Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd [2009] NSWLEC 197 | Case summary

Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd [2009] NSWLEC 197 | Case summary | Zoe

[12]

JUDGMENT Introduction 1 HIS HONOUR: This is a case about existing use rights. 2 It follows two previous judgments regarding the use of the respondents' land: Normans Plant Hire Pty Ltd v South Coast Concrete Crushing & Recycling Pty Ltd [2006] NSWLEC 390; Normans Plant Hire Pty Ltd v South Coast Concrete Crushing & Recycling Pty Ltd (No 2) [2006] NSWLEC 734. At the respondents' request, I have allowed the extent of existing use rights, if any, to be determined as a separate question (see r 28.2, Uniform Civil Procedure Rules 2005). I have also allowed, again at the respondents' request, evidence and submissions on the question of the exercise of the Court's discretion, if required, to be filed and served after the determination of the separate questions. 3 Adjacent to the Princes Highway at South Nowra is an area of land formerly known as the Nowra Brickworks, but no longer used for the purpose of brickmaking. The second respondent, Abib Pty Ltd is the lessee of land from the Crown under a mining lease, described as Mineral Lease 5087 (referred to in these proceedings as "ML1"). ML1 was first granted on 8 January 1948 and remains in force until 8 January 2019. ML1 authorises the extraction of brick clay and clay shale. The first respondent, South Coast Concrete Crushing and Recycling Pty Ltd (SCCCR), occupies the land and, with the consent of Abib, continues to extract material from the land, but the material extracted is no longer used in the manufacture of bricks. SCCCR sells the extracted material as road base and also uses it to manufacture on the land a blended material with crushed waste products. 4 The Council by its amended summons seeks a declaration that the extraction of material not used for brickmaking is an "extractive industry" for which there is no development consent; that the process of importing materials for blending with material extracted from the land is an "industry" which is a prohibited use; and alternatively, that a significant increase in the rate of extraction comprises an unlawful intensification of the existing use; and consequential relief. 5 In particular, the Council says that there was a fundamental and significant change in the use of the land in about the year 2000 when brickmaking ceased. That is, the use of the land for the core purpose of brickmaking was abandoned and the present activities on the land amount to an unlawful change of use and unlawful intensification of use. 6 The respondents say, however, that the activities are protected by existing use rights and by the current consent granted on 14 July 2003 for the "crushing and recycling waste products". 7 The relevant date for the purpose of establishing an existing use is 28 February 1964, when Shoalhaven Interim Development Order No. 1 ("the IDO") commenced and under which extractive industries, industries other than rural industries, mines and quarries were all prohibited.

[48]

In character the process is similar in that the product will be crushed, however extra processing is required for the concrete over the shales and clays, as steel reinforcement has to be removed from concrete products. This is done by the addition of magnets to the existing crushing plan t." 31 The respondents submit that the consent does authorise the blending of extracted material. In support, they note that condition 4 states "This activity is to be undertaken in conjunction with quarrying activities. This consent shall lapse in the event that quarrying activities cease". They submit that the blending of extracted and imported material is otherwise correctly categorised as an "industry" under the Shoalhaven LEP, which is a prohibited use in the Rural 1(b) zone, and that, in order to be lawful, the consent relies for its validity upon the use being classified as ancillary to the quarry operations, which are permissible as an "extractive industry". Further in support, the respondents note that under the consent, there is no limit on the importation of extracted materials for use in the crushing and blending process. 32 In my view, the development consent does not authorise the blending of extractive material with the imported waste products. The terms of the development consent authorise the "crushing and recycling of waste products". There is nothing to suggest that the extractive material is a "waste product". In my view, condition 4 does not expand the authorisation to include the blending of extractive material. I accept that the importation and blending activities may have been regarded by the Council as ancillary to the quarrying activities, since it was described in the development application as a use of the crusher in what would otherwise be "idle" time, but in my view, this alone is not enough to expand the "crushing and recycling of waste products" to include the blending of the waste products with extractive material. 33 In coming to this conclusion, I place no reliance on the statement of environmental effects and the letter of Mr Stevens referred to me by the Council. On the evidence before the Court, these documents have not been incorporated into the development consent. Condition 1 of the development consent states: " This consent relates to Crushing and Recycling of Waste Products as illustrated on the plans, specifications and supporting documentation stamped with reference to this consent …" 34 The documents tendered in evidence are not "stamped with reference to [the] consent", and are thus not expressly incorporated into the consent. Further, in my view, they are not impliedly incorporated into the consent. Consequently, I find that the development consent may not be construed by reference to these documents: Sydney Serviced Apartments Pty Ltd v North Sydney Municipal Council (No 2) (1993) 78 LGERA 404 per Handley JA at 407-408.

[64]

" clay/shale means clay or shale other than structural clay, but does not include clay or shale used in road making or as fill. structural clay means clay or shale used in the manufacture of fired clay building or construction products, such as bricks, pipes and quarry tiles ." 58 The November 2001 amendment also inserted a replacement for cl 50 of the Mining (General) Regulation 1997. For present purposes, the table underneath was identical to the June 2001 table. The new clause was as follows: " 50 Savings A reference in an exploration licence, mining lease or mineral claim (as in force on 1 July 2001): (a) to a mineral specified in Column 1 of the Table to this clause is, on and from that date, taken to include a reference to the mineral specified opposite in Column 2 … " 59 The Mining Regulation 2003 was gazetted on 22 August 2003 and replaced the Mining (General) Regulation 1997. Clause 3 of this Regulation provides definitions to "clay/shale" and "structural clay" which are identical to those in par [57] above. Clause 5 provides: " The substances listed in Schedule 2 are prescribed as minerals for the purposes of the definition of mineral in the Dictionary at the end of the Act." 60 As with the 1997 Regulation, the relevant schedule (Sch 2) lists "clay/shale" and "structural clay" and does not list "clay shale" and "brick clay". 61 In Sch 11, which is entitled "Savings and transitional provisions", cl 6 provides: "(1) Any act, matter or thing that, immediately before the repeal of the Mining (General) Regulation 1997 , had effect under that Regulation continues to have effect under this Regulation. (2) In particular, a reference in an exploration licence, mining lease or mineral claim (as in force on 1 July 2001) to: (a) a mineral specified in Column 1 of the Table to this clause is, on and from that date, taken to include a reference to the mineral specified opposite in Column 2 … " 62 In the table underneath, "brick clay" is listed in column 1 opposite "structural clay" in column 2. "Clay shale" is listed in column 1 opposite "structural clay" and "clay/shale" in column 2. 63 The effect of the changes in the Mining Regulation may therefore be summarised as follows:

[80]

The respondents' submissions regarding change of use 83 The respondents submit that there are no authorities which suggest that the use should be categorised as narrowly as the categorisation suggested by the Council and that the distinctions sought to be drawn by the Council descend to a level of particularity inappropriate for consideration in a continuing use matter. They submit that the authorities indicate that the categorisation should be as liberally construed as the language in the context allows. At an appropriate level of particularity, they submit that the Court must look at the use without reference to the motives behind the use or the eventual use of the extracted material: Shire of Perth v O'Keefe (1964) 110 CLR 529 per Kitto J at 535. The respondents submit that when the use is classified in such a way, the use of the land was correctly categorised as a "quarry" or an "extractive industry" since 1964 and there has been no change of use as contended by the Council. Once the Court is satisfied that "extractive material" is being won, and that this is the predominant land use, the respondents submit that the Court should not concern itself with the precise nature of the minerals extracted or the changes in use of the extracted material: Warlam Pty Ltd v Marrickville Council [2009] NSWLEC 23; (2009) 165 LGERA 184 at [18]. 84 The respondents further submit that, categorised in this way, the entire use was subject to the immunity under the Mining Act. Section 74(1)(a) provides that "mining operations" are unaffected by the EPA Act, and the respondents submit that "mining operations" encompass the use as a "mine", a "quarry" and an "extractive industry", however those terms may be defined in instruments under the EPA Act. 85 The respondents also make a number of submissions in response to the Council's submissions. 86 Firstly, the respondents reject the submission that "taken to include" in this context is a phrase of confinement. They submit that the phrase "taken to include" should be interpreted so as to expand the terms "brick clay" and "structural clay" so that the lawful mining operations were for the extraction of "clay shale", "brick clay", "clay/shale" and "structural clay". The respondents submit that the June 2001 amendment should not be read to take away a right which already existed. The respondents submit that if rights under the mining lease were to be taken away, it would need to occur unambiguously and expressly. 87 Consequently, the respondents submit that: (i) the definitions for "clay/shale" and "structural clay" should not be applied to "clay shale" and "brick clay" because to do so would be attempting to apply definitions to the minerals which were not in force at the time of grant of the mining lease; and (ii) because "brick clay" and "clay shale" are not defined, they do not suffer from any potential definitional limitations. 88 In support, the respondents submit that this approach is consistent with the actions of the Department of Primary Industries, which has continued to collect royalties from the mine. They further rely on a letter to the Council from the Department of Mineral Resources dated 11 December 2002. The letter attaches a title sheet for ML1, which indicates that the grant date for the lease was 8 January 1948 and the expiry date is 8 January 2019. In the section entitled "4 minerals" it lists "brick clay", "clay shale", "clay/shale" and "structural clay". The respondents also rely on a series of returns lodged with the Department of Primary Industries, some of which provide separate entries for "clay shale" and "brick clay".

[84]

(c) " Structural clay " means clay or shale used in the manufacture of certain goods. Again, it looks to purpose. 90 The respondents submit that all of the above definitions, in contrast to "clay/shale", look to how the materials are going to be used. This is supported by the fact that the current definition of "clay/shale" was amended from the previous definition of 15 June 2001, which stated that it does not include clay or shale "suitable for use" in road making or as fill. If the words "suitable for use" had remained, the respondents submit that it would act like the other provisions above which relate to purpose. The respondents further submit that if the Council's approach were adopted, there would be no mineral in Sch 2 which could be extracted for the use of road making and fill. That is, it would mean that one is unable to extract under a mining lease products ultimately to be used for road making or fill. 91 Thirdly, the respondents submit that the difference between a "mine" and an "extractive industry" for the purposes of the EPA Act are irrelevant in the application of the s 74 exemption. The respondents submit that even if they are wrong in their interpretation of "minerals", the existing use provisions are designed to permit the continuation of the use of land for the purpose for which it was used immediately before later regulation that prohibited it wholly or partly or upon conditions: Warlam Pty Ltd v Marrickville Council at [18]. As a consequence, the respondents submit that the site was used for the purposes of the mining lease, which allowed the extraction of "brick clay" and "clay shale", and that this right was not taken away by the later amendments to the Mining Regulation. 92 Fourthly, the respondents submit that the question of whether the mining lease is being complied with is outside the jurisdiction of the Court. They rely on my statement in Normans Plant Hire where I said (at [8]): " I find it unnecessary to go into details of the substances extracted and the use to which the respondents put them to as this is a factual inquiry outside my jurisdiction. If the mining lease has effect s 74(1)(a) allows ' carrying on mining operations in the mining area '. It does not say ' carrying on mining operations in accordance with the mining lease '. Therefore it is irrelevant whether the substance being mined is other than that stipulated in either lease, as this Court does not have jurisdiction to restrain breaches of mining leases. "

[88]

Finding on the change of use in relation to extraction of material 94 I find that if one were to stand on the side of the quarry prior to 1963 and compare the use at that time with the current use, then one would say on both occasions that the site is being used for extraction of material for commercial gain. In my view, it does not matter that there has been a change to the purpose for which the material is being used. 95 According to Mr Hemmings, there are no authorities indicating that an existing use for the production or extraction of a primary material changes when the purpose of use for that primary material has changed. Indeed, in my view, such an approach would lead to absurd consequences. If a property had existing use rights for the extraction of iron ore, and the use changed from use for the manufacture of steel to use for the manufacture of another alloy, there would not in my opinion be a change in use. In my opinion, this principle would also apply to the manufacture of component parts. If a property had existing use rights for the manufacture of ink, and the use of the ink changed from the use for the manufacture of biros to use for the manufacture of printing cartridges, there would not in my opinion be a change in use. 96 In Warlam Pty Ltd v Marrickville Council, Biscoe J, in summarising the relevant principles on the categorisation of existing uses, said (at [18]): " the courts refuse to categorise the purpose of an existing use so narrowly that natural changes in the method of using land or carrying on a business or industry will render an existing use right valueless. Likewise, the courts refuse to categorise the purpose of an existing use so widely that land or premises could be used for a prohibited purpose that was not part of its use at the time of commencement of the prohibiting regulation " 97 In my view, applying the principles summarised by Biscoe J, it would not be categorising the use too widely if it were categorised as the extraction of material from the ML1 site for commercial gain. Accordingly, I consider that, to the extent that it is necessary to apply a definition from the relevant planning instruments, the appropriate categorisation for this use at all relevant times is an "extractive industry" because it involves the "winning of extractive material". 98 As noted above, the Council submits that prior to about 2000, the use was correctly categorised as a "mine" and that, consequently, it could not be classified as an "extractive industry". I do not accept the submission for the following reasons. 99 I agree with the respondents' submission that the distinction between an "extractive industry" and a "mine" is irrelevant when applying the existing use provisions. Classification of the use in the way suggested by the Council would, in my opinion, be adopting the approach that was disapproved by Kitto J in Shire of Perth v O'Keefe (at 535): " The application of the by-law in a particular case has therefore not to be approached through a meticulous examination of the details of the processes or activities, or through a precise cataloguing of individual items of goods dealt in, but by asking what, according to ordinary terminology, is the appropriate designation of the purpose being served by the use of the premises at the material date. " 100 As demonstrated above, the various definitions in relevant legislation have changed since 1963. A use for extraction of material for commercial gain, on the other hand, has not changed. It would, in my opinion, be a "meticulous examination of the details of the process or activities" to confine the use for extraction of material in the way suggested by the Council. 101 Even if the examination suggested by the Council were conducted, in my opinion, the use would continue to be classified as an "extractive industry" at all relevant times. I do not accept the submission of the Council that a use cannot constitute both an "extractive industry" under the Model Provisions and a "mine" under the Mining Act. I do not believe that the definition of "mine" in the Model Provisions corresponds with the definition of "mine" under the Mining Act because they are separate definitions. That is, by defining a "mine" in the Mining Act, the legislature has discarded the ordinary meaning of the word and adopted an artificial meaning solely for the purpose of that Act. Similarly, in the Model Provisions, the word as defined applies solely for the purposes of those Provisions. The definition of "mine" in the Model Provisions is very broad. The terms "with the purpose of obtaining any metal or mineral" should not be narrowly confined to only include "minerals" as defined under the Mining Act. The use clearly falls within alternative (a) of the definition of "extractive industry" under the Model Provisions and, in my opinion, the Mining Act does not change this. The material being extracted clearly falls within the definition of "extractive material".

[95]

108 As noted above, prior to about 2000, the clay and shale won from ML1 was predominantly used for brickmaking. However, the evidence establishes that there was also the importation of material to the site, which was used to blend with material won from ML1. 109 In the early to mid 1960s, material began to be imported to the site from land located on Yalwal Road in South Nowra. The material was blended with the material won from ML1 in order to create a different coloured brick. The imported material from Yalwal Road was not suitable for brickmaking on its own, and was only suitable as a blended product in the brickmaking process. Prior to the importation of material from Yalwal Road, imported material was brought to the site from various locations including Fitzroy Falls, Bundanoon and the Goulburn area. 110 Mr Ronald Downes, who worked on the site between about 1950 and 1997, says that the importation of material from Yalwal Road intensified in about 1966 and that at this time, the Yalwal Road operations were formalised. He says that the material was imported "on a regular basis" from Yalwal Road, particularly to develop different kinds of bricks. This is confirmed by the evidence of Mr Dennis Hinkley, who worked continuously at the site between 1964 and 2000. Mr Hinkley says that he was "often engaged throughout the course of … employment" in transporting clay from Yalwal Road "back to either the brickworks quarry or directly into the brickworks area". Mr Hinkley says that he "regularly" brought material from Yalwal Road to be blended with the material from ML1. Mr Hinkley says that he observed the material from Yalwal Road being blended with the material won from ML 1 and that he "blended the material which was imported [from Yalwal Road] with the material won from ML1 on a daily basis". Mr Hinkley says that: " as part of my daily duties I would operate machinery which performed the functions of winning shale, crushing of shale and, blending ." 111 Mr Hinkley also recalls transporting material from Yalwal Road to the site when he was working a second job for a transport company. This occurred at some time between 1947 and 1984, when the quarry was owned by Mr Claude Downes. Mr Hinkley says that the loads of material imported from the Yalwal Road quarry to the Brickworks quarry varied but that the process was performed "at least weekly".

[103]

The respondents' submissions 123 The respondents submit that, as a matter of fact and degree, the blending and importation has always been ancillary to the existing use as an "extractive industry" or a "quarry". The respondents submit that it follows that it was protected by the immunity under s 74 of the Mining Act until 16 December 2007 and that the current use which, according to Mr Green has been continuing for the "past 11 years", would be protected by s 109 of the EPA Act. 124 In support, the respondents submit that the ancillary nature of the use is reflected in the development consent for crushing and recycling of waste products dated 14 July 2003. Condition 4 states: " This activity is to be undertaken in conjunction with quarrying activities. This consent shall lapse in the event that quarrying activities cease ." 125 The respondents submit that this condition constitutes a concession that there is a history of the importation and blending of extracted materials, and that, given that an "industry" is a prohibited use under the Shoalhaven LEP, the Council needed to rely for the grant of consent on existing use rights insofar as the importation and blending was ancillary to the use as a "quarry" or an "extractive industry". 126 Further in support, the respondents submit that the built form or design of a use can change and remain protected by the existing use provisions: Ashfield Municipal Council v Armstrong [2003] NSWCA 353. 127 The respondents also rely upon Warlam Pty Ltd v Marrickville Council at [18], where Biscoe J, in summarising principles of existing use, said that "the courts refuse to categorise the purpose of an existing use so narrowly that natural changes in the method of using land or carrying on a business or industry will render an existing use right valueless". The respondents submit that the blending and importation of material for the purposes of creating road making material, an ancillary use, is a natural change in the use contemplated by that statement and does not constitute an independent change in use.

[104]

Finding on issue 4(b) 128 In Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157, Glass JA said (at 161): " Where the whole of the premises is used for two or more purposes none of which subserves the others, it is, in my opinion, irrelevant to inquire which of the multiple purposes is dominant. If any one purpose operating in a way which is independent and not merely incidental to other purposes is prohibited, it is immaterial that it may be overshadowed by the others whether in terms of income generated, space occupied or ratio of staff engaged ." 129 In Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404, Meagher JA said (at 409-10): " Notwithstanding the principles laid down in Foodbarn it does not follow that a use which can be said to be ancillary to another use is thereby automatically precluded from being any independent use of the land. It is a question of fact and degree in all the circumstances of the case whether such a result ensues or not. When a resident uses his land to park his motor car at his house, he is no doubt not conducting an independent use of car parking; when an employer installs at his factory a canteen for his workers, no doubt he is not conducting an independent use of running a restaurant; when the Clarks grew vegetables for their table they were not conducting an independent use of vegetable growing. But when one use of the land is by reason of its nature and extent capable of being an independent use it is not deprived of that quality because it is 'ancillary to', or related to, or interdependent with, another use. If a book publisher opens a sales room at his publishing house to sell his products, the selling of books is an independent use although ancillary to the use of publishing. The series of cases dealing with dual uses … illustrate the point: they show that a 'convenience store' and a petrol station are two independent uses, although the former is the ancillary to the latter. This is a fortiori the case where the 'ancillary' use has pre-dated the use to which it is said to become ancillary and when it has done so in circumstances where it was initially not 'ancillary' to any other use. " 130 In my view, applying Foodbarn and Baulkham Hills Shire Council v O'Donnell, there have been three separate existing use rights. 131 The first existing use is an "extractive industry" as described above, which involves the "winning of extractive material". The purpose of this use was to extract material for commercial gain. 132 The second existing use was for brickmaking, which involved a "dry pressing" process. As accepted by the Council, this use had the benefit of existing use rights prior to its abandonment in about 2000. 133 The third existing use is the crushing and blending of clay and shale, which is appropriately categorised as a use for an "industry". This use incorporates the crushing and blending of imported clay and shale, as well as clay and shale extracted from ML1. I find that this crushing and blending is a separate independent use. I make this finding because the physical activity of the crushing and blending of clay and shale has continued for the relevant period. Consistently with my position regarding the physical use for extraction of material, the existing use rights continue. The existing use rights are not dependent upon the eventual use of the products created by the use. 134 As a matter of fact and degree, I find that the use for crushing and blending is not ancillary to the use for brickmaking. As appears from the evidence below, the crushed and blended material was also used for road base and fill. The road base and fill was blended using both extracted material and imported material (see par [143] and par [146] below). 135 I also find, again as a matter of fact and degree, that the use is not ancillary to the use for an "extractive industry". To the extent that the respondents rely upon condition 4 of the development consent, I do not accept that the question of whether existing use rights apply should be determined by what the Council believed to be the case. In any event, as noted in par [28] to par [30] above, the respondents specifically asserted that the consent being sought was ancillary to the quarry operations insofar as it used some idle machinery, which had the predominant purpose of crushing the quarried material for brickmaking purposes. The application to the Council did not indicate that the crushing and recycling of waste products would be blended with the extracted material. In my opinion, I can rely upon these documents because they are not being used to interpret the development consent, but rather to determine whether there are existing use rights. That is, they are being used to make a factual determination as to what was occurring on the land at the relevant time, and what the Council understood to be occurring, when granting the consent. In my view, this is quite different to the interpretation of the development consent itself. I conclude, however, that the importation and blending of clay and shale was at all relevant times an industry, and it is also protected by s 109(1) of the Act. 136 Having established the three separate uses, and finding that the use for brickmaking has been abandoned, there are two further questions to be decided. 137 The first question is whether the current crushing and blending of imported waste materials is subject to existing use rights. As noted above, this activity is authorised by the 2003 development consent which has not been challenged in these proceedings. Accordingly, I find that it is unnecessary and improper to decide this question. 138 The second question is whether the current blending of imported waste materials with the extracted materials is subject to existing use rights. In my opinion, it is not. It is a separate activity using separate materials to those that were physically used on the property prior to about 2000.

[106]

Evidence 139 Mr Kerry Lynch says that between 1989 and 1995, his company, which undertook subcontracting operations for the Nowra Brickworks, paid a royalty to Nowra Brickworks on a per tonne basis for material extracted for haulage offsite to their customers. He says that his company "excavated and hauled offsite shale and other material for use in road building and lot filling projects principally in the Shoalhaven area. This activity was limited during the time that Nowra Brickworks Pty Ltd was owner of the quarry". 140 Mr Lynch says that after his first contact with the quarry in 1989 "a large volume of material was taken away from the quarry in trucks operated by KJL and other haulage contractors. This material consisted of the two grades of shale which were won from the quarry together with overburden which was unsuitable for the brick making process". 141 Mr Stevens, who commenced operations on the site in early 1997, states: " Nowra Brickworks (NSW) Pty Limited made shale and overburden available for sale and in addition supplied blue shale to the brickworks, however, the amount of shale supplied to the brickworks declined. With the decline in the sale of shale to the brickworks there was strong demand for shale to be exported offsite for predominantly road and infrastructure works in the Shoalhaven area. The company received orders on a daily basis to supply shale outside of the quarry and to the best of my information and belief this was a permissible activity ." 142 Mr Stevens also states: " The blending of the recycled material and that material imported from Yalwal Road provided an opportunity to blend with the material won from ML1 and ML2 thus provided a marketable product which was used for roadway infrastructure projects hard stand areas ." 143 Mr Hinkley, who worked continuously at the site between 1964 and 2000, states: "[m]ost of the shale which was won from ML1 was transported into the brickworks for blending. However, there were instances where shale and clay were either exported off site or I remember many tonnes of shale being used to develop the hardstand area around the brickworks … I was also engaged as part of my normal duties in the blending of shale won from Brickworks quarry with material which was brought in from Yalwal Road … Sometimes I would blend material all day depending on the type of material which was being prepared for sale for example for road base or hard stand material which was sold outside of Brickworks or alternatively that such type of material which was then blended for the purpose of brickmaking. …

[109]

" The pattern of material going off site to the best of my recollection was not regular but certainly was undertaken on an ongoing basis. I recall Lindsay telling me that he received calls from Timber Mills who placed orders for material, (normally hard blue shale and other shale from the bottom of the quarry) to be dumped at a particular location normally to either assist with road repairs or otherwise to assist in the establishment of new roads down to the mill. The mill would be responsible normally to spread the material. I observed from time to time various loaders and semi trailers taking shale which was won from the quarry away from the site. I am unable to recall specific locations where overburden and shale was taken however I have a distinct recollection about transport operators having trucks come to the quarry, being loaded and then observing the loads being exported off site. It is difficult to say what the frequency was. To the best of my recollection this was to provide shale and overburden for specific projects." 147 Mr Claude Downes, who operated the quarry between 1947 and 1984, affirmed the following by a handwritten statutory declaration dated 15 December 1998: " I WAS THE PROPRIETOR OF NOWRA BRICKWORKS UNTIL 1984. DURING THIS PERIOD, MATERIAL WAS REMOVED FROM THE QUARRY NEXT TO THE BRICKWORKS, TO BE USED FOR ROADWAYS AND HARDSTAND AREAS. TO AID THE MANUFACTURE OF BRICKS ." 148 Mr Ronald Downes and Mr Hinkley also affirmed statutory declarations on 15 December 1998 which state that materials were "removed from the quarry adjacent to the brickworks and sent to other sites for use as fill, roadways, hardstand areas etc.". The statement of Ronald Downes was in reference to his employment between 1954 and 1997. The statement of Mr Hinkley was in reference to his employment between 1964 and 1998. 149 According to Ronald Downes, Mr Leather took over the operations in 1984 and continued those operations until at least 1997. Mr Leather wrote a letter to the Council dated 4 April 1995. The letter advises that the Nowra Brickworks intend to submit a development application for their "brick shale pit". The letter provides the following information for comment: " Present production output from this pit is approximately 4,000 - 5,000 tonnes per annum and was some 2,000 tonnes per annum more than this up until 10 years ago.

[122]

154 The respondents submit that the exportation of material is not a use which requires development consent pursuant to the EPA Act. The respondents submit that the use of roads for the distribution of extracted materials is no different from any other use that depends upon the use of road infrastructure, including factories, warehouses or shopping centres. 155 In support, the respondents submit that the 2003 development consent acknowledges and anticipates the exportation. Condition 13 states as follows: " Trucks entering or leaving the premises that are carrying loads must be covered at all times, except during loading and unloading. " 156 The respondents also note that there is no limit on the volume of materials to be exported in the consent. 157 In the alternative, the respondents submit that the exportation has occurred over the whole of the period that the ML1 has been in use. They submit it is not an independent use, but rather ancillary to the lawful use of the land for the purposes of an extractive industry (applying O'Donnell and Foodbarn). As a result, they submit that pursuant to s 109, there is no need for a development consent. 158 The respondents also repeat the submissions made with respect to the importation and blending made in par [123] and par [127] above. The respondents submit that 16 December 2007 is the relevant date, and at that time, exportation was ancillary to the "extractive industry" use. The respondents submit that the exportation of material as a natural change in the use will not render the existing use right valueless. It is a part of this that the ancillary aspects can change without there being a change to the purpose, and a change to the existing use. Finding on issue 4(c) 159 The statement of Mr Claude Downes, noted at par [147] above, that the material extracted from ML1 was used for roadways and hardstand areas "to aid the manufacture of bricks" does not exclude the exporting of material in the manner described by Mr Lynch, Mr Stevens, Mr Hinkley and Mr Ronald Downes. I agree with the submissions of the respondents. The use of the site for exportation was at all relevant times something which did not require a separate development consent, and was not a "use" of the land. Even if it did constitute a "use", it is my view that the use for exportation was ancillary to the other uses of the land at all relevant times, and did not constitute a separate "use". It is self-evident that if one is entitled to have an extractive industry and a consent for crushing and recycling of waste products, then the resultant product may be sold and exported off the site.

[125]

162 The respondents rely on a finding that after about 2000, the use for an "extractive industry" or a "quarry" continued to be lawfully conducted under the terms of the mining lease, and that this lawful activity included the use for the importation, blending and exportation of materials. 163 The Council submits that, to the extent I find there was an immunity under the Mining Act, this immunity merely suspended the operation of the EPA Act, so that when the "veil" was lifted in 2007, the provisions of s 109(2) applied from the date of its enactment, that is on 3 February 1986. 164 In my opinion, the immunity under the Mining Act ceased on 23 November 2001, being the date in which the Mining (General) Further Amendment (Minerals and Royalties) Regulation 2001 was gazetted. This amendment changed the definition of "clay/shale" and "structural clay", which had been listed as "minerals" for the purposes of the Mining Act. Consequently, it altered the definition of "mining operations". 165 In my opinion, the relevant question is whether there were "mining operations" undertaken on the mine. Adopting the approach I took in Normans Plant Hire, I do not believe that compliance with ML1 is determinative of whether the immunity applies because s 74 uses the term "mining operations" and not "mining operations in accordance with the mining lease". 166 In my opinion, the use fell within the definition of "mining operations" prior to 23 November 2001 but did not fall within that definition afterwards to the extent that the extracted material was not used for brickmaking. Prior to 15 June 2001, the activities fit within the definitions of "clay shale" and "brick clay" which were listed as "minerals" under Sch 1 of the Mining (General) Regulation 1997. Between 15 June 2001 and 23 November 2001, the activities fell within the definitions of "clay/shale" and "structural clay", which were the only applicable "minerals" in Sch 1 of the Mining (General) Regulation 1997. Following 23 November 2001, the activities did not fall within the definitions of "clay/shale" and "structural clay" or any of the other "minerals" in Sch 1 of the Mining (General) Regulation 1997. I do not accept the respondents' submissions in par [90] above that the activities other than brickmaking fell within the new definition of "clay/shale". In my opinion, the definition of "clay/shale" looks to purpose in the same way as the other examples. The use of the terms "used in" rather than "suitable for use in" does not, in my opinion, mean that the definition of "clay/shale" incorporates clay or shale extracted for the purpose of road making or as fill.

[142]

179 In support, the respondents rely upon the way in which the Court of Appeal approached a similar issue in Vaughan-Taylor v David Mitchell-Melcann Pty Ltd (1991) 25 NSWLR 580. That case considered s 109(2)(b) which, as noted above, provides that nothing in s 109(1) authorises: " any increase in the area of the use made of a building, work or land from the area actually physically and lawfully used immediately before the coming into operation of the instrument therein mentioned " 180 The issue before the Court of Appeal was the extent to which s 109(2)(b) limited the operation a mine in which existing use rights could be exercised. Unlike the present case, the parties had agreed to impose a limitation on the rate of extraction and the issue was exclusively related to area. Nevertheless, Mahoney JA addressed the issue of rate of extraction in the context of s 109(2)(b) and said (at 584): " In my opinion, it does not prevent the company in the present case digging a mine or quarry which is deeper than existed before the relevant date. The paragraph [s 109(2)(b)] is directed to the lateral area of the land use: it does not, in such a case as the present restrict the cubic content of what is done ." 181 The following submission was made on behalf of the mining company in that case (at 584-585): " And, the suggestion is, that for which the land is 'actually physically' being used in that way is, not for 'reserved land' but for 'mining operations', the latter being the appropriate designation of the overall use. It would follow from this, the company contends, that the commencement of the act of quarrying or mining on part of the reserved land would not represent a change in the use to which 'actually physically' it was being put: it would continue to be 'actually physically' used for mining operations notwithstanding that the particular acts constituting those operations in the relevant part of the land had changed." 182 Mahoney JA did not accept the submission. His Honour said (at 585): " The various paragraphs of s 109(2) clearly restrict what previously could be done. In my opinion s 109(2)(b) distinguishes between things which, within one existing use, were 'actually physically' being done in pursuance of that use and things which were not 'actually physically' being done. In this respect, it distinguishes between the area of the use of land which was 'actually physically' being used for the relevant purpose and the area which, though being 'used' for that purpose, was not 'actually physically' being so used. In the present example, it distinguishes between the quarry or mine and the land merely held in reserve. It was, I think, the purpose of the paragraph to make that kind of distinction ."

[143]

183 The respondents submit that, in contrast to s 109(2)(b), s 109(2)(c) does not direct its attention to an actual, physical or lawful rate of extraction, but looks to whether there is an enlargement, expansion or intensification so that one needs to determine the intensification by reference to the properly categorised use. 184 In support, the respondents cite South Sydney City Council v Houlakis (1996) 92 LGERA 401, where the Court of Appeal considered whether an extension of operating hours for a licensed premises was an enlargement, expansion or intensification. In that case, the Court held that there was an enlargement, expansion or intensification because it was easily established that the hours of operation at the relevant date were limited. The respondents submit that this case is distinguishable, because there is no similar easily established notion in the circumstances of this case and, to the contrary, although there are limits on the area and volume lawfully used under the Mining Lease, there is and was no limit upon rate of extraction. The respondents note that in Houlakis, the Court of Appeal didn't go into details as suggested by the Council in the present case. This was deemed unnecessary on the case before the Court of Appeal, as demonstrated by Clarke JA (at 403): " These authorities establish in my opinion that when a question arises whether there has been an enlargement, an expansion or an intensification of a use within 109(2)(c) of the Act the Court is required to examine the extent of the use of the relevant land at the date that the relevant environmental planning instrument came into force … and the later use which is claimed to be an enlarged, expanded or intensified use. The question is one of fact and does not, in my opinion, require a complicated analysis of trading figures, numbers of patrons, etc. In the present case one asks simply whether the great extension of the hours of operation effected an expansion, enlargement or intensification of the earlier use. For my part the question allows only of one answer and that is 'Yes'. … The real question is whether what has been established falls within the notion of increase embodied in s 109(2)(c). I have no doubt that it does. "

[146]

(b) the rate of extraction of material from the quarry increased significantly, so as to constitute an enlargement, expansion or intensification. 187 As to par 186, the Council submits that, on a proper characterisation of the use, the use prior to about 2000 would be classified as a separate use to the use after about 2000 which was not authorised under ML1. The Council submits that the only connection between the two would be the fact that they are occurring on the same land and using material extracted from the quarry. Consequently, the Council submits that the change in use constituted an enlargement, expansion or intensification of the use. 188 As to par 186, the Council submits that the rate of extraction of the material has increased significantly. In the period up to the end of the 1990s the rate of extraction from the site was about 7000 tonnes per annum and by contrast, the rate of extraction is now approximately 100,000 tonnes per annum. The Council also notes that the quantity now being imported onto the site far exceeds the quantity that was ever imported prior to the end of brickmaking. 189 In support of these submissions, the Council notes that s 109(2) removed the authority to expand, enlarge or intensify the existing use and the legislature evinced an intention to construe in a much narrower sense than before the use of land unrestrained by the operation of the planning scheme. This intention was summarised by Mahoney JA in Vaughan-Taylor (at 585): " It was the intention of the legislature, in enacting s 109(2) in its present form, to place restrictions upon what otherwise would have been the operation of existing use rights. Under the pre-existing law, in some at least of the forms which they took, existing use rights would permit … the enlargement, expansion or intensification of particular uses: existing use rights would allow, for example, the digging of many more tonnes of stone than had originally been dug. The various paragraphs of s 109(2) clearly restrict what previously could be done ." 190 In the same case, Priestley JA said (at 587): " The change made by s 109(2) has a particularly radical effect on mining operations. Before Hemmings J the appellant contended it meant the s 109(1) authorisation was limited to precise parts of the area actually disturbed or otherwise physically used at the relevant date. Hemmings J thought that such an interpretation would make vast numbers of mining and quarrying operations unlawful, and that the legislature could not have had such an intention. However, s 109(2) not only seems to me to have the meaning rejected by Hemmings J, but quite deliberately to be intended to have that meaning. It cannot be the case that the legislature, in restricting the ambit of s 109's operation by the addition of subs (2), was unmindful that the provision would affect mining and extractive operations ;..." 191 The Council referred me to the Court of Appeal's judgment in King v Lewis (1995) 88 LGERA 183, noting that it is an indicator, if not a conclusive indicator, of the fact that assessing the quantity of extraction from a facility which was no different to the one in the present case is an example of intensification for the purposes of s 109(2)(c). At first instance, Cripps J had estimated that the intensity of the extraction as at January 1986 should be estimated to be 4,000 cubic metres per year, and that by 1990 this level had risen to 20,000 cubic metres per year. His Honour concluded that there had been a substantial intensification of the use between 1986 and 1990 and that s 109(2) prohibited this intensification. On appeal, Kirby ACJ said (at 195):

[148]

193 As noted above, in my opinion, the use for blending and creation of road product is a separate independent use, and is subject to existing use rights to the extent that it involves the blending of clay and shale. As noted above, in my view, the 2003 development consent granted consent for the importation, crushing and recycling of waste materials, but did not grant consent for the blending of the imported waste materials with clay and shale. I note that Mr Green states that since about November 2006 there has been the continued importation of quarry products from other quarries for blending (see par [10]) and has described the method by which this has been utilised for the past 11 years (see par [11]). As a consequence of these findings and the evidence, I do not accept the submission in par 186 that the change in the purpose for which the material was used constituted an enlargement, expansion or intensification. Further, there is no need to determine whether there was an expansion, enlargement or intensification of the established existing use for crushing and blending and I have not been directed to evidence or heard submissions on this point. 194 It is clear, however, that there was an enlargement, expansion or intensification of the use for an "extractive industry" after 23 November 2001. I accept that the respondents' two step approach should be adopted when determining whether there has been an enlargement, expansion or intensification. However, I reject the submission that the use should be categorised for the purposes of s 109(2) as the "extraction of material within the requirements of the mining lease". Rather, I am of the opinion that the use should be categorised more narrowly as the "extraction of material". 195 In my opinion, the case of Houlakis is not directly relevant, and the submissions of the respondents with respect to that case do not persuade me that their approach should be adopted. The restrictions placed upon the trading hours of a licensed premises are not properly compared with the restrictions placed upon the rate of extraction in ML1. The uses are very different in nature and extent. In that case, the Court of Appeal came to the conclusion that an enlargement, expansion or intensification of a licensed premises could be determined by reference to trading hours. In my view, this case is distinguishable by reason of the nature of the use, and the question of whether there is in the present case an enlargement, expansion or intensification should be determined by reference to rate of extraction, consistently with the Court of Appeal's decision in King v Lewis. The use is not properly categorised as "extraction of material within the requirements of the mining lease" because (i) unlike the trading hours of a licensed premises, the restrictions in ML1 are not an appropriate benchmark for measuring whether there has been an enlargement, expansion or intensification; and (ii) I do not believe that the categorisation of the use as "extraction of material" requires the "complicated analysis" which was disapproved by Clarke JA in Houlakis. 196 In coming to this decision, I bear in mind the following contextual considerations:

[153]

Issue 7: If there has been an enlargement, expansion or intensification, how does one impose a limit? 200 The Council seek a declaration that the quantum of output of combined material in consequence of the blending is 64,555 tonnes per annum, or such other quantum as this Court determines appropriate in the circumstances. 201 The Council cites Nymboida Shire Council v Skar Industries Pty Ltd [1998] NSWLEC 166; (1998) 99 LGERA 178. In that case, Sheahan J said (at 190-191): " As the courts have not construed 'as at' to mean 'on' any particular date, the ordinary meaning of 'immediately before' cannot be quite so narrow and restrictive either. The authorities dealt with in this judgment persuade the court that it is neither necessary nor reasonable to focus only on one day, one month, or perhaps even one year, as the relevant period. Construing the relevant restrictions charitably (Cripps J in Lewis), and resolving their ambiguity in favour of the proponent (Boyts Radio and Kirby ACJ in Lewis), I conclude that the appropriate amount of extraction to allow post 3 February 1986 should take into account the relevant operation history of the quarry, in a naturally fluctuating market, over ' a reasonable period ' prior to ' the key date ' ". 202 The Council submits that the diversity in figures between 2000/2001 and 2006/2007, in circumstances in which the user of the land might wish to increase output on the eve of the abatement of an immunity and in circumstances in which there are fluctuations in extraction, should be considered when adopting the approach applied by Sheahan J in Nymboida Shire Council. 203 The Council submits that even if a liberal or charitable approach were adopted, it needs to be acknowledged that there was a use averaging about 7,000 tonnes per annum for a long period of time, followed by a period of about 5 years in which it was about 65,000 tonnes per annum. Bearing this history into consideration, the Council submits that the long term average would be much lower than 65,000 tonnes per annum. 204 In the alternative, if the relevant date is 16 December 2007, the Council submits that the available evidence suggests that the rate of extraction was an average of about 65,000 tonnes per annum. The Council submits that "expansion, enlargement or intensification" encompasses the increase in extraction rates over the last 11 years.

Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (166 paragraphs)

Parties

Cases Cited (20)

Cited By (4)