to aid the provision of community services and facilities.

(j) SCENIC PROTECTION- to promote a high standard of visual amenity in the Shire of Muswellbrook by way of controls related to conservation of key scenic elements.

(k) CONSERVATION- to recognise the value of items of Aboriginal, European, cultural and natural environmental heritage and to protect them from degradation by unnecessary demolition or unsympathetic development.

(l) RESIDENTIAL- to ensure that the range of densities and developments permissible in residential areas is compatible with the residential environment and that the various housing needs of the community are met.

(m) LAND USE- to ensure that land uses are compatible with their environment and adjoining uses, and that they function in a safe and economical manner in relation to services, traffic, flooding or other similar hazards."

On 4 June 1987 the then Minister for Planning and Environment, Mr Carr, issued a direction pursuant to s.101 of the Environmental Planning and Assessment Act 1979 (the Act) in the following terms:

(2) ... [P]ursuant to Section 101 of the Act direct that the consent authorities listed in Schedule 1 refer to the Secretary of the Department of Environment and Planning for determination by me, all development applications for new coal mines that require new coal leases as provided for under Section 41 of the Coal Mining Act 1973."

Muswellbrook Shire Council was a council affected by that direction. It was thus required to refer any development applications for a new coal mine requiring a new coal lease to the Minister. Where a Minister has, by direction pursuant to s.101(1) called in a development application or class or description of development application, the Minister has conferred upon him by s.101(8) a power to determine the development application by granting consent to that application either conditionally or subject such conditions as the Minister thinks fit, or by refusing consent to that application, "and the provisions of sections 90 and (subject to section 100A) 91 ... apply to and in respect of the determination by the Minister under this section of a development application in the same way as they apply to and in respect of the determination by the consent authority under those sections of such an application".

The power given to a Minister to issue a direction is stated in s.101 to be :

"Where the Minister is of the opinion that it is expedient in the public interest to do so, having regard to matters which in the opinion of the Minister are of significance for state or regional environmental planning"

Development applications which may be called in may be:

"A particular development application or a development application of a class or description of development applications"

Pursuant to s.101(2), a direction under s.101(1) may be given in respect of a development application notwithstanding that the development application is an application for consent to carry out prohibited development.

In 1990 the New South Wales Government, following invited tenders, awarded the Bengalla Coal Development Area to the Bengalla Joint Venture, being a consortium of Australian and Asian coal producers and consumers. Subsequently in February 1991, Authorisation to Prospect No. 438 ("A438") was issued to Costain Resources Ltd (now called Peabody Resources Ltd) on behalf of the Bengalla Joint Venture. A438 has an area of 19.5 sq kms and the proposed mining lease area for which development consent was sought lies within the eastern two-thirds of A438. The site and surrounding area consists of cleared lands used for agricultural purposes with some rural residential development. The alluvial flats are used for agriculture, including cropping and dairying. There are significant coal resources in the area, including the Muswellbrook No. 2 colliery which lies 6 to 8 kms east of the proposed development, and the Bayswater No. 2 open cut mine, 8 kms south east of the proposed development. Dartbrook underground mine is 8 kms north of the site, and development consent was granted in September 1994 for the Bayswater No. 3 open cut coal mine some 6 to 8 kms south of the site. Adjoining to the north is an exploration known as Mount Pleasant, and to the south one known as Mount Arthur North.

The Bengalla Joint Venture commenced exploration drilling in A438 in May 1991. In March 1992 Envirosciences Pty Ltd prepared "Muswellbrook Shire Rural Land Strategy" for the Muswellbrook Council as part of a review of the Muswellbrook LEP. Envirosciences Pty Ltd recommended expansion of the zone No.7(L1) Environment Protection General (Alluvial Areas) Zone. On 19 April 1993 the Muswellbrook LEP was amended by amendment No.24. The effect of that amendment was to extend the zone No.7(L1) to include part of the area of the proposed Bengalla mining site.

In November 1993, the Bengalla Environmental Impact Statement (Bengalla EIS) was completed by Envirosciences Pty Ltd and Bengalla applied for a mining lease for part of A438. On 26 November 1993, Bengalla lodged a development application, No.211/93 (the Bengalla DA) and the Bengalla EIS with Muswellbrook Council. In accordance with s.101(5) of the Act, Rosemount and others requested the Minister to convene a Commission of Inquiry.

On 7 January 1994 the Minister directed the holding of an inquiry by a Commission of Inquiry pursuant to s.101(6) of the Act, and in accordance with s.119 of the Act. The first Commission of Inquiry was conducted by Mr Cleland between April and June of 1994. Submissions were made to that inquiry by Rosemount, Muswellbrook Council, various government departments, as well as Bengalla and many residents of the Muswellbrook area. In August 1994 Mr Cleland provided his first report to the Minister. The Commissioner recommended that the Minister grant consent to the proposed Bengalla coal project subject to conditions to control and mitigate potential environmental effects.

The inquiry was an inquiry pursuant to s.119(1)(b) of the Act with respect to "the environmental aspects of the Bengalla coal project for the Mining of Coal from Authorisation No.438 situated near Muswellbrook."

It was in contest before Mr Cleland whether the subject development was a development permissible with consent, or whether it was a prohibited development as being unable to satisfy the requirements of clause 17(2) of the Muswellbrook LEP.

"There is general agreement among parties that Clause 17(2)(b) of the Muswellbrook Local Environment Plan 1985 allows consideration of the project on land zoned 7(L1) provided the land is not physically part of the alluvial plain and the proposal meets the three criteria set out in Clause 17(2)(a) of the LEP

Rosemount Estates and Dalama Stud argue the development is prohibited as it cannot comply with the requirements. However, the Minister can approve prohibited development according to section 100A of the Environmental Planning and Assessment Act 1979.

Having thoroughly assessed the submissions to the inquiry, I do not consider the relevant objectives of the LEP will be compromised by the development. I am satisfied the evidence establishes the land to be used for mining and the industrial area is not part of the alluvial plain. I am also satisfied that the proposal meets the three criteria set out in Clause 17(2)(a) of Muswellbrook LEP. It will not destroy or impair the agricultural production potential of the land, or detrimentally affect in any way the quantity and quality of water in either subterranean or surface water systems, or visually intrude into its surroundings except by way of suitable screening. I consider the Bengalla Coal Project is permissible with consent."[5]

Accordingly Mr Cleland recommended that the Minister:

"... [G]rant consent to the Bengalla Coal Project subject to the conditions of consent I recommend to control and mitigate potential environmental impact."[6]

One aspect addressed in the first report was visual impact. The report noted that there would be bunding around much of the mine site and the development would be screened by tree screening around the site and on the bunds, and along the Denman Road. Nonetheless, from various points the mine site would be visible at various times during its 21 year operation. In respect of various properties, including Edinglassie and Balmoral, it was proposed that there be tree screening on the properties to reduce or eliminate that visual impact. Mr Cleland was satisfied that :

"... [A]lthough the development will be visible from Edinglassie and Dalama Stud, the visual impact from these properties will be ameliorated by the Company's proposals"[7]

which included tree screening on those properties. In consequence Mr Cleland recommended, as conditions of consent numbered 4 and 5, conditions addressing landscaping and visual amenity. The terms of his recommendation are not materially different to the conditions for consent ultimately imposed to which I will later refer. The conditions proposed were supported by the Muswellbrook Council.

Subsequent to the delivery of the report to the Minister by Mr Cleland in August 1994, on 25 August Rosemount commenced proceedings 40144 of 1994 in the Land and Environment Court against both the Commissioner and the Minister. Rosemount claimed that the report, its findings and recommendations were not a report for the purposes of s.119 and 101 of the Act. The bases for that contention were that the Commissioner had applied the wrong test in determining whether, in accordance with clause 17(2)(b) of the Muswellbrook LEP, the development was permissible with consent, that findings of fact made by Mr Cleland were without an evidentiary base, that his conclusion that the development was permissible with consent was manifestly unreasonable, that Rosemount had been denied procedural fairness, that the Commissioner had failed to give due consideration to relevant matters, and that his recommendation to the Minister that consent be granted was manifestly unreasonable.

Rosemount failed on all grounds save one. Waddell AJ held that the Commissioner's finding that the development was permissible with consent was manifestly unreasonable. That finding was based upon Waddell AJ's view that:

"The material before the Commissioner overwhelmingly leads to the conclusion that the development will, despite screening on the site, intrude into large parts of the surrounding countryside in that it will be visible to people going about their lives there and will be an unwelcome addition to the landscape. The conclusion that it would not do so is manifestly unreasonable ."[8]

The consequence of that finding was that clause 17(2)(b) of the Muswellbrook LEP was not satisfied and accordingly that mining, although permissible in adjoining land zoned rural 1(a), was not permissible in zone 7(L1). Accordingly Waddell AJ declared that the recommendation of the Commissioner was not a recommendation for the purposes of s.119 and 101 of the Act. The Commissioner was directed to exercise his functions required of him by the Minister's reference dated 7 January 1994 according to law.

In the result the Commissioner reopened his inquiry on 19 April 1995. As Commissioner Cleland noted:

"Flowing from Justice Waddell's judgment, Counsel appearing for the reconvened Inquiry agree the proposed development is prohibited development. A legal issue canvassed by the Counsel for Rosemount was whether the Minister has the power to determine the subject development application as prohibited development arising from the procedures adopted for appointing the Commission of Inquiry. Counsel have diverse opinion on this matter. This is clearly not a matter for a Commissioner to determine and it would be prudent for the Minister to seek legal advice. Further, Counsel agree that having regard to the provision of section 119 of the Environmental Planning and Assessment Act 1979 and the Minister's Instrument commissioning the Inquiry it is not the Commissioner's role to determine whether the development is permissible or prohibited, nor for the Commissioner to recommend to the Minister that approval be either granted or refused, but to report to the Minister findings and recommendations concerning the "environmental aspects" of the proposed development.

The issue which remains for me to further address is the potential visual impact of the mine and infrastructure, a matter which I canvassed in detail in my August 1994 report. In that report I found the evidence indicated the extensive bunding and screening proposed by the Company would significantly ameliorate visual impact from specific viewing locations, excepting three properties to the west, other properties to be purchased should the mine proceed, and Wybong Road, and that the proposed development would not visually intrude into its surroundings. As the mine would be clearly visible from the three properties from the west I recommended their purchase as a condition of consent. However, Justice Waddell found the proposed development would visually intrude into its surroundings in the terms of clause 17(2)(a)(iii) of Muswellbrook LEP No.1 and I am now bound to similarly conclude. His Honour's judgment notwithstanding, the evidence is that the extent and degree of visual intrusion would vary with the viewing location."[9]

"However, notwithstanding the visual impact of the proposed development, visual impact is but one "environmental aspect" into which I am required to inquire. Subject to the stringent conditions I recommend I am not persuaded the potential for visual impact should be given determining weight.

This report amends my report of August 1994, as required by the Court Order, and is to be considered with that report. I have considered all submissions before the earlier inquiry and the reconvened inquiry, and the judgment and Orders of the Land and Environment Court. I canvassed the relevant and significant environmental aspects of the proposed development in my earlier report. Excepting my findings in relation to "Permissibility" and "Visual" and my major recommendation, which the Court has now determined, all my other findings and recommendations remain unaltered.

On balance, and in relation to the environmental aspects, I find the potential benefits of the Bengalla Coal Project outweigh the potentially adverse impacts notwithstanding that it would visually intrude into parts of its surroundings.

I recommend that if you are minded to grant consent to the proposal that you attach to that consent the conditions of consent I included in my August 1994 report to control and mitigate the potential environmental impact."[10]

On the 2nd and 5th May 1995, prior to the issue of the second Cleland report, Rosemount wrote to the Minister seeking a meeting to discuss the conflict in the Hunter Valley between mining and agriculture in general, and between Rosemount and Bengalla in particular. The report issued on 15 May 1995. On 18 May 1995 Bengalla wrote to the Minister supporting the report and requesting an urgent meeting. It requested that the Minister "act expeditiously in finalising your consideration and determination (of) our application to allow the project to proceed". On 22 May 1995 Muswellbrook Shire Council conveyed to the Minister its decision "to support the proposed mine subject to strict conditions. The council wrote:

"I hope you will be in a position to give early approval to this development application."

This was said to be "for many reasons, not the least being to overcome the terrible uncertainty by landowners whose properties are proposed to be acquired by Bengalla Mining Company Pty Ltd for the proposed site."

On 18 May 1995, both the Managing Director and a Director of Rosemount, and the company's solicitor Mr Hallett, met with the Minister and again stated Rosemount's opposition to the mine. The Minister indicated his awareness of Rosemount's attitude. It seems at that meeting that Rosemount expressed the view that it "was resolute in its determination to ensure that existing planning requirements would be strictly adhered to."

On 25 May 1995 Rosemount's solicitor Mr Hallett wrote a 10 page letter to the Minister formally stating Rosemount's position and concerns. It argued the Minister had no power to approve the development application, arguing that no inquiry had been directed by the Minister pursuant to ss.100A and 101 of the Act upon the basis that the development was a prohibited development. Alternatively it contended that unless and until an inquiry was directed to be held in accordance with ss. 101(6) and 119(2) of the Act there was no power to determine the development application. As a further alternative it contended that the reports of the Commissioner were not reports for the purposes of ss.119 and 101 of the Act. In addition extensive submissions were put to the Minister that, on a merits basis, the development application ought not to be approved. The letter concluded that:

"If you were to grant development consent, such a decision would be invalid by reason of being either outside the power or an invalid exercise of power."

It is accurate to say that, after receipt of that letter, if not before, the Minister was fully aware of the position, approach, attitude and determination of Rosemount to oppose and challenge any consent which he might grant. As Stein J held:

"Rosemount had said all it wanted about the application. In relation to the development application, Rosemount had been afforded a hearing."[11]

On 6 June 1995 Ms Kibble the Director of the Department of Urban Affairs and Planning, and Mr Haddad, the assistant Director, provided a report to the Minister on the Bengalla development application. After noting that the development application was subject to a direction under s.101 of the Act, and that the Minister would determine the application, the report stated:

"....[T]he Minister must now determine whether or not the proposal complies with the relevant criteria of the Muswellbrook LEP 1985 in regard to permissibility. The Minister can also consider determining the application as a prohibited development under sections 100A and 101 of the Act.

Given the contentious and litigious history of the application, the Minister would be well advised to adopt a cautious approach to his consideration of the application. In summary, there are three options available for the Minister in his determination of this application:

(A) the Minister may proceed to determine the application acknowledging that it is prohibited development. As the DA and the EIS were exhibited as if the development was permissible with consent, failure to comply with public notification procedures for prohibited development may make an consent granted by the Minister vulnerable to challenge.

(B) the Minister may form an opinion that the proposed development is prohibited and ensure that the statutory requirements for notification contained in the Act are complied with. It is possible that the Minister may call a new Commission of Inquiry if one is requested by the Company, Muswellbrook Council or a party who made a submission in relation to the DA under section 87 of the Act. Such an Inquiry would be advertised as an Inquiry into the environmental aspects of a prohibited development. This option is the soundest approach consistent with legal advice obtained by the Department.

(C) the Minister may determine the application as permissible development. A challenge to this action would be likely to succeed. It is the Department's opinion that the Minister can not be reasonably satisfied that the requirements relating to visual intrusion can be met by the proposal.

In conclusion, and as set out in the report, the Department recommends that the appropriate course of action is for the Minister to adopt Option B."[12]

The recommendations accompanying the report were as follows:

"Mining is permissible with consent on the land provided that the Minister is satisfied that the proposed development will not have certain effects. The most problematic is that the development will not visually intrude into its surroundings, except by way of suitable screening.

The Commission of Inquiry has recommended , and the Department of Urban Affairs and Planning agrees, that the environmental impacts can be managed subject to conditions. The issue of permissibility is one for the Minister to determine.

The Company's legal submission to the Inquiry stated that the Minister can still determine the development as prohibited development, notwithstanding that the application has not been publicly notified or advertised as prohibited development. Whilst respectable, this action may not stand a legal challenge.

Given the contentious and litigious history of this matter, the Minister would be well advised to adopt a cautious approach to his consideration of this development application based on the information set out in this submission and taking into account the court decision.

It is the Department's opinion that the Minister can not be reasonably satisfied that the requirements relating to visual intrusion can be met by this proposed development given the court decision and material contained in the Commissioner's report. Accordingly, the Department considers that the appropriate course of action is for the Minister to form an opinion that the proposed development is prohibited, and ensure that the statutory requirements for notification contained in the Act are complied with.

Option B outlines this approach and provides for the Minister to call a fresh Commission of Inquiry if and when an Inquiry is requested in accordance with the Act. This action would provide an opportunity for any additional information relating to the assessment of the proposed development as a prohibited development to be submitted. A further Inquiry, if so requested, would ensure that public participation in the significant decision of determining a development application for prohibited development is maximised.

(i) Determine that the proposed development by Bengalla Mining Company Pty Limited of an open cut mine at Muswellbrook is prohibited development within the definition in s.100A of the Environmental Planning and Assessment Act, 1979;

(ii) Sign the Direction to Muswellbrook Shire Council under s.101 of the Act tagged as "C" hereunder, having formed the opinion that it is expedient in the public interest to do so, this development being a matter of significance for regional environmental planning; and

(iii) Agree to ensure that the statutory notification contained in the Act are complied with before the Minister determines the DA."[13]

On 27 June 1995 the Minister approved the recommendations and signed a direction pursuant to s.101 stating that the Minister:

"Considering it expedient in the public interest to do so having regard to matters of significance for regional environmental planning and being satisfied that this development is prohibited development as defined in Section 100A of the Act, pursuant to Section 101 of the Act direct that Muswellbrook Council refer to the Secretary of the Department of Urban Affairs and Planning for determination by me development application No.211/93 which was lodged with Muswellbrook Council in November 1993 by Bengalla Mining Company Pty Ltd for the mining of coal from Authorisation No.438."

Such direction, although signed, never issued. Had it been issued, the advice to the Minister was that a new Commission of Inquiry would have been necessary.

The Director on 13 July 1995 expressed concern to her deputy Mr Haddad "about the effect of clauses such as in the Muswellbrook LEP and general clauses which may require a double type of assessment on major developments throughout the State."[14] She indicated an intention to address the matter by a State Policy. On 14 July 1995 in a memorandum to the Minister the problem she then saw and the solution she proposed to that problem was addressed. In view of its importance that memorandum is set forth in full.

SUBJECT: Draft State Environmental Planning Policy to Clarify the Planning Controls Applying to the Permissibility of Mining

Development for the purposes of mining is a very important industry in New South Wales. It is a significant generator of revenue for the State of New South Wales and is a major employer. It is therefore essential that environmental planning instruments which seek to control mining contain clear provisions as to whether or not such development is permissible.

Mining is one of the most significant export earning industries in New South Wales and a major contributor to regional development in the State, for instance, within the Hunter Valley it is a major contributor to economic development and employment generation.

For the purposes of certainty and clarity in the planning system, it is essential that environmental planning instruments contain clear provisions as to whether or not mining is permissible. It is unsatisfactory for the developer, the consent authority and any other interested parties to have planning provisions applying which make the issues of the permissibility of a mine dependent on an assessment of a range of environmental criteria.

Before an environmental planning instrument is prepared, there are provisions in the Environmental Planning and Assessment Act to enable decisions to be taken as to the suitability of a particular zone and the range of land uses which are permitted in that zone. This does not remove the need for environmental impact assessment in respect of particular development in the zone, but places an onus on the plan maker to form a clear opinion as to whether the development should be permissible,

Whilst it is acknowledged that there is a role for flexible planning and objective based planning, it is inappropriate for development for the purposes of mines to be subject to such uncertainty and risk. Mining, by its nature, is large scale development which often requires complex financing arrangements, including commitments to capital investments and long term future contracts, to be in place before the developer can commit to undertaking the development. These arrangements demand clear and certain zoning controls.

It has become clear that provisions have been introduced into environmental planning instruments which make the permissibility of mining or mines dependent upon the development satisfying various criteria which can be characterised as criteria involving environmental assessment. This is totally unsatisfactory as it creates a situation where the permissibility of this type of development cannot be established until extensive and, often expensive, environmental assessment has been undertaken to determine whether or not the proposed development complies with the planning controls. An example of this is the DA for the proposed Bengalla Mine near Muswellbrook. Similar issues may arise in respect to the proposed Mt Pleasant mine which is adjacent to the Bengalla site.

Uncertainty as to the permissibility of this type of development increases the potential for litigation which can be both time consuming and costly. This can have adverse implications not only for the developer but for neighbouring property owners and the local community, which may be affected by the proposed development.

It is a matter of significance for environmental planning for the State that there be certainty and transparency concerning planning controls which determine the permissibility of mining.

The overrider of provisions of the kind in question should be considered. The matters of environmental assessment and judgement which such provisions treat as determinants of permissibility should desirably rather be matters relevant to permission or not, and if permission (is granted) appropriate conditions, in the consent authority's consideration under s90 of the EP & A Act. If this were done, an appropriate approach to the permission of mining based on the particular merits of an application would be better served. It is not considered appropriate that the only alternative in the case of such provisions should remain consideration by the Minister of the application under s100A.

It is therefore proposed that a State Environmental Planning Policy should be made to apply to the State which will provide that where mining is capable of being permitted with consent, (e.g. in a zoning table or because a provision in an EPI makes it permissible because it is permissible in an adjoining zone), then no other criteria can override its permissibility. Any other criteria should be matters to be considered by the consent authority at the time of determining whether consent for the particular development should be granted or not, and if so, on what conditions under s90 of the EP & A Act.

The making of the Policy can therefore be justified on the basis that it is of significance for environmental planning for the State.

I consider it appropriate to consult with the Chief Executive Officers of the Department of Mineral resources and The Department of State Development to seek their opinion concerning the proposal."[15]

As contemplated, letters of consultation were forwarded to the directors of the Department of State Development and the Department of Mineral Resources. As these letters are said to have misstated the proposal, and thus consultation in fact did not occur, the relevant provisions of the letters are set forth.

"It has come to my attention that provisions have been introduced into environmental planning instruments which make the question of permissibility (as opposed to the question of whether to permit that which is permissible) of mining or mines dependent upon the development satisfying various criteria (including requirements that development be consistent with zone objectives). This may lead to difficulties as it creates a situation where the permissibility of this type of development cannot be established until extensive environmental assessment has been undertaken to determine whether or not the proposed development complies with the relevant criteria.

It is therefore proposed that in respect of this matter a State Environmental Planning Policy should be made to apply to the State. The intention is for the Policy to provide that where mining is capable of being permitted with consent (e.g. in a zoning table or because a provision in an environmental planning instrument makes it permissible because it is permissible in an adjoining zone) no other criteria or provisions in the environmental planning instrument can render it prohibited within the relevant zone.

As you will appreciate, it is the Government's aim to facilitate the appropriate utilisation of natural resources throughout the State. Consequently, I am seeking your advice on whether you support the proposal for the Policy and any other comments you may wish to make on the matter. I would be pleased to receive your response by the close of business on 24 July 1995."[16]

Favourable responses were received from each department.

On 24 July 1995, Rosemount's solicitors wrote to the Minister again restating their view of his absence of power to approve the Bengalla development and threatening litigation should he do so.

On 28 July 1995 the Director submitted to the Minister a draft State Environment Planning Policy No.45 and an accompanying memorandum.

In light of the challenge to this SEPP 45 significant portions of the memorandum are set forth:

Mining is a very important industry in New South Wales. It is one of the most significant export earning industries in New South Wales and is a major contributor to regional development in the State. It is a major contributor to economic development and employment generation.

The overall objective of the proposed State Environmental Planning No 45 - Permissibility of Mining is to promote the social and economic development of the State by ensuring that clear planning controls apply to determine the permissibility of mining. The SEPP will be made under the Environmental Planning and Assessment Act, 1979 ("the Act").

At present, there are environmental planning instruments applying in certain parts of the State containing provisions which require a consent authority to satisfy itself that mining meets or satisfies various provisions, including zoning objectives, to determine whether or not mining is permitted in that zone. Mining must be found to be permitted in accordance with these provisions before any development consent can be granted. The consent authority is then required to consider the heads of consideration in section 90 of the Act before determining whether or not to consent should be granted.

This introduces an unacceptable level of uncertainty concerning whether or not a mine is permissible in a zone. It is a matter of significance for environmental planning for the State that there be certainty and transparency concerning planning controls which determine the permissibility of mines. The lack of clear controls creates uncertainty and increases the potential for litigation which can be time consuming, costly and lead to delays and uncertainties in the decision making process for important mining projects. There are also potential adverse implications for not only the developer, but for neighbouring property owners and the local community, who may be affected by the proposed mine.

The SEPP will ensure that where planning controls allow mining to be carried out in a zone, subject to meeting provisions in an environmental planning instrument, including whether the development is permissible in an adjoining zone, these provisions are of no effect and mining becomes permissible in that zone. These provisions will also have no effect and will not be required to be satisfied when the consent authority determines whether or not to grant consent.

However, individual projects will still need to be considered on their merits having regard to the matters for consideration in section 90 of the Act. There will continue to be an opportunity for public participation in the decision making process.

I believe that the making of the SEPP is justified because it deals with matters of significance for environmental planning for the State, as described below...

Environmental planning instruments applying within some local government areas in New South Wales contain provisions which need to be satisfied before a mining project can be dealt with as development which is permitted under the relevant planning instruments. The provisions may make the permissibility of a particular proposed development dependent on the consent authority being satisfied about various provisions, such as matters incorporated in zone objectives, environmental criteria or other matters in the environmental planning instruments.

Consequently, where such provisions apply, a consent authority is required to undertake two processes in order to determine whether or not development consent can be granted. It first must determine whether the proposed development is permissible and then it is required to comply with the requirements of section 90 of the Act to determine whether or not consent can be granted for the development.

Such an approach is unacceptable for mining, which is so important to the social and economic development of the State. This may lead to delays and uncertainties in the decision making process for important mining projects, with additional cost being incurred by the parties concerned, without adding value to the merit assessment of the proposed development.

An example of these types of provisions is in Muswellbrook Local Environmental Plan (LEP) 1985. The provisions includes matters in zone objectives and certain special requirements, such as the consideration of the impacts of the development on: the productive potential of land for agriculture; surface and subterranean water systems; flooding or flood characteristics; water quality; the potential use of the land as an urban buffer; the impact of the development on other forms of development; and the visual impact on the neighbourhood.

The Muswellbrook LEP 1985 applies to land where the proposed Bengalla Open-Cut mine near Muswellbrook would be located, if approved. Similar issues may arise with respect to the proposed Mount Pleasant mine, which is adjacent to the Bengalla site.

LEPs for the Wyong and Newcastle areas are also examples where the permissibility of mining may be dependent on the consent authority forming the opinion that proposed mining would be consistent with zone objectives.

I am concerned that Councils may seek to include similar provisions dealing with permissibility in the future.

Mining provides substantial social and economic benefits to the State, both directly and indirectly. Mining, whether it is for coal or other minerals, is a major employer and generator of revenue for the State. Also, mining is one of the main export-earning industries in NSW and it is a significant contributor to regional development in the State. The economic and social significance of mining was stressed in the responses to my consultation with other Chief Executive Officers on the proposed SEPP, as summarised below.

The use of the land for appropriate mining projects helps to achieve the objects of the Act. These objects of the Act include encouraging "the proper management, development and conservation of natural and man-made resources, including ... minerals ... for the purpose of promoting the social and economic welfare of the community ..." and "the promotion and co-ordination of the orderly and economic development and use of the land."

In view of the importance of mining for the State, and having regard to the results of my consultation with other Chief Executive Officers, I consider that for the purposes of section 37(1) of the Act, the issue relating to planning controls applying to mining described in this submission is a matter of significance for environmental planning for the State. It is therefore appropriate for me to prepare a draft State Environmental Planning Policy on the matter and to submit it to the Minister.

As indicated above, I consulted with the Chief Executive Officers of the Department of Mineral Resources and the Department of State Development to seek their opinions concerning a proposal to prepare a State Environmental Planning Policy relating to planning controls on mining. Their responses are summarised below.

It is not considered necessary to exhibit or otherwise publicise the draft SEPP prior to it being made. The SEPP is directed towards resolving a very specific planning problem. It is believed that the response required to address this problem and its implications are well understood by Government.

In this context, it is relevant to note that the role of the SEPP is limited to ensuring that a proposed mining project can be considered and assessed on its merits when the proposed development is considered under sections 90 and 91 by the consent authority, rather than having also to be assessed initially against provisions to identify whether or not it is permitted. The substantial mining projects are normally designated development. Persons with concerns or interests about any particular project will still be able to participate by making submissions and having their matters considered in the decision making process.

The consent authority will be required, as for any other development application, to take into account the matters for consideration in section 90 of the Act before determining the development application. The making of the SEPP will not remove the rights of the community to participate in the decision making process but it will allow project proposals to be considered on their merits. The Minister for Urban Affairs and Planning is usually the authority who has the responsibility for determining development applications for coal mining projects and the larger developments involving other forms of mining."[17]

On 28 July 1995 the Minister approved the memorandum and signed an explanatory note to the Governor. On 2 August 1995 the Governor made SEPP 45 pursuant to s.39(4) of the Act, the document being gazetted on 4 August 1995.

(a) to promote the economic development of the State; and

(b) to facilitate the development of the State's natural resources; and

(c) to facilitate the development of significant export-earning industries for the State; and

(d) to create significant employment opportunities within the State; and

(i) the circumstances in which mining may be permitted under environmental planning instruments; and

(ii) the determination of development applications for consent to carry out development for the purposes of mining.

(2) This Policy removes the effect of certain provisions in environmental planning instruments that might, in the absence of this policy, be relevant to:

(a) the determination of whether or not a proposed development for the purposes of mining is permissible with development consent (including provisions that might otherwise require a consent authority to be satisfied as to certain matters before determining that mining is permissible with development consent); and

(b) the determination of development applications for consent to carry out development for the purposes of mining.

"mining" includes a mine and any form of mining, including surface mining (whether by open cut or any other method) and underground mining.

5.(1) If mining is permissible on land with development consent in accordance with an environmental planning instrument if provisions of the instrument are satisfied, mining is permissible on that land with development consent without those provisions having to be satisfied and those provisions have no effect in determining whether or not mining is permissible on that land or to the determination of a development application for consent to carry out development for the purposes of mining on that land.

(2) Without limiting subclause (1), if mining is permissible on land with development consent in accordance with an environmental planning instrument if the consent authority is satisfied as to certain matters specified in the instrument, mining is permissible on that land with development consent without the consent authority having to be satisfied as to those specified matters.

Relationship to other environmental planning instruments

6. In the event of an inconsistency between this policy and another environmental planning instrument, this Policy prevails to the extent of the inconsistency."[18]

On 3 August 1995 Rosemount's solicitors wrote to each of the Premier and the Minister indicating that litigation would be commenced if any approval of the Bengalla project was given.

On 7 August 1995 the Minister determined the development application pursuant to s.101 by granting consent to the project but imposing conditions. The conditions included conditions 4 and 5 which were in the following terms:

A) Within six months of the date of granting this consent or within such further period as Council may permit, the Applicant shall submit for Council's approval:

i) A detailed landscaping plan and land use plan covering all land within the proposed mining area and those areas outside the lease area identified by Council as necessary to assist in the screening of the development. The Applicant shall engage a suitably qualified person to assist in the landscaping plan. The plan shall provide for the establishment of trees and shrubs and the construction of moundings and bunds.

ii) Proposals for the visual appearance of the structural components of the development including paint colours and specifications.

iii) A comprehensive landscape management plan which shall include detailed plans, specifications and staged work programs to be undertaken, maintenance of all landscape works and plantings, and maintenance of building materials and cladding.

B) Prior to commencement of mining, the Applicant shall to the satisfaction of Council construct suitable bunding and mounding and install tall screen covers in accordance with the adopted landscape management plan in order to reduce the visual impact of the mine operation.

C) Buildings and structures shall be designed so as to present a neat and orderly appearance and to blend as far as possible within the surrounding landscape.

A) Before the commencement of mining the Applicant shall consult with adjacent residents and Council regarding any visual impact created by the balloon loop and rail line and construct any bunds and screen tree planting to the satisfaction of Council.

B) The applicant shall within two years of the commencement of construction comply with the requirements of Council in respect to the provision of any supplementary tree planting, bund construction and visual amenity enhancement works for properties along Denman Road, Link Road, Wybong Road, and Roxburgh Road.

C) Before the commencement of mining the Application shall negotiate with the owners of properties 22 and 115 shown in Figure 1 hereto to determine measures to be undertaken by the Applicant to mitigate visual impact at residences, including tree planting and bunding."[19]

Rosemount commenced proceedings in the Land and Environment Court on the following day, 8 August 1995.

Stein J upheld the challenges to the procedural validity of the making of SEPP 45, the substance of SEPP 45 and the consequential validity of the development consent. The reasoning which directed his Honour is found in the following passage:

"The scope and legal effect of SEPP 45 render nugatory the environmental planning inherent in LEPs which are subjected to analysis and scrutiny by the public and public authorities through the plan-making processes in Part 3 of the Act. The effect of the Policy on the only local environmental plans identified (Muswellbrook, Wyong and Newcastle) is to make permissible mining which will have, or is likely to have, adverse environmental effects in environmental protection zones. Mining is then subject to the balancing of relevant s90 factors. Mining which is prohibited outright (without any qualification which may make it permissible) is not affected.

The SEPP makes permissible mining which is likely to be inconsistent or incompatible with zone objectives and/or environmental performance criteria. This must be contrary to good environmental planning. It involves setting aside a fundamental stage in the system of planning established by and integral to the Act. This is, the `first' or `planning' stage. This stage involves the study and design of appropriate statutory zones and boundaries, together with the formulation of objectives and development purposes seen as appropriate to occur without consent, with consent or be prohibited. The process establishes the environmental planning parameters for all development. It is what statutory planning, embedded in the Act, is all about. The effect of SEPP 45 is to render otiose this first planning stage in relation to mining by overriding prohibitions in LEPs. This is a manifestly unreasonable result in the sense explained in Wednesbury Corporation et al.

I accept the submission of Mr McClellan QC, on behalf of the applicants, that both the substance of the SEPP and the manner in which it was made were manifestly unreasonable (Prasad v Minister for Immigration [1985] FCA 47; (1985) 65 ALR 549 at 563). The Policy, which it needs to be emphasised is subordinate legislation and not subject to Parliamentary scrutiny, was not reasonably proportionate to the `problem' outlined by the Director. I accept that it is not explicable by reference to the stated object of providing clarity and transparency in LEPs dealing with the permissibility of mining. The response of the SEPP to the `problem' was a disproportionate one because it applies to all planning instruments containing provisions which make mining permissible upon satisfaction of certain criteria, and not just to those lacking clarity and transparency.

In the circumstances it was, in my opinion, essential to identify the environmental planning instruments (and their provisions) which lack such clarity, and specifically amend them by Policy. But no LEP is identified in the policy as being affected by any lack of clarity or transparency. In any event, it is important to note that the policy has nothing to do with clarity and meaning. It directly and radically alters the provisions of those LEPs which are affected by overriding them. Its effect is plain - potentially environmentally harmful development, prohibited in environmental protection and other zones, is made permissible in these zones. The intent of the SEPP was not to clarify meaning but to change the meaning and effect of certain provisions so as to make mining permissible where previously it was prohibited. It will be obvious from the above that I reject the submission of Mr Walker SC for the Minister that the effect of SEPP 45 is to clarify meaning.

Making the Policy apply throughout the State to all environmental planning instruments which permit mining conditional upon the satisfaction of any criteria, whether or not a subjective assessment is required, is to go further than was necessary to achieve the stated purpose of the policy in cl.2. This was a disproportionate response to the perceived problem."[20]

Further, his Honour held that the decision by the Director to consult with two departments only was manifestly unreasonable as was the Minister's decision not to publicise the draft SEPP.

Regarding the Director's decision on consultation, his Honour said:

"The Director's decision to limit consultation under s37(1) to the two public authorities mentioned was also manifestly unreasonable having regard to the scope and effect (bearing in mind its terms) of the draft Policy. In particular, it applied throughout the State; it made permissible development which by its very nature was likely to adversely affect the environment and it amended an unknown number (potentially large) of planning instruments to make mining permissible where previously it was prohibited. It was also to apply to outstanding development applications, which included Bengalla. Further, the LEPs to be overridden by the SEPP were prepared by local councils who would have an interest in the integrity of their Plans. Section 4 of the Act defines a `public authority' to include a local authority.

To consult so narrowly also runs counter to the objectives of the Act - s5(b) and 9(c) - to promote the sharing of the responsibility for environmental planning between the different levels of government and to provide increased opportunity for the public involvement and participation in environmental planning. In determining what public authorities to consult (s37(1)) and whether it is appropriate or necessary to publicise the draft policy (s39(2)), regard must be had to the objects of the Act. I reject the Minister's submission that the objects in s5(b) and (c) are entirely overthrown by ss37 and 39. The discretions conferred by those sections must be exercised in the light of, and consistent with, the objects of the Act.

To override the LEPs throughout the State without any prior consultation cannot be said to meet the objectives in s5(b) or (c) of the Act. In addition, the decisions under ss37(1) and 39(2) appear to have ignored the Minister's functions under s7(b) of the Act. By severely limiting the consultation under s37(1), the Director (and through her the Minister) were deprived of information and assistance from public authorities which would have improved the quality of decision-making in the preparation of the Policy. The decision not to publicise assumes that the material brought forward in the process of public involvement would not improve or modify the Government's understanding."[21]

The Minister's decision not to publicise the draft was held to be an irrational exercise of the discretion in s.39(2), first, because it was "inconsistent with the promotion of the express object of the Act of providing increased opportunity for public involvement and participation in environmental planning (s.5(c))". Stein J was of the view that the purported reason for non publication, namely, that the public have the opportunity to participate in the development application at the consent stage, was misconceived because it ignored "the two stage process of plan making and development assessment embedded in Parts 3 and 4 of the Act respectively". His Honour held that, in exercising the discretions pursuant to ss.37 and 39, the Director and the Minister were "obliged to do so in an manner consistent with the promotion of the Act's objects and in the context of the framework of the legislation. They were also obliged to exercise the discretions having regard to the subject matter, scope and effect of the draft policy." His Honour said:

"For there to be a proper exercise of power under section 37 and 39 there would need to be cogent reasons, consistent with the objects of the Act, for not consulting (and publicising). I have found that there were not such reasons. The legislation intended that a proper exercise of the discretions under section 37 and 39 occur before a State environmental planning policy may be made."[22]

Having found that the discretions had miscarried, the SEPP was held not to have been lawfully made, and the consequential consent was held to be invalid. His Honour rejected an argument that s.100A of the Act conferred upon the Minister a valid alternative source of power sufficient to sustain SEPP 45.

These findings have been challenged on appeal. By notice of contention, Rosemount has challenged a great number of other contentions advanced before and rejected by Stein J aimed at establishing alternative bases of invalidity of the consent. I will deal with each of these in due course as each matter unsuccessfully argued before Stein J has been advocated in this appeal

It is convenient to consider the various challenges to Stein J's decision in this respect by considering the conditions precedent to and formal validity of the steps taken in purported compliance with ss.37 and 39 of the Act in making SEPP 45. Before doing so it is important, in light of Stein J's judgment and the approach adopted by Rosemount, to note certain provisions of the Act. This is so because of the findings that some significant emphasis is to be placed upon the objects of the Act when considering the exercise of discretionary power in ss. 37 and 39, and further because of Stein J's view that, in exercise of those powers and in the making of a SEPP pursuant to ss.37 and 39, regard must be had to what was described as a "two stage" planning structure found in the Act.

THE STRUCTURE OF THE ACT

The objects of the Act are found in s.5 and include:

(i) the proper management, development and conservation of natural and man-made resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment;

(ii) the promotion and co-ordination of the orderly and economic use and development of land;

(iii) the protection, provision and co-ordination of communication and utility services;

(b) to promote the sharing of the responsibility for environmental planning between the different levels of government in the State; and

(c) to provide increased opportunity for public involvement and participation in environmental planning and assessment."

The meaning of "environmental planning" is not defined although an environmental planning instrument is defined to mean a State environmental planning policy, a regional environmental plan, or a local environmental plan. Environment includes "all aspects of the surroundings of man, whether affecting him as an individual or in his social group".

It is apparent from the objects enunciated in s.5 and the provisions to which I have referred that the objects, scope and purpose of the Act include the provision of instruments of various degrees of particularity which will indicate or specify the response of government at a local, regional or state level to the manner in which land is to be used, whether for economic, domestic or recreational purposes with the intent that the welfare of the community and the welfare of the environment is fostered. It is apparent from those objects that a balancing of competing views is required and that different perspectives regarding problems of balance or predominance of interest may arise at different local, regional and state levels. The manner in which any such conflict is to be resolved is dealt with in later provisions of the Act. Section 7 charges the Minister with the responsibility of promoting and co-ordinating environmental planning and assessment for the purpose of carrying out the objects of the Act.

Part 3, entitled "Environmental Planning Instruments", contemplates the making of different instruments. State environmental planning policies (SEPP) are contemplated by Division 2(ss.37-39). Regional environmental plans (REP) are contemplated by Division 3 (ss.40-52), and local environmental plans (LEP) are contemplated by Division 4 (ss.53-72). Those instruments embody the planning aspects of the Act to which Stein J referred. They address planning at different levels. A State environmental planning policy addresses matters which, in the opinion of the Director, and subsequently the Minister, are "of significance for environmental planning for the State." Regional environmental plans, as distinct from policies, address matters which, in the opinion of the Director and Minister are of significance for environmental planning for a region (s.40(1)); and local environmental plans relate to planning at a local, shire or council level. There is no general presumption that a State environmental planning policy prevails over a regional environmental plan or a local environmental plan,[23] or that a regional environmental plan prevails over local environmental plan but, unless a contrary intention appears, a later instrument prevails over an earlier one. The consequence is that there may be enacted by or at the direction of the Minister a SEPP, a REP or a LEP at any time which will have the consequence of altering or varying an earlier planning instrument at a different level. Although it is the Minister or the Director who may generate a SEPP or a REP,[24] either the Minister, or local councils may generate a LEP[25]. Nonetheless ultimately it is the Minister who controls the making of each of the three categories of planning instrument[26].

Before a REP or a LEP is made there must be an environmental study[27], but that is not so in the case of a SEPP. Before a REP or a LEP is made there must be consultation with each council whose area is an area to which the instrument applies[28], as well as with such other public authorities as either the Director in the case of a REP or the council in the case of the LEP, in their respective opinions considers appropriate[29]. However in the case of a SEPP consultation is not expressed to be mandatory as it is in the other instances but it said to be permissive ("may") and to be with such authorities as the Director determines. In the case of a REP or a LEP, the exhibition of the draft plan and consideration of submissions in consequence is mandatory[30]. However in the case of a SEPP the Minister has a discretion to take such steps, if any, as he considers appropriate or necessary to publicise the draft SEPP and to consider received submissions. It is to be noted that s.68(4)(d)(iii) requires a council to submit to the Secretary to the department a statement giving details of any inconsistency between the draft LEP and other planning instruments but there is no corresponding provision in the case of a SEPP or a REP. This suggests that the legislature did not require identification of inconsistency when a SEPP or REP was being proposed, perhaps because matters of State or regional significance would, by their nature, be likely to affect a LEP, whereas the reverse would not necessarily be so. No doubt the identification of any inconsistency would assist the Director in preparing the report required by s.69(d), specifying the relationship between the draft plan and other environmental planning instruments. There is no corresponding provision in respect of a SEPP or REP.

Part 4 addresses environmental planning control and deals with the granting of consent having regard to environmental planning instruments[31]. It does not address concepts of planning as such except in the sense of addressing the steps necessary to be taken, and the factors relevant to, the obtaining of an actual consent for a particular development to occur. Of particular relevance is s.90 specifying the matters which a consent authority shall take into consideration. Those matters include any environmental planning instrument that applies to the land to which the development application relates[32]. Thus it is contemplated that in considering consent, a consent authority will have regard to each of a SEPP, a REP, and a LEP if there be one applicable to the land the subject of the development application, recognising that the three instruments may be in conflict with each other, and recognising that the three instruments prevail in respect to each other in accordance with s.36(b), subject to contrary intention in a particular instrument. The applicable environmental planning instruments are but one of the matters referred to in s.90 which are to be taken into consideration in considering developing consent[33]. Whilst, in determining the content of an environmental planning instrument, be it a SEPP, REP or LEP, the Minister and others must have regard to the objects of the Act, many aspects of those objects which might be included in the environmental planning instrument are further specifically stated to be matters to be taken into consideration when considering a development application under Part 4. By way of example, the objects specified in s.5 include the protection of the environment, and that is an aspect to be considered in an environmental planning instrument under Part 3,[34] yet the impact of the particular development on the environment is also to be considered under Part 4 when considering consent to a development application in consequence of, not only the planning instrument, but the terms of s.90(1)(b). Similarly the objects of the Act include promoting "the social and economic welfare of the community". This matter is to be considered in planning instruments[35]: it is also to be considered under Part 4 in consequence of s.90(1)(d) in relation to the particular development.

It is thus clear, in my view, that the objects clause, the provisions of Part 3 relating to planning instruments at various levels, and the provisions of Part 4 dealing with the control of development, are in harmony. The particular aspects addressed by the objects clause will inevitably conflict and require resolution within a planning instrument when the subject matter of the object is considered at the planning instrument stage. The conflict of objects may be resolved differently depending upon the level at which the planning instrument applies. The subject matter of the objects, in so far as it may require consideration in a different context under Part 4, and in particular pursuant to s.90, requires a new and different consideration in the weighing of competing matters in determining whether a particular consent is to be granted, refused, or granted upon conditions.

It is apparent from what I have said that the structure of the Act contemplates change to environmental planning instruments by subsequent instruments. Section 36 makes that obvious. It must follow in my opinion that a later instrument, in this instance a SEPP, which may have the effect of changing the Muswellbrook LEP or its effect, is not to be regarded as being destructive of some earlier and integral planning stage. The fact that a SEPP might make permissible that which a LEP made permissible only upon satisfaction of certain conditions is not to be regarded as destructive of the planning process, as Stein J thought when he said that it "rendered nugatory the environmental planning inherent in LEPs which are subjected to analysis and scrutiny by the public and public authorities by the plan making processes in Part 3 of the Act". It follows that it is wrong, in my opinion, to say, as Stein J did that "this must be contrary to good environmental planning. It involves setting aside a fundamental stage in the system of planning established by and integral to the Act". Nor is it correct to say that: "the effect of SEPP 45 is to render otiose this first planning stage in relation to mining by overriding prohibitions in LEPs".

It may have had that effect, but that is an effect contemplated and permitted by the statutory provisions, subject only to whether the exercise of the discretion is to be set aside as being unreasonable. Unreasonableness, however, is not established from the circumstance that the exercise of a statutory power changes a previously existing provision in an earlier planning instrument, or its effect. Nor is it established simply by showing that there was an absence of consultation, advertising of the draft plan and consideration of submissions if that absence is permitted by statute, merely because it has the effect of over ruling a prior environmental planning instrument which was promulgated after the required consultation, advertising and consideration of submissions for an environmental planning instrument of that character.

Once it is recognised that an existing environmental planning instrument may be amended, altered, varied or replaced by a subsequent environmental planning instrument, as s.74 and s.36(b) explicitly provide, much of the basis for Rosemount's contention upheld by Stein J disappears. That is particularly so when it is appreciated that a different regime is specified for the generation, consultation, advertising and consideration of submissions in relation to environmental planning instruments of different types. It seems to me not possible, against that background, to uphold the view that a planning instrument prepared in accordance with its designated statutory regime suffers the blight of unreasonableness because it alters a pre-existing environmental protection instrument created under a different statutory regime in the same Act, where such alteration is, in specific terms, permitted by that Act.

Nor is it possible to expand the statutory requirements of a particular regime which specifies the manner in which a particular planning instrument may be made by reference to the objects of the Act. The content of a scheme may be required to conform with the objects of the Act, and the procedural steps, insofar as they have an object or policy content, may be controlled by the objects of the Act in the sense that if the steps are taken for a purpose foreign to the objects of the Act, the procedural step in truth may not be one within the statutory power. However, subject to those matters the issue descends, in my view, to the narrow issue of Wednesbury unreasonableness. It is not unreasonable to do that which the statute permits in performance of a statutory power or obligation and for purposes contemplated or permitted by the statute.

The first matter challenged as being vitiated by Wednesbury unreasonableness was the decision of the Director pursuant to s.37(1) to consult only the chief executive officers of the Department of Mineral Resources and the Department of State Development. That was said to be manifestly unreasonable for four reasons. First, having statewide operation, SEPP 45 was likely to have made permissible many mining operations otherwise permissible only if certain criteria were satisfied, and thus was likely to generate public comment and controversy. There should thus have been wider consultation. Second, the effect of the SEPP was to amend the provisions of local environmental plans. Local councils were interested in those plans. Thus, they should have been consulted. Third, not to consult with different levels of Government was to deny or not accord with the objects of the Act specified in s.5(b) and (c) of sharing responsibility for environmental planning between different levels of government and providing an increased opportunity for public involvement in environmental planning. And fourth, failure to consult denied the Director, and thus the Minister, the benefits of consultation which included the opportunity of others to express views and thus improve the quality of decision making.

Whatever may be the strength of these four bases, s.37 confers upon the Director a discretion to consult with "such public authorities as she determines". The discretion is not restricted nor, in my view, are the objects specified in s.5 of the Act to be read into the discretion so as to expand the obligation or, put another way, restrict the discretion, so as to require greater consultation than in the opinion of the Director is necessary or appropriate. The circumstance that SEPP may produce a change permitting mining that otherwise might not become permissible, and which might generate public comment or controversy does not elevate the level of consultation required from that determined on a discretionary basis by the Director to some higher level to permit the generation of public comment or controversy. Had the legislature, in the case of a SEPP, intended that there be a broader regime of consultation than that rationally determined by the Director as being appropriate or necessary it could have so provided as it did in the case of a REP or a LEP. Provided the decision taken by the director so to consult is a decision to which a reasonable person could come[36], the decision is unimpeachable on the grounds of unreasonableness or irrationality[37]. In my opinion it cannot be said that the Director's decision is "so devoid of plausible justification that no reasonable person could have taken that course". In relation to the problem which the Director was addressing, namely the absence of certainty and clarity in the planning system in relation to proposed mining developments on land where mining was permissible only if certain conditions were met, a rational person could decide to consult in relation to a solution to that problem only with the two departments consulted.

Regarding the second reason advanced, namely the local councils interest in the planning matters in their respective LEPs, this overlooks the statutory regime which permits amendment by such an instrument by a later SEPP. And it does so by a procedure which, in contrast to that in respect of a REP, does not require consultation with the local council. Giving operative effect to that discretion, a Director could properly decide not to consult with all, or indeed any council, in New South Wales.

The third reason advanced, namely the sharing of planning responsibility, also neglects the statutory framework of planning to which I have referred. Given that framework, and the express discretion contained in s.37, the discretion is not to be reduced by reference to the objects of the Act so as to require consultation where, in the reasonable or rational decision of the Director, none is necessary.

The fourth basis advanced, namely deprivation of advantages of consultation, is obviously contemplated by the grant of discretion. That deprivation thus cannot be a basis for holding that in exercising the discretion the director acted unreasonably.

It was contended that the consultation which in fact occurred was inadequate. That was said to be so because:

(a) The letters of consultation inadequately expressed the intent of SEPP so that its import was not clear.

(b) The letters failed to give sufficient information on the environmental planning instruments affected or amended by SEPP thus depriving those being consulted of any notion of the nature, extent and consequences of SEPP 45.

For these reasons it was said any consultation miscarried because, for consultation to be effective, the Director must clearly state and the persons consulted must clearly know what is proposed, if those persons are adequately to express their views.[38]. Contrary to the view of Pearlman CJ in Darling Casino Ltd v Minister for Planning and Sydney Harbour Casino Ltd[39], failure to properly consult was argued to render SEPP invalid.

I respectfully agree with Stein J that "the letters of consultation adequately and with reasonable exactitude described the `concept or idea' which was the subject of the draft policy" and further that "the operation of SEPP 45 has the effect described in the letters". Any fair reading of the letters makes that clear.

Reliance was placed upon the decision in Minister for Immigration and Ethnic Affairs v Teoh[40] where Mason CJ and Deane J said:

"The existence of a legitimate expectation that a decision maker will act in a particular way does not necessarily compel him or her to act in that way. That is the difference between a legitimate expectation and a binding rule of law. To regard a legitimate expectation as requiring the decision maker to act in a particular way is tantamount to treating it as a rule of law. It incorporates the provisions of the unincorporated convention into our municipal law by the back door ... but if a decision maker proposes to make a decision inconsistent with a legitimate expectation, procedural fairness requires that the persons affected should be given notice and an adequate opportunity of presenting a case against the taking of such a course."

Stein J upheld these submissions. The decision not to publicise was found to be "inconsistent with the promotion of the express object of the Act of providing increased opportunity for public involvement and participation in environmental planning (s.5(c))." His Honour held that the reasons given by the Minister for not publicising were "neither cogent nor consistent with the objective of s.5(c) of the Act. The purpose of publication was said to be `to afford the public the opportunity to comment upon the proposed action and on its proposed terms'. One of the objectives of publication is also to better inform the decision maker. I accept the applicants submission that to deny that opportunity to the public is to close the Minister's mind to outside comment." Further, his Honour rejected the reason advanced for non publication, namely that there was an opportunity for participation at the development application consent stage as being misconceived because it ignored "the two stage" process of plan making and development assessment embedded in Parts 3 and 4 of the Act respectively. His Honour concluded :

"I hold that the scope, purpose and subject matter of the draft SEPP (in the context of the Act) and the terms of the procedural discretions in sections 37 and 39 are such as to require consultation and publication respectively"

With due respect, this approach negates the fact of a discretion conferred by s.37 and s.39. In 1993, the words "if any" were inserted in s.39(2) so that the section now reads:

"The Minister shall take such steps, if any, as he considers appropriate or necessary to publicise a draft State Environmental Planning Policy and to seek and consider submissions from the public before he makes such a recommendation." (emphasis added).

The insertion of the words "if any" make clear there reposes in the Minister a discretion. It is thus not correct to say that the section, or the Act, "requires publication".[41] Stein J reversed the statutory discretion to impose an obligation and in so doing fell into error. The exercise of the statutory power to publicise must be considered, but there remains a discretion whether it be exercised. Further, whilst regard may be had to an objects clause to resolve uncertainty or ambiguity, the objects clause does not control clear statutory language,[42] or command a particular outcome of exercise of discretionary power.

Additionally there is the contrast already noted that in the case of a REP or a LEP, publication is mandatory[43]. That is to be contrasted with the discretion conferred by s.39(2).

The reason advanced by the Minister in his memorandum to the Governor for not publicising the draft SEPP was that "SEPP is concerned with a very specific problem relating to planning control. It is believed that the action required is well understood by Government and that it is appropriate action to address matters of significance for environmental planning for the State". The specific problem was absence of clarity upon whether mining in areas not specifically prohibited was permissible. The Department and the Minister had a clear view that it should be permissible, with planning control being determined at the consent stage. That forms a sufficient basis for a rational view that it was unnecessary to advertise the SEPP. Others may not agree with the view but it could not in my opinion be regarded as irrational or subject to Wednesbury unreasonableness. The decision was, in that sense, legally "justifiable as being a view reasonably open to a person in the position of the Minister called upon to exercise a discretion".[44]

Nor do I think Teoh obliges a contrary view. I am not, at this point, considering questions of procedural fairness or legitimate expectation. I am considering the exercise of a statutory discretion. Where the statute, as here, makes clear that the Minister has a discretion not to publicise a SEPP, in contrast to the obligation in relation to a REP and a LEP, in my opinion there is not imposed by intergovernmental agreement or departmental publication a restriction on the exercise of that discretion so as effectively to impose upon the Minister an obligation to publish in denial of the statutory discretion. Those documents can neither negate the statutory discretion nor render an exercise of the discretion contrary to the documents unreasonable where to do so would in effect negate the discretion.

Reliance was placed upon the passage in the speech of Lord Reid in Padfield & Ors v Minister of Agriculture, Fisheries and Food[45]. His Lordship said:

"Parliament must have conferred the discretion with the intention that it should be used to promote the policy and objects of the Act; the policy and objects of the Act must be determined by construing the Act as a whole and construction is always a matter of law for the court"

Here the objects are stated in s.5. However, the later sections provide a different regime for publication depending upon the nature of the environmental planning instrument being considered. In my opinion Padfield is not to be interpreted so as to negate a conferred statutory discretion and elevate the obligation of the Minister to exercise that discretion in a particular way equivalent to a denial of true discretion. I respectfully agree with the views expressed by Pearlman J in Darling Casino[46] that s.37, and s.39, confer a true discretion.

Prior to the making of a SEPP in accordance with s.39(4) the Minister is obliged to address the question of publication of the draft policy and to determine whether he regards such publication as necessary. It may be that if he had not done so any resulting SEPP would have been invalid for failure to comply with a condition precedent to its making[47] but here the question of exercise of discretion was addressed and, in my opinion, a determination reached which was not infected by unreasonableness.

It follows, in my opinion, that the challenge to the exercise of each of the discretions within s.37 and s.39 fails.

Stein J so held for the reasons I have indicated. I respectfully disagree with his Honour's view.

The proper approach of the court in considering subordinate legislation such as SEPP 45 was stated by Kirby P in State of NSW v Macquarie Bank Ltd[48]. The President said:

"The function of the court in considering an attack on the validity of subordinate legislation is not to substitute its opinion about the policy of the delegated legislation nor to judge whether it considers that policy inexpedient or misguided. So to act would take the judicial branch of government beyond its proper function and into the province of the Executive Branch of government which, by the grant of power, is authorised by the Legislature to make the subordinate rule in question[49]."

For reasons I have previously given regarding the structure of the Act, the statute clearly contemplates amendment of existing environmental planning instruments by subsequent instruments. The later instrument cannot be said to be unreasonable merely because it amends a prior instrument. Nor does any such amendment interfere with the planning process in Part 3 of the Act, or the consent process in Part 4 of the Act. Indeed it is part of the planning process.

Subordinate legislation is said to be unreasonable if it can properly be said not to be within the purview of the power conferred by the legislature to make subordinate legislation[50]. If, however, it can be said that there is "a real connection" between the subordinate legislation and the purpose for which the regulation making power was conferred, the legislation will be held within power and thus not "unreasonable"[51].

In my opinion it is clear that SEPP 45 has the required "real connection" with the power conferred by ss.37 to 39 of the Act. The structure of the Act contemplates the Governor on the recommendation of the Minister making a SEPP which addresses matters which are in the opinion of the Director and the Minister of significance for environmental planning for the State, and which may alter or negate planning provisions in a prior environmental instruments. In my opinion the very terms of the SEPP make clear it is within power and thus not unreasonable.

Nor, in my opinion, can it be said to be unreasonable because it interferes with interests. The legislature has by ss.36, 37-9 and 74 contemplated and permitted the circumstance of the Minister recommending to the Governor the making of a SEPP which will, by amending existing environmental planning instruments, and after the exercise of a discretion not to publicise the draft SEPP, necessarily affect interests which exist or are determined by the terms of an existing LEP or REP which may be amended by a SEPP. In those circumstances it cannot be said to be unreasonable as being beyond power.

In the portion of the judgment which I have quoted, Stein J upheld the attack on SEPP 45 based on lack of proportionality. His Honour held that :

"The response of the SEPP to the `problem' was a disproportionate one because it applies to all planning instruments containing provisions which make mining permissible upon satisfaction of certain criteria, and not just to those lacking clarity and transparency."[52]

His Honour thought it necessary to identify each environmental planning instrument, and their provisions which lacked clarity and to specifically amend those instruments and provisions by specific terms of the policy. His Honour thought SEPP 45 had "nothing to do with clarity and meaning", it radically altered by overriding affected LEPs, and its effect was that "potentially environmentally harmful development, prohibited in environmental protection and other zones, is made permissible in these zones." The intent was "not to clarify meaning but to change the meaning and effect of certain provisions so as to make mining permissible where previously it was prohibited".

"Making the policy apply throughout the State to all environmental planning instruments which permit mining conditional upon the satisfaction of any criteria, whether or not a subjective assessment is required, is to go further than was necessary to achieve the stated purpose of the policy in clause 2. This was a disproportionate response to the perceived problem."[53]

It is unresolved in Australia whether the concept of proportionality in the consideration of the validity of subordinate legislation is to be regarded as an independent ground of invalidity, or a sub-ground of irrationality. In the United Kingdom, although not finally resolved, members of the House of Lords appear to be disinclined to adopt proportionality as an independent ground for judicial review.[54] The concept was adopted by Deane J in the Tasmanian Dam Case[55] where his Honour said the requirement for validity of legislation based on a specific power involved "a need for there to be a reasonable proportionality between the designated purpose or object and the means which the law embodies for achieving or procuring it ... the law must be seen, with "reasonable clearness", upon consideration of its operation, to be "really, and not fancifully, colourably, or ostensibly, referable" to and explicable by the purpose or object which is said to provide its character". That test was accepted by the parties in South Australia v Tanner[56] without disapproval, and with approval by Brennan J.[57] In discussing the validity of regulations made in exercise of a power, Brennan J made clear that consideration of validity involved consideration of the relationship between the power and its statutory object. His Honour said:

"First, as the validity of the regulation depends on whether it answers the statutory description, the problem is one of characterisation. Next, the character of a regulation is ascertained by reference to its operation and legal effect in the circumstances to which it applies. The character of the regulation is ascertained by the court's own assessment of the directness and substantiality of the connection between the likely operation of the regulation and the statutory object to be served. If the directness and substantiality of the connection between the likely operation of the regulation and the statutory object is so exiguous that the regulation could not reasonably have been adopted as a means of fulfilling the statutory object, the regulation is invalid. Moreover, it must be steadily borne in mind that the fulfilling of the statutory object is a limitation on the power to make the regulation. A regulation which is so widely drawn as needlessly to embrace a field of operation which is quite unconnected with the statutory object cannot reasonably be adopted in exercise of a power so limited. These are broad tests, involving matters of degree".[58]

Dawson J accepted the concept of proportionality as being applicable where a purposive power was involved, but doubted its applicability as a separate head of invalidity in other circumstances.[59]

The power to make a State environmental planning policy as contained in sections 37 to 39 of the Act is a purposive power. It confers the power to make such a policy with respect to such matters as are, in the opinion of the Director and ultimately the Minister, of significance for environmental planning for the State. Stein J held, correctly in my view, that there was no reason why "certainty and transparency" in planning controls which determine the permissibility of mining (or any other use for that matter) cannot be seen as of significance for environmental planning for the State."

However the "certainty and transparency" to which the Director's memorandum, and the SEPP itself referred was somewhat more precise. She wrote:

"It has become clear that provisions have been introduced into environmental planning instruments which make the permissibility of mining or mines dependent upon the development satisfying various criteria which can be characterised as criteria involving environmental assessment. This is totally unsatisfactory as it creates a situation where the permissibility of this type of development cannot be established until extensive and often expensive, environmental assessment has been undertaken to determine whether or not the proposed development complies with the planning controls ...

It is a matter of significance for environmental planning for the State that there be certainty and transparency concerning planning controls which determine the permissibility of mining.

It is therefore proposed that a State Environmental Planning Policy should be made to apply to the State which will provide that where mining is capable of being permitted with consent, (e.g. in a zoning table or because a provision in an EPI makes it permissible because it is permissible in an adjoining zone), then no other criteria can override its permissibility."[60]

The aim or objective of the SEPP was provided in clause 2(2):

"This Policy removes the effect of certain provisions in environmental planning instruments that might, in the absence of this policy, be relevant to:

(a) the determination of whether or not a proposed development for the purpose of mining is permissible with development consent ...

(b) the determination of development applications for consent to carry out development for the purposes of mining."

Clause 5 made clear the permissibility of mining. It stated that:

"If mining is permissible on land with development consent in accordance with an environmental planning instrument if provisions of the instrument are satisfied, mining is permissible on that land with development consent without those provisions having to be satisfied ..."

As it overrode environmental planning instruments which preceded it in point of time, it made clear the permissibility of mining on land to which it relates. The objective of the SEPP was not "certainty and transparency" at large: it was clarity in relation to permissibility of mining on land where mining was permissible subject to compliance with either objective or subjective criteria.

If the Director, and ultimately the Minister wished to introduce certainty statewide in relation to the permissibility of mining in land so zoned, it cannot be said, in my opinion, that a SEPP having that effect is a disproportionate response to the Director and Ministers' view that there existed lack of planning certainty throughout the State regarding the permissibility of such mining. Clarity regarding the permissibility of such mining is a matter upon which, as I have previously indicated, the Director and Minister could reasonably form the view that the matter was of significance for environmental planning for the State.

Rosemount argued, however, that disproportionality was shown by four circumstances. First, it was said that if clarity and transparency was desired there should have been an identification of each of the provisions in each environmental instrument said to lack clarity or transparency, and further that SEPP should have set forth guidelines to assist those preparing environmental planning instruments so as to avoid the problem of lack of clarity and transparency. SEPP 45 was said to do neither.

I see no reason why the suggested process should be followed. The legislature has contemplated by ss.37 to 39 the making of State environmental planning policies which may overrule earlier instruments. I see no reason why clarity and transparency in relation to the permissibility of mining could not be achieved by a brief statement in a policy that, notwithstanding the requirement to satisfy conditions before mining becomes permissible which are found in other earlier environmental planning instruments, such mining is nonetheless permissible. Clarity and transparency in relation to the permissibility of mining is had by simple recourse to one document, SEPP 45, once it is known that the land on which the mining is proposed is land upon which mining is permissible subject to satisfaction of conditions.

Second, it was contended SEPP should have sought to introduce its stated objectives of clarity and transparency in relation to all aspects of development, not just mining. Thus it was said that SEPP 45 did not have the character of one dealing with clarity and transparency in planning controls, but simply one dealing with mining.

This submission misunderstands the objective which was not to introduce "clarity and transparency" generally, but to introduce it in relation to the permissibility of mining in zones where mining was permissible with consent upon satisfying conditions. Lack of proportionality is not established by too widely stating the planning objective to permit the response to be regarded as too narrow, or vice versa.

Third, it was said that SEPP 45 did not introduce clarity and transparency; rather it changed the meaning of prior environmental instruments in that it rendered that which might be impermissible, permissible. That was said not to be a matter of significance for environmental planning for the State.

This submission is based, in my opinion, on the misconception of the relationship between a State environmental planning policy and prior planning instruments, in particular local environmental planning instruments. Once it is appreciated that the former may amend the operation and effect of the latter, it becomes impossible, in my view, to argue that the State environmental planning policy is a disproportionate response to a perceived problem because of that amendment.

Finally, it was contended that failure to identify the particular environmental instruments said to lack clarity and transparency resulted in SEPP applying to those environmental planning instruments which may have those characteristics. Thus it was said to be disproportionate because it applied to all prior environmental planning instruments. Examples given in the Director's memorandum were said to refer to subjective criteria which needed to be met before mining was permissible, but the general operation of SEPP 45 meant that it applied also to objective criteria conditions and thus was said to be disproportionate.

I see no reason why a State environmental planning policy cannot, to ensure clarity and transparency in relation to mining permissible in zones subject to compliance with conditions, whether they be subjective or objective, simply introduce a provision rendering mining permissible in those zones and rendering such conditions immaterial to permissibility, although they may remain material at the consent stage. Such a policy results in it being unnecessary to consider the nature of any such conditions or to determine whether a particular environmental instrument expressed the condition with clarity, whether it be subjective or objective.

For these reasons, in my opinion, the challenge to SEPP 45 upon the basis of lack of proportionality fails.

The Minister and Bengalla contended that, apart from SEPP 45, the Minister had a power available to him in s.100A to grant the consent which he did. That power was said to sustain the validity of the consent notwithstanding that the power had not in fact been relied upon by the Minister. It was contended that all conditions for the exercise of the power contained in s.100A(2)(a) had been satisfied. The Minister's approach to determining the development application would have been the same whether it was a permitted or prohibited development, and thus the development consent could be sustained upon this alternative basis.

Stein J rejected those contentions. His Honour found that whilst s.100A was on a factual basis available as a source of power on 7 August 1995 when consent was given, the source of power was not legally available because, to implement that power it was first necessary for the Minister to issue a direction pursuant to s.101 calling in development applications for his determination. Stein J was of the view that the s.101 direction issued by the Minister in 1987 related only to permissible developments, not applications in respect of prohibited developments. If SEPP 45 was not valid, or did not convert the application from one which was prohibited to one which was permissible, such application had not been called into the Minister pursuant to s.101, and thus the power under s.100A was not available to be exercised. Further, Stein J was of the view that, assuming there had been a calling in of a prohibited development pursuant to s.101, it was necessary for a fresh commission of inquiry to be held before development consent could have been given because an inquiry in relation to a prohibited development would be a different inquiry to one in respect of a permissible development. For this additional reason the power was said to be unavailable.

Although, as Stein J noted, it was thus unnecessary for him to consider further submissions, his Honour additionally accepted the contention of Rosemount that:

"The considerations taken into account under s.101(8) may be different from an exercise of power under s.100A(2). Under s.100A a Minister needs to take into consideration relevant clauses in the LEP (e.g cll 17(2), 8(4) and the 7(L) and 10(L2) zone objectives) before exercising his power under s.101(8). However, because the Minister took his decision on the basis of SEPP 45, these matters were not necessarily directly considered."[61]

It is clear law that "a mistake in the source of the power works no invalidity. Validity depends simply on whether a relevant power existed."[62] Thus if s.100A confers a source of power sustaining the development consent, it matters not if SEPP 45 be invalid or ineffective notwithstanding it was thought to be the source of power pursuant to which consent was given. That is so provided any conditions necessary for the exercise of the power pursuant to s.100A have been satisfied.[63]

The suggested alternative source of power contained in s.100A applies only in respect of a "prohibited development". Section 100A provides:

"100A. (1) In this section and section 101:

(a) development which cannot be carried out either with or without development consent; or

(b) development the carrying out of which is prohibited under this Act.

(2) Notwithstanding section 76(3) or section 91(2) or any other provisions of this Act or the provisions of an environmental planning instrument:

(a) the Minister may, subject to and in accordance with section 101 grant consent to the carrying out by a person of prohibited development; and

(b) a person may, subject to and in accordance with a consent referred to in paragraph (a), carry out prohibited development."

If it were to be found that SEPP 45 was invalid, or ineffective to render the development permissible, it otherwise being a prohibited development because it had been held by Waddell AJ not to be able to comply with the provisions of cl.17(2)(a)(iii), s.100A(2)(a) confers a power on the Minister to grant development consent "subject to and in accordance with s.101".[64] The expression "subject to and in accordance with s.101" invokes the provisions of s.101(1), (4), (5), (6), (7) and (8). The Minister had, in 1987, given a direction calling in "all development applications for new coal mines that require new coal leases as provided for under s.41 of the Coal Mining Act, 1973." That direction was in unrestricted terms. In my opinion there was no basis for Stein J's finding that it related only to permissible developments. In terms it was wide enough encompass prohibited developments. It was a power purportedly exercised pursuant to s.101 which, by s.101(2), contemplated that a direction might be given "notwithstanding that the development application is an application for consent to carry out prohibited development". There is thus no basis for reading down the general terms of the notice calling in to the Minister "all" development applications of the type nominated.

Once a valid notice is given pursuant to s.101(1), subsection (4) requires applicants, and other persons to be notified and subsection (5) confers upon the applicant or persons who had made submissions in respect of the application, the "opportunity of a hearing if so required by any of them before the Minister determines the application." If such a hearing is required, by subsection (6) the Minister is obliged to direct that an inquiry be held in accordance with s.119, and the applicant and persons who have made submissions were entitled to appear and be heard at that inquiry. Subsection (7) obliges the Minister to consider the findings and recommendations of such a commission of inquiry before determining the development application in accordance with the power conferred by subsection (8). In exercising the power under subsection (8) to determine the application the Minister, as the substituted determining authority, must take into account the matters for consideration referred to in s.90 and must determine the development application, subject to s.100A, having regard the provisions of s.91. Whilst s.91(2) would normally prevent the granting of a development consent where the development involves subdivision of land, the provisions of s.100A(2) render nugatory that provision where the Minister is exercising a determinative power pursuant to s.101(8) in respect of a prohibited development.

In my opinion the procedural steps preliminary to exercise of the power under s.101(8) were satisfied.

A commission of inquiry was held, producing two reports. The applicant and many objectors, including Rosemount, were given the opportunity both to call for that inquiry and to appear and put submissions to it. They were thus given a hearing. The Minister considered the reports of the Commissioner, thus the requirements of s.101(4) to (7) inclusive were satisfied prior to exercise of the power under s.101(8).

It is not correct to say, as was held by Stein J and submitted by Rosemount, that the nature of the inquiry would have been different depending upon whether the development was a permitted development or a prohibited development. At the first inquiry there was significant debate regarding whether the development was prohibited or permitted. The commissioner found the development to be permissible because it was not on the alluvial plain and met the criteria in clause 17(2)(a) of the Muswellbrook LEP. He reversed that view in accordance with the decision of Waddell AJ. In the first report he recommended the development subject to conditions upon the basis that it was permissible. In the second report he recommended the development subject to conditions on the basis that it was not a permissible development. Thus there was a report on both bases.

There was no distinction required by the procedures for advertising or objecting to a development application, or advertising or conducting an inquiry pursuant to s.119 as contemplated by s.101, dependent upon whether a development was permissible or prohibited. The procedures were the same, and Rosemount did not allege that there was any deficiency in the procedural steps taken in relation to the development and the holding of the inquiry. That position is to be distinguished from Rosemount's submission that once it was determined that the development was a prohibited development, it was necessary to hold a new inquiry. I reject that latter submission because, first, any further inquiry would have traversed the same ground as covered by Mr Cleland's two inquiries, and second, his two inquiries were in truth conducted initially on a contested basis as to whether the development was permissible or prohibited, and later on the basis that it was prohibited.

Further, it is to be recalled that the inquiries conducted by Mr Cleland were regarding the "environmental aspects of the proposed development". That was a limited inquiry contemplated by s.119(1)(b) and s.101(6). The environmental aspects of the development are in truth the same whether the development be permissible or prohibited.

Accordingly there was no procedural or legal inhibition to the exercise of the power under s.101(8) arising from the legislative requirements preliminary to the exercise of the power. The power was legally available.

Rosemount argued unsuccessfully before Stein J that the power was not factually available. The argument advanced by Rosemount was to the following effect. The Minister granted consent on 7 August 1995. SEPP 45 was proclaimed on 4 August 1995. SEPP 45 was "ostensibly valid", and remained in fact valid unless and until it is subsequently declared to be invalid by a court. That did not happen prior to 7 August 1995. Accordingly at the time the Minister exercised his power on that date SEPP 45 is to be regarded as valid. Therefore at that date the development was to be regarded as a prohibited development having been made a permissible development by the operation of SEPP 45 on 4 August 1995. Thus the power under s.100A which related only to prohibited developments at that time had no application and factually there was no alternative power.

It seems to be established that where an administrative act is done without compliance with principles of natural justice the act is valid and operative unless and until it is challenged "but upon such challenge being upheld it is void, not merely from the time of a decision to that effect by a court, but from its inception".[65] To similar effect in a wider context is the view expressed by Lord Diplock in F Hoffmann-La Roche & Co. AG & Ors v Secretary of State for Trade and Industry[66] where his Lordship said:

"Under our legal system, however, the courts as the judicial arm of government do not act on their own initiative. The jurisdiction to determine that a statutory instrument is ultra vires does not arise until its validity is challenged in proceedings inter partes either brought by one party to enforce the law declared by the instrument against another party or brought by a party whose interests are affected by the law so declared sufficiently directly to give it locus standi to initiate proceedings to challenge the validity of the instrument. Unless there is such challenge and, if there is, until it has been upheld by a judgment of the court, the validity of the statutory instrument and the legality of acts done pursuant to the law declared by it are presumed. It would, however, be inconsistent with the doctrine of ultra viries as it has been developed in English law as a means of controlling abuse of power by the executive arm of government if the judgment of the court in proceedings properly constituted that a statutory instrument was ultra viries were to have any lesser consequence in law than to render the instrument incapable of ever having had any legal effect upon the rights or duties of the parties to the proceedings."

Consistent with this approach, it seems to me that if, in the proceedings before Stein J, SEPP 45 was held to be not a valid exercise of power so as to render it inoperative or ineffective, it must be deemed to have been so since the date upon which it was made, namely, 4 August 1995. That would mean that on 7 August 1995 the development was a prohibited development and there would factually be available the power conferred by s.100A.

Rosemount further argued that, even if the power conferred by s.100A(2) to grant consent existed both factually and legally, the considerations to which the Minister was obliged to have regard under s.102A(2) and s.101(8) were different. As the Minister believed on 7 August 1995 that SEPP 45 was operative, he did not consider clauses 17(2), 8(4) and the objectives of zones No.7(L1) and 7(L2) of the Muswellbrook LEP. The substance of the discretions conferred under the two sections to grant consent were thus different and a court should not usurp that exercise of discretion which truly belonged to the Minister. Reliance was placed upon Commission of Taxation v Cripps & Jones Pty Limited[67] where the Full Court of the Federal Court said:

"If the integrity of the doctrine that the discretion belongs to the administrator, and not to the court, is to be preserved, the court must not only refrain from interfering, upon discretionary grounds, with a lawful decision, but it must also refrain from justifying an unlawful decision, by reference to a discretion which lawfully belongs to the administration under a different head of power. That is no mere technicality. However probable it may seem to the court that the same result would have been reached had the administrator adverted to the right head of power, the exercise of that power does not belong to the court."

There were a number of answers to these submissions advanced by the Minister and Bengalla which in my opinion should be accepted. First, as Stein J found[68] clause 5 of SEPP 45 does not oblige the Minister to disregard the provisions or objectives in the Muswellbrook LEP upon which Rosemount relies. It does not override s.90(1)(a)(i) or (p)(i). Second, as Stein J also found, the evidence established in fact that the Minister had regard to clause 8(4) and the zone objectives.[69] Third, by having regard to Mr Cleland's reports, the Minister had regard to the matters referred to in clause 17(2). Fourth, apart from s.91(2), rendered inapplicable by s.100A(2), the matters to be considered by the Minister in granting a consent pursuant to s.100A(2) in consequence of s.100(8) addresses the same matters in ss.90 and 91 as would be addressed if the development was a permissible development. Having decided that he should be the determining authority and having issued a direction pursuant to s.101(1), the Minister is obliged in exercising his powers under s.101(8) to have regard to the same considerations irrespective of whether the development is permissible (s.101(1)), or prohibited (s.101(2)).

It follows that if, contrary to my view, SEPP 45 was an invalid exercise of power and was thus inoperative to confer a power to grant the consent, s.100A was a valid and available alternative source of power to sustain the consent.

It was argued, however, that upon the basis of some exercise of discretion, this Court should not so hold because on 27 June 1995 the Minister had signed but not issued a direction pursuant to s.101 calling in the Bengalla development application as a prohibited development. I see no basis upon which, if there be a valid alternative basis of power to sustain the development consent, that basis should be rejected because the Minister failed to adopt a permissible procedure directed specifically to conferring upon him a power of determination in relation the Bengalla development specifically. If the notice given in 1987 was a valid notice under s.101 encompassing the Bengalla development, the fact that the Minister signed but did not issue a further direction is, in my opinion, legally irrelevant.

The appellant thus succeeds on the two major matters argued. However a considerable number of alternative matters were raised by notice of contention which I will now address.

SEPP 45 WAS OUTSIDE POWER AS IT WAS NOT A "POLICY"

Rosemount argued that SEPP 45 "does not answer the description of "a policy" within the Act; rather it is to be characterised as "comprising the `plan making' task of specifying the basis upon which mining should be permissible". It contended that whilst there was a difference between a "policy" and a "plan', as Sheller JA pointed out in Leichhardt Municipal Council v Minister for Planning,[70] to be a policy the document must have the "character of establishing a course of action for environmental planning for the State". This led to the ultimate submission that "policies are designed to establish environmental planning principles of state wide application which can then be applied in designing zoning and permissibility provisions in local and regional environmental plans. But it was not seen to be the role of policies to establish the zones or devise or amend the criteria for permissibility in particular zones - these were matters of detailed local land use to be settled by local councils in local environmental plans."

In my opinion there is no legislative basis for these submissions. They reflect the approach of Rosemount which misconstrued the proper relationship between planning instruments to which I have earlier referred. In particular the submissions disregard the provisions of ss.36 and 74 and place undue emphasis on the planning role of a local environmental plan.

It is, in my opinion, sufficient to note that a State Environmental Planning Policy means a document prepared with respect to such matters as are in the opinion of the Director and ultimately the Minister of significance for environmental planning for the State. I do not think it helpful to seek further to analyse the meaning of the word "policy". It is apparent that "policy" can be used in different senses and thus have a different meaning depending upon the context in which it is used.[71] Construed in its legislative context, the content of a state environmental planning policy is that which relates to matters which are in the opinion of the Minister of significance for environmental planning for the state, and the content of the policy may have the effect contemplated by ss.36 and 74 of amending prior and possibly more detailed environmental planning instruments. A policy of a government, or of a Minister may thus be to clarify planning controls, in this instance statewide, in relation to mining developments by making such developments permissible where they are otherwise permissible only on satisfaction of conditions.

DENIAL OF PROCEDURAL FAIRNESS IN THE MAKING OF SEPP 45 Stein J upheld the Minister's submission that, having regard to SEPP 45's statewide application, Rosemount had no special right to be heard superior to that of any other person regarding the making of SEPP, even though its interests might be affected. His Honour held that Rosemount could not have a legitimate or reasonable expectation that it would be accorded procedural fairness before the making of SEPP, and further that no expectation of procedural fairness arose from dealings between the Department and Rosemount, or from other exterior circumstances.

On appeal Rosemount contended that the rules of procedural fairness in relation to the making of SEPP were attracted by reason, first, of Rosemount's reasonable expectation arising from the assurances given, second, from the existence of a course of dealing, third, from the consequences of being denied the opportunity to consider the SEPP and put submissions to the Minister, and fourth, from the existence of statements which supported such a reasonable legitimate expectation.

Natural justice, or procedural fairness, does not require "that everyone who may suffer some detriment as an indirect result of an order ... is entitled to heard before the order is made. Orders made by (the Commission) may affect many members of the community who are not parties to the proceedings in question but that does not mean that any member of the community who will be indirectly affected by an order of the (Commission) had a right to be heard in those proceedings."[72] SEPP 45 had statewide application, not merely Hunter region application, and not specifically application to Bengalla's development application. It was not restricted to coal mining, impacting upon all mining on lands zoned to permit mining on satisfaction of conditions. In my opinion it is indistinguishable, in principle, from the position addressed by Mahoney JA in Medway & Anor v Minister for Planning[73] and the principles there enunciated result in Rosemount having no special right to be heard preliminary to the making of SEPP 45, unless that right arose from conduct for which the Minister was responsible. Put another way, Rosemount had no special interest in SEPP 45 sufficient to give rise to a legitimate expectation to be heard prior to the making of SEPP because it was in no different position to any member of the class of persons who may wish to mine for any mineral or product throughout the state on land zoned to permit mining of satisfaction of conditions.[74]

Further, in reality, Rosemount had, at the very least, a reasonable opportunity to present its case to the Minister against the exercise of a power, however effected, which would have the effect of permitting the Minister to grant consent, and granting it.[75] Their representations were advanced to the commissions of inquiry, by personal meetings with officers of the Department, by personal meetings between the directors and legal advisers of Rosemount with the Minister, and by extensive correspondence from Rosemount's solicitors to the Minister. They had made entirely clear their opposition to any step which would either permit the granting of development approval, or result in its grant. In reality it cannot be doubted that the Minister was fully aware of Rosemount's position.

Rosemount contended that it was denied procedural fairness in relation to the making of SEPP 45 because it had a legitimate expectation of being consulted prior to any such proclamation. That expectation is said to flow from:

(a) The giving of assurances which were said to comprise:

(i) representations in August and October 1994 by the then Minister and Premier that the stake holders would be consulted in the process of preparation of a comprehensive cumulative impact study for coal related developments in the upper Hunter Valley;

(ii) representations in February 1995 by the Minister that before any further action was taken in relation to the Bengalla Coal mine, the Department of Planning would facilitate discussions between all parties;

(iii) a representation in February 1995 by the Minister that all parties with an interest in the Upper Hunter region were invited to participate in the process of preparing a cumulative environmental study in the upper Hunter Valley which study would enhance strategic planning and decision making;

(iv) representations from August 1994 onwards that there would be a regional environmental study and plan which would consider the cumulative environmental impacts of the different economic activities in the Hunter region, such representations said to be in Minister's news releases and the Premier's speech on 5 October 1994;

(v) representations made by Mr Haddad in February 1995 that nothing would be done until there had been further contact and consultation with Rosemount, coupled with representations said to have been made by Mr Haddad in April and June 1995 that Rosemount would be contacted and kept informed.

(b) A course of dealing with the Minister and officers of the Department of Planning throughout 1994 and 1995.

(c) The fact that the Bengalla project had the potential to adversely affect Rosemount.

(d) The existence of the materials referred to in (a) above, and the circumstance that the Minister received Ministerial briefing notes suggesting that a further public notification and fresh commission of inquiry may be required if the matter was dealt with as a prohibited development. Additionally the Intergovernmental Agreement on the Environment, the ESD Strategy and a departmental discussion paper "Modernisation the Planning System" all fostered the concept of discussion giving rise to a reasonable expectation of consultation before action to proclaim SEPP 45. The Minister for Ethnic Affairs v Teoh[76] was relied upon.

In my view each of these submissions fail. No assurances were given that the Government would not enact a State Environmental Planning Policy which might have an effect upon the Bengalla application, and Rosemount's opposition to it. Further, Rosemount was given every opportunity over a period years to present its objections to the proposed development. As Stein J held:

"Rosemount had said all it wanted about the application."[77]

Insofar as the making of SEPP 45 facilitated the grant of development consent, it is undoubted, as the Minister must have known, that had he consulted with Rosemount their opposition, and the arguments in opposition to it being made would have been the same as had been advanced in the preceding years. Nothing flows from the course of dealing between the Minister, Department and Rosemount over a number of years which could give rise to any reasonable expectation that the Government, through the Minister, would give to Rosemount in advance notice of steps it intended to take which might facilitate development consent. Particularly is that so in the circumstance that the Minister had formed the view in the interests of State environmental planning that there should be clarity in relation to mining permissibility on land zoned to permit mining on satisfaction of conditions. Further, the fact that there may exist reports, documents or indeed agreements of an inter-governmental nature, later given additional force by enactment, that consultation was desirable did not bring about the result that it was a denial of procedural fairness for there not to have been a further consultation or hearing when, in truth, all that Rosemount wished to say on the matter had been said, and said repetitively. There is nothing in my understanding of Teoh which requires the Court, in those circumstances, to hold that the existence of intergovernmental agreements, strategies or discussion papers results in Rosemount having or being entitled to assume a legitimate expectation that the Minister would act in conformity with those documents before exercising a subordinate legislative

DEVELOPMENT APPLICATION INVALID AS IT WAS NOT ACCOMPANIED BY A VALID ENVIRONMENTAL IMPACT STATEMENT

Stein J rejected Rosemount's contention that the development consent was invalid because the development application being in respect of a designated development was required by s.77(3)(b) to be accompanied by an environmental impact statement in the prescribed form. The EIS in fact provided was said to be inadequate because it did not provide an adequate visual assessment of the development, nor was there any analysis of feasible alternatives, including the alternative of not carrying out the development at all. Rosemount had relied upon the absence of graphic representation of the development from various viewpoints at various stages in the development. It was said no proper elevations were provided.

Stein J thought that the visual impact assessment contained in Appendix 14 to the EIS "passes muster. It may not be perfect but it does not have to be (Leatch v National Parks & Wildlife Service (1993) 81 LGERA 270 at 280). It did not explore every avenue advocated by experts, but this not necessarily lead to invalidity (Prineas v Forestry Commission (1983) 49 LGRA 402 at 417, Guthega Development Pty Limited v Minister (1986) 61 LGRA 401 at 409-410, 412 and Schaffer Corporation v Hawkesbury City Council (1992) 77 LGRA 21 at 31 approved in Helman v Byron Shire Council (1995) 87 LGERA 349 at 357)."[78]

I agree with Stein J's view, and with his finding that absence of graphic illustrations does not necessarily result in invalidity. In my opinion Appendix 14 was sufficient to direct an informed reader to possible environmental consequences. It is tolerably clear that, whilst there may have been criticisms of the EIS, it was sufficient for objectors at the Commission of Inquiry to have a reasonable understanding of the impact of the proposals, and was adequate to enable Mr Cleland to report thereon.

Regarding the asserted failure adequately to address feasible alternatives, and the consequences of not carrying out the development at all, as required by regulations 34(h) and (i), I respectfully agree with the finding by Stein J that these matters were sufficiently addressed in sections 6.1 and 6.2 of Volume 1 of the EIS to an extent "sufficiently specific to direct a reasonably intelligent and informed mind to those issues."

In these circumstances it is unnecessary to consider the submissions advanced on behalf of Bengalla and rejected by Stein J that Rosemount was estopped from advancing this ground of invalidity of the development application before Stein J based on principles enunciated in Port of Melbourne Authority v Anshun Pty Limited[79]

DENIAL OF PROCEDURAL FAIRNESS IN GRANTING DEVELOPMENT CONSENT

This ground raises no issue materially different to that raised in the contention of denial of procedural fairness in relation to the making of SEPP 45. In my opinion it is overwhelming clear that Rosemount had been heard by the Minister regarding all it wished to say against the granting of development consent. Stein J correctly so held.

DEVELOPMENT CONSENT LACKED FINALITY AND CERTAINTY

Rosemount contended that conditions of consent numbers 4, 5, 6 and 8 resulted in the consent being invalid as lacking certainty and finality. I have previously set out conditions 4 and 5. Conditions 6 and 8 are as follows:

A) The Applicant shall ensure full compliance with all statutory requirements including but not restricted to those set down by Local Government Act, 1993, Pollution Control Act, 1970, Clean Air Act, 1961, Clean Water Act, 1970, Noise Control Act, 1975, Protection of the Environment Administration Act, 1991, and all other relevant legislation, Regulations, Australian Standards, Codes, Guidelines and Notices and to the requirements of the NSW Environment Protection Authority (`EPA'), Department of Mineral Resources (`DMR'), National Parks and Wildlife Service (`NPWS'), Department of Land and Water Conservation (`LAWC'), and Roads and Traffic Authority (`RTA').

B) The Applicant shall undertake and implement monitoring with respect to:

ii) ground water levels and quality required by the LAWC and pursuant to Condition 10.

C) The Applicant shall annually provide the DMR, LAWC and the Council, results and analysis of environmental monitoring undertaken pursuant to the provisions of sub-clause A and Condition 8 herein.

D) The Applicant shall within twelve (12) months of this Consent, prepare and implement an Environmental Plan in consultation with the EPA, DMR and LAWC.

a) The plan shall include a comprehensive water management plan detailing procedures and works necessary to avoid any discharge of mine water to the Hunter River other than pursuant to an EPA licence to do so in the event of a wet year or unplanned pit inflows and including the requirements set out in Condition 10.

b) The plan shall also include the Applicant's Environmental Policy and the principles and procedures to be adopted to achieve stated environmental objectives herein.

A) The Applicant shall prepare and submit to the DMR for approval an annual Environmental Management Plan Report (`EMP report'). The report shall include:

ii) Rehabilitation report in respect of open cut operations.

iii) A review of effectiveness of environmental management of the subject area in terms of the EPA requirements.

iv) A review of performance in terms of the conditions of development consent.

v) A listing of performance in terms of the conditions of development consent.

B) The Applicant shall consult with the Director of Urban Affairs and Planning (`the Director') during report preparation concerning any additional requirements that the Director may have.

C) Copies of the EMP report shall be submitted annually to the Director, EPA, DMR, LAWC, and the Council.

D) The first report shall be completed and submitted within twelve (12) months of this Consent, at a date to be determined in consultation with the DMR, and thereafter annually on the anniversary of that date.

E) In reviewing compliance of the EMP report with statutory approvals, provisions of the Mining Act apply including the issuance of directions by the District Inspector of Mines and notices by the minister for Mines as provided in Condition 6A of this consent."[80]

After referring to Mison v Randwick Municipal Council[81], and Scott v Wollongong City Council[82], Stein J said:

"Judged by Mison, Scott and s91(3A), none of the conditions in question are capable of resulting in any change to the core purpose of the development. Conditions 4 and 5 are clearly ancillary to that purpose, albeit important matters. They are ameliorative measures addressing visual impact. They cannot have the effect of changing the core purpose of the development in any fundamental respect. The details of the ameliorative measures in conditions 4a and 5 are, of necessity, required to be worked through. They are not the sort of conditions contemplated by Samuels AP in Scott at p118.8. Condition 5C cannot effect any alteration of the fundamental nature of the development. Nor can conditions 6 and 8 which require compliance with the law, an environmental management plan and environmental monitoring. They do not leave to the Council the power to determine matters which may effect a change in the nature, extent or characteristics of the development. Such conditions do not offend the principle discussed in Mison."[83]

I respectfully agree. In particular, the provisions of s.91(3A) which had not been enacted when Mison and Scott were decided, provides:

"A consent may be granted subject to a condition that a specified aspect of the development that is ancillary to the core purpose of the development is to be carried out to the satisfaction of the consent authority or a person specified by the consent authority."

That makes clear that it is permissible to impose conditions which are to be performed to the satisfaction of a council where the conditions relate to ancillary aspects of the development.

It was also submitted that conditions which required tree planting or other works on the property of others were unenforceable. They were thus invalid, striking down the consent. Reference was made to Inghams Enterprises Pty Limited v Kira Holdings Pty Limited & Anor[84] where I said:

"If, at the time of considering whether consent should be granted, the incompatibility between the proposed development and that on an existing adjacent property cannot be resolved by imposition of conditions upon the developer/applicant, the development should be refused."

The fact that a condition is imposed upon a developer to do work on the property of another does not mean that the condition is invalid; it may not be able to be performed but that and any consequences flowing from non-performance are different matters.

Rosemount contended that the Minister failed to consider the visual intrusion of the mine into the landscape because he deferred consideration of the subject of conditions 4,5,6 and 8. Stein J rejected those contentions stating:

"A review of the material before the Minister when he determined to grant consent indicates that he could not have failed to consider the matters in the impugned conditions or the mine's visual intrusion into the landscape. It must be concluded that he gave `real' consideration to the issue (Parramatta City Council v Hale (1982) 47 LGRA 319). He neither failed to consider these matters nor deferred them for consideration at a later date. There is no breach of the principles enunciated in Mison. As to the question of the mine's visual intrusion in the landscape, this was addressed by Mr Cleland (Ex J) and his views were before the Minister. The decision was made by the Minister based on the Department's acceptance of the Commissioner's Report that there would continue to be some visual intrusion into the surrounding areas, ameliorative measures notwithstanding (and see also Ex K 772(e)). The reference in (e) to `avoid' before `visual intrusion' may be anomalous but it cannot lead to the conclusion that the Minister (or Mr Cleland) failed to take into consideration the development's visual intrusion into parts of its surroundings."[85]

Rosemount contended that the granting of the relevant consent was "manifestly unreasonable" with the consequence that the "approval is irrational". It was contended that, having regard to objective (c) of the 7(L1) zone, namely of providing a buffer to Muswellbrook and surrounding areas from the effects of mining, it must be found that to grant consent breached those objectives because of the effect of the Bengalla project with regard to visual impact, noise and dust. The implicit adoption by the Minister of the Commissioner's findings that the noise and dust created by the development would not impact upon Muswellbrook, and the visual impact on Muswellbrook would not be unacceptable, infected the consent with unreasonableness because the Commissioner's findings were unreasonable.

Stein J rejected these contentions, in my view correctly.

The contention before Stein J and this Court was that "overriding weight" must be given to the factors of visual impact, noise and dust because of the provisions of the Muswellbrook LEP, and its objectives. Particular reference was made to clause 11 of the Muswellbrook LEP which specified the factors which the Council was required to consider in determining a development application in zone 7(L1).

In determining the development application the Minister is required to have regard to the provisions of s.90. That involves the weighing of various factors one of which is the provisions of the Muswellbrook LEP. However there is no basis for the view that the Muswellbrook LEP is to be given predominance, nor in considering the Muswellbrook LEP are the topics of visual effect, noise or dust to be given predominant weight. As Mason J said in Minister for Aboriginal Affairs v Peko-Wallsend Limited[86]:

"In the absence of any statutory indication of weight to be given to various considerations, it is generally for the decision maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power."

As it is apparent, as Stein J found, that these matters were taken into account there is no basis for a finding that the decision to grant consent was unreasonable arising from any failure to give certain factors "overriding weight".

Furthermore, analysis shows that each of the subject matters contained in clause 11 of the Muswellbrook LEP, with the possible exception of Aboriginal heritage, is a matter which would require the Minister's consideration under the list of topics specified in s.90(1) even disregarding the provisions of s.90(1)(a)(i) or (p)(i).

I agree with Stein J's finding that the Minister's decision to grant consent cannot be held to be "arbitrary, capricious or manifestly unreasonable". The Minister by considering the Commissioner's report did give weight to the aspects of visual impact, noise and dust.

Rosemount contended that the Minister misdirected himself as to the proper approach to the consideration of the matters in s.90(1). It was argued that because of s.90(1)(a) the Minister was obliged to have regard to the matters within the Muswellbrook LEP otherwise than in relation to permissibility. It was said this did not occur it being contended that the report to the Minister dated 4 August 1995 considered the Muswellbrook LEP only with respect to permissibility but did not make reference to clause 2 (aims and objectives), clause 11 or the objectives in Schedule 1.

Stein J correctly rejected this contention. Any fair reading of the Cleland reports and the reports to the Minister of 4 August 1995 makes clear that the Minister did consider the merit of the proposal having regard both to the provisions of the Muswellbrook LEP, the provisions of clause 11 which in any event correspond to the matters for consideration under s.90(1). There is no requirement to refer specifically to each clause in an LEP when considering consent to establish that it has been taken into account. The Cleland reports make generalised reference to the Muswellbrook LEP and specific reference to particular matters including the objectives of zone 7(L1) and clause 8(4) which inhibits a council from granting consent if it is not of the opinion that the carrying out of the development is consistent with the objectives of the zone within which the development is proposed. Those objectives were before the Minister for zone 7(L1). Thus it cannot be said that the Minister only had regard to the Muswellbrook LEP in relation to permissibility.

(a) State Environmental Planning Policy No. 45 Permissibility of Mining is invalid;

(b) The development consent granted by the Minister for Urban Affairs and Planning to Bengalla Mining Company Pty Limited on 7 August 1995 (DA 211/93) is invalid

Since writing the above the State Environmental Planning (Permissible) Mining Act 1996 has been enacted and was assented to on 21 June 1996. In supplementary submissions all parties to the appeal accepted that the result of that legislation was that the orders set out above must be made.

The question of costs is reserved for future argument.

[5] Commission of Inquiry Report, dated May 1995, p.iv.

[6] Commission of Inquiry Report, dated May 1995, p.x.

[7] Commission of Inquiry Report, dated May 1995 p.78.

[8] (1995) 86 LGERA 1 at 27.

[9] Commission of Inquiry Report, dated May 1995, p.ii.

[10] Commission of Inquiry Report, dated May 1995, p.iii-iv.

[16] Appeal Book, pp.1145P-T, 1146 F-I, O-Q.

[17] Appeal Book, pp.1159G-1160H-1161O, 1162K-U.

[36] Attorney General (NSW) v Quinn [1990] HCA 21; (1990) 170 CLR 1 at 37

[37] See Associated Provincial Picture Houses v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223 at 230; Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; (1995) 183 CLR 273 at 290.

[38] Rollo v Minister of Town & Country Planning [1948] 1 All ER 13 at 17; Port Louis Corporation v Attorney General (Mauritius) [1965] AC 1111 at 1124; Regina v Secretary of State, ex parte Metropolitan Authorities [1986] 1 WLR 1; Leichhardt Municipal Council v Minister for Planning (1992) 78 LGERA 306 at 366; Air New Zealand v Wellington International Airport Ltd [1993] 1 NZLR 671; Regina v Secretary of State for Transport; ex parte London Borough of Richmond-Upon-Thames [1994] 1 WLR 74.

[39] (1995) 86 LGERA 186 at 199.

[40] [1995] HCA 20; (1995) 183 CLR 273 at 291.

[41] Mitchell v The Queen [1996] HCA 45; (1996) 70 ALJR 313 at 319-20.

[42] See Pearce and Geddes:Statutory Interpretation in Australia 4th edition section 4.34

[44] See Parramatta City Council v Pestell [1972] HCA 59; (1972) 128 CLR 305 at 323 per Menzies J; R v Secretary of State; ex parte Greenpeace Ltd [1994] All ER 353 at 383, 384.

[45] [1968] UKHL 1; [1968] 1 AC 997 at 1030.

[47] See Leichhardt Municipal Council v Minister for Planning & Anor (1992) 78 LGERA 306 at 338-9 per Sheller JA

[48] (1992) 30 NSWLR 307 at 320.

[49] See also Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 341 per Mason CJ; Attorney General (NSW) v Quinn [1990] HCA 21; (1990) 170 CLR 1 at 37-8 per Brennan J.

[50] Minister for Primary Industries & Energy v Austral Fisheries Pty Ltd [1993] FCA 45; (1993) 40 FCR 381 at 381-2 per Lockhart J

[51] Clements v Bull [1953] HCA 61; (1953) 88 CLR 572 at 577; see cases cited by Lockhart J in Austral at 383-4.

[54] See Regina v Secretary of State for the Home Department, ex parte Brind & Ors [1991] UKHL 4; [1991] 1 AC 696 at 749 per Lord Bridge, 750 per Lord Roskill, 762-3 per Lord Ackner and particularly 766-7 per Lord Lowry.

[55] The Commonwealth v Tasmania (1983) 158 CLR 1 at 260.

[56] [1989] HCA 3; (1989) 166 CLR 161 at 165 per Wilson, Dawson, Toohey and Gaudron JJ.

[57] [1989] HCA 3; (1989) 166 CLR 161 at 178.

[58] [1989] HCA 3; (1989) 166 CLR 161 at 178-179.

[59] See Cunliffe v The Commonwealth [1994] HCA 44; (1994) 182 CLR 272 at 356-357; see also State of New South Wales & Ors v Macquarie Bank Limited (1992) 30 NSWLR 307 at 321 per Kirby P, Qiu v Minister for Immigration and Ethnic Affairs (1994) 55 FCR 439 at 446 per Lockhart J.

[62] Johns v Australian Securities Commission & Ors [1993] HCA 56; (1993) 178 CLR 408 at 426 per Brennan J.

[63] See generally Moore v Attorney General (Irish Free State) [1935] AC 484 at 498; The King v Bevan; Ex parte Elias and Gordon [1942] HCA 12; (1942) 66 CLR 452 at 487 per Williams J; Lockwood v The Commonwealth [1954] HCA 31; (1954) 90 CLR 177 at 184 per Fullaghar J; Australian Broadcasting Tribunal & Anor v Saatchi & Saatchi Compton (Vic) Pty Limited (1985) 10 FCR 1 at 9-10 per Bowen CJ; Brown v West & Anor (1990) 169 CLR 195 at 203 per Mason CJ, Brennan, Deane, Dawson and Toohey JJ.

[65] Forbes v New South Wales Trotting Club Limited [1979] HCA 27; (1979) 143 CLR 242 at 277 per Aitken J; Macksville & District Hospital v Mayze (1987) 10 NSWLR 708 at 729-730 per Kirby P, the passage in Smith v East Elloe District Council [1956] UKHL 2; [1956] AC 736 at 769-770 in the speech of Lord Radcliffe is to be understood to the same effect.

[66] [1975] AC 295 at 365.

[67] (1987) 17 FCR 55 at 63.

[70] (1992) 78 LGERA 306 at 329.

[71] See for instance Re: Drake and the Minister for Immigration & Ethnic Affairs (No.2) (1979) ALD 634 at 640 where Brennan J discussed a power to make a "policy in order to guide" the Minister in the exercise of statutory discretion; Leppington Pastoral Company Pty Limited v Department of Administrative Services (1990) 23 FCR 148 at 156 where the width or narrowness of the degree of specificity inherent in the expression and controlled by construction of the legislation was noted; Professional Promotions & Services Limited v Attorney General [1989] NZHC 896; (1990) 1 NZLR 501 at 509-510 where policy in relation to a government statement was held to have been "the course of action adopted or to be adopted by a government on a stated issue".

[72] R v Ludeke; ex parte The Customs Officers Association of Australia [1985] HCA 31; (1985) 155 CLR 513 at 520 per Gibbs CJ.

[73] (1993) 30 NSWLR 646 at 651-653.

[74] See Bread Manufacturers of NSW & Ors v Evans & Ors [1981] HCA 69; (1981) 180 CLR 404 at 415, 432-433 per Mason and Wilson JJ.

[75] See Sullivan v Department of Transport (1978) 20 ALR 323 at 343 per Deane J; Re Association of Architects of Australia; ex parte Municipal Officers Association of Australia [1989] HCA 13; (1989) 63 ALJR 298 at 305 per Gaudron J.

[76] [1995] HCA 20; (1995) 183 CLR 273 at 291.

[79] [1981] HCA 45; (1981) 147 CLR 589.

[81] (1991) 73 LGRA 349 at 351.

[82] (1992) 75 LGRA 112 at 119.

[84] Unreported,Court of Appeal (NSW), 29 March 1996, per Cole JA, p.10.

[86] [1986] HCA 40; (1986) 162 CLR 24 at 41.