Australian Coal Alliance Incorporated v Wyong Coal Pty Ltd

[2019] NSWLEC 31

Land and Environment Court

New South Wales

Medium Neutral Citation:	Australian Coal Alliance Incorporated v Wyong Coal Pty Ltd [2019] NSWLEC 31
Hearing dates:	12 to 14 November 2018
Date of orders:	22 March 2019
Decision date:	22 March 2019
Jurisdiction:	Class 4
Before:	Moore J
Decision:	(1)   The summons is dismissed; (2)   The hearing listed for 4 April is vacated; and (3)   Costs are reserved.
Catchwords:	JUDICIAL REVIEW - development consent issued for Wallarah 2 Coal Project - development consent issued by Planning Assessment Commission (PAC) Panel - Applicant challenges the validity of development consent on 10 pleaded grounds JUDICIAL REVIEW - Grounds 1 to 3 together - whether consent invalid by reason of failure to consider downstream greenhouse gas emissions - whether consent invalid by reason of failure to consider cl 14(2) of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 - whether consent invalid by reason of failure to consider principles of ecologically sustainable development - adequacy of PAC reasons concerning greenhouse gas emissions - adequacy of PAC consideration of ecologically sustainable development concerning greenhouse gas emissions - PAC’s Determination Report discloses proper consideration of downstream greenhouse gas emissions - no obligation on the PAC to impose conditions on the project to address downstream greenhouse gas emissions - no failure to give adequate consideration to ecologically sustainable development - Grounds 1 to 3 rejected JUDICIAL REVIEW - alleged failure to consider the impacts of a future Central Coast water supply pipeline (the pipeline) - necessity for the pipeline would arise to provide compensatory water to the Central Coast water supply only after mining progresses to Longwall 6N and beyond - development consent granted by the PAC does not approve mining of Longwall 6N and beyond - route of the pipeline (if required) not certain, although two options identified over land owned by the mine or by public authorities - other potential pipeline routes possible over private land but not identified - not possible to identify with any precision any pipeline route capable of being assessed due to the uncertainty of either the necessity for such a pipeline or the location of a preferred route - separate future application required to be made for a pipeline if mining is proposed to continue into Longwall 6N and beyond - condition valid - Ground 4 rejected JUDICIAL REVIEW - failure to consider flood impacts - ground pleaded on four bases, two of which were abandoned - alleged failure to consider risks to the livelihoods of private property owners or of such owners being forced to sell their properties - degree of particularity to which the PAC was required to assess issues - matters remaining pressed of too greater degree of particularity to be considered beyond the extent to which the PAC addressed flooding impacts - Ground 5 rejected JUDICIAL REVIEW - error of fact in relation to flooding impacts - PAC comment that development proponent had agreed to acquire flood-affected properties where remediation or amelioration was not possible - PAC misled by assertion to this effect in departmental project assessment report - flooding impacts condition of consent addresses basis for landholders to seek compensation for flooding impacts but does not impose any requirement concerning property acquisition - error of fact did not mandate the PAC to address the erroneous finding in the flooding impacts condition of consent - flooding impacts condition of consent delegates to the Secretary resolution of any issues which might arise concerning flooding impact compensation - flooding impact compensation issues will arise to be considered on the particular facts and circumstances of any specific compensation claim pursuant to the condition - no uncertainty invalidating the condition as a consequence - Ground 6 rejected JUDICIAL REVIEW - Grounds 7 and 8 not pressed JUDICIAL REVIEW - alleged failure to consider the risk to private water supplies - two elements pleaded in support of the ground abandoned - alleged failure by the PAC to consider the two bases remained pressed - allegation that consideration of the matters had been impermissibly deferred to determination by the Secretary - PAC did consider the complained of matters - condition sets out the framework for affected landholders seeking to claim compensation - flooding impact compensation issues will arise to be considered on the particular facts and circumstances of any specific compensation claim pursuant to the condition - no uncertainty invalidating the condition as a consequence - Ground 9 rejected JUDICIAL REVIEW - alleged invalidity of water supply compensation condition - pleading that the condition impermissibly constrained landowners rights to compensation pursuant to other statutory entitlements not pressed - allegation of absence of power to impose a water supply compensation condition - pleading of Wednesbury unreasonableness of compensation condition - consideration of power to impose condition - power existed to impose condition - no submissions made in support of Wednesbury “unreasonableness” assertion - condition said not to relate reasonably to the development (second Newbury test) - condition reasonably relates to the development - Ground 10 rejected
Legislation Cited:	Associations Incorporation Act 2009 Environmental Planning and Assessment Act 1979 State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007, cl 14 Supreme Court Act 1970, s 69 Uniform Civil Procedure Rules 2005, r 6.24
Cases Cited:	Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245 Anderson v Director General of the Department of Environmental and Climate Change & Anor (2008) 163 LGERA 400; [2008] NSWCA 337 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33 Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 Darkinjung Local Aboriginal Land Council v Wyong Coal Pty (No 2) [2014] NSWLEC 71 Gloucester Resources Ltd v the Minister for Planning [2019] NSWLEC 7 Hoxton Park Residents Action Group Inc v Liverpool City Council [2010] NSWLEC 242 Hoxton Park Residents Action Group Inc v Liverpool City Council (2011) 81 NSWLR 638; [2011] NSWCA 349 Hurstville City Council v Renaldo Plus 3 Pty Ltd [2006] NSWCA 248 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 Manly Council v Hortis (2001) 113 LGERA 321; [2001] NSWCA 81 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40 Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6 Minister for Planning v Walker (2008) 161 LGERA 423; [2008] NSWCA 224 Moorebank Recyclers Pty Ltd v Benedict Industries [2015] NSWLEC 40 Newbury District Council v Secretary of State for the Environment [1981] AAC 578 Parramatta City Council v Hale (1982) 47 LGERA 319 Rivers SOS Inc v Minister for Planning (2010) 178 LGERA 347; [2009] NSWLEC 213 The Queen v Australian Broadcasting Tribunal; ex parte Hardiman (1980) 144 CLR 13; [1980] HCA 13 Ulan Coal Mines Limited v Minister for Planning and Moolarben Coal Mines Pty Limited (2008) 160 LGERA 20; [2008] NSWLEC 185 Walsh v Parramatta City Council [2007] NSWLEC 255 Weal v Bathurst City Council (2000) 111 LGERA 181; [2000] NSWCA 88 Western Australian Planning Commission v Temwood Holdings Ply Ltd (2004) 221 CLR 30; [2004] HCA 63 Wollar Progress Association Inc v Wilpinjong Coal Pty Ltd [2018] NSWLEC 92 Wollongong Coal Pty Ltd v Minister for Planning and Environment [2016] NSWLEC 154
Category:	Principal judgment
Parties:	Australian Coal Alliance Incorporated (Applicant) Wyong Coal Pty Ltd (First Respondent) Minister for Planning (Second Respondent) Kores Australia Pty Ltd (Third Respondent) Sojitz Coal Resources Pty Ltd (Fourth Respondent) Kyungdong Australia Pty Ltd (Fifth Respondent) SK Networks Resources Australia (Wyong) Pty Ltd (Sixth Respondent) SK Networks Resources Pty Ltd (Seventh Respondent)
Representation:	Counsel: Mr C Leggat SC/Ms J Walker, barrister (Applicant) Mr R Lancaster SC/Mr D Hume, barrister (First Respondent) Mr A Shearer and Ms R Mansted, barristers (Second Respondent) Submitting appearance (Third, Fourth, Fifth, Sixth and Seventh Respondents)   Solicitors: EDO NSW (Applicant) Minter Ellison (First Respondent) Department of Planning and Environment (Second Respondent)
File Number(s):	120210 of 2018
Publication restriction:	No

TABLE OF CONTENTS

Introduction

The parties

The relief sought

Legislative citation

The outcome of the proceedings

The agreed chronology

The approach to be taken to the PAC’s Determination Report

An inference against the PAC?

General comments - the greenhouse gas emission grounds (Grounds 1-3)

Introduction

Describing categories of greenhouse gas emissions

The decision in Gloucester Resources Ltd v the Minister for Planning

The greenhouse gas emission grounds - Grounds 1, 2 and 3

Introduction

Ground 1

Ground 2

Ground 3

Clause 14(2) of the Mining SEPP

The documentary material relevant to Grounds 1, 2 and 3

Introduction

Material referenced in the Determination Report as considered by the PAC Panel

The First Respondent’s summary of relevant information

The Project’s Environmental Impact Statement

The Department’s Preliminary Assessment Report

The First PAC Review Report

The Departmental Addendum Report

The Second PAC Review Report

The PAC’s Determination Report

Some preliminary matters concerning Grounds 1, 2 and 3

The composition of the PAC Panel

Wollar Progress Association Inc v Wilpinjong Coal Pty Ltd [2018] NSWLEC 92

Reliance on the departmental advice

The need to avoid lapsing into merit review under the guise of judicial review

The submissions on Grounds 1 and 2

The Applicant’s position

The Applicant’s broad position in reply

Consideration of the “lens mistake”

Introduction

The content of the materials considered by the PAC

Absence of specific referencing of cl 14(2) of the Mining SEPP

Consideration of the “location mistake”

The matters actually pleaded in Ground 1

The relevant paragraph of the PAC’s Determination Report

The essence of the “location mistake”

Consideration of the “location mistake”

Ground 3

Introduction

The Departmental Addendum Report

The First Respondent’s response to Ground 3 on the facts

The Minister’s submissions on the factual matters relating to Ground 3

Conclusion about Ground 3 on the facts

The First Respondent’s response on the requirements of the EP&A Act

Conclusion on Ground 3

Ground 4

Introduction

The necessity for water supply compensation

The position concerning possible pipeline routes

The PAC’s consideration

The water supply compensation conditions

The primary condition

The secondary conditions

The Applicant’s position

The position of the active respondents

The Minister's position

Consideration

Ground 5

Introduction

Was there a legal inadequacy?

Introduction

Consideration of the asserted legal impediment

Was there a factual inadequacy?

Introduction

The flooding conditions

Conclusion on Ground 5

Ground 6

Introduction

The relevant background

The complained of paragraph

The PAC’s flooding compensation condition

The Applicant’s position

The First Respondent’s position

The PAC’s exercise of jurisdiction relevant to Ground 6

Grounds 7 and 8

Considering Grounds 9 and 10 together

Introduction   1

Ground 9

Introduction

The Water Supply Condition

The Applicant’s written submissions’ position on Ground 9

The Applicant’s reply position on Ground 9

Consideration

Ground 10

Introduction

The Water Supply Condition

The Applicant’s position

The Applicant’s reply position

The First Respondent’s written submissions

The First Respondent’s oral submissions

The Minister's position

The Minister’s oral submissions

Consideration

Orders

Judgment

Introduction

1. These Class 4 judicial review proceedings were commenced on 16 April 2018 by the Australian Coal Alliance Incorporated (the Applicant) seeking judicial review of the Planning and Assessment Commission’s (the PAC) determination of the Wallarah 2 Coal Project (the project).

2. The PAC assessed and determined State Significant Development Application No SSD 4974 (the development application), which sought approval for the project, as delegate for the Minister for Planning (the Minister). The PAC granted consent to the development application on 16 January 2018 (the consent).

3. The Applicant contends that the consent is invalid and of no effect and seeks an order restraining each of Wyong Coal Pty Ltd (the First Respondent), Kores Australia Pty Ltd (the Third Respondent), Sojitz Coal Resources Pty Ltd (the Fourth Respondent), Kyungdong Australia Pty Ltd (the Fifth Respondent), SK Networks Resources Australia (Wyong) Pty Ltd (the Sixth Respondent) and SK Networks Resources Pty Ltd (the Seventh Respondent) from undertaking any development in reliance on the consent.

4. The Applicant raises 10 grounds in its Second Further Amended Summons (Second FAS) upon which it says the consent is invalid and of no effect. In short form, these grounds can be summarised as:

1. A failure to consider downstream emissions;

2. A failure to consider cl 14(2) of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (the Mining SEPP);

3. A failure to consider principles of ecologically sustainable development (ESD);

4. A failure to consider the impacts of constructing a pipeline to discharge treated minewater to the Central Coast Water Supply System (the CCWSS pipeline);

5. A failure to consider flood impacts;

6. An error of fact in relation to flood impacts;

7. A misconstruction of the flood compensation condition of the consent on the part of the PAC;

8. Invalidity of the flood compensation condition;

9. A failure to consider the risk to private water supplies; and

10. Invalidity of the water supply condition in the consent.

5. The details from the Applicant’s Second FAS are set out at the commencement of the relevant section of this judgment.

The parties

6. The Applicant is an association incorporated under the Associations Incorporation Act 2009 (NSW) with registration number Y2211018. The Applicant says it is a not-for-profit volunteer-based organisation which brings this matter on its own behalf and in the public interest.

7. The development application was lodged by the Wyong Areas Coal Joint Venture (WACJV). The First Respondent manages the project on behalf of the WACJV and is the Applicant for Mining Lease Applications 462 and 522 in respect of the project site. The First Respondent is the only one of those economically involved with the proposed mine to take an active role in the proceedings.

8. The Third Respondent is the ultimate holding company of the First Respondent and is the Applicant for Mining Lease Applications 342, 343, 346 and 350 in respect of the project site. The Third Respondent has an interest of 82.25% in the WACJV. The Fourth Respondent has an interest of 5% in the WACJV. Each of the Fifth, Sixth and Seventh Respondents has an interest of 4.25% in the WACJV.

9. Each of the Third, Fourth, Fifth, Sixth and Seventh Respondents has filed a submitting appearance in the proceedings.

The relief sought

10. The substantive relief sought by the Applicant is in the following terms:

In relation to State Significant Development Application No. SSD 4974 lodged by Wyong Areas Coal Joint Venture (the development application) for the Wallarah 2 Coal Project (Project) and purportedly determined by the Planning Assessment Commission (PAC) by granting consent on 16 January 2018 (the consent):

(a)   a declaration that the consent is invalid and of no effect;

(b)   an order restraining the First, Third, Fourth, Fifth, Sixth and Seventh Respondents from undertaking any development in reliance on the consent.

11. The Applicant also seeks a costs order in its favour.

Legislative citation

12. The elements of the Environmental Planning and Assessment Act 1979 (NSW) (the EP&A Act) to which reference was made throughout these proceedings, and in this judgment, were cited by the numbering system applying prior to 1 March 2018 - a system now replaced in a renumbered and rearranged EP&A Act. I have not incorporated references to the renumbered provisions.

The outcome of the proceedings

13. For the reasons that follow, I have determined that all grounds are without merit and the Second FAS is to be dismissed. As a consequence, it is unnecessary to consider the supplementary submissions filed for the Minister (on 21 November 2018) or the Applicant (on 28 November 2018) concerning what might have been the impact of s 102 of the EP&A Act had I upheld any of the pleaded grounds.

The agreed chronology

14. The parties provided an agreed chronology (Court Book, folios 265 and 266) which is reproduced below:

Date	Event
October 2012	Original Development Application lodged.
April 2013	Environmental Impact Statement
26 April 2013 to 21 June 2013	Department placed Environmental Impact Statement on public exhibition
September 2013	WACJV Response to Submissions
Feb 2014	Department’s Preliminary Assessment Report.
April 2014	PAC held public hearings
June 2014	First PAC Review Report.
12 June 2014	Decision handed down in Darkinjung Local Aboriginal Land Council v Wyong Coal Pty (No 2) [2014] NSWLEC 71 found that consent to the original DA could not be granted without the Land Council’s consent.
1 July 2014	WACJV Response to First PAC Review Report
7 July 2016	Amended Development Application lodged.
22 July to 5 September 2016	Amended Development Application placed on public exhibition.
4 November 2016	WACJV response to Submissions on the amended Development Application.
22 December 2016	Department sought further information from the WACJV
16 January 2017	WACJV submitted information in response to Department’s request
February 2017	Department’s Addendum Report.
5 April 2017	PAC held public hearings
19 May 2017	Second PAC Review Report.
27 June 2017	WACJV response to the Second PAC Review Report.
30 June 2017	Department requested additional information from WACJV
6 July 2017	Department met with Central Coast Council representatives
13 July 2017	WACJV provided a response to Department’s information request
September 2017	Department’s Residual Matters Report.
20 October 2017	PAC receives a briefing from the Department
2 November 2017	PAC meets with the Central Coast Council; PAC meets with WACJV; PAC attends a site visit
3 November 2017	PAC holds a public meeting at the Wyong Golf Club; 21 speakers are heard
11 November 2017	PAC receives expert advice on subsidence impacts
23 November 2017	WACJV Response to PAC Queries
16 January 2018	PAC Determination Report; consent granted subject to conditions.

The approach to be taken to the PAC’s Determination Report

15. In Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6 at 272, the plurality of the High Court endorsed the proposition that, in undertaking a judicial review of an administrative decision-maker’s decision:

The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error.

16. The plurality also said that, in the context of the propositions it had endorsed (including that reproduced immediately above):

… the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed.

17. As a general position, these propositions, by themselves, could be regarded as providing a complete answer to the Applicant’s complaints about insufficiency of explanation in the PAC’s Determination Report. I accept that they cannot act as an answer to any complaint of absence of reasons where reasons are to be regarded as necessary.

17. During the opening of the First Respondent’s submissions, Mr Lancaster SC, on behalf of the First Respondent, said (Transcript, 12 November 2018, page 25, lines 30 to 49):

LANCASTER: … Your Honour, the case for the applicant evidently springs, in our submission, from a fundamental disagreement with, and disappointment about, the merits of the decision of the PAC to approve coal mining subject to conditions in this instance. We submit that that disagreement has led the applicant to commit a series of errors in its own analysis of the decision and they're errors that the authorities have consistently warned against in proceedings for judicial review. The first of those is to take an unfairly demanding approach to the reasons for decision. Here, of course, there was no statutory or other obligation on the PAC to provide a statement of reasons.

Nevertheless, it provided a determination report which is evidently its summary and only a summary of the vast amount of information and analysis that have been undertaken over many years that supported its final determination. And when I say "unfairly demanding approach to the reasons" that, of course, is a reference on my part to the line of cases that warns against requires that Courts not proceed on the basis of an approach of looking for error in the reasons or of asking questions about disconnections between sentence A and sentence X and suggesting that there must be an error somewhere in between.

19. In Wollongong Coal Pty Ltd v Minister for Planning and Environment [2016] NSWLEC 154 at [16] to [18], I explained why I considered, by analogy, the oft-cited passage from the judgment of Kirby P in Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 concerning the decisions by Commissioners of this Court was equally applicable to decisions made by panels of the PAC. It is convenient to repeat what the President said, at 368:

Here, the parliament has specifically envisaged a tribunal which included lay assessors. It would be quite wrong, in my opinion, for this Court to examine their decisions as if they were written by a lawyer. I am not, by these comments, suggesting double standards; simply that the Court should take into proper account the composition of the tribunal, as it has been created by the parliament.

20. The common descriptor described for considering such decisions is that they are not to be analysed with a “fine-tooth comb”. I am satisfied that this is the appropriate approach to take to this Determination Report concerning the approval of this coal mine.

An inference against the PAC?

21. The Applicant proposes that, because the PAC has not provided any explanatory material concerning its determination for the purposes of these proceedings nor sought to be heard to defend its position, I should draw a Jones v Dunkel inference (Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8) that any such material would not be of assistance to support the PAC's determination. There are a number of significant difficulties with this proposition.

22. The first is that the PAC is not a party to these proceedings, and the Applicant has not sought to have them joined as a respondent to the proceedings. It is difficult to see how there can be an inference drawn, of the nature proposed by the Applicant, in these circumstances as there is no obligation on the PAC to participate, nor is there any basis advanced as to why either the Mining Respondents or the Minister should be seen to have some inferred obligation to seek to call the PAC to give evidence in their case.

23. The second difficulty would arise if the Applicant had sought to join the PAC as a party to the proceedings. For the purposes of this discussion, it is not necessary to consider whether or not the PAC might have sought to resist such joinder by submitting that neither of the tests in r 6.24 of the Uniform Civil Procedure Rules 2005 applied to necessitate such joinder. It is, however, reasonable to assume that, as was the position with this Court when it was a party to proceedings brought pursuant to s 69 of the Supreme Court Act 1970 (the general supervisory jurisdiction of the Supreme Court) (see Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245), any appearance on behalf of the PAC would have been a submitting appearance, save as to costs.

24. Third, in the circumstances where the PAC might become a party, it would not be appropriate for it to seek to be an active party in the proceedings for the reasons discussed by the High Court in The Queen v Australian Broadcasting Tribunal ex parte Hardiman (1980) 144 CLR 13; [1980] HCA 13.

25. It is appropriate to note that the role of the PAC, with respect to this mining project, has been to act as the consent authority that made the determination to grant the project development consent, subject to conditions. Whilst the PAC had, earlier, undertaken two reviews of the project, the processes undertaken in each of those instances were functionally different from that challenged in these proceedings. In those earlier review processes, the PAC was acting in an advisory capacity and not in a determinative one. However, despite that distinction, the PAC, in its determinative role currently under challenge, was entitled to (and, indeed, could reasonably be expected to be mandated to) have regard, amongst the material necessary for its consideration of whether to grant development consent to the project, to the review reports which had been prepared by the PAC when undertaking its advisory function.

26. In this fashion, it is appropriate to understand that the PAC performs a primary consent authority role, a role which is not amenable to merit appeal in circumstances where the PAC has held a public hearing into the proposed development for which it has been invested with the approval role. In this instance, there is no dispute that the PAC has held a public hearing in the necessary fashion to act to exclude any merit review of its determination. In these circumstances, as is here the case, the only avenue to question the PAC’s determination is by judicial review, one which, of necessity, must be founded on the assertion that defects in the PAC’s process miscarried in one or more respects in a sufficiently material fashion to vitiate the PAC’s determination.

27. In these circumstances, the PAC neither could, nor should, have been a party to these proceedings.

28. It is clearly inappropriate to suggest that any adverse inference of the nature proposed on behalf of the Applicant should be drawn against either the Mining Respondents or the Minister as a consequence of the fact that there has been no active evidentiary or other participation by the PAC in these proceedings.

General comments - the greenhouse gas emission grounds (Grounds 1-3)

Introduction

29. The Applicant has pleaded three separate grounds concerning what it submitted were failures of the PAC to address, adequately, greenhouse gas emissions. The general approach adopted by the Applicant to these grounds is discussed later. The specific grounds themselves, as pleaded in the Second FAS, are also set out at the commencement of my consideration of those grounds.

30. However, in the context of a broad introduction to my consideration of these grounds, several preliminary observations are appropriate.

31. First, as can be observed from the grounds pleaded, the Mining SEPP was engaged for the purposes of the PAC’s determination process. A range of matters in the Mining SEPP required to be considered. The Applicant’s complaint concerning the PAC’s processes relates only to whether or not the PAC discharged the obligations placed on by cl 14 of the Mining SEPP. It is sufficient, for these introductory purposes, merely to reproduce the terms of this clause. It will, however, be necessary to return to its terms (including how cl 14(1)(c) and cl 14(2) interact). Clause 14 of the Mining SEPP is in the following terms:

14   Natural resource management and environmental management

(1)   Before granting consent for development for the purposes of mining, petroleum production or extractive industry, the consent authority must consider whether or not the consent should be issued subject to conditions aimed at ensuring that the development is undertaken in an environmentally responsible manner, including conditions to ensure the following:

(a)   that impacts on significant water resources, including surface and groundwater resources, are avoided, or are minimised to the greatest extent practicable,

(b)   that impacts on threatened species and biodiversity, are avoided, or are minimised to the greatest extent practicable,

(c)   that greenhouse gas emissions are minimised to the greatest extent practicable.

(2)   Without limiting subclause (1), in determining a development application for development for the purposes of mining, petroleum production or extractive industry, the consent authority must consider an assessment of the greenhouse gas emissions (including downstream emissions) of the development, and must do so having regard to any applicable State or national policies, programs or guidelines concerning greenhouse gas emissions.

(3)   …

Describing categories of greenhouse gas emissions

32. As can be seen in cl 14(2) of the Mining SEPP reproduced above, the obligation placed on the PAC to consider an assessment of greenhouse gas emissions expressly requires that the PAC consider downstream emissions. In this context, greenhouse gas emissions are conventionally described as being Scope 1, Scope 2 or Scope 3 emissions. It is uncontroversial in these proceedings that what are described in cl 14(2) of the Mining SEPP as “downstream emissions” are those emissions that fall within Scope 3 of the Emissions Classification System.

The decision in Gloucester Resources Ltd v the Minister for Planning

33. Since reserving my decision in these Class 4 proceedings, Preston CJ has delivered (on 8 February 2019) his decision in Gloucester Resources Ltd v The Minister for Planning [2019] NSWLEC 7. His Honour determined that the State Significant Development Application for the amended Rocky Hill Coal Project was to be refused. Those proceedings were merit review proceedings in Class 1 of the Court's jurisdictions.

34. His Honour rejected that proposed open-cut coal mine on two broad, but entirely separate, bases. The first, not a matter potentially arising for consideration in these proceedings, was based on his Honour's findings as to the negative social and other local impacts that that mine proposal would have had on the community of Gloucester. Second, his Honour also rejected the proposed mine on the basis of what would be its future greenhouse gas emission impacts. His Honour concluded that these impacts outweighed the benefits which might be obtained from approving the proposed mine.

35. At [699], his Honour summarised the bases upon which he had reached his conclusion to reject the proposed mine, saying:

699   In short, an open cut coal mine in this part of the Gloucester valley would be in the wrong place at the wrong time. Wrong place because an open cut coal mine in this scenic and cultural landscape, proximate to many people’s homes and farms, will cause significant planning, amenity, visual and social impacts. Wrong time because the GHG emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in GHG emissions. These dire consequences should be avoided. The Project should be refused.

36. It is important that I note that these proceedings are entirely different in nature to those leading to his Honour's conclusion set out above. These are Class 4 judicial review proceedings in which I am examining the decision-making process for (and not the decision merits of) the consideration by the PAC of this proposed coal mine and its determination to approve it.

37. The greenhouse gas emission merit issues, which led to the conclusion by the PAC that these did not warrant refusal of this project, are not ones which I am considering. To do so would be a fundamental error in my exercise of the Class 4 judicial review jurisdiction of this Court.

38. That the PAC, in this case, and Preston CJ in the Gloucester Resources case, reached differing conclusions on these merit matters does not arise as a factor for my consideration in these proceedings. The Chief Judge determined the Gloucester Resources case on the basis of the evidence presented to him, whilst the PAC dealt with this proposed mine on the material presented to it.

39. Each case turned, in a merit assessment sense, on the facts and circumstances of the particular application being considered and the evidence brought concerning it. That minds may differ on the conclusions to be reached is a not an unusual circumstance, but one that plays no part in my consideration in these proceedings.

40. I should add that the Chief Judge's reasoning for the “wrong time” basis for refusal of the Gloucester Resources proposed mine were set out in 134 lucidly explained paragraphs (between [422] and [556]) of his lengthy judgment.

41. Although I have concluded that there was no error in the PAC’s processes, that conclusion does not constitute any endorsement, on a merit basis, of the conclusion that that body reached concerning greenhouse gas emissions.

The greenhouse gas emission grounds - Grounds 1, 2 and 3

Introduction

42. In light of the way the Applicant’s oral submissions addressed the greenhouse gas grounds (Grounds 1, 2 and 3), it is appropriate to set out, first, the terms of all three of these grounds as pleaded prior to setting out again the terms of cl 14 of the Mining SEPP, as it is the primary foundation of complaint in these three grounds (although, it is to be noted, the objects of the EP&A Act and the matters engaged by s 79C of the Act also require some limited consideration in addressing these grounds).

Ground 1

43. The Applicant’s Ground 1 was pleaded in the following terms:

Ground 1 - failure to consider downstream emissions

5 Clause 14 of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP) applied to the determination of the development application by the PAC.

Particulars

i.   The activities the subject of the development application meet the definition of 'mining' in clause 3 of the Mining SEPP.

6 Clause 14(2) of the Mining SEPP provides that when determining a development application for development for the purposes of mining, petroleum production or extractive industry, the consent authority must consider an assessment of the greenhouse gas emissions (including downstream emissions) of the development.

7 Clause 14(2) of the Mining SEPP made the downstream greenhouse gas emissions of the project a mandatory relevant consideration to be taken into account by the PAC when determining the development application.

8   The PAC, when determining to grant the consent:

a.   did not consider an assessment of the downstream greenhouse gas emissions of the project; and

b.   did not otherwise consider the downstream greenhouse gas emissions of the project.

8A In the alternative to [6] above, cl 14(2) of the Mining SEPP requires the consent authority to consider an assessment of greenhouse gas emissions (including downstream emissions) of the development when deciding whether or not to impose conditions under cl 14(1) of the Mining SEPP to ensure that greenhouse gas emissions were minimised to the greatest extent practicable.

8B In the alternative to [7] above, cl 14(2) of the Mining SEPP made the downstream greenhouse gas emissions of the project a mandatory relevant consideration to be taken into account by the PAC when deciding whether or not to impose conditions pursuant to cl 14(1) of the Mining SEPP.

8C   In the alternative to [8] above, the PAC, when determining to grant the consent subject to conditions aimed at ensuring that the greenhouse gas emissions were minimised to the greatest extent practicable:

a.   did not consider an assessment of the downstream greenhouse gas emissions of the project;

b.   did not otherwise consider the downstream greenhouse gas emissions of the project; and

c.   did not consider whether or not to impose conditions to limit the downstream greenhouse gas emissions of the project.

Ground 2

44. The Applicant’s Ground 2 was pleaded in the following terms:

Ground 2 - failure to consider cl 14(2)

10 Section 79C(1)(e) of the EP&A Act applied to the determination of the development application by virtue of s 89H.

11 Pursuant to s 79C(1)(a)(i) of the EP&A Act, a consent authority, when determining a development application is required to take into consideration the provisions of any environmental planning instrument of relevance to the development.

12 Section 79C(1)(a)(i) made cl 14(2) of the Mining SEPP a mandatory relevant matter to be considered by the PAC when determining the development application.

13 The PAC, when deciding to grant the consent, did not consider cl 14(2) of the Mining SEPP.

13A In the alternative to [12]-[13] above, s 79C(1)(a)(i) made cl 14(1) of the Mining SEPP a mandatory relevant matter to be considered by the PAC when determining the development application.

13B In the alternative to [12]-[13] above, s 79C(1)(a)(i) made cl 14(2) of the Mining SEPP a mandatory relevant matter to be considered by the PAC when determining whether or not to impose conditions pursuant to cl 14(1) of the Mining SEPP to · ensure that greenhouse gas emissions were minimised to the greatest extent practicable.

13C The PAC, when deciding to impose conditions to ensure that greenhouse gas emissions were minimised to the greatest extent practicable did not consider cl 14(2) of the Mining SEPP.

Ground 3

45. The Applicant’s Ground 3 was pleaded in the following terms:

Ground 3 - failure to consider ESD

15 Pursuant to s 79C(1)(e) of the EP&A Act, a consent authority, when determining a development application, is required to consider the public interest.

16   At the time that the consent was granted, the principles of Ecologically Sustainable Development (ESD), including the precautionary principle and the principle of intergenerational equity were so plainly an aspect of the public interest that a failure to take them into account demonstrated a failure to take into account the public interest.

17   When determining to grant consent to the development, the PAC failed to take into account the precautionary principle and the principle of intergenerational equity by failing to take into account the downstream greenhouse gas emissions of the project and the impact of those emissions on the environment and future generations.

Clause 14(2) of the Mining SEPP

46. As earlier noted, the terms of cl 14 of the Mining SEPP provide the primary foundation of complaint in these three grounds. The relevant elements of the clause are reproduced below:

14   Natural resource management and environmental management

(1)   Before granting consent for development for the purposes of mining, petroleum production or extractive industry, the consent authority must consider whether or not the consent should be issued subject to conditions aimed at ensuring that the development is undertaken in an environmentally responsible manner, including conditions to ensure the following:

(a)   …,

(b)   …,

(c)   that greenhouse gas emissions are minimised to the greatest extent practicable.

(2)   Without limiting subclause (1), in determining a development application for development for the purposes of mining, petroleum production or extractive industry, the consent authority must consider an assessment of the greenhouse gas emissions (including downstream emissions) of the development, and must do so having regard to any applicable State or national policies, programs or guidelines concerning greenhouse gas emissions.

The documentary material relevant to Grounds 1, 2 and 3

Introduction

47. Next, it is appropriate to set out what the PAC determination panel identified as the material considered by it in reaching the conclusion that conditional consent should be granted to the proposed mine.

48. It is also appropriate, both in summary and in a little detail, to identify appropriate elements of the material referenced in the PAC’s Determination Report.

Material referenced in the Determination Report as considered by the PAC Panel

49. The PAC’s Determination Report set out (Evidence Book, folio 3831) an outline of the various meetings and the site visit that this PAC Panel undertook during its determination process.

50. The Determination Report then listed (Evidence Book, folio 3832) a range of matters under the heading “5. COMMISSION’S CONSIDERATION”. These matters are listed in the following terms:

In this determination, the Commission has considered carefully:

•   all information provided by the applicant including the additional information that was provided through the process;

•   the Department’s preliminary, addendum and residual matters assessment reports;

•   additional information from the Department;

•   advice and recommendations from experts and government agencies;

•   speakers’ presentations at the public hearing (and public meeting) and written submissions received by the Commission;

• relevant matters for consideration specified in section 79C of the Environmental Planning and Assessment Act 1979 (EP&A Act), including:

○   relevant environmental planning instruments;

○   the Environmental Planning and Assessment Regulation 2000;

○   the likely impacts of the development on both the natural and built environments;

○   social and economic impacts in the locality;

○   the suitability of the site for the development;

○   written and verbal submissions from the public; and

○ the public interest, including the objects of the EP&A Act.

The key matters considered by the Commission during this process include:

1.   Strategic context.

2.   Impacts on surface and groundwater

3.   impacts on residents and property relating to mine induced subsidence.

4.   Continued access due to proposed road closure.

5.   Biodiversity

6.   economic costs and benefits.

7.   The precautionary principle.

The Commission is satisfied with the Ddepartment’s assessment of other matters including Aboriginal cultural heritage, historic heritage, cliffs and rock formations, traffic and transport, agriculture, visual impacts, contamination, management of waste, rehabilitation and the relevant environmental planning instruments, including Wyong Local Environmental Plan 2013, State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007, State Environmental Planning Policy Number 71 - Coastal Protection and State Environmental Planning Policy (Infrastructure) 2007.

51. Immediately after this list of matters dealt with by the PAC, the determination report continued, in “5.1 Strategic Context”, with a section “5.1.1: Coal quality, demand in greenhouse gas emissions”. This portion of the determination report was in the following terms:

The Wallarah 2 coal mine proposes to extract 95 million tonnes of high-grade thermal coal over 28 years. Coal mining would be undertaken at depths of between 350m and 690m below the surface within the underground extraction area. Mining and related activities are expected to occur 24 hours a day, seven days a week. Extracted coal would undergo minimal processing on site. Product coal would be transported by rail to the port of Newcastle for export or to local domestic power stations.

Demand for coal over the next 28 years and the acceptability of the greenhouse gas emissions associated with the end use of the coal are significant uncertainties for the project. Renewable energy technologies have advanced substantially since mining of this resource was first contemplated. Global agreement on climate change and the need for mitigation has also strengthened around the Paris Agreement at the United Nations Framework Convention on Climate Change at the 21st Conference of the Parties in Paris (30 November to 12 December 2015).

Notwithstanding this, construction of new thermal coal power plants continues. In Southeast Asia alone, coal consumption could more than double in the period to 2040 under some estimates. Even scenarios designed to accommodate the objectives of the Paris Agreement suggest Southeast Asia's coal consumption will increase, before falling back to current levels, of around 60 GW of coal generated electricity capacity in 2040. The Powering Past Coal Alliance declaration notes that coal phase-out is needed no later than by 2030 in the OECD and EU28, and no later than 2050 in the rest of the world. Carbon capture and storage solutions also continue to be developed.

The Commission acknowledges there is uncertainty in the future demand for thermal coal over the life of the proposed project. Generally, the profitability of the project is a matter for the applicant in developing and operating the mine. Nonetheless, the Commission has considered carefully the potential impacts of the mine becoming unviable, and ceasing to operate partway through the proposed 28-year Life of Mine plan. The Commission notes the potential socio-economic impacts of an unplanned early mine closure, and has also sought clarification on the environmental impacts of an unplanned mine closure. These issues are addressed further in section 5.2 and 5.6 below.

52. Critical to my consideration of Grounds 1 to 3 pressed by the Applicant, this portion of the PAC’s Determination Report then continued saying:

The Commission also acknowledges the greenhouse gas emissions that would be produced from any future burning of the coal extracted, whether it is consumed locally or internationally. It is noted that presently there are alternative coal sources available to the market in the event that this mine does not proceed. Consequently, the downstream use of the coal (and any emissions abatement or capture technologies deployed) will need to be considered at that location.

53. The determination report then concluded this section with a paragraph concerning emissions generated on the mine site. Although not relevant to the matters pleaded by the Applicant in Grounds 1 to 3, for completeness I include this concluding paragraph. It is in the following terms:

In relation to the emissions generated on site, the Commission is satisfied that greenhouse gas emissions will be minimised as the conditions require a feasibility study for the beneficial use of methane, along with implementation of any feasible options, and the capture and flaring of methane where beneficial use is not feasible.

The First Respondent’s summary of relevant information

54. The First Respondent’s written submissions set out, under the heading “Factual flaws in the ACA’s argument”, a summary of the various documentary locations where relevant greenhouse gas emissions consideration occurred in material referenced by the PAC as having been considered by it in reaching its conclusion to approve the proposed mine. The relevant portion of the First Respondent’s written submissions is reproduced below:

39   The EIS included an “Air Quality and Greenhouse Gas Assessment” (EB Tab 8). At EB 1093- 1100, there was a report described as a “Greenhouse Gas Assessment”. That included an assessment of scope 1, scope 2 and scope 3 emissions over 38 years (EB 1096). It also included specific detailed analyses of scope 3 emissions for diesel consumption (EB 1119), electricity (EB 1121) and transportation of product coal (EB 1125).

40 The Air Quality and Greenhouse Gas Assessment was, on any view, an assessment of the greenhouse gas emissions (including downstream emissions) of the project within the meaning of cl 14 of the Mining SEPP. This appears to be conceded: AWS [38].

41.   The EIS Main Report included a summary of the conclusions from the Air Quality and Greenhouse Gas Assessment: see EB 301. That summary included an analysis of scope 3 emissions. The EIS Main Report also identified steps the proponent was proposing to take to mitigate impacts in respect of greenhouse gases: EB 302.

42.   The Department’s Assessment Report addressed greenhouse gas emissions at EB 1701-1702. The Department informed the PAC that “[t]he EIS includes an assessment of greenhouse gas (GHG) emissions”” EB 1701. The Department also addressed the potential impacts from scope 3 emissions ie the burning of coal. The Department indicated that due consideration should be given to, inter alia, the “project’s contribution to global warming/climate change”: EB 1701. The Assessment Report also set out a summary of the estimated emissions from the project, including estimated scope 3 emissions: EB 1702. This, again, was an “assessment” of downstream emissions.

43.   The Department’s Assessment Report also referred to steps which WACJV was proposing to implement to mitigate greenhouse gas emissions: EB 1702.

44.   The proponent’s Response to Submissions also addressed greenhouse gas emissions (EB 1355- 1357) and, in particular, dealt with the principle of inter-generational equity in that context (EB 1356-1357).

45.   The proponent placed before the PAC a summary of the submissions provided by stakeholders (including members of the public): see EB Tab 12. A number of those submissions related to greenhouse gas emissions from the project.

46. In its first Review Report, the PAC dealt with greenhouse gas emissions and, in particular, referred to estimated scope 3 emissions from the project: EB 1973-1974. The ACA observes that the PAC suggested in this report that it would be “helpful” for there to be comparisons between the project’s scope 1, 2 and 3 emissions and total emissions in NSW, Australia and the world: AWS [23]. This observation is fatal to the ACA’s argument. It shows that the PAC had carefully considered the estimate of emissions and was engaging with that issue.

47.   Following the first Review Report, the proponent undertook to implement methane capture methods: EB 2144.

48.   Thereafter, the proponent prepared a supplementary Air Quality and Greenhouse Gas Assessment: EB Tab 21. At EB 2345-2351, there were updated assessments of scope 3 emissions. A narrative summary of the detailed assessments is at EB 2323-2328. Again, on any view, this was an assessment of greenhouse gas emissions, including downstream emissions.

49.   Greenhouse gas emissions were again addressed in WACJV’s further response to submissions (EB 2566, 2614-2615, 2645, 2656-7, 2673). That response addressed, inter alia, the incremental effect which scope 1 emissions on the project would have on Australia’s Kyoto commitments (EB 2614).

50.   The PAC dealt with greenhouse gas emissions in its Second Review Report: EB 3054.

51.   The proponent also addressed the cost of total emissions from the project (whether downstream or otherwise) in its Response to the Second PAC Report (EB 3146). Those costs were identified as “ranging between $27 million and $121 million”.

52.   The PAC said that it had considered the Air Quality and Greenhouse Gas Assessment (as one of the proponent’s documents) and it should be taken at its word. That is the end of this ground. There is no basis for the serious allegation “that the PAC made a conscious decision to ignore” the proponent’s assessment of downstream emissions: cf AS [38] (also repeated at AWS [64]).

55. In addition to this short form summary of the documentation before the PAC determination panel, it is also appropriate to set out more detailed extracts from the documentary material considered by the PAC Panel. This is set out under headings identifying the source document.

The Project’s Environmental Impact Statement

56. The executive summary of the project’s Environmental Impact Statement (EIS) (Evidence Book, folio 131) sets out, in short form, what the EIS said was the position concerning greenhouse gas emissions. It read:

Greenhouse Gas

A greenhouse gas impact assessment was undertaken for the project by PAEHolmes.

The main sources of greenhouse gas emissions from the project have been identified as resulting from electricity consumption, fugitive emissions of CO2 and CH, diesel usage, emissions associated with flaring and the transport and final use of the product coal.

The proposed plan to capture and flaring of remaining CH4 during operations was found to have significant benefits in the reduction of greenhouse gas emissions. When compared with the base case involving unmitigated fugitive emissions of CH for, the flaring scenario results in a greenhouse gas saving of approximately 8MT CO2=e or 54% of Scope 1 emissions over the project life. Additional greenhouse gas savings may be realised through the use of on-site power generation which will be implemented if economically suitable to do so.

The Project’s contributions to projected climate change, and associated impacts, will be in proportion with its contribution to global greenhouse gas emissions. Average annual scope one emissions from the project (0.2 MT CO2=e) represent approximately 0.04% of Australia's annual average commitment under the Kyoto Protocol (591.5 MT CO2=e) and a very small proportion of global greenhouse gas emissions, given that Australia contributed approximately 1.5% of global greenhouse gas emissions in 2005 (Commonwealth of Australia, 2011).

The Project will develop an Energy and Greenhouse Strategy within two years the commencement of longwall coal extraction. The strategy will address interim and long-term energy and greenhouse management plans and initiatives, including monitoring, reporting and continuous improvement.

57. The EIS noted (Evidence Book, folio 214) that cl 14(2) of the Mining SEPP was engaged for consideration. With respect to this provision, after setting the clause out in full, the EIS said:

The Project has been designed to minimise, as far as practical, its impact on water resources, global warming and biodiversity. Impact minimisation is addressed in section 7.1, 7.2, 7.3, 7.4, 7.6 and 7.9 of this EIS.

Further, a summary of management and mitigation measures incorporated into the project design are included in section 8. Applicable state and national policies, programs and guidelines in relation to greenhouse gas abatement are addressed in section 7.6.

58. The greenhouse gas section of the EIS (7.6) commenced at Evidence Book, folio 300. It is not necessary to reproduce the entirety of this section of the document. It is, however, appropriate to note that the section acknowledges that, in addressing Scope 1, 2 and 3 emissions, the following gases were considered in the assessment:

• carbon dioxide;

• methane;

• nitrous oxide; and

• four nominated synthetic gases.

59. At Evidence Book, folio 301, in Table 50, the EIS set out what were predicted to be the total greenhouse gas emissions that would be associated with the carrying out of the project over its life. These were set out under all three scopes against, as relevant, six potential emission sources. These sources were:

• diesel;

• fugitive mine ventilation here;

• flaring;

• electricity;

• energy production; and

• rail.

60. The table recorded that these emissions, over the life of the project, would be 6,786,770 tonnes of Scope 1 emissions; 1,477,707 tonnes of Scope 2 emissions; and 360,866,276 tonnes of Scope 3 emissions. The total emissions that would be associated with the project over its lifespan were said, in this table, to be 369,130,553 tonnes of greenhouse gases.

The Department’s Preliminary Assessment Report

61. The next relevant document was the Department’s Preliminary Assessment Report. The relevant section is reproduced below (Evidence Book, folios 1701 and 1702):

5.7.3   Greenhouse Gas Emissions

The EIS includes an assessment of greenhouse gas (GHG) emissions and potential impacts, undertaken by PAEHolmes.

The Department acknowledges the potential climate change impacts caused by the burning of coal and other fossil fuels to provide the energy needs of various human societies, but does not consider that these in themselves should necessarily preclude the approval of the project. Rather, consideration of potential GHG impacts needs to be balanced, with due consideration given to:

•   the project’s particular contribution to global warming/climate change;

•   whether refusing the development application would reduce global GHG emissions;

•   the benefits of the project, including job creation and its contribution to the NSW economy;

• the objects of the EP&A Act, including the encouragement of ESD; and

•   available GHG impact mitigation measures.

The GHG assessment calculates direct and indirect GHG emissions associated with the project, including ‘Scope 1’ emissions (ie direct GHG emissions from sources controlled by WACJV), ‘Scope 2’ emissions (ie indirect emissions associated with the import of electricity for use in the project) and ‘Scope 3’ emissions (ie other indirect emissions, such as those associated with the downstream combustion of the product coal). The calculated GHG emissions associated with the project are shown in Table 9.

The assessment indicates that the vast majority (97.76%) of the total GHG emissions generated as a consequence of the project are those associated with the downstream burning of the product coal for energy production purposes - ie Scope 3 indirect emissions. The Department is satisfied that the project’s contribution to annual global GHG emissions, even when assessed on a full life-cycle basis (ie including downstream GHG emissions), would be very small.

62. The Preliminary Assessment Report then reproduced a table which was, in effect, a summary of what had been set out in the greenhouse gas scope calculations in the EIS. It then continued.

It must be noted that if the project was not allowed to proceed, the resultant gap in the thermal coal supply would be almost certainly filled by another coal resource, sourced either from elsewhere in NSW, Australia or overseas. In other words, preventing GHG emissions from the project would not result in any decrease in global CO2 emissions. This point illustrates the reality that the key response to the issue of climate change needs to be made at a national and international policy or strategic planning level, outside and above the project assessment process in NSW.

The First PAC Review Report

63. As the chronology (at [14] above) records, in June 2014, after conducting the first PAC review of the (original) mine proposal, the PAC produced the First PAC Review Report. It addressed greenhouse gas emissions relevant to these grounds in the following terms (Evidence Book, folio 1973):

3.8.1   Greenhouse Gas Emissions

The PAR says the strategic policy for greenhouse gas emissions should be made at a national and international level rather than at the project planning stage although several submissions including LMCC and WSC are critical of relying on a national approach as there is no carbon emissions trading scheme and the carbon tax is proposed to be abolished. The Commission accepts the validity of these concerns and therefore considers that all practical means should be adopted to minimise greenhouse gas emissions.

The PAR notes that Scope 3 accounts for over 97 per cent of the total emissions and concludes that the project’s contribution to annual global GHC emissions would be very small and if the project does not proceed then the coal would be sourced from elsewhere in Australia or overseas. The generalisation that the project’s contribution to global CO2 emissions would be small could be applied to almost every project around the world and is therefore not a good comparison. It would be more helpful for comparisons to include Scope 1, 2 and 3 emissions for NSW, Australia and global.

The Departmental Addendum Report

64. In July 2016, following the handing down of this Court’s decision in Darkinjung Local Aboriginal Land Council v Wyong Coal Pty (No 2) [2014] NSWLEC 71, an amended development application for the mine was lodged. The Department prepared an Addendum Report to assist the PAC, as the amended development application for the mine was referred to a PAC Panel for a second review. The Addendum Report noted (Evidence Book, folio 2901):

Greenhouse Gas Management

WACJV previously committed to the development of an Energy and Greenhouse Strategy to focus on improving energy efficiency and reducing greenhouse gas emissions. The Department assessed the impacts of greenhouse gases in Section 5.7.3 of the PAR and considers that the nature and quantity of emissions has not materially changed between the original and amended project and continues to recommend the previously proposed management strategies.

The Second PAC Review Report

65. In May 2017, a PAC Panel produced its Second PAC Review Report. This report endorsed the matters quoted from the earlier documents as set out between [61] and [64] above (Evidence Book, folio 3054).

The PAC’s Determination Report

66. On 16 January 2018, a freshly constituted PAC Panel finalised its determination report and granted conditional development consent to the proposed mine. The relevant elements of the PAC’s Determination Report requiring consideration, for the purposes of Grounds 1, 2 and 3 of the Second FAS, are set out at [51] and, particularly, [52] above.

Some preliminary matters concerning Grounds 1, 2 and 3

The composition of the PAC Panel

67. Although it was suggested that I might have regard to the fact that two of the three members of the PAC Panel that approved the proposed mine were also members of the separately established PAC Panel which conducted the second PAC review process (Transcript, 12 November 2018, page 44, lines 20-24), I am not prepared to do so. I did not understand that this proposition was strongly pressed.

68. Although the second PAC Review Report addresses greenhouse gas emissions, including downstream emissions, the only appropriate use to be made of the second PAC Review Report does not arise from the composition of the panel which undertook the review process but arises from the terms of the Review Report itself and the fact that the PAC Panel whose determination is challenged in these proceedings stated, in its determination, that it had considered the content of that Review Report.

69. Although the First Respondent put, at the end of (16) of its written submissions, that:

This is not to say that consideration by the PAC acting as a review body is itself consideration by the PAC acting as a consent authority: cf AWS [37]. Rather, it is to say that it is inherently unlikely that the PAC would have “forgotten” and failed to have regard to things it had given considerable attention to over the course of the process when the PAC came ultimately to deciding to grant the Consent.

The real relevance of the earlier review reports, arising from differently constituted PAC Panels, comes from the content of those reports and the inference to be drawn that the determining PAC Panel had had regard to those review reports as they are expressly referenced in the determination report. The extent of the referencing evidences them having been taken into account on the totality of the matters dealt with by them, not merely as to the topics specifically identified in the determination report.

Wollar Progress Association Inc v Wilpinjong Coal Pty Ltd [2018] NSWLEC 92

70. The Applicant's written submissions, at (8) to (12), address the judgment of Sheahan J in Wollar Progress Association Inc v Wilpinjong Coal Pty Ltd [2018] NSWLEC 92, apparently in anticipation that one or other of the active respondents might seek to use that decision to found a submission that cl 14(2) of the Mining SEPP only applies to the imposition of conditions.

71. I mention this but briefly, as no such restrictive proposition was advanced on behalf of either the First Respondent or the Minister. Both the active respondents adopted the position that the two elements of cl 14 of the Mining SEPP operate together with the required assessment aiding the consent authority to consider what relevant conditions might/should be imposed (First Respondent's written submissions at (26)). Although the Minister’s written submissions on this point were somewhat lengthier (from (37) to (43) of the written submissions), they are not inconsistent with the position advanced by the Applicant as to how I should approach the two elements of cl 14 of the Mining SEPP advanced by both the Applicant and the First Respondent.

Reliance on the departmental advice

72. Preston CJ observed in Moorebank Recyclers Pty Ltd v Benedict Industries [2015] NSWLEC 40 (Moorebank Recyclers), at [155]:

155   A decision-maker is entitled to rely on the advice of its advisers, such as officers of a government department or local council, in making decisions, including forming any required satisfaction about a matter that is made a condition of the exercise of the power: see, for example, Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1086] HCA 40; (1986) 162 CLR 24 at 30-31, 65-66. However, when a decision-maker relies on advice, as it is entitled to do, and the advice is materially inadequate or misleading, any such failing may introduce legal error into the decision-maker’s decision. Whether it does so will depend on the significance of the error or omission in the advice relied upon: Phosphate Resources Ltd v Minister for the Environment, Heritage and the Arts (No 2) [2008] FCA 1521; (2008) 251 ALR 80 at [95].

The need to avoid lapsing into merit review under the guise of judicial review

73. Minister for Planning v Walker (2008) 161 LGERA 423; [2008] NSWCA 224 (Walker) drew on a range of earlier decisions to caution about requiring, in judicial review proceedings, any greater degree of prescription in determining whether or not a consent authority has considered a matter or matters. In particular, in my consideration here engaged, the decision of Preston CJ in Walsh v Parramatta City Council (2007) 161 LGERA 118; [2007] NSWLEC 255 at [56] was cited with approval (citations omitted):

An applicant dissatisfied with the merit assessment and outcome of an exercise of discretionary power by a consent authority make (sic) seek to disguise a challenge on those merits in terms of recognised grounds of judicial review, such as the relevant considerations grounds. A court should see through the disguise. The court must avoid the temptation to express the conclusion in terms of a recognised ground of review while in truth making a decision on the merits …

The submissions on Grounds 1 and 2

The Applicant’s position

74. The opening by Mr Leggat SC, on behalf of the Applicant, set the framework within which the Applicant proposed to advance its argument that the PAC’s mandated consideration of greenhouse gas emissions had miscarried concerning downstream emissions. He said (Transcript, 12 November 2018, page 2, lines 43 to 47):

The first mistake I'm going to call "the lens mistake." The second I'm going to call "the location mistake." Our submission in relation to the climate change grounds is that the approach that was taken by what I'll call the PAC 2, cl 14.2 of the mining SEPP, was influenced adversely by the lens mistake and the location mistake.

75. He described the basis of the “lens mistake’ as follows (Transcript, 12 November 2018, page 3, lines 39 to 43):

So it's clear from that that the opportunity was missed to draw to the attention of the decision-maker the important parts of cl 14.2, namely the consent authority must consider an assessment of the greenhouse gas emissions, including downstream emissions of the development. So that's the starting point of the lens mistake.

76. He later described the basis of “location mistake” as follows (Transcript, 12 November 2018, page 5, line 37 to page 6, line 14):

If I can take your Honour to tab 24 at p 2614 and I’m now going to indicate the other mistake, the location mistake. So, p 2614, your Honour sees here, “6.4.2 Climate Change” and here we have the consultants responding to a concern expressed by the NCC, the Nature Conservation Council, about there being a focus on only scope 1 and scope 2 emissions.

So, the NCC is stating, or the consultants are describing the NCC’s concern that, putting it another way, scope 3 emissions, downstream emissions - and I’ll come back to the relationship between scope 3 emissions and downstream emissions in due course, but your Honour sees there that the NCC’s concern can be expressed in terms of a criticism that scope 3 emissions, downstream emissions, haven’t been dealt with. Now, the response, if can invite your Honour to scroll down a little bit further, this sentence here, “In order to avoid”, “In order to avoid double counting of emissions NGERS only requires companies to report scope 1 and scope 2 emissions as scope 3 emissions are reported where the fuel is combusted”. That is the location mistake and that is the mistake that has been taken on board by the PAC.

It is an approach that differs from the approach required by cl 14(2) of the mining SEPP because that provision, as your Honour has seen, requires that in determining a development application, the consent authority shall consider an assessment of greenhouse emissions including downstream emissions or scope 3 emissions. The consultants have said in response to the criticism of the NCC as to the lack of information about scope 3 emissions that scope 3 emissions are reported where the fuel is combusted. That is, are reported at that location, at the location where the fuel is combusted. Hence, that’s why we’re calling this “the location mistake”.

The Applicant’s broad position in reply

77. The Applicant’s argument in reply submissions responded to the written submissions advanced by the First Respondent (reproduced above at [54]) on the documents said to provide a proper factual basis to reject the Applicant’s greenhouse gas emission grounds. The reply submissions said:

14   The FROS summarises at [39] to [52] the various documents before the PAC which addressed downstream GHG emissions. These documents could have provided the basis for consideration of an assessment of downstream GHG emissions, but the ultimate question is whether consideration actually occurred. The PAC Determination Report provides the best evidence of what the PAC considered at the point of determination, and it provides incontrovertible evidence to the contrary in the following:

The Commission also acknowledges the greenhouse gas emissions that would be produced from any future burning of the coal extracted, .whether it is consumed locally or internationally. It is noted that presently there are alternative coal sources available to the market in the event that this mine does not proceed. Consequently, the downstream use of the coal (and any emissions abatement or capture technologies deployed) will need to be considered at that location.

15   The first respondent at FROS [54] construes the third sentence of this paragraph as if it contained the word "also", but this is not consistent with the sequence of ideas in the paragraph as a whole. It does not follow as a "consequence" of the availability of coal from other sources that the emissions must also be considered at the downstream location, rather the obvious connection between these two ideas is that the PAC believes that because of the substitutability of supply, the reduction of downstream emissions can more effectively be achieved by consideration at the downstream location than by consideration at the Project approval stage.

16   The use of the word "need" reinforces this construction. The PAC is saying that downstream emissions "need" to be considered at the downstream location, because it would be ineffectual to consider them now.

17   Put another way, if the PAC did not perceive consideration at the point of emission as an alternative to consideration at the point of approval of a coal mine, then why mention it at all? This fact was only relevant to the PAC's determination if it obviated the need to consider downstream GHG emissions when approving the project.

78. The Applicant’s argument in reply submissions also responded to the written submissions advanced by the Minister on the documents said to provide a proper factual basis to reject the Applicant’s greenhouse gas emission grounds. The reply submissions said:

14 The second respondent submits at SROS [46] that it is not in dispute that the PAC considered documents including the GHG Assessment. This statement, if left unanswered, could be misconstrued. The applicant accepts that the PAC had before it, and may have even read, the GHG Assessment which included an assessment of downstream GHG emissions. However, it does not accept that the PAC considered an assessment of downstream GHG emissions as required by cl 14(2), even if that obligation is construed as an obligation merely to consider a document. To read a document containing an assessment of downstream GHG emissions, and to take that assessment into consideration in making its decision are not the same thing. The paragraph quoted at [13] above shows that the PAC treated downstream GHG emissions as something which was irrelevant to its decision, therefore it also necessarily treated as irrelevant any document dealing with that subject-matter.

15   The FROS at [56] and SROS at [48](d) rely on various conditions which were imposed relating to GHG emissions. These conditions only related to direct emissions, and therefore do not assist the respondents.

79. The difficulties with the above submissions from the Applicant are twofold. First, they are of an impermissible “fine-tooth comb” degree of examination of what the PAC actually did. Second, they propose that the PAC was required to address the extraordinarily broad range of material before it in a fashion that did not consider and have proper regard to the material provided in the departmental and PAC review advice.

Consideration of the “lens mistake”

Introduction

80. Conflating Grounds 1 and 2, then separating them into argument streams, based on what Mr Leggat has described as the “lens mistake” and the “location mistake”, makes it somewhat difficult to respond to the quite specific bases upon which Grounds 1 and 2 have been pleaded in the Second FAS. It seems to me that, in order to address the Applicant's case as pleaded, rather than in the less structured way it was argued in Mr Leggat's oral submissions, what was described as the “lens mistake” is, in reality, a bundling-up together of the various matters pleaded in Ground 2 (perhaps with some lesser but imprecise flavours of Ground 1 sprinkled in as well).

81. However, I propose to deal further with the “lens mistake” on this basis because that which needs to be analysed in this context, it seems to me, provides a proper basis to consider and dispose of Ground 2 (although out of the order of the pleadings).

The content of the materials considered by the PAC

82. I have set out, at [72], the basis upon which the PAC was entitled to consider the departmental advice given to it. Although triggered by, and responsive to, the original development application, the EIS and, subsequently, the amended development application, the relevant elements of the departmental advice and the earlier PAC Review Reports have earlier been set out at [61] to [65]. In this regard, the earlier PAC Review Reports are to be encompassed within the observations from Moorebank Recyclers, set out at [72], concerning reliance on advice.

83. I accept the submissions on behalf of the active Respondents that the PAC acknowledging that it is properly is to be regarded as having considered, because it has so acknowledged the fact, the relevant range of documents and their content extracts earlier set out. Although not falling within the scope of Moorebank Recyclers, the EIS was also considered by the PAC - relevantly to Grounds 1 and 2 - those earlier extracted elements dealing with Scope 1, 2 and 3 greenhouse gas emissions.

84. Where those documents expressly addressed Scope 3 emissions directly or by necessary inference, I am satisfied that that which is set out concerning downstream greenhouse gases at [52], although laconic, is sufficient to establish that the PAC has had regard, as it was obliged to by cl 14(1) and (2) of the Mining SEPP, the question of downstream emissions that will arise from the burning of the coal proposed to be produced from this mine and that it has considered what conditions were appropriate to consider imposing and then actually impose concerning greenhouse gas emissions.

85. This, it seems to me, is a complete answer to Grounds 1 and 2. However, for completeness, I also turn to address other approaches to these two grounds which separately warrant the conclusion that they should be rejected.

Absence of specific referencing of cl 14(2) of the Mining SEPP

86. In the context of what the Applicant describes as the “lens mistake”, it is to be observed that the expression “clause 14(2) of the SEPP” is not some magical incantation, the repetition of which would legitimise the illegitimate or the absence of which would illegitimise the legitimate. The complaint made by the Applicant about the absence of specific repetitions of this formula will be quite without foundation if the PAC’s Determination Report has adequately addressed the substance of what would be required to satisfy the terms of the provision despite the fact that it was not expressly referenced.

87. I am satisfied that that is here the case. This is clear from [32] of Manly Council v Hortis (2001) 113 LGERA 321; [2001] NSWCA 81 (Hortis) (a decision relied upon by the Applicant) that it is unnecessary to cite expressly a provision such as cl 14(2) of the Mining SEPP (let alone set out its terms) if that which is required to be addressed is, in fact, sufficiently addressed. There was no absence of express reference to the effect of cl 14(2) of the Mining SEPP in the extensive information available to the PAC making the determination (Hortis at [54]) and it is clear that the PAC considered all the material relevant to this point.

88. The “lens mistake” complaint basis for Ground 2 is rejected.

Consideration of the “location mistake”

The matters actually pleaded in Ground 1

89. Ground 1 relies on what are said to be a number of errors in the PAC’s processes with respect to the requirements of cl 14(2) of the Mining SEPP. There are two primary bases of complaint with three being pleaded in the alternative. My reading of (6) to (8C) of Ground 1 as formally pleaded in the Second FAS requires my consideration of three separate elements of complaint - although pleaded in various permutations. They are, in my summary:

• the PAC did not consider any assessment of the greenhouse gas emissions of the project when determining to grant development consent to it;

• the PAC did not consider downstream emissions when determining whether or not to impose conditions pursuant to cl 14(1) of the Mining SEPP (including downstream emissions) despite cl 14(2) mandating this; and

• the PAC did not consider whether it should impose specific conditions designed to address and limit downstream greenhouse gas emissions, which would result from the burning of coal mined from the project (whether that burning occurred locally or internationally).

The relevant paragraph of the PAC’s Determination Report

90. The relevant paragraph of the PAC’s Determination Report

The Commission also acknowledges the greenhouse gas emissions that would be produced from any future burning of the coal extracted, whether it is consumed locally or internationally. It is noted that presently there are alternative coal sources available to the market in the event that this mine does not proceed. Consequently, the downstream use of the coal (and any emissions abatement or capture technologies deployed) will need to be considered at that location.

The essence of the “location mistake”

91. The essence of the “location mistake” is that the downstream emissions should have been dealt with in the context of this proposed mine, rather than being deferred to consideration in the context of emissions at the location of burning of the coal proposed to be extracted from this mine.

The applicant does not press FAS [43](c), because it does not appear that this form of compensation would be covered by either the Mining Act or the Subsidence Act.

201. Second, as with Ground 9, the Applicant refers to relevant elements of its written submissions on Ground 8.

202. Although portion of the Minister’s written submissions, at (122) (reproduced later in this decision), includes the assertion:

The Applicant does not address any argument to Summons [43(b)] (that the condition is so unreasonable that no reasonable Consent authority would have imposed it), and so it is assumed that is also abandoned.

this is clearly not correct.

203. In fact, the Applicant’s reference to relevant elements of its written submissions on Ground 8 takes me to (129) to (136) of the Applicant’s written submissions, on the basis that those paragraphs are to be read, mutatis mutandis, as applying to the condition sought to be impugned in this ground. Those paragraphs (footnotes omitted) were in the following terms:

129   In the alternative, the Flood Compensation Condition is invalid because it offends the second limb of the Newbury Test.

130   The general test for validity of planning conditions is derived from the decision of the UK Court of Appeal in Newbury District Council v Secretary of State for the Environment [1981] AAC 578 and was restated in the following terms by McHugh J in Western Australian Planning Commission v Temwood Holdings Ply Ltd (2004) 221 CLR 30 at [57]:

A condition attached to a grant of planning permission will not be valid... unless:

1   The condition is for a planning purpose and not for any ulterior purpose. A planning purpose is one that implements a planning policy whose scope is ascertained by reference to the legislation that confers planning functions on the authority, not by reference to some preconceived general notion of what constitutes planning.

2   The condition reasonably and fairly relates to the development permitted.

3   The condition is not so unreasonable that no reasonable planning authority could have imposed it.

131 This test has been applied frequently both in this Court and the Court of Appeal to conditions imposed under s 80A of the EPA Act. There is no reason why this implied constraint should not also apply to the more general power at s 89E(1)(a). Indeed, the absence of express statutory guidance as to the kinds of conditions which may be imposed increases the need to adhere to the implied limits.

132   On the question of whether uncertainty may result in invalidity of a condition, Tobias AJA (Mason P and Hodgson JA Agreeing) said in Hurstville City Council v Renaldo Plus 3 Pty Ltd [2006] NSWCA 248 at [89]:

It must be remembered that, as Basten JA observed in Kindimindi at 292 [55], and as noted by Mason P in Transport Action Group Against Motorways Inc at 628 [112], mere uncertainty may not give rise to invalidity. Whether or not uncertainty does give rise to invalidity depends upon a different question, namely, whether the condition alleged to be uncertain complies with the statutory limits imposed upon the power of the consent authority.

133   In the present case, the onerous nature of the condition, its capacity to operate arbitrarily upon both the proponent and affected landowners, and the lack of specificity about the terms of the required compensation or acquisitions, must lead to the conclusion that it does not fairly and reasonably relate to the subject development. Yes, there is a nexus between the development and the need for the acquisitions. However, the relationship between the development and the proposed acquisitions cannot be "fair and reasonable" where the condition fails to provide any criteria for how the measures are to be implemented. Who triggers the process of voluntary acquisition? In what time frame is the developer required to respond? How are disputes about the amount of compensation to be resolved? A condition which fails to resolve any of these questions cannot be fair and reasonable.

134 The respondents may say that the Secretary of the Department of Planning and Environment retains the power to ensure that arrangements for compensation and acquisition are fair and reasonable, since the flooding monitoring program must be approved by her. However, the PAC cannot delegate to the Secretary its obligations under s 89E(1)(a). The question is not whether the condition may produce a fair and reasonable result, but whether it is fair and reasonable, considered at the time that the condition is imposed. The Flood Compensation Condition does not fulfil this criterion.

135   An indication that s 89E does not confer a power to impose a completely open­ended compensation and acquisition condition may be found in the highly specific terms of the power to impose developer contribution conditions in Part 4 Division 6 of the EPA Act, as discussed above. While it is not suggested that the Flood Compensation Condition is governed by Part 4 Division 6 per se, there is a similar need for compensation conditions to be specific and certain.

136 The Flood Compensation Condition is not severable because it is clear from the passage cited at [102] above that the PAC relied upon the supposed right to compensation to alleviate otherwise unacceptable flooding impacts. Without the Flood Compensation Condition, the Consent would operate differently from the intention of the PAC because it would expose affected landowners to flooding risks without a right to compensation.

The Applicant’s reply position

204. I have earlier set out what Mr Leggat said his oral submissions in reply to Grounds 9 and 10 and it is not necessary to repeat them.

The First Respondent’s written submissions

205. The First Respondent's written submissions on Ground 10 were, in addition to the factual recitals, comparatively brief. It is, therefore, appropriate to reproduce them in full. They were in the following terms:

175   As set out above in respect of Ground 8, the power to impose conditions is broad and (consistently with the authorities) it is very difficult to establish legal unreasonableness.

…

178   The ACA’s criticism of this condition appears to be that (i) it requires the proponent to acquire water access licences so as to transfer them to third parties; and (ii) the PAC did not have power to impose a condition of that kind.

179   The first aspect of this criticism is unsound. The condition does not require WACJV to acquire water licences. Nor does the condition require WACJV to transfer any acquired water licences to third parties. Further, the condition in terms contemplates that an alternative long-term water supply may not be able to be secured, in which case WACJV is to provide alternative compensation.

180   It is unnecessary to decide whether the PAC would have had power to impose a condition requiring acquisition and transfer of water licences. That was not the condition imposed.

206. As a consequence, as with the Applicant’s position, it is also necessary to turn to the First Respondent’s submissions made on Ground 8 concerning the scope of the PAC’s power to impose conditions. The relevant elements of the First Respondent’s written submissions were in the following terms:

149.   In assessing this ground, the starting point is the scope of the PAC’s power to impose conditions. The source of that power was s 89E(1) of the Act, which stated:

The Minister is to determine a development application in respect of State significant development by:

(a)   granting consent to the application with such modifications of the proposed development or on such conditions as the Minister may determine; or

(b)   refusing consent to the application. (emphasis added)

150. The power is not, in terms, confined. It is of course subject to such limits as arise from the subject matter, scope and purpose of the EP&A Act, together with the limits identified in Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at [57]. Those limits no doubt include that a legally unreasonable condition cannot be imposed. However, the authorities make it clear that the test for legal unreasonableness is stringent: see, eg, Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [106]-[109] (Gageler J).

207. The remainder of the First Respondent’s written submissions concerning Ground 8 were specific to the terms of the condition challenged in that ground and do not need to be repeated here.

The First Respondent’s oral submissions

208. Mr Lancaster said (Transcript, 13 November 2018, page 56, lines 16 to 42):

To take a step back, what the applicant is trying to do is actively trying to invalidate the condition that provides for compensatory water supply on the basis that there's no power to impose a condition for that effect. We're talking, of course, of Condition 16 of p 3881 of the conditions of consent. Your Honour, it is impossible to accept, in our respectful submission, this condition as beyond power. It does not leave any matters to be determined in the future, in the sense in which the authorities from time to time identify important matters left undetermined.

What Condition 16 does, on a fair reading of it - on any reading of it, that is reasonable - it stipulates a requirement that any effective land owner should have an equivalent quality and volume of water to be able to use, and that any loss of quality or volume should be restored within 24 hours of the water supply going down. It then provides that compensation is due if that can't be achieved in the long term, that is the quality and volume and timing requirements can't be achieved in the long term, such an amount to be determined by the Secretary. And of course, the extent of that conversation would be absolutely fact specific. It couldn't possibly be determined in advance because one wouldn't know what private land owner is affected. The character of the affectation of their water supply, and the only possible mechanism that would not involve idle speculation on the part of the PAC to deal with the compensation provision would have been precisely a condition term as is expressed there.

The Secretary would need to consider and determine the matter, because the facts would be so specific. So, your Honour, there is no legal flaw with Condition 16, and ground 10 can be rejected.

The Minister's position

209. The starting point for the Minister’s submissions concerning Ground 10 refers back, via the submissions on Ground 8, to general submissions earlier made concerning the Minister’s power to impose conditions, a power exercised in these proceedings on behalf of the Minister by the PAC. Those general elements of the Minister’s written submissions were in the following terms (footnotes omitted):

33   Imposition of conditions: Where invalidity of a condition is alleged, the relevant question is whether the given condition falls outside the power to impose conditions that the power expressly or impliedly permits. The power of the PAC to impose conditions is found in s 89E(1)(a) of the EPA Act. It provides that the Minister can determine a development application in respect of State Significant Development by, relevantly, "granting consent to the appUcation with such modifications of the proposed development or on such conditions as the Minister may determine". On its face, that provision provides a broad power to impose conditions and the conditions that may be imposed pursuant to it are unfettered.

34 Given the function of Division 4.1 of Part 4, to facilitate large and complex development projects, to be decided as they are by the Minister or the PAC acting as delegate (rather than local authorities) it is unsurprising thats 89E(1)(a) is broad. Of course, Division 4.1 of Part 4 replaced the old Part 3A. And in this regard, the text of the power to impose conditions under s 89E in respect of State Significant Development is relevantly identical to the text of the equivalent power in old Part 3A in respect of major projects to which that Part applied.

35 Numerous authorities considered the scope of the condition making power in Part 3A, emphasising its breadth. Given the relevantly identical text- and the context by which Division 4.1 of Part 4 replaced Part 3A as the regime applicable to generally the same kinds of large­ scale, significant projects - the principles articulated in those cases are directly applicable to s 89E of the EPA Act. In this regard, the power to impose conditions has been recognised as wide and there is no warrant to read that power down by imposing a limitation that parameters of any adjustment to the project to meet an outcome or objectives specified, must also be specified. Retention of practical flexibility, leaving matters of detail for later determination, and delegation of supervision of some stage or aspect of the development, is recognised as being desirable and in accordance with the statutory scheme. Furthermore, the scale of the projects involved, which are often complex, expensive and multistage projects, make the retention of such flexibility appropriate and inevitable. In the context of such large projects, including mining projects, it has been held that conditions imposing an adaptive management approach (the preparation of plans of management) are an appropriate response to deal with the uncertainty and risk concerning the impacts .. . and the measures to mitigate the impacts and reflect the precautionary principle.

210. With respect to specific matters addressing Ground 10 alone, the Minister’s written submissions said:

121   … Again, the relevant question is whether the given condition falls outside the power to impose conditions that the power in s 89E expressly or impliedly permits having regard to the scope of that power as addressed elsewhere in these submissions.

122 The bases on which the invalidity of the condition is alleged are articulated in Summons [43]. Three reasons are there alleged. The Applicant has abandoned Summons [43(c)]. The Applicant does not address any argument to Summons [43(b)] (that the condition is so unreasonable that no reasonable Consent authority would have imposed it), and so it is assumed that is also abandoned. That leaves Summons [43(a)], which alleges that "s 89E does not authorise the imposition of conditions requiring the payment of compensation for loss of water supplies as a means of mitigating the impacts of development".

123   As to the one matter which seems to be pressed, it raises similar issues to those addressed in paragraph 105 above. Nothing in the statutory scheme supports such a limited view of s 89E and it would be bizarre if a condition could not be included providing a compensation mechanism for the benefit of persons impacted by a development. Again, such a radical proposition must be rejected.

211. After reciting the terms of the Compensatory Water Supply condition (earlier set out at [181]), the Minister’s written submissions continued, saying:

125   Plainly the primary obligation is to "provide a compensatory water supply" and which must be "equivalent, in quality and volume" and "within 24 hours" of identification. The allegation in Summons [43(a)] does not address the condition as a whole or its ordinary operation and so does not provide a basis for challenging the validity of the condition.

126   In its submissions, the Applicant attacks the condition on the basis that the PAC impermissibly exercised a power to impose "a condition requiring the proponent to acquire water access licences for the purpose of transferring them to third parties" (AS [145]). That is not the pleaded basis of the challenge. That aside, the condition imposes no such requirement.

The Minister’s oral submissions

212. Mr Shearer said (Transcript, 14 November 2018, page 106, lines 12 to 41):

… It seems that (a) is the only one potentially live, but we've not really had a developed argument in relation to that either. What that subparagraph does is to take one tiny aspect of the condition out of its context. Your Honour's been taken to Condition 16, if I can go to it, document 43, p 3881. So, it needs to consider the condition as a whole. It begins with a notification obligation, then it provides an obligation to provide compensatory water, and then what that compensatory water supply must provide for is then dealt with in the next paragraph.

There's a dispute resolution mechanism in the next paragraph, and then finally, "If the applicant...provide alternative compensation." Now, what is picked up here is just that last little bit. The primary obligation is to provide a compensatory water supply, and it's not a correct approach, in my submission, in seeking to impugn a comprehensive condition by isolating the last little fall back aspect of it and saying that the Court would then find that the condition is invalid. The ultimate question is whether the condition is outside the scope of the broad power for the reason that the applicant has alleged, and we say there is no basis to so conclude.

There's an additional argument outside the scope of the summons that has been raised in the applicant's written submissions at para 145. It's different, so now we've moved from the condition being invalid as alleged in the summons because s 89E doesn't authorise the imposition of conditions requiring the payment of compensation as a means of mitigating. Now in 145, it is said that, "The Court should find 89E(1) does not include a power to require the proponent to provide compensatory water." So, it's a different focus here, and then there's reference to the Water Management Act and so on. None of that's pleaded of course, but in any event, it follows from what I've really already said about the breadth of the condition-making power, that it's not a basis to impugn the condition.

Consideration

213. Before turning to the question of the power to impose condition 16, and any other matters relating to it, it is appropriate to address the unreasonableness proposition advanced by the Applicant as the first element of (43)(b) pleaded in Ground 10. Only after doing so is it appropriate to address the Applicant's proposition that no compensatory measure could be effective in the circumstances proposed to be addressed by the condition.

214. As I have earlier set out, the First Respondent addressed the issue but briefly, whilst the Minister did not address the question of “unreasonableness” in terms.

215. Although Ground 10 is pleaded (at the first portion of (42)(b)) in terms redolent of Wednesbury unreasonableness (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223), the Applicant’s submissions on Ground 8 only invoke the second of the Newbury tests (Newbury District Council v Secretary of State for the Environment [1981] AAC 578) on the issue of reasonableness - that is, reasonably relating to the proposed development and its impacts. I therefore do not address the question of Wednesbury unreasonableness.

216. For this purpose, I accept the validity of the propositions put in [130] and [131] of the Applicant's written submissions, that the Newbury tests, as adopted in Australia in the form discussed in Western Australian Planning Commission v Temwood Holdings Ply Ltd (2004) 221 CLR 30; [2004] HCA 63, apply equally to conditions imposed pursuant to s 89E(1)(a) of the EP&A Act when this is done by the PAC as the Minister’s delegate.

217. Also for the purposes of this consideration, I assume (only for the purposes of determining Ground 10) that that which is set out in (132) of the Applicant's written submissions is correct and that the element of the decision in Hurstville City Council v Renaldo Plus 3 Pty Ltd [2006] NSWCA 248, extracted in the submissions, is to be taken to apply to Condition 16.

218. The remainder of the elements dealing with unreasonableness, in (133) and the first sentence in (134), are particular to the flooding condition the subject of Ground 8. Of the remaining matters set out, from that point in (134) to the end of (136) of the Applicant's submissions concerning Ground 8, I have extracted what I consider to be the relevant elements as they are applicable to condition 16. These may be restated as:

The question is not whether the condition may produce a fair and reasonable result, but whether it is fair and reasonable, considered at the time the condition is imposed. The Compensatory Water Supply condition does not fulfil this criterion.

…

There is a need for compensation conditions to be specific and certain.

219. I am unable to discern any rational basis as to how the terms of Condition 16 might offend the second of the Newbury tests. The Applicant points to no specific aspects (separate to those dealt with in Ground 9) as to how this element of Ground 10 might be established.

220. At (136), the Applicant's submissions dealt with severability, a question which only arises if I was to have found that condition 16 was invalid. As I have not done so for the reasons that follow, whether condition 16 is severable does not arise.

221. Next, to start my substantive consideration of Ground 10, it is appropriate to hark back to a former statutory regime that applied, amongst other things, to projects such as those that are now classified as State Significant Development. That regime was in (the now repealed) Pt 3A of the EP&A Act. The relevant power for the granting of approvals, and, particularly the imposition of conditions of consent to attach to such approvals, was contained in the then s 75J of the Act. The condition-making power was contained in s 75J(4), a provision in the following terms:

(4)   A project may be approved under this Part with such modifications of the project or on such conditions as the Minister may determine.

222. The provision engaged in these proceedings concerning the Minister’s powers for the determination of State Significant Development is, relevantly, contained in s 89E(1)(a) of the EP&A Act as earlier set out. The words investing the Minister with power are, as to their operative effect, identical. The specific portion of the repealed provision and the now applicable provision concerning the ability of the Minister to impose conditions are identical.

223. For these purposes, relevant past decisions that have addressed the extent of, and test to be applied concerning, conditions, imposed pursuant to s 75J(4) of the EP&A Act concerning Pt 3A projects, are equally relevant to testing such conditions imposed pursuant to s 89E(1)(a) in the determination of State Significant Development proposals such as the one here being considered. In Ulan Coal Mines Limited v Minister for Planning and Moolarben Coal Mines Pty Limited (2008) 160 LGERA 20; [2008] NSWLEC 185 (Ulan), Preston CJ dealt with the validity of conditions imposed pursuant to the then s 75J at [50] and [51] (citations omitted):

50   Rather, a condition will only be invalid, by lacking certainty or finality, if it falls outside the class of conditions which the statute expressly or impliedly permits. Where a condition does fall outside what the statute permits, the purported approval is not an approval under the statute at all (assuming the condition is not severable).

51   The relevant question in this case, therefore, is whether Condition 29 falls outside the power to impose conditions that s 75J of the Act expressly or impliedly permits. This involves construction of the section and its application to the circumstances of this particular Project.

224. In Rivers SOS Inc v Minister for Planning (2010) 178 LGERA 347; [2009] NSWLEC 213, Preston CJ was again faced with the question of whether a particular condition in that Pt 3A project was valid or not. In [134], his Honour restated the test he had set out in [50] of Ulan and then, having undertaken that assessment, he applied the test and concluded:

134 Having regard to the condition, its relationship to other conditions of the approval and its likely operation, as well as to the nature and extent of the Project, Condition 6 of Schedule 6 cannot be said to be outside the power under s 75J(4) of the Act to impose conditions.

225. It is clear that condition 16, in terms, responds in that fashion to the matters in the PAC’s Determination Report and materials considered by the PAC on this topic.

226. Finally, in the Applicant's written submissions in reply, at (44), the Applicant responds to that element of the First Respondent's written submissions concerning the submission that the proponent would need to acquire and transfer water licences. These written submissions in reply, on this point, were in the following terms:

The FROS at [179] contended that the water supply condition does not require the transfer of water licences. This is not a reasonable construction of the condition. Where the condition is triggered, the obligation to provide compensatory water supply is both express and mandatory. The compensatory water supply must be “long-term” and “equivalent in quality and volume, to the loss attributed to the development”. There is no other way, practically speaking, under the Water Management Act 2000 to provide a reliable long-term water supply or private landowner on a regulated river, them by the purchase and transfer of water licences.

227. In the terms submitted, what is questioned is a finding of fact, implicit in the PAC’s consideration and adoption of a condition based on its assessment of the facts and circumstances arising from the material before it. This element of the Applicant's submission involves an impermissible canvassing of the merits of the condition, a position not permitted in proceedings of this type. Although Wednesbury “unreasonableness” was pleaded by implication in (43)(b), the Applicant made no submissions in support of that proposition and that complaint must also fail.

228. Ground 10 is rejected.

Orders

229. Having been unsuccessful in establishing any of the grounds (as finally pressed) founding the Applicant’s challenge of the PAC’s determination, the orders of the Court are that:

1. The summons is dismissed;

2. The hearing listed for 4 April 2019 is vacated; and

3. Costs are reserved.

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Decision last updated: 25 March 2019