GROUND 3: APPREHENSION OF BIAS
141Ground 3 is that the Minister's decision to make the Recommendation was infected by apprehended bias in the form of prejudgment.
142The NSW Government's formulation of and commitment to the LHRS (the Lower Hunter Regional Strategy) over time has been summarised above at [6], [7], and [13] - [18].
143The applicant submits that:
(a)the overall impression is that the Government was committed, and had been committed for some years, to enabling the Huntlee development to proceed;
(b)as the Minister was not provided with the SSS Study but a short briefing note describing some of the issues at a high level, a fair minded lay observer might conclude that the Minister might not have assessed the MD SEPP Amendment on its merits, as he was in no position to do so, and instead made the Recommendation without regard to the merits because it was consistent with the Government's high level policy objectives and with the earlier decision to make Amendment No 35.
144I substantially adopt the respondent's submissions.
145The test of apprehended bias is whether a fair-minded properly informed lay observer might reasonably apprehend that the decision-maker might not bring an impartial mind to the resolution of the question the decision-maker is required to decide. Although the test is the same in both curial and non-curial decision-making, different considerations apply depending on the nature and role of the administrative decision-maker: Ebner v Official Trustee in Bankruptcy [2000] HCA 63, 205 CLR 337 at 345; F & D Bonaccorso Pty Ltd v Canada Bay Council (No 2) [2007] NSWLEC 537, 158 LGERA 250 per Biscoe J at [110] ff, [115]; Re Refugee Review Tribunal; Ex parte H [2001] HCA 28, 179 ALR 425 at [5]. Ministers are not judges and their conduct is to be evaluated "in the light of his or her political role, responsibility and accountability": Minister for Immigration v Jia Legeng [2001] HCA 17, 205 CLR 507 at [63].
146The respondents submit that the principle of procedural fairness by prejudgment is inapplicable because, on its proper construction, s 38 of the EPA Act is not the source of the Minister's power to recommend. They submit that the Minister's power to recommend is a non-statutory executive power which is merely acknowledged in s 38; the source of the duty to afford procedural fairness is statutory; and therefore there is no duty of procedural fairness in this case.
147The respondents' submission requires consideration of the debate as to whether the source of the duty to afford procedural fairness is the common law or statute. In the leading case of Kioa v West (1985) 159 CLR 550 Mason J favoured the common law (at 584 - 585) while Brennan J favoured statute (at 620). However, that debate was resolved, at least in this State, in Stewart v Ronalds [2009] NSWCA 277, 76 NSWLR 99 at [70] where Allsop P (Hodgson JA and Handley AJA agreeing) proceeded "on the basis that the common law is the source of the duty to afford procedural fairness". Although his Honour noted that that important question did not receive detailed treatment in argument in that case, the decision is binding upon this Court. Consequently, even if the the Minister's power to recommend the making of a SEPP is not statutory, this is not a reason for excluding the rules of procedural fairness. However, as stated above at [102], in my opinion, the Minister's power to recommend is statutory: it is implicit in s 38.
148Next, the respondents submit that procedural fairness obligations do not attach to an exercise of power of this kind (i.e. recommending the making of a SEPP) because the power is legislative in character and results in a planning instrument of general application: Kioa v West (1985) 159 CLR 550 at 584-5, 620; Vanmeld Pty Ltd v Fairfield City Council [1999] NSWCA 6, 46 NSWLR 78 at 91 - 100; Save the Showground for Sydney Inc v Minister for Urban Affairs and Planning (1997) 95 LGERA 33 at 51 - 53; Transport Action Group against Motorways Inc v Roads and Traffic Authority [1999] NSWCA 196, 46 NSWLR 598 at 622 - 625; Minister for Local Government v South Sydney City Council [2002] NSWCA 288, 55 NSWLR 381 at 439; McGuiness v State of New South Wales [2009] NSWSC 40, 73 NSWLR 104 at 119 - 128.
149In Kioa v West Mason J said at 584:
The law has now developed to a point where it may be accepted
that there is a common law duty to act fairly, in the sense of
according procedural fairness, in the making of administrative
decisions which affect rights, interests and legitimate expectations,
subject only to the clear manifestation of a contrary statutory
intention. ... But the duty does not attach to every decision of an administrative character. Many such decisions do not affect the rights, interests and expectations of the individual citizen in a direct and immediate way. Thus a decision to impose a rate or a decision to impose a general charge for services rendered to ratepayers, each of which indirectly affects the rights, interests or expectations of citizens generally does not attract this duty to act fairly. This is because the act or decision which attracts the duty is an act or decision:
... which directly affects the person (or corporation) individually and not simply as a member of the public or a class of the public. An executive or administrative decision of the latter kind is truly a 'policy' or 'political' decision and is not subject to judicial review.
( Salemi [No.2], per Jacobs J.)
150Mason J added at 585:
When the doctrine of natural justice or the duty to act fairly in its
application to administrative decision-making is so understood, the need for a strong manifestation of contrary statutory intention in order for it to be excluded becomes apparent. The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case? It will be convenient to consider at the outset whether the statute displaces the duty when the statute contains a specific provision to that effect, for then it will be pointless to
inquire what the duty requires in the circumstances of the case, unless there are circumstances not contemplated by the statutory provision that may give rise to a legitimate expectation. However, in general, it will be a matter of determining what the duty to act fairly requires in the way of procedural fairness in the circumstances of the case. A resolution of that question calls for an examination of the statutory provisions and the interests which I have already mentioned.
151Brennan J said at 620 :
The legislature is not likely to intend that a statutory power of a strictly legislative nature be conditioned on the observance of the principles of natural justice for the interests of all members of the public are affected in the same way by the exercise of such a power: cf Bates v Lord Hailsham . But the legislature is more likely to intend the exercise of a statutory power of an executive, administrative or quasi-judicial nature to be so conditioned if an exercise of the power singles out individuals by affecting their interests in a manner substantially different from the manner in which the interests of the public at large are affected....
152In Save the Showground there was a change of government policy that resulted in the making of a state environmental planning policy ( SEPP 47 ) which effected a rezoning of Sydney Showground to permit development for certain purposes. The validity of SEPP 47 was unsuccessfully challenged on the ground that it was made in circumstances which involved a denial of procedural fairness said to be based upon a legitimate expectation that the applicants would be consulted before the policy was made. Gleeson CJ said at 35: "Our task is to determine, in the light of the argument presented by the appellant, whether the making of SEPP 47 was a valid exercise of a power which the Parliament has vested in the Governor, acting on the advice of the Minister." It was held that the Executive could not by promise fetter itself in the exercise of discretion to change policy. Beazley JA (Powell JA agreeing) also said at 66:
Assuming the absence of circumstances giving rise to a legitimate expectation, the almost untrammelled role for policy and political decisions without the constraint of judicial review finds expression in a number of authorities...
This approach applies equally to all policy areas, including planning matters such as are involved here...
...The power to initiate either the SEPP or the REP process
lies with the Minister or the Director in accordance with the provisions of ss 37 and 40 respectively. There is nothing in the legislation which prevents the Minister or Director from abandoning either process, nor is there any procedure which must be followed if one or other process is abandoned. A decision to abandon is as much a matter of policy as is a decision to instigate the process, and is one which a government is free to make, unfettered by any previous representation or promise... .
153Mason J's example in Kioa v West of a decision to enforce a rate or general charge for services on ratepayers seems to me to be of a different character to a decision to recommend the making of a SEPP to effect a rezoning to permit development. The reality is that a particular developer is usually the proponent of the rezoning and directly affected by the decision. That is reflected in the routine joinder of the developer in proceedings such as these.
154It is unnecessary to reach a concluded view about the applicability of principles of apprehended bias to the exercise of power by the Minister to recommend the making of a SEPP because, assuming that they are applicable, in my opinion the applicant's contention that there is a reasonable apprehension of predetermination of the relevant kind fails on the facts.
155It is not enough to point to matters that suggest a predisposition by the Minister toward a particular outcome or a strategic policy towards delivering certain results. Apprehension of bias of the relevant kind only arises when the decision-maker's mind appears closed in the sense of not being open to persuasion. In Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17, 205 CLR 507 at [72] Gleeson CJ and Gummow J (Hayne J agreeing) said:
The state of mind described as bias in the form of prejudgment is one so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented. Natural justice does not require the absence of any predisposition or inclination for or against an argument or conclusions.
156In McGovern v Ku-ring-gai Council [2008] NSWCA 209, 72 NSWLR 504 Spigelman CJ said (omitting citations):
22 ...a "fair and unprejudiced" mind is not necessarily a mind which has not given thought to the subject matter or one which, having thought about it, has not formed any views or inclination of mind upon or with respect to it.
23 The "open to persuasion" test is an appropriate formulation for bias by prejudgment, to which the dual "might" test of apprehended bias must be applied; that is, that an independent observer might reasonably apprehend that the decision-maker might not be open to persuasion.
157The general principles relating to apprehended bias must be understood in their application to the particular statutory context and the particular position of the Minister in his policy making role of recommending the making of SEPPs. In McGovern Spigelman CJ said:
6...The case law on judicial decision-making is not a starting point when determining the application of the apprehended bias test in a specific statutory context. The statute must be part of the assessment from the outset and not treated as some kind of qualification of a prima facie approach.
7How the apprehended bias test is applied is ...affected by the statutory functions being performed and by the identity and nature of the decision maker who is obliged by statute to perform those functions. The content of what the test requires varies from one context to another by a process involving, and usually determined by, statutory interpretation.
158In Jia Legeng Hayne J said at [187]:
It is critical... to understand that assessing how rules about bias, or apprehension of bias, are engaged depends upon identification of the task which is committed to the decision-maker. The application of the rules requires consideration of how the decision-maker may properly go about his or her task and what kind or degree of neutrality (if any) is to be expected of the decision-maker.
159In the same case Gleeson CJ and Gummow J said at [62] - [63]:
In [ R v Anderson Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 at 189] it was also said that there is "a significant difference between a discretion given to a minister and one given to a departmental head". The context in which that difference was being considered concerned the right to act on the basis of governmental policy/the implication being that, when a power is reposed in a Minister, the statute, in the absence of an indication to the contrary, would be taken to contemplate that the Minister would be entitled, within the limits of any other constraints that may be found in the statute, to act in accordance with such policy. There are other consequences that flow from the circumstance that a power is vested in, and exercised by, a Minister. Relevantly to the present case, they include the consideration that the conduct of a Minister may need to be evaluated in the light of his or her political role, responsibility and accountability.
160The role of recommending the making of SEPPs involves a policy making function that is associated with high level political decisions of significance to the State. In exercising the function of making such recommendations the Minister operates in the arena of public debate, political controversy and democratic accountability. Elected officials have political ties and are expected to "support particular views as to what is in the best interest of the community": R v West Coast Council; Ex parte Strahan Motor Inn (1995) 87 LGERA 383 at 389 per Zeeman J. Ministerial decisions are not subject to the same requirements of manifest impartiality as are required by law of the decisions of courts, tribunals and bureaucratic decision-makers and tribunals
161In CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 the New Zealand Court of Appeal considered the validity of an Order in Council made under s 3 of the National Development Act , which applied the Act to a proposed smelter project. That Act was comparable to Part 3A of the EPA Act. It was argued in CREEDNZ by reference to public statements of Ministers which were recorded in press clippings, that members of the Executive Council had predetermined the advice they gave to the Governor-General in Council and the consent expressed to the making of the Order in Council under s 3 of the National Development Act: at 191 - 192. Cooke J stated at 179:
The references, in the amended statement of claim to a real probability or suspicion of predetermination or bias are beside the point in relation to a decision of this nature at this governmental level. Projects of the kind for which the National Development Act is intended, whether Government works or private works, are likely to be many months in evolution. They must attract considerable public interest. It would be naive to suppose that Parliament can have meant Ministers to refrain from forming and expressing, even strongly, views on the desirability of such projects until the stage of advising on an Order in Council.
In relation to decisions under s 3(3) I think that no test of impartiality or apparent absence of predetermination has to be satisfied. Any other approach would make the legislation practically unworkable. The only relevant question can be whether at the time of advising the making of the Order in Council the Ministers genuinely addressed themselves to the statutory criteria and were of the opinion that the criteria were satisfied. If they did hold that opinion at that time the fact that all or some of them any have formed and declared the same opinion previously does not make the order invalid. No doubt, if Ministers had approached the matter with minds already made up, the inference would readily , be drawn that they could not genuinely have considered the statutory criteria when advising the making of the Order in Council. But the newspaper reports fall short of showing closed minds. And the terms of the Order in Council suggest that the minds of the Ministers were not closed.
162Richardson J stated at 194:
What is fair in a given situation must depend on the circumstances. The application of the rules against bias must be tempered with realism. It would be unrealistic to expect Ministers to have completely open minds as to the criteria set out in s 3(3) of the National Development Act or as to the desirability in the public interest of a proposed work. An assumption that the Governor-General in Council may be predisposed to apply the provisions of the National Development Act to a project is not enough. It is not expected that Ministers will approach their consideration of the application under s 3(3) with perfect detachment. Before the decision can be set aside on the grounds of disqualifying bias it must be established on the balance of probabilities that in fact the minds of those concerned were not open to persuasion and so, if they did address themselves to the particular criteria under the section, they simply went through the motions.
163The Court held that the Ministers had genuinely addressed themselves to the statutory criteria, and the evidence before the Court did not show that the Ministers failed to consider the application with minds open to persuasion.
164In Franklin v Minister for Town and Country Planning [1948] AC 87 the House of Lords held that a Minister was not subject to the bias rule when considering a report on his proposal to site a larger "new town" in a certain area, although the Minister was under a duty to give genuine consideration to the report. It was also held that the Minister had discharged this duty, despite his pre-report speech indicating that his proposal would prevail over all objections: at 105. In Jia Legeng , a majority of the High Court described Franklin as a "useful reminder" of how the requirements of bias are modified when applied to Ministers: Gleeson CJ and Gummow J at 539 (Hayne J agreeing).
165The reasonable fair-minded lay observer postulated for the purposes of the apprehended bias test is one who is "properly informed": see Hot Holdings Pty Ltd v Creasy [2002] HCA 51, 210 CLR 438 at 459 per McHugh J. In the context of the present case, the notion of being "properly informed" must include a proper appreciation of the role of strategic government policy and environmental planning.
166These matters must be assessed in the context of a legislative scheme which expressly contemplates strategic planning and policy making. The objects of the EPA Act, as set out in s 5(a), relevantly include:
to encourage:
(i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and. villages for the purpose of promoting the social and economic welfare of the community and a better environment,
(ii) the promotion and coordination of the orderly and economic use and development of land,
...
(iv) the provision of land for public purposes,
...
(vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species, populations and ecological communities, and their habitats
167Section 7 provides that the Minister is charged with the responsibility of "promoting and co-ordinating environmental planning and assessment" to fulfil those objects. In discharging that responsibility, the functions of the Minister include:
7 Responsibility of Minister
...
(c) to promote the co-ordination of the provision of public utility and community services and facilities within the State,
(d) to promote planning of the distribution of population and economic activity within the State...
168Section 117 contemplates that the Minister may direct councils as to the way in which certain functions, including the preparation of LEPs, are to be exercised. This may include a direction to include in a planning proposal provisions which will "achieve or give effect to such principles or such aims, objectives or policies, not inconsistent with [the EPA Act], as are specified in the direction": s 117 (2)(b).
169Consistently with these statutory objectives and functions, the Minister was part of a Government which had endorsed high level strategic documents to guide population and economic growth, planning and conservation in the Lower Hunter Region. The LHRS was made in October 2006. The preface to the LHRS describes the strategy as:
an agreed NSW government position on the future of the Lower Hunter. It is the pre-eminent planning document for the Lower Hunter Region and has been prepared to complement and inform other relevant State planning instruments.
170Part 13 of the LHRS describes the strategy for implementation:
The Lower Hunter Regional Strategy will be implemented primarily through local environmental plans, development control plans, through the State Infrastructure Strategy and through funds collected as developer contributions.
...
IMPLEMENTATION BY COUNCILS
The Lower Hunter Regional Strategy provides the framework and context for statutory planing controls and development assessment of individual projects and proposals. It will guide the preparation of a new local environmental plans prepared by local councils.
171As anticipated in the LHRS, on 26 February 2007 the Minister issued a s 117 direction (Direction No 30) requiring councils to implement the LHRS.
172As the terms of the LHRS make clear, the strategy did not purport to override the statutory procedures for the determination of particular development proposals and proposed instruments under the EPA Act. The LHRS was rather intended to provide a strategic policy framework for the coordinated administration of the EPA Act. This is confirmed by the terms on which the Minister publicly endorsed the LHRS in February 2010:
Minister for Planning, Tony Kelly, said the Government has been looking at the existing regional strategy following legal action in regard to approvals for the two sites.
"That action affected a small number of development sites where memorandums of understanding (MOUs) and deeds were in place", the Minister said.
"The existing regional strategy, independently of those MOUs and deeds, continues to provide a clear basis for all sites in the strategy to be considered on their merits and assessed according to law."
173I do not think that a fair minded observer of the process could reasonably conclude that the stated policy of the Government, as embodied in the LHRS and the LHRCP, indicated that the Minister would not consider the merits of individual proposals, as and when required, pursuant to the EPA Act. At the core of the applicant's case is the notion that a government policy which identifies strategic planning opportunities in particular areas necessarily gives rise to an inference that those charged with exercising statutory functions will perform those functions according to fixed preconceptions and without reference to the merits of particular proposals. If that were true, no planning policies could be promulgated without giving rise to an apprehension of such a kind.
174The fact that the LHRS uses "unqualified statements" (the applicant's description) as to the strategic planning opportunities identified in the document does not support any apprehension of predetermination in the relevant sense. In my view, having regard to the passages referred to above, the terms of the Minister's media release and the policy context of the document, a fair minded reasonable observer would not think that the Minister might have already formed a conclusion, in respect of each and every possible planning outcome described in the strategy, which was incapable of alteration, whatever evidence or arguments may be presented.
175The applicant relies on the fact that certain policies and other documents between 2009 and 2010 referred to the prospect that the planning agreement procedure under the EPA Act would be used as the preferred mechanism for facilitating the conservation land offsets envisaged in the LHRS and the LHRCP. No logical connection exists between the use of the statutory planning agreement procedure and the proposition that the Minister had a relevantly closed mind about the merits of the rezoning proposal. The use of that procedure was consistent with the Minister dealing with the proposal for the SEPP amendment in accordance with the relevant statutory procedures, including by securing development contributions through a planning agreement.
176The applicant suggests that certain references in documents could give rise to a reasonable apprehension that the Government and the Minister were "committed to seeing through the Huntlee Development notwithstanding the decision in Gwandalan and the 2009 Orders". The suggestion seems to be that it is inappropriate for the Minister to determine a fresh application for rezoning, in circumstances where a previous application in respect of the same land had been determined favourably but then set aside by the Court. This is no more than a conventional operation of decision-making under the EPA Act following the invalidation of a decision by the Court. in my view, a reasonable observer properly informed about the circumstances (including the nature of judicial review) would not draw any adverse conclusion about the open-mindedness of the Minister from the fact that a separate instrument had been invalidated in the past. Neither Gwandalan nor the 2009 Orders can be understood as indicating to an informed observer that the Minister was precluded from considering any future applications in respect of the same land.
177The applicant places particular reliance on a reference in the briefing note that was before the Minister at the time of the Recommendation, to the previous SEPP instrument and concept plan approval having been invalidated "due to matters of procedure". To the extent that it is suggested that the description is inaccurate or dismissive of the invalidation of the past decisions (or, by extension, the decision in Gwandalan ), I do not accept the submission. It is a not inaccurate description of what had occurred. The previous instrument and decision had been set aside on the basis that the grounds of review and surrounding facts were relevantly equivalent to those in Gwandalan . The successful grounds in Gwandalan involved a reasonable apprehension of bias and taking into account an irrelevant consideration. Those grounds of review relate directly to the procedure adopted by the decision-maker in reaching the decision under review. The bias rule is an aspect of procedural fairness. As noted in Aronson, Dyer and Groves, Judicial Review of Administrative Action , 4 th ed (2009), Sydney Lawbook Co, at [7.20] (citing Kioa v West at 622 and other authorities), the hearing rule and the bias rule "can be described as procedural, in a broad sense, in that they address the manner in which a decision is made and not the merits of the decision itself".
178The applicant criticises the sufficiency of the material before the Minister regarding the merits of the rezoning proposal. In a related proposition, the applicant contends that the fact that the SSS Study was not before the Minister provides a basis for inferring that the Minister had predetermined the matter. The criticisms of the sufficiency of the material before the Minister do not provide a sound basis for drawing the extreme conclusion that the Minister made the Recommendation without regard to the merits of the proposal. It does not follow that because the Minister received a condensed assessment of the proposal when a more detailed study existed, the Minister must have predetermined the application.
179In my view, there was nothing in evidence which might have caused a reasonable person to apprehend that the Minister might make the decision to recommend the making of the Huntlee MD Amending SEPP other than on the factual and legal merits. In particular:
(a)there is nothing untoward in the briefing note signed by the Deputy Director-General and the Minister in November 2009, after consent orders were made on 19 October 2009 in Gwandalan , which confirmed:
The Department considers that the [LHRS] remains a sound strategy and its validity is not dependent on the existence of the Memorandum of Understanding or Deed of Agreement...Moving forward should the developments proceed as envisaged under these [LHRS], any land offsets would be facilitated through the preparation of VPAs in accordance with s 93F...
That is consistent with the objects in s 5(a)(ii) and (iv) of the EPA Act, namely, the promotion and co-ordination of the orderly and economic use and development of land and the provision of land for public purposes.
(b)Likewise with the Director-General's confirmation to JBA by letter dated 22 December 2009 that the NSW Government remained committed to the LHRS and LHRCP "and recently re-endorsed both";
(c)Similarly with the Government's media release titled "Lower Hunter Regional Strategy" dated 18 February 2010, which confirmed that "the existing regional strategy independently of ...MOUs and deeds, continues to provide a clear basis that all sites in the strategy to be considered on their merits and accessed according to law" and that "conservation offsets [would] now be facilitated through the preparation of Voluntary Planning Agreements within the framework of the [EPA Act]";
(d)These comments apply to both the Deputy Director-General's letter of 26 February 2010 to interested councils and others in relation to the effect of the decision in Gwandalan , as well as the briefing note of the same date. The effect of the Court's decision in Gwandalan was not such that the Minister could never again make a decision in respect of an application designed to overcome the deficiencies which led to the invalidity of a previous approval.
180Accordingly I reject Ground 3.