Oshlack v Rous Water

Ballina Council 62In relation to Ballina Council, on 25 March 2010 it resolved to defer consideration of approval under Part 5 of the EPA Act of the proposed fluoridation plant at Marom Creek to its April meeting. Subsequently however, the matter was not placed on the agenda for the Ballina Council meeting scheduled for 22 April 2010 as the officers of Ballina Council wished to be in a position to assess the decision of Rous Water, which was expected to be made at the latter's meeting on 21 April 2010. 63Ballina Council proceeded to consider approval of the Marom Creek fluoridation plant at its meeting on 27 May 2010. The report to Ballina Council for that meeting noted under the heading "Background" that "[t]he NSW Department of Health has directed Rous Water to fluoridate the public water supply under their control to Lismore, Richmond Valley and Ballina Councils and also directed Ballina Council to fluoridate the supply from Marom Creek". The latter statement was not an accurate description of the approval given to Ballina Council. 64Under the heading "Options" the report noted two options for Ballina Council. First, to decline to approve the construction of the proposed fluoridation dosing plant at Marom Creek or secondly, to approve the construction of the proposed plant at Marom Creek, subject to the recommended conditions of the Determination Report. The latter was expressed to be the preferred option. 65On 27 May 2010, Ballina Council resolved: "That Council approves the construction of the proposed fluoridation dosing plant at Marom Creek WTP, subject to the recommended conditions of the Determination Report."

Appellant's contentions below 66At the hearing before the primary judge, the appellant abandoned two challenges to the respondents' decisions, one founded upon s 112 of the EPA Act and the other upon the ground that the respondents' decisions were manifestly unreasonable, illogical or irrational. This left four issues for determination raised in the pleadings as follows: (1)whether the respondents failed to comply with s 111 of the EPA Act and cl 228(2) of the EPA Regulations in making their respective decisions; (2)whether Rous Water took into account an irrelevant consideration, namely, "erroneous" legal advice from Lindsay Taylor Lawyers; (3)whether Rous Water "made an error of law" pursuant to s 111 of the EPA Act by acting on the belief that it had no power to exercise its jurisdiction other than to make the decision it did; and (4)whether in making their respective decisions either respondent constructively failed to exercise its jurisdiction because it misconstrued its powers and duty pursuant to Part 5 of the EPA Act. 67In relation to the fourth ground of review identified above, it may be observed that the appellant never identified before the primary judge, nor on the appeal, any relevant "power" conferred on the respondents by Part 5 of the EPA Act, in respect of which there was an alleged constructive failure to exercise jurisdiction.

Decision of primary judge 68The primary judge rejected each of the appellant's grounds of review seeking to impugn the respondents' decisions (see Rous Water (No 2)).

First ground 69As to the first ground of review (founded on s 111 of the EPA Act), the primary judge rejected the appellant's submission that the respondents failed to properly consider the impact of the relevant fluoridation activities on the environment because of an absence of information before either of them as to the fate of the fluoridated water and its interaction with, and impact upon, the receiving environment. The primary judge held (at [78]) that each of the respondents adequately discharged their duty pursuant to s 111 of the EPA Act and cl 228(2) of the EPA Regulations insofar as each took into account to the fullest extent reasonably possible all matters affecting or likely to affect the environment by the uplift in water fluoridation. 70In making this finding, the primary judge (at [80]) rejected the appellant's submission that it was incumbent on the respondents to, independently from each other or from the Secretary of the Department of Health, undertake a comprehensive de novo investigation into the environmental effects of water fluoridation in order to comply with s 111 of the EPA Act. 71In relation to the appellant's alternative submission that the respondents failed to give "proper, genuine and realistic consideration" to relevant matters contained in s 111 of the EPA Act, the primary judge noted (at [84]) the essence of the appellant's complaint was that the respondents considered themselves compelled by the direction and approvals given to them by the Secretary to the Department of Health to fluoridate the public water supplies under their control. Therefore, the appellants contended, the Secretary had not given proper, genuine or realistic consideration to the mandatory matters contained in s 111 of the EPA Act and cl 228(2) of the EPA Regulations. 72The primary judge held (at [91]) that under this first ground of review the Court's task was to determine whether or not the respondents complied with s 111 of the EPA Act. Her Honour held that this was an objective inquiry and that even if the respondents held a subjective view that the material before them was inadequate, this was irrelevant. Rather, provided the respondents examined and took into account the relevant matters referred to in s 111 of the EPA Act and cl 228(2) of the EPA Regulations to the fullest extent reasonably possible, each respondent discharged its duty. 73The primary judge held (at [92]) there was insufficient evidence upon which it could reasonably be concluded that the respondents were somehow intimidated into making their decisions as alleged by the appellant. Further, the primary judge held (at [96]) that it had not been demonstrated that by reason of either the Blakes advice or the Lindsay Taylor advice, the respondents regarded themselves as improperly bound or that either respondent failed to take into account to the fullest extent reasonably practicable the mandatory matters each was required to consider pursuant to s 111 of the EPA Act and cl 228(2) of the EPA Regulations. 74In respect of the Ballina Council decision, the primary judge also held (at [100]) that the challenge on the ground of an alleged failure to comply with the EPA Act and EPA Regulations was premature, because the decision only related to the construction of the fluoridation dosing plant at Marom Creek, not the addition of fluorine and hence s 111 of the EPA Act was not yet engaged.

75As to the second and third grounds of review (taking into account irrelevant considerations and error of law pursuant to s 111 of the EPA Act), the primary judge dealt with these together, observing (at [103]) that they were essentially different formulations of the same complaint. The essence of this complaint was the purportedly erroneous nature of the legal advice insofar as it allegedly indicated to the respondents that they had no alternative but to immediately implement the Secretary's direction and approvals and that any failure to do so could result in sanctions. 76The primary judge held (at [106]) that these grounds of review must fail in addition to the reasons given in respect of the first ground of review. First, it had not been demonstrated that the legal advice was erroneous. Secondly, there was nothing in the statutory power being exercised by Rous Water prohibiting consideration of arguably incorrect legal advice. Thirdly, the appellant was not able to identify what further expert advice or material Rous Water would have sought prior to making its decisions, and moreover, the effect that such information would have had on its decisions. Fourthly, even assuming the legal advice was wrong, at its highest this would amount to an error of fact made by the respondents, which was not reviewable.

Fourth ground 77As to the fourth ground of review (constructive failure to exercise jurisdiction), the primary judge proceeded upon the basis (at [108]) that a constructive failure to exercise jurisdiction occasioned by taking into account an irrelevant consideration, or by Rous Water failing to apply itself to the task that s 111 of the EPA Act mandates must be undertaken, is clearly an error going to jurisdiction. 78In respect of Rous Water, the primary judge held (at [109]) that the essence of this challenge was the same as the second and third grounds of review, namely, the reliance on the Lindsay Taylor legal advice. Hence the challenge was rejected for the same reasons given in respect of the second and third grounds. 79In respect of Ballina Council, the primary judge considered (at [110]) that the complaint was identical (to that in respect of Rous Water). Her Honour noted that the substance of the legal advice given to Rous Water was known to Ballina Council at the time of the Marom Creek decision, and the two members of the Ballina Council were also councillors of Rous Water, both of whom were aware of the legal advice provided by Blakes and Lindsay Taylor to Rous Water. 80The primary judge held (at [111]), that the appellant had not demonstrated any misapprehension by Ballina Council as to the exercise by it of any power under Part 5 of the EPA Act, notwithstanding that it had misdescribed in its minutes of the meeting at which the decision was made on 27 May 2010, that a direction had been given to the council, rather than only an approval.

Issues on appeal 81The issues on appeal were substantially narrowed at the commencement of the hearing following the filing of a second further amended notice of appeal which abandoned Grounds 4, 6, 7 and 8. (These appeal grounds were directed to the first, second and third grounds of review below.) The remaining grounds of appeal were directed to two matters. First, the alleged constructive failure to exercise jurisdiction. Secondly, the costs order below. 82During the hearing of the appeal, the appellant sought leave to amend Ground 1 relating to alleged incorrect legal advice received by the respondents, which was said to have influenced their decisions, to include another aspect of the advice concerning the "deadlines" in Condition 3 which was also said to be erroneous. 83That amendment was opposed by the respondents on two grounds. First, that it raised a new issue which was not raised below and was inconsistent with the position put by the appellant on the hearing of the two preliminary questions. Secondly, there was no utility in granting the amendment because it was without merit. The respondents did not submit that the amendment caused them any particular prejudice. The court indicated that it would determine the amendment application as part of its determination of the appeal. 84The amendment to Ground 1 should be permitted because it is not suggested that it would cause any prejudice to the respondents. However, for the reasons explained below, the amendment of itself does not assist the appellant's challenge to the respondents' decisions. 85In summary, the issues as narrowed on appeal were as follows: (1)Whether the primary judge erred in holding that it had not been shown that the legal advice dated 16 April 2010 was erroneous, when Justice Biscoe's findings in his decision of 28 April 2011 made plain that the legal advice was erroneous, because: (a)in the case of an approval, the authority is not obliged to carry out the activity in accordance with the terms of approval but is merely empowered to do so; (b)the letter dated 4 March 2009 (p 147, Blue) constituted an approval within the meaning of Condition 3 of each of the approval and direction gazetted (Ground 1). (2)Whether the primary judge erred in failing to draw the inference that the legal advice received by the respondents had influenced their decisions, when the inference should have been drawn on the evidence that the legal opinions had influenced the decisions of the respondents (Ground 2). (3)Whether the primary judge erred in finding that there was no constructive failure to exercise jurisdiction by the respondents, when the respondents were under the misapprehensions that the legal effect of the approvals they had been granted amounted to a direction to fluoridate, that they had an obligation fluoridate and that they had a deadline by which to fluoridate drinking water in each water supply area the subject of each resolution (Ground 3). (4)Whether the primary judge erred in holding that there was no error in relying on the legal advice, even if it were wrong when reliance on the advice caused a constructive failure by the first respondent to exercise jurisdiction in accordance with its duty under s 111 of the EPA Act because the respondents were under the misapprehensions that the legal effect of the approvals they had been granted amounted to a direction to fluoridate, that they had an obligation to fluoridate and that they had a deadline by which to fluoridate drinking water in each water supply area the subject of each resolution (Ground 5). (5)Whether, in the exercise of her discretion when making costs order against the appellant, the primary judge erred in finding: (a)that the respondents had always denied that the question whether an environmental impact statement was required pursuant to s 112 of the EPA Act raises a question of jurisdictional fact, namely whether an activity is likely to have a significant effect on the environment, when the pleadings showed and the respondents conceded that the critical change to their pleading, from accepting to denying that the question whether an environmental impact statement was required pursuant to s 112 of the EPA Act raises a question of jurisdictional fact, was made in the week before the hearing; and (b)that the appellant engaged in disentitling conduct in discontinuing his challenge under s 112 of the EPA Act (Ground 9). 86This appeal lies as of right: Land and Environment Court Act 1979, s 58.

Issues which are not raised by this appeal 87Having regard to the way in which the appellant pleaded and conducted his case below, and has cast his amended grounds of appeal focussing on the respondents' alleged constructive failure to exercise jurisdiction, it is important to record what is not in issue in this appeal. 88First, there is no challenge to the decision of the primary judge in rejecting each of the other three grounds of review relied upon by the appellant below. 89Secondly, there is no challenge to the primary judge's conclusion in relation to Ballina Council, that the appellant's attempt to impugn the Marom Creek decision on the basis of an alleged breach of the statutory duty in s 111 of the EPA Act was premature and ought to be dismissed for this additional reason.

Grounds 1, 2 and 3 90The appellant submitted that appeal Grounds 1, 2 and 3 should be read together as part of the complaint that there was a constructive failure to exercise jurisdiction by the respondents. 91Thus, the appellant submitted that the Lindsay Taylor legal advice dated 16 April 2010 was erroneous, that this legal advice had "influenced" the respondents' decisions and hence there was a constructive failure by the respondents to exercise jurisdiction in accordance with their duty under s 111 of the EPA Act. This was said to follow because the respondents were under the misapprehension that the legal effect of the approvals they had been granted by the Secretary amounted to a direction to fluoridate, that they had an obligation to fluoridate and they had a deadline (specified in Condition 3) by which to fluoridate drinking water in each water supply area the subject of each resolution. 92The respondents' submissions highlighted that the appellant's complaint on appeal was somewhat differently framed to his challenge below. Before the primary judge, the appellant had contended that the respondents had failed to exercise jurisdiction by taking into account an irrelevant consideration, or had failed to apply itself to the task that s 111 mandates must be undertaken. The primary judge (at [106]) rejected the appellant's challenge based on these two complaints when dismissing the second and third grounds of review below. There is no appeal in respect of those findings or conclusions. 93The respondents noted that the appellant now submits on appeal that the respondents misapprehended the nature or limits of their functions or powers by making an erroneous finding or reaching a mistaken conclusion as to the legal effect of the approvals, that is, they had no choice in the circumstances but to decide immediately to construct the fluoride plants. 94The respondents submitted that the misapprehension relied upon by the appellant is in substance the inference the appellant says the primary judge should have drawn, but correctly declined to draw, in relation to the effect of the legal advice on the respondents' decisions. I consider this specific complaint below under Ground 2. 95The respondents submitted that the decisions by the respondents were exercisable pursuant to their general powers under s 24 of the LG Act, as found by the primary judge (at [63]). There is no challenge to this finding of the primary judge. 96The respondents also submitted that appeal Grounds 1, 2, 3 (and 5) proceed from a misconception about the duty imposed upon a decision maker by s 111 of the EPA Act, upon which the appellant's case below was based. The respondents highlighted that s 111 is a duty and not a power. That section imposes an obligation on the respondents to examine and take into account to the fullest extent (reasonably) possible all environmental effects of an activity. This duty involves an objective standard that has either been complied with or not, and the primary judge held it had. Again, there is no challenge to these findings. 97In relation to the significance of the legal advice, the respondents' position was that it was correct but as it did not ultimately matter this was not put at the forefront of the respondents' submissions. It was permissible, they submitted, for the respondents to take account of legal advice that the Review of Environmental Factors and the supplementary documents provided to Rous Water by the NSW Department of Health and the EPA satisfied the requirements of s 111 of the EPA Act, as held by the primary judge (at [78] and [97]). The respondents submitted that what the legal advices said about other matters was irrelevant to compliance with s 111.

Was the legal advice wrong (Ground 1) 98The appellant submitted that the legal advice from Lindsay Taylor was erroneous for two reasons:

• First, that in the case of an approval, a water supply authority is not obliged to carry out the activity in accordance with the terms of the approval, but is merely empowered to do so.
• Secondly, that the letter to Rous Water from the Acting Chief Dental Officer dated 4 March 2009 constituted an approval within the meaning of Condition 3 of the Lismore Approval and the Richmond Valley Direction extending the time for commencement of the upward adjustment of fluorine in the relevant water supply from no later than 31 December 2008 to an indeterminate date. 99The first alleged error raises a question as to the proper construction of s 6, s 6A and s 6B of the Fluoridation Act. The second alleged error raises a question as to the alleged effect of the Acting Chief Dental Officer's letter of 4 March 2009 for the purposes of Condition 3 of the Lismore Approval and the Richmond Valley Direction. 100The appellant accepted on the appeal that the correctness of the Lindsay Taylor legal advice was not an issue on the preliminary questions determined by Biscoe J. Nevertheless, the appellant submitted that the distinction between a direction and approval had been correctly recognised by Biscoe J on the preliminary questions, where his Honour said in Rous Water (No 1) at [39]: "There is a great difference in the nature of the obligation to fluoridate under s 6(1A) created by a direction and the nature of a discretionary right to fluoridate under s 6(1) created by an approval." 101The subject of the Lindsay Taylor advice and the earlier Blakes advice was whether Rous Water had sufficient material before it to satisfy s 111 of the EPA Act to proceed to an assessment of the environmental impacts of the proposed uplifts and construction of the fluoride dosing plants. 102The primary judge noted (at [90]) that the Blakes advice did not mandate the outcome of the assessment under s 111 of the EPA Act, rather it stated that Rous Water had sufficient information to proceed to an assessment and that any failure to do so may result in a breach of the Fluoridation Act, in particular under s 6(6) and s 6A(5), as a consequence of its delay in complying with Condition 3 of the Lismore Approval and the Richmond Valley Direction. 103The primary judge also considered (at [90]) that the Lindsay Taylor advice did not mandate the outcome of the assessment under s 111 of the EPA Act. However, the Lindsay Taylor advice was in more emphatic terms as to breach of the Fluoridation Act, if Rous Water did not comply with the approvals granted and the direction given to it by the Secretary: see [37] above. 104In this regard, the Lindsay Taylor advice noted that: (1)s 6 of the Fluoridation Act clearly distinguished between approvals granted and directions given by the Secretary; (2)s 6(1A) made it clear that a water supply authority must add fluorine to a public water supply if a direction to do so is given by the Secretary; (3)that there was no express equivalent provision that obliged a water supply, authority to act in relation to an approval to add fluorine to a public water supply, and ordinarily a statutory approval to do something does not create an obligation to do the thing; (4)however, the better view of the effect of the statutory scheme in the Fluoridation Act and particularly the operation of s 6(5)(b) and s 6B is that, once given, an approval by the Secretary of the Department of Health under s 6 must be implemented and complied with, unless it is revoked by the Secretary under s 6B. That is, there is no discretion in a water supply authority to whom an approval has been given regarding the implementation of that approval, unless that approval had been revoked (which had not occurred). 105I have concluded that the final part of the Lindsay Taylor advice (referred to in [85(4)] above) was erroneous insofar as it concerns the legal effect of an "approval" by the Secretary. On the proper construction of the statutory scheme contained in the Fluoridation Act, a water supply authority to whom an approval has been granted under s 6 is not obliged to carry out the activity the subject of the approval, but is merely empowered to do so. My reasons are as follows.

Effect of an approval under s 6 106The starting point in the analysis is to observe that the language of s 6(1) of the Fluoridation Act is permissive. By use of the word "may", a water supply authority is empowered to add fluorine to any public water supply under its control, subject to the provisions of s 6 and the regulations. 107Unless the contrary intention appears in the Fluoridation Act, the word "may" which is used to confer a power in s 6(1), indicates that the power may be exercised or not, at discretion: see Interpretation Act 1987 (NSW) s 5, s 9; Ward v Williams (1955) 92 CLR 496 at 505-506; Samad v District Court of New South Wales [2002] HCA 24; (2002) 209 CLR 140 at [33]-[34]. 108Next, s 6(2) contains a prohibition on a water supply authority adding fluorine to any public water supply with two means of lifting the prohibition, being either the grant of an approval (s 6) or the giving of a direction (s 6(1A)) by the Secretary to undertake such conduct. 109The circumstances in which an approval may be granted or a direction given by the Secretary are different. The grant of an approval is subject to a prior application for the approval by a water supply authority (s 6(4)). By contrast, a direction may be given only if the water supply authority has referred the question of fluoridating the public water supply to the Secretary for consideration and the Secretary has received advice of the Fluoridation of Public Water Supplies Advisory Committee as regards that question. 110In the case of a direction given by the Secretary, the use of the mandatory language "shall" in s 6(1A) makes clear that the power conferred on an authority by s 6(1), also imposes a duty to exercise the power in the circumstances where a direction has been given by the Secretary. That is, a direction given under s 6(1A) lifts the prohibition in s 6(2) and replaces it with an obligation on the water supply authority to add fluorine to the public water supply under its control on the terms attached to the direction (s 6A(3)). 111In the case of an approval granted by the Secretary, the approval also lifts the prohibition in s 6(2) but nothing in s 6 creates an obligation on the water supply authority to whom an approval has been granted to fluoridate a public water supply under its control. Thus, a different effect is given by s 6 to an approval and a direction. 112The next question is whether any other provisions of the Fluoridation Act indicate a contrary intention that an approval by the Secretary under s 6 creates an obligation. Two potential contrary indicators are the terms of s 6(6) and s 6B. 113First, s 6(6) provides that a water supply authority which contravenes or fails to comply with any provisions of this section or the conditions attached to an approval is guilty of an offence. 114Secondly, s 6B(1) provides that a water supply authority to which an approval has been granted or a direction has been given shall not discontinue fluoridating the public water supply concerned, unless the approval or direction (as the case may be) is revoked by the Secretary. Section 6B(2) provides that it is an offence for an authority to contravene this provision. 115In my view, neither s 6(6) nor s 6B have the effect of altering the prima facie permissive nature of an approval under s 6. My reasons are as follows.

Section 6(6) 116The differential effect of an approval and a direction by the Secretary is highlighted by the terms of the offence provision in s 6(6) in the case of an approval, compared to the offence provision in s 6A(5) in the case of a direction. 117In the case of a direction, it is an offence for an authority to contravene or fail to comply with the direction or any terms attached to the direction (s 6A(5)). By contrast, in the case of an approval it is an offence if an authority contravenes or fails to comply with any provisions of s 6 or any conditions attached to an approval granted to it (s 6(6)). Two observations arise from the terms of s 6(6). 118First, the reference to an authority contravening or failing to comply with the provisions of s 6 is clearly directed to the circumstance of an authority adding fluorine to any public water supply without the requisite approval or direction of the Secretary. 119Secondly, the reference in s 6(6) to contravening or failing to comply with "any conditions attached to an approval" limits the scope of any offence in the case of an approval. Thus, it is an offence if a water supply authority fails to comply with the conditions attaching to the approval relating to the concentration and form of fluorine to be used (s 6(5)(c)(i) and (ii)) or any other condition attached to the approval (s 6(5)(c)(iii)). 120However, it is not an offence under s 6(6) if the water supply authority does not engage in the conduct the subject of the approval. Failure to commence adding fluorine to the relevant public water supply area by any date specified in the conditions attaching to an approval (such as Condition 3 in this case) would only have the consequence that the approval was no longer in force. Hence the prohibition in s 6(2) would apply, absent a new approval under s 6 or a direction given under s 6A. It is not an offence under s 6(6) not to commence adding fluorine at all, by any date specified in the conditions attaching to an approval.

Section 6B 121The appellant submitted that the language in s 6B ("a water supply authority to which an approval has been granted or a direction has been given shall not discontinue fluoridating ...") means in the case of an approval, if an approval is taken up and fluoridation commences. The respondents submitted that the Lindsay Taylor legal advice was correct i.e., the effect of s 6B is that an approval once granted must be implemented, unless revoked by the Secretary. 122In my view, s 6B does not reveal a contrary intention that a water supply authority is obliged to carry out the activity permitted by an approval. My reasons are as follows. 123First, the circumstance with which s 6B is concerned is conduct of an authority discontinuing fluoridating the public water supply under its control, in the absence of revocation of an existing approval or direction by the Secretary. The language of "shall not discontinue fluoridating ..." is directed to discontinuing an existing activity of fluoridating a public water supply. 124Secondly, in the case of a direction, the statutory scheme is that failing to comply with a direction or any terms attached to a direction to add fluorine to a public water supply is an offence (s 6A(5)), and there is a separate offence if an authority discontinues fluoridating without the direction having been revoked by the Secretary (s 6B(2)). 125Thirdly, and in contrast to a direction, in the case of an approval under s 6, there is no offence for failing to add fluorine to a public water supply under its control following the grant of an approval. The offence provisions are directed to two other distinct matters: (a) failing to comply with the conditions of an approval (s 6(6)); and (b) discontinuing fluoridating a public water supply under its control, absent revocation of the approval by the Secretary (s 6B). 126It is not an offence for an authority to apply for and obtain an approval, but not to carry out the activity the subject of the approval. However, if an authority obtains an approval, it is an offence if the authority discontinues the permitted activity, that is fluoridating the public water supply, except if the approval has been revoked by the Secretary (s 6B(2)). 127In summary, the power conferred on an authority by s 6 of the Fluoridation Act to add fluorine to a public water supply under its control where an approval has been granted by the Secretary, does not impose a duty on the authority to carry out the permitted activity the subject of the approval.

Condition 3 - extension of time 128The appellant submitted that a letter from the Acting Chief Dental Officer of NSW Health dated 4 March 2009 constituted an effective approval under Condition 3 to extend for an indefinite period, the time by which Rous Water was to commence adding fluorine to the relevant water supply areas. That is, there was no longer any time limit in Condition 3 for the commencement of fluoridation of the relevant water supply in respect of either the Lismore Approval and the Richmond Valley Direction. 129The respondents submitted that the 4 March 2009 letter from the Acting Chief Dental Officer was neither in form nor in substance an extension of the time specified in Condition 3. In my opinion, the respondents' submission is correct. 130First, as to form, there is no reference in the 4 March 2009 letter to the terms of Condition 3 of either the Lismore Approval or the Richmond Valley Direction, or any request by Rous Water, let alone any decision by the Acting Chief Dental Officer, to approve an extension of the time specified in Condition 3. 131Secondly, there is no evidence that Rous Water had requested an extension of time under Condition 3 of the relevant approval and direction prior to the 4 March 2009 letter. However, it did so subsequently (see [36] above). 132Thirdly, as to substance, the words in the 4 March 2009 letter relied upon by the appellant, namely, "Rous will have to await the outcome of the Council's decision on the matter" (which the appellant submitted should be taken to be a reference to an impending decision of Ballina Council), are entirely inapt to constitute an approval of an extension of the time specified in Condition 3 for implementation of fluoridation of the relevant water supply areas of Lismore and Richmond Valley. 133Fourthly, the apparent context of the 4 March 2009 letter is somewhat unclear on the evidence. The letter commences by referring to a letter from Rous Water of "13 February" regarding its frustration with delays in implementing fluoridation. There is also a reference to Rous Water's "Form 1" which is said to be in the process of being completed following identification by the Department of Water and Energy of issues that require changes to the original concepts provided to it by Rous Water. Neither the 13 February letter from Rous Water, or the Form 1 are in evidence. Insofar as the 4 March 2009 letter is to be taken to be referring to an impending decision of Ballina Council (as submitted by the appellant), the context appears to be its decision on 26 March 2009 indicating support for fluoridation of the Ballina Council water supply area (see [21] above). The apparent context of the 4 March 2009 letter does not justify the characterisation sought to be given to it by the appellant.

Did the legal advice influence the decisions (Ground 2)? 134The appellant submitted that the primary judge erred in failing to draw the inference that the legal advice received by the respondents had influenced their decisions. In this regard, it is necessary to consider the factual position concerning receipt of legal advice by each respondent separately. 135The appellant's complaint was not limited to the primary judge's refusal to draw the suggested inference when rejecting the fourth ground of review below (constructive failure to exercise jurisdiction), but extended to the primary judge's refusal to draw other inferences concerning the effect of the legal advices, when rejecting the first ground of review below (s 111 of the EPA Act). The context in which the primary judge refused to draw such other inferences is significant, when considering the complaint now advanced by the appellant on appeal concerning the primary judge's refusal to draw the suggested inference in relation to the fourth ground of review below.

Rous Water 136The appellant submitted that the influence of legal advice on the decision of Rous Water was patently clear on the evidence because Rous Water wanted to and was entitled to make its own inquiries. In this regard, the appellant referred to:

• the resolution of Rous Water on 17 February 2010 (see [28] above) to defer consideration of the matters and seek legal advice on a motion not to determine the REF until "full regard" had been had to the effects of the discharge of fluoridated water; and
• the subsequent resolution of Rous Water on 17 March 2010 (see [35] above) to seek approval from the Chief Dental Officer of NSW Health to extend the deadlines prescribed in Condition 3 of the Lismore Approval, the Richmond Valley Direction and the Ballina Approval and subject to obtaining that extension, to seek a report on the cost to provide further expert advice from a professional environmental toxicologist, and that it was not satisfied with the response from the Department of Health. 137The appellant submitted that by seeking an extension of the time specified in Condition 3 of the approvals and direction (as suggested in the Blakes advice), Rous Water was seeking a way around the strict legal obligations and the "deadlines" it had been advised it must comply with, in order for it to comply with its duty under the EPA Act to consider the impact on the environment to the greatest extent reasonably possible. 138The appellant also referred to the Lindsay Taylor advice and in particular, the summary of the key points in the report presented to the meeting of Rous Water on 21 April 2010 which noted that Rous Water had no discretion to do otherwise than to implement the approvals and the direction, without delay and in strict accordance with their terms and concluding that Rous Water had no alternative but to approve the REF and the Determining Authority's report and proceed to call tenders. 139The appellant submitted that the terms of the Rous Water decision itself are decisive of the question as to whether the legal advice influenced the decision. The appellant pointed to paragraphs 1 and 2 of the resolution which noted the two legal advices received, and submitted that these were fundamental to the decision which Rous Water reached. 140The appellant also referred to a notice published by the Chair on the Rous Water website the following day (22 April 2011) explaining the decision in terms of Rous Water having been "instructed" by NSW Health to provide fluoridated water to the councils and that "despite all the argument for and against the proposition, today's decision was simply about Council complying with that direction", as additional evidence from which an inference of reliance on the legal advice could be drawn.

Ballina Council 141The appellant submitted that Ballina Council had the report that went to the Rous Water meeting on 21 April 2010, containing details of the Lindsay Taylor advice, and that Ballina Council was under the same misapprehension as to the effect of an approval. 142The appellant submitted that the primary judge should have drawn the inference that Ballina Council was influenced by the Lindsay Taylor advice. 143The respondents submitted that Ballina Council did not appear to have had the Lindsay Taylor advice before it when making its decision on 27 May 2010, but accepted that two of the councillors were common as between Rous Water and Ballina, and those two councillors could be taken to be aware of the legal advice that had been received by Rous Water. 144In my view, the evidence established that Rous Water sent a copy of its report prepared for the purposes of its 21 April 2010 meeting (which contained details of the Lindsay Taylor legal advice) to Ballina Council on Friday 16 April 2010 (Blue 703), but did not establish that Ballina Council received any of the three attachments to the report prepared for Rous Water, in particular, attachment 2 being the Lindsay Taylor advice. 145There was no direct evidence that the councillors of Ballina Council, individually, had read the report prepared for Rous Water which contained details of the Lindsay Taylor advice. However, as a general proposition material in the possession of Ballina Council will be treated as being in the possession of the councillors (see Schroders Australia Property Management Ltd v Shoalhaven City Council [2001] NSWCA 74 at [67]; Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 at 265 [132]) 146The fact that there were two councillors in common on Ballina Council and Rous Water does not of itself establish that those two councillors, let alone the collegiate mind of Ballina Council misconceived their duty under s 111 of the EPA Act, because two councillors were aware in a different capacity of the legal advice received by Rous Water. 147As to the report which went to Ballina Council's meeting of 27 May 2010, there are two significant matters which are inconsistent with the suggested inference for which the appellant contends. First, the report does not contain any reference to the legal advice received by Rous Water, nor is that legal advice included as one of the attachments to that report. 148Secondly, the report outlined the two options for consideration, namely, either to decline, or to approve, the construction of the proposed fluoridation plant at Marom Creek. The report does not suggest that Ballina Council is obliged to carry out the relevant activity of adding fluorine to a public water supply by reason of the grant of the approval by the Secretary.

Suggested inferences 149The respondents submitted that the primary judge was correct to refuse to draw the inferences which the appellant contends in Ground 2 should have been drawn, namely, that the respondents: (a) considered that they were compelled to make the decisions they did (see [87] and [88]); (b) were somehow intimidated into making their decisions (see [92]); (c) regarded themselves as improperly bound or failed to take into account to the fullest extent reasonably practicable all the mandatory matters required to be considered pursuant to s 111 of the EPA Act (see [96]); and (d) were under a misapprehension as to the exercise of any power under Part 5 of the EPA Act (see [109]) and [111]).

Inferences concerning s 111 duty 150The first three inferences which the primary judge refused to draw each related to the first ground of review below (s 111 of the EPA Act), which the primary judge dismissed, and there is no appeal from that part of the decision. 151The relevant context in which the appellant contended below that these three inferences should be drawn was whether Rous Water had complied with its duty under s 111 of the EPA Act and cl 228 of the EPA Regulations. The primary judge found (at [90]) that, to the extent that the legal advice concerned whether the information before Rous Water was sufficient to proceed to an assessment under s 111, the legal advice was not wrong, as the legal advices in their terms did not mandate the outcome of an assessment under s 111, but rather recommended that Rous Water proceed to assess the environmental impacts. The primary judge observed (at [92]) that the chronology of the decision making process revealed that the respondents engaged in their task in a cautious and thorough manner and did not consider themselves improperly bound, which is inconsistent with the inferences which the appellant contends should have been drawn. Further, the primary judge found (at [97]) that Rous Water made its decision on the basis that the material before it was sufficient for it to do so, and not because the legal advices dictated the decision it should make. 152Having regard to the unchallenged findings of the primary judge in relation to the first ground of review below, the appellant's complaint that the primary judge should have drawn the three inferences (referred to at 130, (b) and (c) above) is unsustainable.

Inference concerning misapprehension of their task 153The fourth inference which the appellant contends should have been, but was not drawn by the primary judge, specifically concerns the fourth ground of review below (constructive failure to exercise jurisdiction). 154Two preliminary observations should be made. 155First, the context in which the primary judge refused to draw this inference was that the respondents had allegedly constructively failed to exercise jurisdiction because each misconstrued its powers and its duties under Part 5 of the EPA Act and this affected their purported exercise of power. The primary judge considered that the essence of this challenge was the same as the second and third grounds of review, namely, the reliance on the Lindsay Taylor advice. However, the primary judge had already rejected the second and third grounds of review below (and there is no appeal from that part of the decision), and held (at [109]) that this complaint must also be rejected for the same reasons. 156Secondly, the appellant's submission on appeal that the respondents misapprehended their task is not made out, in my view, by simply pointing to the receipt of legal advice, part of which concerning the legal effect of an approval under s 6 of the Fluoridation Act, I have concluded was wrong. The appellant needs to establish that the primary judge was in error in not drawing the inference that the respondents misconceived their duty pursuant to s 111 of the EPA Act having regard to that part of the legal advice which was incorrect. 157In this regard, I accept the respondents' submission that it was open to the primary judge to find that it had not been demonstrated that by reason of the legal advices (part of which I have concluded was wrong), the respondents regarded themselves as improperly bound, or had failed to take into account to the fullest extent reasonably practicable the mandatory matters they were required to consider under s 111 of the EPA Act. 158In addition, insofar as the appellant's complaint concerned the refusal by the primary judge (at [111]) to draw the inference that Ballina Council was under a misapprehension as to the exercise of any "power" under Part 5 of the EPA Act, this complaint is misconceived. Ballina Council was not exercising any "power" reposed in it under Part 5 of the EPA Act. Rather, it was subject to a statutory duty pursuant to s 111, which duty the primary judge found had been adequately discharged, and there is no challenge to this finding.

Constructive failure to exercise jurisdiction (Ground 3) 159The appellant submitted that there is a constructive failure to exercise jurisdiction, constituting jurisdictional error, where a decision maker misapprehends the nature or limits of their functions or powers, and that such an error of law will invalidate any order or decision of the respondents which reflects it (see Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 178-9; Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 420; and R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 267-268). 160The appellant submitted that the respondents fell into an error of law which caused them to make an erroneous finding, or reach a mistaken conclusion and their purported exercise of "power" was thereby affected. It was submitted that the misapprehension as to the legal effect of the approvals which had been granted to the respondents caused a constructive failure to exercise jurisdiction by each respondent because the respondents thought they had no choice in the circumstances but immediately to construct each of the relevant fluoride plants. 161It may be immediately observed that the appellant's submissions did not identify any "power" reposed in the respondents under Part 5 of the EPA Act, the purported exercise of which was said to have been affected by a misapprehension as to the legal effect of the approvals which had been granted to the respondents. 162The respondents submitted that first, in relying on the legal advice, the respondents did not act outside their powers pursuant to s 24 of the LG Act; secondly, that s 111 of the EPA Act imposed a duty and not a power, and whether the respondents discharged their statutory duty or not was to be determined objectively having regard to the material before the respondents; and thirdly, that the primary judge was correct in finding that the respondents did not labour under any misapprehension as to their duty under s 111 of the EPA Act when reaching their decisions.

Principles 163The nature of jurisdictional error extends to a constructive failure to exercise jurisdiction, but one needs to be clear as to what is meant by this type of jurisdictional error. As explained by Jordon CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council at 420: "I quite agree that the mere fact that a tribunal has made a mistake of law, even as to the proper construction of a statute, does not necessarily constitute a constructive failure to exercise jurisdiction .... But there are mistakes and mistakes; and if a mistake of law as to the proper construction of a statute investing a tribunal with jurisdiction leads it to misunderstand the nature of the jurisdiction which it is to exercise, and to apply 'a wrong and inadmissible test'; ... or to 'misconceive its duty', or 'not to apply itself to the question which the law prescribes': The King v War Pensions Entitlement Appeal Tribunal [Ex parte Bott] (1933) 50 CLR 228 at 242-3]; or 'to misunderstand the nature of the opinion which it is to form': The King v Connell [(1944) 69 CLR 407 at 432], in giving a decision in exercise of its jurisdiction or authority, a decision so given will be regarded as given in a purported and not a real exercise of jurisdiction, leaving the jurisdiction in law constructively unexercised, and the tribunal liable to the issue of a prerogative writ of mandamus to hear and determine the matter according to law ...." (emphasis added). 164The general principles with respect to constructive failure or refusal to exercise jurisdiction as stated by Jordan CJ in Ex parte Hebburn, were referred to with approval by Aickin J in R v Toohey; Ex parte Northern Land Council at 267-268 and by Gaudron J in Minister for Immigration v Yusuf [2001] HCA 30; (2001) 206 CLR 323 at 339. See also Rockdale Beef Pty Ltd v Industrial Relations Commission of NSW [2007] NSWCA 128; [2007] 165 IR 7 at 20 [85] per Basten JA. 165The authorities distinguish between a failure to exercise jurisdiction and a constructive failure to exercise jurisdiction. In the former case, there is an actual failure to exercise jurisdiction if the decision maker wrongly holds it has no jurisdiction or is not authorised to make a particular decision. On the other hand, a constructive failure to exercise jurisdiction arises when a decision maker misunderstands the nature of its jurisdiction and, in consequence, applies a wrong test, misconceives its duty, fails to apply itself to the real question to be decided or misunderstands the nature of the opinion it is to form (see Minister for Immigration v Yusuf at 339 per Gaudron J).

Consideration 166The appellant's pleading alleging a constructive failure to exercise jurisdiction ([43] and [44] of the further amended points of claim, which were denied by each of the respondents) asserted that each respondent "misconstrued its powers and its duty under Part 5 of the [EPA Act] and this affected the Council's purported exercise of power". 167The appellant's pleading and his submissions before the primary judge and on appeal, all proceed on an implicit assumption (which may be doubted) that s 111 of the EPA Act invests jurisdiction in the respondents. However, the respondents did not contend on appeal that this view of s 111 of the EPA Act was incorrect. 168Rather, the respondents repeated their submissions below, which the primary judge accepted, that s 111 is a duty not a power, and involves an objective standard which has been either complied with or not, and noted that the primary judge had held that the respondents had adequately discharged their s 111 duty. 169There are a number of difficulties in accepting the appellant's challenge to the respondents' decisions based on the alleged constructive failure to exercise jurisdiction. 170First, insofar as the challenge is based on an allegation that the respondents misconceived their "powers" under Part 5 of the EPA Act, as already noted above, this complaint is misconceived. The respondents' decisions did not involve the exercise of any "power" under Part 5 of the EPA Act. 171Secondly, insofar as the appellant's challenge asserted that the respondents misconceived their statutory duty under s 111 of the EPA Act, the appellant's submissions conflated the jurisdiction which the respondents were undoubtedly exercising when considering and approving the activities in question (namely, their powers under s 24 of the LG Act) with the respondents' statutory duty under s 111 of the EPA Act when exercising such powers. 172Thirdly, the appellant did not challenge on appeal either the conclusion of the primary judge that the s 111 duty involved an objective standard, or the finding that the respondents had adequately discharged their s 111 duty. Nor did the appellant challenge the findings or conclusions of the primary judge when rejecting the second and third grounds of review below based on allegedly taking into account irrelevant considerations (namely, the erroneous legal advice) and error of law pursuant to s 111 of the EPA Act. 173Fourthly, the appellant has not demonstrated error by the primary judge in refusing to draw the inference that the respondents misapprehended their task under s 111 of the EPA Act when considering and approving the fluoridation activities in question. The statutory duty under s 111 required the respondents to examine and take into account the matters referred to in that provision and cl 228(2) of the EPA Regulations to the fullest extent "reasonably" possible. The primary judge held that the respondents adequately discharged this duty for the reasons summarised in [132] above. The premise of the appellant's complaint that the respondents misconceived their duty under s 111 of the EPA Act is that the respondents purported to but failed to perform their statutory duty. This premise is inconsistent with the unchallenged findings and conclusion of the primary judge that the respondents adequately discharged their s 111 duty. The alleged jurisdictional error is not made out. 174In my view, Ground 1 of the notice of appeal is made out, but not Grounds 2 and 3. Accordingly, the appellant's challenge based on the alleged constructive failure to exercise jurisdiction fails.

Ground 5 175The appellant contended in Ground 5 that the primary judge erred in holding that there was no error in relying on the legal advice, even if it were wrong, when reliance on the advice caused a constructive failure by the first respondent to exercise jurisdiction in accordance with its duty under s 111 of the EPA Act. 176As amended on appeal, the appellant's complaint in Ground 5 is very similar to that in Grounds 1, 2 and 3. The essential difference is that it challenges the primary judge's conclusion, based on the assumption that the legal advice was wrong. 177The appellant's written submissions dealt with appeal Grounds 4 and 5 together. The written submissions were primarily directed to Ground 4, which has now been abandoned. The essence of the appellant's complaint is that it is not for the legal advisers to Rous Water to dictate that a decision maker had no right to seek further material, if that material was a relevant consideration within the legislative scheme, here the EPA Act in carrying out its duty under s 111. 178The respondents submitted that the legal advices from Blakes and Lindsay Taylor stated that there was sufficient material before the respondents to proceed to assess the environmental impacts under s 111 of the EPA Act, and the primary judge correctly considered that the legal advices did not mandate the outcome of an assessment under s 111. Rather they recommended that Rous Water proceed to assess the environmental impacts. 179This ground of appeal fails for the same reasons as apply to Grounds 2 and 3. It involves the same complaint that the first respondent misconceived its duty under s 111 of the EPA Act. In my view, the appellant has not established error in the primary judge's refusal to draw this inference. 180Ground 5 of the notice of appeal is not made out.

Ballina Council (Ground 8) 181There is an additional reason why the challenge to the decision of Ballina Council must fail. 182The primary judge held (at [100]) that the impugned decision concerned only the "construction of the proposed fluoridation plant", and was not a resolution to increase the fluoride levels in the relevant public water supply. Accordingly, there was no requirement at that time for Ballina Council to consider the "likely impacts" generated by the proposal in compliance with s 111 of the EPA Act and clause 228(2) of the EPA Regulations (compare the meaning of the words "likely impacts of that development" in s 79C(1)(b) of the EPA Act, considered in Hoxton Park Residents Action Group Inc v Liverpool City Council [2010] NSWLEC 242; and on appeal Hoxton Park Residents Action Group Inc v Liverpool City Council [2011] NSWCA 349; (2011) 81 NSWLR 638 at [44]-[48]). The primary judge concluded that any attempt to impugn the Marom Creek decision on the basis that Ballina Council had failed to consider the impact of any uplift in fluoridation was premature. 183On the hearing of the appeal, the appellant abandoned Ground 8 which challenged the primary judge's conclusion in relation to the Marom Creek decision that s 111 of the EPA Act had not yet been engaged and hence the appellant's challenge was premature. It is unnecessary to express any view on whether the primary judge's conclusion in this regard was correct. 184Having abandoned the challenge to the decision of the primary judge that s 111 of the EPA Act had not yet been engaged, the appellant's challenge to the Marom Creek decision alleging a constructive failure to exercise jurisdiction in accordance with Ballina Council's duty under s 111 of the EPA Act must necessarily fail.

Costs discretion (Ground 9) 185The appellant submitted that the exercise of the costs discretion of the primary judge miscarried in Rous Water (No 3) and that the costs order below should be set aside. 186It was further submitted that the cost discretion should be re-exercised by this court and that there should be no order against the appellant as to the costs of the expert evidence. It should be noted that the order sought in the second further amended notice of appeal that the respondents pay the appellant's costs below, was not pressed in either the appellant's written or oral submissions. 187Unless the appellant can show some error of principle by the primary judge in the exercise of her discretion, or that she considered irrelevant matters, or failed to consider relevant matters, or made some manifest mistake, then this court will not interfere with the costs decision. 188The appellant makes no complaint about the principles applied by the primary judge. Nor is any complaint made concerning the primary judge's apportioning the cost payable by the appellant so as to exclude the costs associated with Rous Water (No 1). Rather, the appellant complains that the primary judge erred in making certain findings of fact, namely, that: (1)the appellant had engaged in disentitling conduct in discontinuing his claim based on s 112 of the EPA Act on the second day of the hearing; and (2) the respondents had always denied that the question whether an EIS was required pursuant to s 112 of the EPA Act raised a question of jurisdictional fact when the critical change to the respondents' pleading from accepting to denying that the question whether an EIS was required pursuant to s 112 of the EPA Act raised a question of jurisdictional fact, was made in the week before the hearing. 189It appears from the reasons in Rous Water (No 3) that the principal determinates of the cost application were that: (1)There was disentitling conduct by the appellant occasioned by his late abandonment of two grounds of review on the second day of the hearing, being the ground founded upon s 112 of the EPA Act and the manifest unreasonableness ground. (2)The respondents initially contended in their points of defence filed on 17 September 2010 that the question of whether or not an EIS is required pursuant to s 112 of the EPA Act may raise a question of "jurisdictional fact" in an appropriate case, and otherwise denied the paragraph in the appellant's points of claim alleging a jurisdictional fact in s 112. (3)On 15 June 2011, the respondents filed a further amended points of defence which withdrew the admission of the allegation concerning a "jurisdictional fact" and pleaded a bare denial to that allegation. (In fact, the primary judge was in error in referring to a bare denial. The further amended points of defence pleaded a non-admission of this allegation.) (4)Whatever may have been the understanding of the parties before Biscoe J on 14 March 2011 for the limited purpose of determining the separate questions, at no point did either respondent concede for the purposes of the final hearing that s 112 of the EPA Act required the establishment of a jurisdictional fact. (5)On 15 June 2012, the appellant received the respondents' written submissions which included argument on whether s 112 of the EPA Act involved a jurisdictional fact. The appellant continued to prepare for the hearing, and on 17 June 2011 notified the respondents of the precise parts of his expert evidence upon which he intended to rely at the hearing. (6)On 21 June 2011, the appellant first foreshadowed the possible abandonment of the s 112 claim following argument on the first day of the hearing, concerning the admissibility of the expert evidence of the appellant's principal scientific witness. The s 112 claim was abandoned the next day, 22 June 2011. 190The respondents properly acknowledged on the appeal that the transcript before Biscoe J, which was not in evidence before the primary judge on the application for costs, reflected a concession made by the respondents on the hearing of the separate questions on 14 March 2011 admitting that, on the better view of the Court of Appeal authorities, s 112 of the EPA Act raised a question of jurisdictional fact. 191Nevertheless, the respondents submitted that the costs order of the primary judge should not be disturbed because:

• first, having regard to the terms of the defence filed by the respondents on 17 September 2010, the question of whether s 112 raised a jurisdictional fact was in issue between the parties until the admission was made before Biscoe J on 14 March 2011 and by that date much of the expert evidence to be relied upon by the parties had already been filed;
• secondly, the primary judge correctly observed that at no stage did the appellant object to the filing of the amended defence on 15 June 2011;
• thirdly, the appellant's explanation for abandoning the s 112 EPA Act challenge on the second day of the hearing (being 22 June 2012), namely that he considered it unlikely he would succeed on the question of whether s 112 raised a jurisdictional fact if the position was not agreed, was beside the point. The critical point was that the appellant brought and maintained an erroneous allegation that s 112 raised a jurisdictional fact;
• fourthly, the appellant has not challenged the findings of the primary judge that two countervailing circumstances prevented the proceedings from being characterised as in the public interest, namely, the matters of public interest raised were narrow and concerned particular factual matters, and the appellant's disentitling conduct also included the late abandonment of the manifest unreasonableness ground of review. 192In my view, the appellant has failed to demonstrate relevant error on the part of the primary judge in the exercise of the costs discretion. 193First, the characterisation of the appellant's late abandonment of the challenge founded on s 112 of the EPA Act (and the manifestly unreasonable ground) as disentitling conduct was entirely justified. 194The appellant made an allegation concerning the existence of a "jurisdictional fact" raised by s 112 which if accepted by the Court as being correct, would involve proof by evidence, including expert evidence, of whether the activity of adding fluorine to the water supply is likely to significantly affect the environment, or threatened species, populations or ecological communities, or their habitats. 195Neither the qualified admission in the respondents' points of defence filed on 17 September 2010, nor the admission made on the hearing of the preliminary questions before Biscoe J in Rous Water (No 1) as to the better view of the Court of Appeal authorities, would obviate the need for the appellant to have satisfied the Court on the final hearing that, on its proper construction, s 112 of the EPA Act raised a "jurisdictional fact". 196Secondly, the respondents change of position in its amended defence, of which the appellant complains, occurred relatively soon after the hearing of the preliminary questions in Rous Water (No 1) at which the concession referred to above was made by the respondents (that s 112 raised a jurisdictional fact), and the appellant did not object to the filing of the amended defence by the respondents. 197Nor did the appellant complain at any time that he was prejudiced by the amended defence, because any costs associated with the filing of any expert evidence between 14 March 2011 and 15 June 2011, or prior to that period, would have been necessarily wasted. 198Thirdly, the appellant continued to maintain his allegation concerning a "jurisdictional fact" raised by s 112 up until the second day of the hearing before the primary judge. It is irrelevant that the appellant asserts that he then considered it unlikely he would succeed at least in a lower court on the question of whether s 112 raised a jurisdictional fact if the position was not agreed between the parties. The parties could not by agreement ascribe a jurisdictional fact to s 112 of the EPA Act if that was not the correct construction of that provision as a matter of law. 199In my view, the conclusion as to costs did not involve error on the part of the primary judge.

Conclusion 200I propose the following orders: (1)Grant leave to the appellant to amend Ground 1 of the second further amended notice of appeal in the terms of his oral application on 30 April 2013. (2)Appeal dismissed. (3)Appellant to pay the respondents' costs of the appeal. 201PRESTON CJ of LEC: I have had the advantage of reading in draft the judgment of Gleeson JA. I agree with his Honour's conclusions on each of the grounds pressed on appeal and the orders proposed. I also agree generally with his Honour's reasons. I wish, however, to express briefly some particular reasons for my agreement. I gratefully adopt his Honour's summaries of the facts concerning the direction and the approvals to fluoridate, the events leading up and involving the making of the decisions by Rous Water to construct and operate four fluoridation plants (at Clunes, Dorroughby, Corndale and Knockrow) and by Ballina Shire Council to construct (but not operate) one fluoridation plant (at Marom Creek), the decision of the primary judge, and the statutory framework. I will use the same abbreviations as his Honour uses, such as the Richmond Valley Direction, Lismore Approval and Marom Creek Approval.

The decision-makers and their powers and duties 202Critical to understanding, and dealing with, Mr Oshlack's grounds of appeal is identification of the administrative decision-making bodies and the powers and duties being exercised. 203Rous Water is a county council for the purposes of Part 5 of the Local Government Act 1993 ('LG Act'). It has a governing body elected by its constituent councils, which are the Ballina, Byron, Lismore and Richmond Valley councils. Its area of operations includes areas within each of those four local government areas. Its functions are to provide potable water in its area of operations. Ballina Shire Council is a local government body under the LG Act. 204Section 24 of the LG Act confers on a council the function to "provide goods, services and facilities, and carry out activities, appropriate to the current and future needs within its local community and of the wider public" subject to the LG Act, the regulations thereunder and any other law. The functions of a county council may comprise any one or more of the functions of a council under the LG Act: s 394 of the LG Act. Hence, a county council may have the functions under s 24 of the LG Act. 205It was common ground between the parties in this case that, in deciding to approve the construction and operation of the various fluoridation plants, Rous Water and Ballina Shire Council were exercising a function under s 24 of the LG Act. 206In exercising this function under s 24, Rous Water and Ballina Shire Council were bound to consider relevant matters and ignore irrelevant matters under the LG Act, and otherwise comply with the requirements of the LG Act. 207In addition, however, s 111 of the Environmental Planning and Assessment Act 1979 ('EPA Act') required Rous Water and Ballina Shire Council to "examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of" the activities of constructing and operating the fluoridation plants.

The crux of the appeal is the erroneous legal advice 208On the appeal, Mr Oshlack's challenge to the decision of the primary judge, dismissing his judicial review challenge to the decisions of Rous Water to approve the construction and operation, and Ballina Shire Council to approve the construction, of fluoridation plants, revolved around the legal advice given to Rous Water on 16 April 2010 by Lindsay Taylor Lawyers before Rous Water and Ballina Shire Council made their respective decisions. Mr Oshlack contended that this legal advice was erroneous and that the primary judge erred in finding otherwise (appeal ground 1). The three other grounds of appeal pressed by Mr Oshlack were different ways in which he argued that the decisions of Rous Water and of Ballina Shire Council miscarried in law as a consequence of that erroneous legal advice. Mr Oshlack contended that the erroneous legal advice influenced the decisions of Rous Water and Ballina Shire Council (appeal ground 2); caused a constructive failure by Rous Water and Ballina Shire Council to exercise jurisdiction under s 24 of the LG Act to approve the construction and operation of the fluoridation plants (appeal ground 3); and caused a constructive failure by Rous Water to exercise jurisdiction in accordance with its duty under s 111 of the EPA Act to consider the environmental impacts of the construction and operation of four fluoridation plants (appeal ground 5).

The legal advice was erroneous 209As to the first appeal ground, I agree with Gleeson JA for the reasons he gives (at [105]-[127]) that the legal advice was in error in stating that Rous Water was obliged to add fluoride to the public water supply in accordance with the Lismore Approval and that its failure to do so by the date specified in the Lismore Approval (31 December 2008) caused it to be exposed to ongoing liability for offences against s 6(6) of the Fluoridation of Public Water Supplies Act 1957 ('the Fluoridation Act'). 210This means that the primary judge erred in finding, at [106], that it had not been demonstrated that the legal advice was wrong. Appeal ground 1 is therefore made out.

Erroneous legal advice must be causative of legal error 211However, establishing that the legal advice was in error in some respect, whilst necessary, is not sufficient by itself to render invalid the exercises of the power under s 24 of the LG Act or the duty under s 111 of the EPA Act by Rous Water or by Ballina Shire Council. The erroneous legal advice must be shown to be causative of the exercises of that power or that duty miscarrying in law. 212On appeal, Mr Oshlack sought to do this in two ways. The first was said to be that the erroneous legal advice had "influenced" the decisions of Rous Water and Ballina Shire Council (appeal ground 2). However this, by itself, is legally insufficient. Influence alone has no legal consequence - the influence must involve legal error, such as causing the exercise of the power or duty to miscarry in law. For example, at trial, Mr Oshlack contended that the erroneous legal advice was an irrelevant consideration which Rous Water and Ballina Shire Council were bound to ignore, but which they instead took into account (ground 3 of the amended points of claim). That contention was rejected by the primary judge and Mr Oshlack did not press his appeal on that ground. Another example, which Mr Oshlack did press on appeal, was that the erroneous legal advice caused a constructive failure by Rous Water and Ballina Shire Council to exercise their jurisdiction to determine to approve the construction and operation of fluoridation plants (appeal ground 3) or to examine and take into account to the fullest extent possible the environmental impacts of those plants (appeal ground 5). 213Hence, in order for Mr Oshlack to succeed, he needed to establish in what respect the erroneous legal advice influenced the exercise of the power or duty by Rous Water and Ballina Shire Council and how such influence had the legal consequence of causing the exercise of the power or duty to miscarry in law. Establishing appeal ground 2, therefore, was legally insufficient by itself to invalidate the exercises of power and duty by Rous Water and Ballina Shire Council and could only serve as a factual foundation for appeal grounds 3 and 5 which concern constructive failure by those bodies to exercise jurisdiction. 214The focus of each of appeal grounds 3 and 5 was different. Appeal ground 3 concerned the decisions of Rous Water and Ballina Shire Council to approve the construction and operation of the fluoridation plants. These decisions were made exercising the function (which is a power) under s 24 of the LG Act. Hence, the jurisdiction which Mr Oshlack contended in appeal ground 3 that Rous Water and Ballina Shire Council constructively failed to exercise was the power under s 24 of the LG Act. 215Appeal ground 5 concerned a different jurisdiction, being the duty on Rous Water under s 111 of the EPA Act to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of the activity of construction and operation of the four fluoridation plants. 216I will deal with each challenged exercise of power and duty by Rous Water and Ballina Shire Council.

Exercise of power by Rous Water to approve construction and operation of fluoridation plants 217In relation to the exercise by Rous Water of the power under s 24 of the LG Act to approve the construction and operation of four fluoridation plants, Mr Oshlack relied on the resolutions of the governing body of, correspondence of, and public notices issued by, Rous Water to show the influence of the erroneous legal advice on the decision of Rous Water to approve construction and operation of the four fluoridation plants. These resolutions and documents are summarised by Gleeson JA (at [38]-[61] and [136]-[140]). 218Mr Oshlack submitted that an inference should be drawn from this material that Rous Water believed that it had no choice in the circumstances but to decide immediately to construct each of the fluoridation plants (at [24] of appellant's written submissions). The perceived compulsion was said to be both as to outcome (approving rather than refusing the construction) and timing (deciding immediately rather than deferring the decision). 219Mr Oshlack submitted that the inference as to timing should be drawn from the fact that prior to receiving the legal advice, Rous Water had wanted to make further inquiries and consider further the environmental impacts of fluoridation, and had wanted to extend the deadline for fluoridation of water under the Richmond Valley direction and the Lismore Approval (at [14]-[16] of the appellant's written submissions), but after receiving the legal advice indicating that it had no discretion to do otherwise than to implement the direction and approval without delay and in accordance with their terms (at [18] of the appellant's written submissions), Rous Water resolved to approve the construction and operation of the fluoridation plants (at [19] of the appellant's written submissions). Mr Oshlack submitted that the inference as to outcome should be drawn from those facts as well as from the notice published on the Rous Water website the day after Rous Water's decision stating that the decision was simply about complying with NSW Health's direction (at [20] of the appellant's written submissions). 220The primary judge rejected Mr Oshlack's argument that Rous Water believed it had no option but to resolve to approve the construction and operation of the fluoridation plants. First, the use by Rous Water of non-discretionary language in the material was explicable by recourse to similar language employed in s 6A (concerning directions) and s 6 (concerning approvals) of the Fluoridation Act and in the various notices published in the Gazette. Hence, the use of non-discretionary language did not permit an inference to be drawn that Rous Water felt compelled to make the decisions they did: at [87] and [88] of the primary judge's judgment. 221Secondly, "the chronology of the decision-making process reveals that each [of Rous Water and Ballina Shire Council] engaged in its task in a cautious and thorough manner. That the vote by Rous Water was not unanimous (four councillors voted against the proposed resolution) strongly indicates, in my opinion, that its will was not overborne in the manner suggested by Mr Oshlack" (at [92] of the primary judge's judgment). The primary judge noted that: ... Rous Water had been considering these issues since 2005. There had been extensive public consultation. The Council had commissioned the REF, which examined the environmental impacts of the approved and directed activity in detail. NDC, the consultants engaged by the Council, required further assurance on the environmental impacts and obtained such assurance from the Department of Health. The Council then adopted the REF, incorporating as it did the material from the Department of Health. It was only after this process, which culminated in the provision of the two legal advices, that the Council proceeded to make a decision because the material before it was sufficient for it to do so; not because, as Mr Oshlack submitted, the legal advices dictated the decision it should make. (at [97] of the primary judge's judgment). 222In my view, Mr Oshlack has not established that the primary judge erred in failing to draw the inference that Ballina Shire Council considered itself compelled to decide to approve the construction and operation of the fluoridation plant. 223First, the resolution of Rous Water to approve the construction and operation of the fluoridation plants does not positively establish this fact. It is true that the resolution in terms noted the legal advice. However, this only established that Rous Water considered it. It does not establish that Rous Water, after such consideration, felt compelled to make a decision that they did not otherwise wish to make of approving the construction and operation of the fluoridation plant. 224Secondly, as the primary judge found, voting by the governing body of Rous Water reveals that there was a division of opinion between the councillors. The resolution was only passed on the casting vote of the chair. This does not support an inference that the governing body felt compelled to vote in only one way, being for approval. 225Thirdly, as the primary judge also found, Rous Water had been considering the issue for many years, made many inquiries, and received many reports and advices. Mr Oshlack relied on this earlier consideration, and inquiries for further information and for extension of time, to support the drawing of an inference that Rous Water could not have changed its view and resolved to approve construction and operation of the plants unless it felt compelled to do so. But this is not the only rational inference that can be drawn. An equally available inference to be drawn is that, after years of consideration and inquiries, reports and advices, the governing body of Rous Water considered that the material before it was sufficient, and the governing body was ready to make a decision to approve or not approve the construction and operation of the fluoridation plants. 226Accordingly, Mr Oshlack has not established that the erroneous legal advice so influenced Rous Water as to cause it to constructively fail to exercise the power under s 24 of the LG Act to approve the construction and operation of the fluoridation plants.

Exercise of power by Ballina Shire Council to approve construction of a fluoridation plant 227In relation to the exercise by Ballina Shire Council of the power under s 24 of the LG Act to approve the construction of the Marom Creek fluoridation plant, Mr Oshlack submitted that, because Ballina Shire Council had been given the report that went to the Rous Water meeting on 21 April 2010 containing details of the legal advice, Ballina Shire Council must be taken to have also been under the same misapprehension as to the effect of the approval, that the approval was a direction, that it set a statutory deadline that had to be met, and that there was no discretion to be exercised by Ballina Shire Council than to do otherwise than implement the approval (at [22] of the appellant's written submissions). This argument fails for at least two reasons. 228First, the legal advice was sought by and given to Rous Water not Ballina Shire Council, and its contents were directed to Rous Water's situation, particularly in regard to the Richmond Valley Direction and the Lismore Approval, rather than Ballina Shire Council's situation which concerned the Marom Creek Approval. The respect in which the legal advice was erroneous concerned the Lismore Approval which contained a condition requiring fluoridation by a date (31 December 2008) that had already expired. The legal advice was that the expiry of this date caused Rous Water to be exposed to ongoing liability for offences under s 6(6) of the Fluoridation Act. However, the relevant approval for the Marom Creek Project in Ballina Shire was the Marom Creek Approval granted on 11 December 2009. The date by which the condition of the Marom Creek Approval required fluoridation was 31 December 2010. That date had not expired by the time of the legal advice to Rous Water (16 April 2010), Rous Water's meeting (21 April 2010), or Ballina Shire Council's meeting (27 May 2010). The legal advice did not refer at all to the Marom Creek Approval, and the analysis of the Lismore Approval in the legal advice was inapplicable to Ballina Shire Council's prospective decision with respect to the Marom Creek fluoridation plant. Ballina Shire Council should not, therefore, be inferred to have been influenced by a legal advice that did not and could not apply to the decision it was to make. 229Secondly, the evidence does not establish that Ballina Shire Council felt compelled, by reason of the legal advice provided to Rous Water, to make a decision to approve the construction of the Marom Creek fluoridation plant that it would not otherwise have made. First, there is no evidence that the collegiate body of Ballina Shire Council, which made the decision to approve construction of the Marom Creek fluoridation plant, received, considered, or was influenced by the report to the Rous Water meeting on 21 April 2010 that contained details of the legal advice to Rous Water or by the attachments to that report, including the actual legal advice. The report that did go to Ballina Shire Council's meeting of 27 May 2010 did not refer to the legal advice Rous Water had received or attach that legal advice. Secondly, the report to the Ballina Shire Council meeting expressly stated that there were two options for consideration, namely to decline to approve or to approve the construction of the Marom Creek fluoridation plant. This is inconsistent with the inference which Mr Oshlack submitted should be drawn that Ballina Shire Council believed that there was only one option, being to approve. 230For these reasons, appeal grounds 2 and 3 have not been established by Mr Oshlack.

Exercise of duty by Rous Water to consider environmental impacts of fluoridation plant 231Mr Oshlack submitted that the erroneous legal advice also caused a failure by Rous Water to exercise the duty under s 111 of the EPA Act (appeal ground 5). The argument was that Rous Water had, by its past conduct of resolutions and inquiries, evidenced a desire to continue to obtain and consider further information on the impacts on the environment of fluoridation. However, the legal advice stated that Rous Water had sufficient information within the meaning of s 111 in relation to the impacts of carrying out the proposals, that Rous Water could not lawfully decide to seek further expert evidence, and that the effect of seeking further advice would be to cause Rous Water to continue to commit offences against the Fluoridation Act. Mr Oshlack submitted that it was not for a lawyer advising Rous Water to dictate that a decision-maker had no right to seek further material if that material was a relevant consideration under s 111 of the EPA Act (at [27] of the appellant's written submissions). 232The primary judge rejected Mr Oshlack's argument. The primary judge held that Rous Water had adequately discharged its duty under s 111 of the EPA Act to take into account to the fullest extent possible all matters affecting the environment by reason of the construction and operation of the fluoridation plants (at [78] of the primary judge's judgment). Determining whether or not Rous Water had complied with s 111 of the EPA Act was an objective inquiry. Thus, even if Rous Water had held a subjective view that the material before it was inadequate, this view was irrelevant (at [91] of the primary judge's judgment). Put another way, even if the legal advice was erroneous, and this had caused Rous Water not to obtain the further information it would otherwise have wished to obtain, this did not result in Rous Water failing to comply with s 111 of the EPA Act. 233In any event, the primary judge held that there was insufficient evidence upon which it could reasonably be concluded that Rous Water was intimidated into making its decision (at [92] of the primary judge's judgment). Rather, it should be concluded that Rous Water proceeded to make its decision because the material before it was sufficient for it to do so (at [97] of the primary judge's judgment). 234In my view, Mr Oshlack has not established that the primary judge erred in so holding. Even if the legal advice was erroneous in the respect earlier stated, this did not cause Rous Water to constructively fail to exercise the duty under s 111 of the EPA Act. 235First, causation has not been established. The evidence does not establish that Rous Water, at the time it made its decision on 21 April 2010, still wished to obtain and consider further information but felt compelled not to do so by reason of the legal advice. As the primary judge found, an equally available inference is that Rous Water considered, by that time, that the material was sufficient to discharge its duty under s 111 of the EPA Act. That was the advice that had been given. Rous Water was entitled to accept it without feeling compelled to do so. 236Secondly, the primary judge found that, objectively viewed, Rous Water had discharged its duty under s 111 of the EPA Act to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of the construction and operation of the four fluoridation plants. Mr Oshlack did not challenge this finding on appeal. In these circumstances, even if Rous Water had subjectively wished to examine and to take into account further information but felt compelled not to do so by the legal advice, there would not be a constructive failure to exercise the duty under s 111 of the EPA Act. The duty had already been exercised. This was the point the primary judge was making when her Honour stated that, even if Rous Water had held a subjective view that the material before it was inadequate, this view would be legally irrelevant. 237Ground 5 is therefore not established by Mr Oshlack.

Conclusion: erroneous legal advice not causative of a constructive failure to exercise jurisdiction 238In conclusion, Mr Oshlack has not established that the erroneous legal advice caused the exercise by Rous Water of either its power under s 24 of the LG Act to approve the construction and operation of four fluoridation plants or its duty under s 111 of the EPA Act to consider the environmental impacts of those plants to miscarry in law, or cause the exercise by Ballina Shire Council of its power under s 24 of the LG Act to approve the construction of one fluoridation plant to miscarry in law.

Exercise of costs discretion 239I agree with the reasons of Gleeson JA that Mr Oshlack has not established that the primary judge's exercise of the costs discretion miscarried. Appeal ground 9 has not been established.

Disposition of the appeal 240I agree with the orders proposed by Gleeson JA including that the appeal be dismissed and that the appellant pay the respondent's costs of the appeal.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 June 2013