City of Ryde Council v State of New South Wales

[2019] NSWLEC 47

Land and Environment Court

New South Wales

Medium Neutral Citation:	City of Ryde Council v State of New South Wales [2019] NSWLEC 47
Hearing dates:	27 February 2019
Date of orders:	12 April 2019
Decision date:	12 April 2019
Jurisdiction:	Class 4
Before:	Preston CJ
Decision:	The Court orders: (1)   The proceedings are dismissed. (2)   The applicant is to pay the respondent’s costs of the proceedings.
Catchwords:	JUDICIAL REVIEW – State environmental planning policy – amendment of policy to make low rise medium density housing complying development – decision of relevant authority not to consult with Chief Executive of Office of Environment and Heritage – opinion that policy not adversely affect critical habitat or threatened species, populations or ecological communities or their habitats – whether decision not to consult miscarried in law – whether briefing notes and reasons legally inaccurate – whether misdirection, failure to consider relevant matters or manifestly unreasonable decision – decision not shown to have miscarried in law
Legislation Cited:	Biodiversity Conservation Act 2016 Environmental Planning and Assessment Act 1979 Environmental Planning and Assessment Amendment Act 2008 Environmental Planning and Assessment Regulation 2000 Fisheries Management Act 1994 National Parks and Wildlife Act 1974 Native Vegetation Act 2003 Protection of the Environment Administration Act 1991 Ryde Local Environmental Plan 2014 State Environment Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Medium Density Housing) Amendment 2018 State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Medium Density Housing) State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Medium Density Housing) Further Amendment 2018 Threatened Species Conservation Act 1995
Cases Cited:	All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289 Clifford v Wyong Shire Council (1996) 89 LGERA 240 Coleman v Power (2004) 220 CLR 1 Collector of Customs v Pozzolanic (1993) 43 FCR 280 Currey v Sutherland Shire Council (1998) 100 LGERA 365 De Angelis v Pepping [2015] NSWCA 236 Director General, NSW Department of Industry and Investment v Mato Investments Pty Ltd (2014) 87 NSWLR 465; [2014] NSWCA 465 Franklins Ltd v Penrith City Council and Campbells Cash & Carry Pty Ltd [1999] NSWCA 134 Gee v Sydney City Council (2004) 137 LGERA 157 Helman v Byron Shire Council (1995) 87 LGERA 349 Hossain v Minister for Immigration and Border Protection (2018) 92 ALJR 780; [2018] HCA 34 Huntlee Pty Ltd v Sweetwater Action Group (2011) 185 LGERA 429; [2011] NSWCA 378 Lazarus v ICAC (2017) 94 NSWLR 36 Manly Council v Hortis (2001) 113 LGERA 321 Minister for Immigration and Border Protection v SZMTA (2019) 93 ALJR 252; [2019] HCA 3 Minister for Immigration and Citizenship v Khadgi (2010) 190 FCR 248 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Parramatta City Council v Hale (1982) 47 LGRA 319 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Somerville v Dalby (1990) 69 LGRA 422 Stambe v Minister for Health [2019] FCA 43
Category:	Principal judgment
Parties:	City of Ryde Council (Applicant) State of New South Wales (Respondent)
Representation:	Counsel: Mr J Kirk SC and Ms Z Heger (Applicant) Mr N Williams SC and Mr C Lenehan (Respondent)   Solicitors: Sparke Helmore Lawyers (Applicant) Crown Solicitor’s Office (Respondent)
File Number(s):	2018/205864
Publication restriction:	Nil

Judgment

A council challenges the State’s medium density housing policy

1. The City of Ryde Council (“Ryde Council”) is concerned about the increase in housing density in its local government area facilitated by various policies of the NSW State Government. One particular policy of concern is the State Government’s amendments of environmental planning instruments to make certain types of medium density housing complying development. The primary environmental planning instrument that was amended was State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (“Codes SEPP”). Other environmental planning instruments that were amended were around 20 local environmental plans, including Ryde Local Environmental Plan 2014 (“Ryde LEP”).

2. Ryde Council fears that the policy will allow medium density housing on land in residential zones where previously it would not have been permissible.

3. Ryde Council, by judicial review proceedings, has challenged the validity of the State Government’s environmental planning instruments that have implemented the medium density housing policy, being State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Medium Density Housing) 2017 published on 6 April 2018 (“the Amending SEPP”) and subsequent amendments to the Amending SEPP by the State Environment Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Medium Density Housing) Amendment 2018 published on 18 May 2018 (“the Amending SEPP Amendment”) and the State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Medium Density Housing) Further Amendment 2018 published on 5 July 2018 (“the Amending SEPP Further Amendment”).

4. The basis of challenge is that the decision of the Secretary of the Department of Planning and Environment under s 34A(2) of the Environmental Planning and Assessment Act 1979 (“EPA Act”) not to consult with the Chief Executive of the Office of Environment and Heritage (“OEH”) concerning the Amending SEPP miscarried in law. Section 34A(2) provides that:

“Before an environmental planning instrument is made, the relevant authority must consult with the Chief Executive of the Office of Environment and Heritage if, in the opinion of the relevant authority, critical habitat or threatened species, populations or ecological communities, or their habitats, will or may be adversely affected by the proposed instrument.”

5. In the case of a proposed State environmental planning policy, the “relevant authority” is the Secretary of the Department of Planning and Environment (s 34A(1)(a) of the EPA Act).

6. The Secretary formed the opinion, first on 29 September 2016 and again on 8 December 2017, that consultation with OEH was not required because the proposed Amending SEPP will not or may not adversely affect critical habitat or threatened species, populations or ecological communities, or their habitats.

7. Ryde Council contended that the Secretary erred in law in forming this opinion by:

1. misconstruing cll 1.17A and 1.19 of the Codes SEPP, and in particular cl 1.17A(1)(e) by proceeding on the basis that it precluded “complying development” wherever threatened species, populations or ecological communities, or their habitats, occur;

2. failing to take due (i.e. legally accurate) account of mandatory relevant considerations, being the matters identified in s 34A(2) of the EPA Act;

3. making a legally unreasonable decision given that there was no logical basis for concluding that cl 1.17A(1)(e) avoided adverse effects on threatened species, populations or ecological communities, or their habitats.

8. Ryde Council contended that the Secretary’s non-compliance with s 34A(2) of the EPA Act results in the invalidity of the Amending SEPP.

The Secretary’s decision not to consult

9. The Secretary’s first decision not to consult with OEH was made on 29 September 2016. It was based on a briefing note signed by Ms Alison Frame, Deputy Secretary, Policy and Strategy of the Department of Planning and Environment. The briefing note specifically addressed the issue under s 34A of the EPA Act of whether to consult with OEH on the proposed Amending SEPP. The purpose of the briefing note was stated to be:

“To seek the Secretary’s agreement that a proposed amendment to the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (the State Policy) does not require consultation with the Chief Executive of the Office of Environment and Heritage or Director General of the Department of Primary Industries under section 34A of the Environmental Planning and Assessment Act 1979 (the Act).”

10. The briefing note recommended that the Secretary:

“- notes the Department’s intention to publicly exhibit a proposed amendment to the State Policy to allow certain medium density housing to be carried out as complying development, subject to the Minister’s approval.

- form the opinion under section 34A and 5C of the Act that the draft amendment to the State Policy will not adversely affect threatened species, populations or ecological communities, or their habitats (including fish and marine vegetation) and accordingly that consultation under the section is not required with the Chief Executive of the Office of Environment and Heritage or the Secretary of the Department of Primary Industries.”

11. The briefing note explained, in a section headed “Current Position”, the proposal for the Amending SEPP to permit low rise medium density housing as complying development. The briefing note referred to an Explanation of Intended Effect (“EIE”) which detailed the proposed amendments to the Codes SEPP and attached the EIE (at Tab A).

12. The attached EIE was entitled “The ‘Missing Middle’ – Medium density housing design in NSW”. The EIE stated that it had been prepared for the purposes of s 38 of the EPA Act, which required the Minister, before recommending the making of an environmental planning instrument by the Governor, to take such steps, if any, as the Minister considers appropriate or necessary to publicise an explanation of the intended effect of the proposed instrument and to seek and consider submissions from the public on the matter. The EIE stated that it:

“forms an explanation of the intended effect of the proposed amendments to the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (the State Policy) and the Standard Instrument (Local Environmental Plan) (SI SEPP). The proposed amendments will introduce a new ‘Medium Density Housing Code’ into the State Policy and introduce new definitions into the SI SEPP to support the new Code.

The new Code will:

- Provide an efficient mode of delivery for low rise medium density housing

- Remove existing obstacles to deliver this form of housing

- Provide a variety of housing choice across NSW in areas that are zoned for medium density housing.”

13. The EIE explained that the Codes SEPP “provides planning guidance for the fast tracked, combined planning and building approval of one and two storey dwelling houses under the combined development pathway”, but not for certain medium density development types. The EIE stated that:

“A policy gap exists in providing design guidance and faster approval pathway for medium density housing types, including low rise examples such as dual occupancies, manor homes, town houses and terrace houses. This policy gap is known as the ‘Missing Middle’.”

14. The purpose of the amending SEPP was to address this “Missing Middle”.

15. In section 1.3 on the proposed medium density development types, the EIE stated that it was proposed to rationalise the terms for medium density housing types within the Standard Instrument, by amending the definition of “multi dwelling housing” and adding two new terms and definitions of “manor house” and “multi dwelling housing (terraces)” to the Dictionary to the Standard Instrument. The EIE stated that these proposed development types will be made complying development under the Codes SEPP:

“The proposed changes to the State Policy look to enable medium density dwelling types as complying development where it is permissible under the council local controls.

The proposed medium density housing is intended to be of the same scale as a dwelling house that can be currently carried out as complying development under the current General Housing Code. (For example a dwelling house carried out under the General Housing Code will be of similar scale to a terrace house proposed under these changes, and a manor house containing 3 or 4 dwellings will be of similar scale to dwelling house carried out under the General Housing Code.

The development proposed generally has significant similarities with a single dwelling house in that:

- Each dwelling has a frontage to a street

- Each dwelling has a front and rear setback

- Private open space is typically located at ground level.”

16. In section 1.5 on permissibility, the EIE noted that cl 1.18 of the Codes SEPP would apply to the proposed medium density development types. Clause 1.18(1)(b) provides that, in order to be complying development, the development must be permissible with consent under an environmental planning instrument applying to the land on which the development is to be carried out. The EIE explained that:

“The development type must be permissible on the subject land to be carried out as complying development.

The only exception to this is the manor house. It is proposed to amend the Standard Instrument LEP to add the manor house, which is currently not a defined term.

As a new development type, to enable it across NSW it is proposed to allow a manor house as complying development on any land where multi dwelling housing or a residential flat building is permitted.

Further it is proposed to restrict complying development to R1, R2 and R3 and RU5 land use zones. R4 zoned land is excluded as typically large scale residential flat buildings are anticipated on this land.

All other provisions under cl 1.17, 1.17A and 1.19 of the State Policy would also apply to the proposed medium density development type.

Consistent with development specified for the General Housing Code, the proposed complying development cannot be carried out in:

- heritage conservation areas or draft heritage conservation areas

- heritage items or draft heritage items

- land reserved for public purpose

- environmentally sensitive areas

- all other areas listed in 1.19(1) and (2) of the State Policy.”

17. In section 3.2 on structure, the EIE noted that “the proposed complying development standards are proposed to be included in a new Medium Density Housing Code which will be included in the State Policy”. The proposed development standards for each proposed medium density development type were detailed in the following subsections, including subsection 3.4 for multi dwelling housing (terraces) and subsection 3.5 for manor house and dual occupancy.

18. These matters discussed in the EIE were summarised in the briefing note. The briefing note stated:   

“Medium density housing will only be allowed as complying development where it is permitted in the relevant zone and also meets the development standards in the Medium Density Housing Code.”

19. The development standards in the Medium Density Housing Code, inserted by the proposed amending SEPP, require that the design of the relevant medium density housing types be consistent with the relevant design criteria in the Medium Density Design Guide. The briefing note attached the Medium Density Design Guide (at Tab B).

20. The briefing note stated that “it is proposed that rationalising a number of terms along the medium density housing spectrum in the Standard Instrument will assist understanding”. The reference to the Standard Instrument was a reference to the Standard Instrument prescribed by Standard Instrument (Local Environmental Plans) Order 2006 (“Standard Instrument”). The briefing note stated that the definition in the Standard Instrument Dictionary to “multi dwelling housing” would be amended and new terms of “manor house” and “multi dwelling house (terraces)” would be added to the Standard Instrument Dictionary.

21. With that background on the proposal, the briefing note addressed the issue of consultation under s 34A of the EPA Act, stating:

“Under sections 5C and 34A of the Act, the Secretary must consult with the Chief Executive of the Office of Environment and Heritage or Director General of the Department of Primary Industries before preparing a proposed SEPP if, in the opinion of the Director General, a critical habitat or threatened species, populations or ecological communities, or their habitats (as relevant to the agency’s area of responsibility) will or may be adversely be affected by a proposed SEPP.

It is the Department’s view that consultation under sections 5C and 34A of the Act is not required as the amendment does not propose any changes to the current provisions within the State Policy which ensure that critical habitat or threatened species, populations or ecological communities or their habitats are not adversely affected by development carried out under the State Policy. Full consideration of the requirements under sections 5C and 34A are provided at Tab C.”

22. Tab C was a separate document headed “Consideration of the requirements to consult under sections 5C and 34A of the Environmental Planning and Assessment Act 1979”. The document commenced with a summary of the requirements of s 34A and s 5C of the EPA Act:

“Under sections 34A and 5C of the Environmental Planning and Assessment Act 1979 (the Act), the Secretary must consult with the Chief Executive of the Office of Environment and Heritage or Director General of the Department of Primary Industries before preparing a proposed State Environmental Planning Policy (SEPP) if, in the opinion of the Secretary, a critical habitat or threatened species, populations or ecological communities, or their habitats, (as relevant to the agency’s area of responsibility) will or may be adversely be affected by a proposed SEPP.”

23. In the section headed “Consideration” the document considered whether the Secretary should consult with OEH on the proposed amending SEPP:

“- The provisions of the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (the State Policy) sets a consistent State-wide approach for streamlined development consents (complying development) and development that does not require planning or building approval (exempt development).

- The development standards in the State Policy manage the location, scale and form of development on a site, to protect the amenity of surrounding development.

- Under section 76 of the Act, exempt development cannot be carried out in the critical habitat of an endangered species, population or ecological community (identified under the Threatened Species Conservation Act 1995 or the Fisheries Management Act 1994) or a wilderness area (identified under the Wilderness Act 1987).

- Additional development standards within the State Policy ensure that development is of minimal environmental impact. For example, exempt development such as driveways, sheds and farm buildings are not permitted on lands in a foreshore area or in an environmentally sensitive area, which includes land identified as being a critical habitat under the Threatened Species Conservation Act 1995 or Part 7A of the Fisheries Management Act 1994.

- Complying development for new buildings such as a dwelling house or industrial building, can only be carried out if it is a permissible use under the relevant Local Environmental Plan. Complying development is not permitted on land which is identified as an environmentally sensitive area, which includes land identified as being a critical habitat under the Threatened Species Conservation Act 1995 or Part 7A of the Fisheries Management Act 1994.

- For the purposes of the State Policy, “environmentally sensitive area” is defined as the following:

- the coastal waters of the State,

- a coastal lake,

- land to which State Environmental Planning Policy No 14-Coastal Wetlands or State Environmental Planning Policy No 26-Littoral Rainforests applies,

- land reserved as an aquatic reserve under the Fisheries Management Act 1994 or as a marine park under the Marine Parks Act 1997,

- land within a wetland of international significance declared under the Ramsar Convention on Wetlands or within a World Heritage Area declared under the World Heritage Convention,

- land identified in this or any other environmental planning instrument as being of high Aboriginal cultural significant or high biodiversity significance,

- land reserved under the National Parks and Wildlife Act 1974 or land to which Part 11 of that Act applies,

- land reserved or dedicated under the Crown Lands Act 1989 for the preservation of flora, fauna, geological formations or for other environmental protection purposes,

- land identified as being critical habitat under the Threatened Species Conservation Act 1995 or Part 7A of the Fisheries Management Act 1994.

- The draft amendment also does not propose any changes to the current provisions within the State Policy which ensure that exempt and complying development does not adversely affect critical habitat or threatened species, populations or ecological communities, or their habitats, or marine vegetation.

- The LEP will still identify where medium density housing is permissible. However it is proposed to amend several definitions of medium density housing in the Standard Instrument LEP. The definition of ‘multi dwelling housing’ will be amended to mean “3 or more dwellings (whether attached or detached) on one lot of land, each with direct access to the dwelling and private open space at ground level, but does not include a residential flat building”.

- The following new terms will be added to the Dictionary:

- manor house means a building containing 3 or 4 dwellings on one lot of land, where:

(a) each dwelling is attached to another dwelling by a common wall and/or floor; and

(b) the building contains no more than 2 storeys, excluding any basement storey.

- multi dwelling housing (terraces) means 3 or more dwellings (whether attached or detached) on one lot of land, each dwelling has a frontage to a public road and no other dwellings above or below.”

24. The document concluded with the recommendation:

“It is recommended that the Secretary forms the opinion that consultation with the Chief Executive of the Office of Environment and Heritage or Director General of the Department of Primary Industries is not required under sections 5C and 34A of the Act.”

25. The Secretary’s second decision not to consult was made on 8 December 2017. It was based on a briefing note written by Ms Elizabeth Kinkade, Executive Director, Planning Policy and Ms Alison Frame, Deputy Secretary, Policy, Strategy and Governance and signed by Ms Kinkade. The first briefing note and the Secretary’s first decision concerned the proposed Amending SEPP. In order to implement the Amending SEPP, there needed to be consequential amendments to the Standard Instrument and to 20 local environmental plans to change or add definitions of the proposed medium density development types and to ensure that these development types were permitted in medium density zones. This was the purpose of the second briefing note and the Secretary’s second decision. The second briefing note and the Secretary’s second decision concerned the consequential amendments to the Standard Instrument and various local environmental plans.

26. The second briefing note was headed “Section 34A – Consequential Amendments to the Medium Density Housing Code”. In a form of executive summary, the second briefing note described its purpose and the analysis in the briefing note:

“Purpose: To seek the Secretary’s agreement that the consequential amendments included in the State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Medium Density Housing) 2017 (Amending Instrument) do not require consultation with the Chief Executive of the Office of Environment and Heritage or Director General of the Department of Industry, Skills and Regional Development under Section 34A of the Environmental Planning and Assessment Act (EP&A Act).

Analysis: The proposed Medium Density Housing Code and proposed amendments to the Standard Instrument Local Environmental (LEP) Order, will introduce two new medium density development types, manor houses and multi dwelling houses (terraces). Consequential amendments to 20 LEPs are required to add the two new definitions, to ensure these development types are permitted in medium density zones.

It is the Department’s view that consultation under section 34A of the EP&A Act is not required as the consequential amendments do not propose any changes to the current provisions within the Codes SEPP, which ensure that critical habitat or threatened species, populations or ecological communities or their habitats are not adversely affected by development carried out under the Codes SEPP. Full consideration of the requirements under section 34A is provided in Attachment A.”

27. The second briefing note recommended that the Secretary:

“Form the opinion not to consult with the Chief Executive of the Office of Environment and Heritage or Secretary of the Department of Primary Industries (DPI), under Section 34A of the EP&A Act as the consequential amendments in the Amending Instrument will not adversely affect critical habitat or threatened species, populations or ecological communities or their habitats (including fish and marine vegetation).”

28. The second briefing note then expanded on the key reasons and supporting analysis for the recommendation not to consult with OEH. Key reasons were stated to be:

“The proposed Medium Density House Code has been developed to meet the needs of the State’s growing population, to improve housing affordability and provide for more housing diversity in NSW. Under the Code, dual occupancies, manor houses and multi dwelling housing (terraces) will be able to be carried out as complying development where the use is permitted under the relevant council Local Environmental Plan (LEP) and where the development meets the relevant development standards. This will provide more housing options that are affordable to suit a range of lifestyles and changing demographics.

Manor houses and multi dwelling housing (terraces) are new development types in the Medium Density Housing Code. A new definition for these development types will be inserted in the Standard Instrument LEP.

In order to permit manor houses and multi dwelling housing (terraces) in all zones where medium density housing is permitted, consequential amendments to various LEPs will be required. As manor houses will be defined as a type of residential flat building they will be permitted where residential flat buildings are permitted (apart from high density – R4 zones). The consequential amendments will allow manor houses and multi dwelling houses (terraces) as complying development in LEPs that are Standard Instruments, where the development type is currently not expressly permitted but where residential flat buildings and multi dwelling housing is permitted in a Council LEP. These consequential amendments will result in amendments to 20 LEPs in NSW (refer to analysis of all LEPs in Attachment B).

29. The supporting analysis was stated to be:

“Section 34A consultation

Section 34A of the EP&A Act requires the Secretary to consult with OEH and the DPI before a SEPP is made if, in the opinion of the Secretary, critical habitat or threatened species, populations or ecological communities may be adversely affected by the Amending Instruments.

The Secretary has previously approved that no consultation was required in accordance with Section 34A of the EP&A Act for the proposed Medium Density Housing Code and Standard Instrument (Local Environmental Plans) Amendment (Low Rise Medium Density Housing) Order 2006 (qA395507).

It is the Department’s view that the consultation under section 34A of the Act is not required as the amendment to include a new Medium Density Housing Code including consequential amendments, does not propose any changes to the current provisions within the Codes SEPP which ensure that critical habitat or threatened species populations or ecological communities or their habitats are not adversely affected by development carried out under the Codes SEPP.

Under the proposed Medium Density Housing Code, medium density developments will only be allowed in areas zoned for medium density under the Council’s LEP and threatened species issues will have been addressed at rezoning stage. Complying development is not permitted in ecologically sensitive areas or on environmentally sensitive lands, which includes land reserved under the National Parks and Wildlife Act 1974 and land identified as being critical habitat under the Threatened Species Conservation Act 1995.

The Department considers that the proposed consequential amendments do not adversely affect critical habitat or threatened species, populations or ecological communities, or their habitats. Full consideration of the requirements under Section 34A is provided at Attachment A.”

30. Attachment A to the second briefing note was headed “Consideration of the requirement to consult under section 34A of the Environmental Planning and Assessment Act 1979”. It was similar in form and content to Tab C attached to the first briefing note. It started with a summary of the requirements of the Act:

“Under section 34A of the Environmental Planning and Assessment Act 1979 (EP&A Act), the Secretary must consult with the Chief Executive of the Office of Environment and Heritage or Secretary of the Department of Industry, Skills and Regional Development before preparing a proposed SEPP if, in the opinion of the Secretary, a critical habitat or threatened species, populations or ecological communities, or their habitats, (as relevant to the agency’s area of responsibility) will or may be adversely affected by the proposed SEPP.”

31. Under the heading “Consideration” Attachment A stated:

“- The provisions of the State and Environmental Planning Policy (Exempt and Complying Development) 2008 (Codes SEPP) for exempt and complying development sets a consistent State-wide approach for development that needs no planning or building approval (exempt development) and streamlined development consents (complying development).

- Both exempt and complying development must comply with specific development standards. The development standards manage the location, scale and form of development on a site. This provides certainty about what type of development is allowed under the Codes SEPP. To be exempt or complying development, the development must comply 100% with the development standards.

- Under section 76 of the EP&A Act exempt development cannot be carried out in critical habitat of an endangered species, population or ecological community (identified under the Threatened Species Conservation Act 1995 or the Fisheries Management Act 1994), and cannot be carried out in a wilderness area (identified under the Wilderness Act 1987).

- Under clause 1.17A of the Codes SEPP, complying development cannot be carried out on land that is identified as environmentally sensitive land. Environmentally sensitive land is defined in the Codes SEPP as:

- the coastal waters of the State,

- a coastal lake,

- land to which State Environmental Planning Policy No 14-Coastal Wetlands or State Environmental Planning Policy No 26-Littoral Rainforests applies,

- land reserved as an aquatic reserve under the Fisheries Management Act 1994 or as a marine park under the Marine Parks Act 1997,

- land within a wetland of international significance declared under the Ramsar Convention on Wetlands or within a World Heritage area declared under the World Heritage Convention,

- land within 100m of land to which paragraph (c), (d) or (e) applies,

- land identified in this or any other environmental planning instrument as being of high Aboriginal cultural significant or high biodiversity significance,

- land reserved under the National Parks and Wildlife Act 1974 or land to which Part 11 of that Act applies,

- land reserved or dedicated under the Crown Lands Act 1989 for the preservation of flora, fauna, geological formations or for other environmental protection purposes,

- land identified as being critical habitat under the Threatened Species Conservation Act 1995 or Part 7A of the Fisheries Management Act 1994.

- Manor houses and multi dwelling houses (terraces) are newly defined terms in the Medium Density Housing Code and will need to be included into LEPs across the State to allow for manor houses and multi dwelling housing (terraces) to be carried out as complying development under the Code.

- The Standard Instrument (Local Environmental Plans) Amendment (Low Rise Medium Density Housing) Order 2006 (Amending Order) will be amended to introduce two new definitions into the Standard Instrument Principal LEP for manor houses and multi dwelling housing (terraces).

- The consequential amendments will allow manor houses and multi dwelling houses (terraces) as complying development in LEPs that are Standard Instruments, where the development type is currently not been expressly permitted.

- Under clause 1.19 of the Codes SEPP, complying development under the Housing Code or the Rural Housing Code cannot be carried out on land identified by an environmental planning instrument as being within an ecologically sensitive area or on environmental sensitive land.

- The restrictions under clauses 1.17A and 1.19 will also apply to the new Medium Density Housing Code.

- Additional development standards for both exempt and complying development also ensure that development is of minimal environmental impact. For example, exempt development such as driveways, sheds and farm buildings are not permitted on land in a foreshore area or in an environmentally sensitive area.

- Complying development for new buildings such as dwelling house or industrial building is only permitted [in] where a council permits the development type in the zone under its Local Environmental Plan.

- The proposed SEPP does not make any changes to the provisions that currently ensure that exempt and complying development does not adversely affect critical habitat or threatened species, populations or ecological communities, or their habitats, or marine vegetation.”

32. Attachment A concluded with the recommendation:

“It is therefore recommended that the Secretary form the opinion that the consultation with the Chief Executive of the Office of Environment and Heritage and the Secretary of the Department of Primary Industries is not required under section 34A of the EP&A Act.”

Ryde Council’s argument that the Secretary’s consideration of s34A miscarried

33. Ryde Council’s argument focused on the statements in:

1. the first briefing note that consultation was not required because the proposed Amending SEPP “does not propose any changes to the current provisions within the State Policy which ensure that critical habitat or threatened species, populations or ecological communities or their habitats are not adversely affected by development carried out under the State Policy” (and the similar statement in Tab C attached to the first briefing note); and

2. the second briefing note that consultation was not required “as the amendment to include a new Medium Density Housing Code including consequential amendments, does not propose any changes to the current provisions within the Codes SEPP which ensure that critical habitat or threatened species, populations or ecological communities or their habitats are not adversely affected by a development carried out under the Codes SEPP” (and similar statement in Attachment A to the second briefing note).

34. Ryde Council submitted that these statements are legally erroneous. The current provisions in the Codes SEPP do not “ensure” that threatened species, populations or ecological communities, or their habitats, are not adversely affected by development carried out under the Codes SEPP, but only that “critical habitat” is not adversely affected by development carried out under the Codes SEPP.

35. Clause 1.17A(1) of the Codes SEPP provides that in order to be complying development, the development must not:

“(b)  be on land that is critical habitat,

…

(e) except as otherwise provided by this Policy, be on land that is within an environmentally sensitive area.”

36. The concepts of “critical habitat” and “environmentally sensitive area” are defined. As at 29 September 2016, when the Secretary made the first decision not to consult with OEH, “critical habitat” was defined in s 4(1) of the EPA Act to have the same meaning as in the Threatened Species Conservation Act 1995 (“TSC Act”) or Part 7A of the Fisheries Management Act 1994 (“FM Act”). The TSC Act defined “critical habitat” as “habitat declared to be critical habitat under Part 3” of the TSC Act. Section 220B of the FM Act defined “critical habitat” as “habitat declared to be critical habitat under Division 3” of Part 7A. At that time, the only areas declared “critical habitat” under those Acts were the habitat for Gould’s Petrel, the habitat for the little penguin population in Sydney’s north harbour, the habitat for the Mitchell’s Rainforest Snail in Stotts Island Nature Reserve and the habitat for the Wollemi Pine.

37. As at 8 December 2017, when the Secretary made the second decision not to consult with OEH, the TSC Act had been repealed by Sch 10 of the Biodiversity Conservation Act 2016 (“BC Act”). Schedule 10 also deleted the definition of “critical habitat” from the EPA Act. The result was that, as at 8 December 2017, that term was not defined in the EPA Act. However, the EPA Act was clearly intended to be read with the BC Act and the FM Act. Section 5AA (now s 1.17) of the EPA Act provided that the Act has effect subject to the BC Act, Part 7 and the FM Act, Part 7A. “Critical habitat” should be construed as referring to “areas of outstanding biodiversity value” as declared under Part 3 of the BC Act. The latter concept under the BC Act was intended to replace the former under the TSC Act: see the transitional provisions in the BC Act (as made), Schedule 9. “Critical habitat” also included areas declared critical habitat under the FM Act, Part 7A.

38. As at 29 September 2016 and 8 December 2017, “environmentally sensitive area” was defined under cl 1.5 of the Codes SEPP to mean:

“environmentally sensitive area means any of the following:

(a) the coastal waters of the State,

(b) a coastal lake,

(c) land to which State Environmental Planning Policy No 14-Coastal Wetlands or State Environmental Planning Policy No 26-Littoral Rainforests applies,

(d) land reserved as an aquatic reserve under the Fisheries Management Act 1994 or as a marine park under the Marine Parks Act 1997,

(e) land within a wetland of international significance declared under the Ramsar Convention on Wetlands or within a World heritage area declared under the World Heritage Convention,

(f) land within 100m of land to which paragraph (c), (d) or (e) applies,

(g) land identified in this or any other environmental planning instrument as being of high Aboriginal cultural significance or high biodiversity significance,

(h) land reserved under the National Parks and Wildlife Act 1974 or land to which Part 11 of that Act applies,

(i) land reserved or dedicated under the Crown Lands Act 1989 for the preservation of flora, fauna, geological formations or for other environmental protection purposes,

(j) land identified as being critical habitat under the Threatened Species Conservation Act 1995 or Part 7A of the Fisheries Management Act 1994.”

39. The reference in paragraph (j) to “critical habitat” is to critical habitat as defined in the TSC Act and FM Act and later to areas of outstanding biodiversity value as declared under Part 3 of the BC Act.

40. Ryde Council submitted that neither the concept of “critical habitat” nor the concept of “environmentally sensitive area” included in terms “threatened species, populations or ecological communities, or their habitats”. Accordingly, cl 1.17A of the Codes SEPP did not operate to exclude as complying development, development carried out on land on which threatened species, populations or ecological communities, or their habitats, occur.

39. Clause 1.19 of the Codes SEPP provides that in order to be complying development specified for the General Housing Code or the Rural Housing Code, the development must not be carried out on:

“(e) land identified by an environmental planning instrument as being:

…

(iii) within an ecologically sensitive area, or

(iv) environmentally sensitive land…”

42. Although “environmentally sensitive area” is defined in cl 1.15 of the Codes SEPP, neither “ecologically sensitive area” nor “environmentally sensitive land” are defined in the Codes SEPP or the EPA Act. Ryde Council submitted that a possible construction is that “environmentally sensitive land” has the same meaning as “environmentally sensitive area” defined in cl 1.15, but if it does then the concept would only include “critical habitat” and not “threatened species, populations or ecological communities, or their habitats”.

43. The upshot is, Ryde Council submitted, that the current provisions of the Codes SEPP at the time of the Secretary’s decisions at best only ensured that “critical habitat” was not affected adversely by development carried out under the Codes SEPP, and not “threatened species, populations or ecological communities, or their habitats”. The briefing notes, therefore, summarised in a legally inaccurate manner the effect of the current provisions of the Codes SEPP.

44. Ryde Council submitted that the second briefing note was legally inaccurate in other ways. The second briefing note stated that:

“Under the proposed Medium Density Housing Code, medium density developments will only be allowed in areas zoned for medium density under the Council’s LEP and threatened species issues will have been addressed at rezoning stage.”

45. Ryde Council submitted that this statement reveals four errors:

“First, the statement refers to the assessment of “threatened species” only, when s 34A referred also to threatened populations and ecological communities and their habitat.

Secondly, there was no evidence before the Secretary to support that conclusion. The statement in the second briefing note reflects a mere assumption on the Secretary’s part that those issues “will have been addressed” at the rezoning stage.

Thirdly, even if consideration of “threatened species” issues did take place at the “rezoning stage”, that process asks the wrong question for s 34A purposes. Section 34A required consideration of whether the proposed amendments to the Codes SEPP “will or may adversely affect” critical habitat (etc). Consideration had to be given to the impact of the particular developments that were contemplated by those amendments, such as manor houses. Any “threatened species” impact assessment at the rezoning stage would have been conducted at a higher level of generality, assessing the impacts of zoning a particular area “medium density”.

Fourthly, the Briefing Note proceeds on the basis that the medium density developments (including manor houses) would only be permitted in areas zoned for medium density housing under the LEPs. However the effect of the amending SEPP is to permit manor houses in Zone R2, which is Low Density Residential…Manor houses are a type of RFB, and RFBs are not permissible in the R2 Zone under the Ryde LEP. So it could not be said that the impacts of this type of development in the R2 Zone would have been assessed during rezoning.”

46. Developing the fourth argument in oral address, Ryde Council submitted that it was incorrect to state that medium density developments will only be allowed in areas zoned for medium density under the Council’s LEPs as the Amending SEPP allows manor houses, a form of residential flat building, in the R2 Low Density Residential Zone.

47. Ryde Council submitted that these legal inaccuracies in the briefing notes not only caused the Secretary to misdirect herself in forming the opinions not to consult under s 34A of the EPA Act, but they also caused her consideration of the relevant matters under s 34A to miscarry and her opinions under s 34A to be manifestly unreasonable.

The State Government’s argument that the Secretary’s consideration of s 34A did not miscarry

48. The State Government contended that, on a proper reading of the briefing notes and attached information, no legal error is revealed. It submitted that Ryde Council’s:

“assertion of error relies on a strained reading of the decision minutes considered by the Secretary when making the First and Second Decisions, and a failure to appreciate the context in which the Medium Density Code came to be added to the Codes SEPP. When those matters are brought to account, no error is revealed in the First Decision or the Second Decision. The applicant’s assertion is ‘minute analysis’ at its worst: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272.”

49. The State Government submitted that the statements in the briefing notes that the current provisions of the Codes SEPP “ensure” that critical habitat or threatened species, populations or ecological communities, or their habitats, are not adversely affected by development carried out under the Codes SEPP need to be read in three contexts: first, the current provisions of the Codes SEPP; secondly, the analysis in the body of the briefing notes; and thirdly, the information and discussion in the documents attached to the briefing notes.

50. Starting with the current provisions of the Codes SEPP, the State Government submitted that the Codes SEPP affords three layers of protection for critical habitat or threatened species, populations or ecological communities, or their habitats.

51. First, at the zoning level, development cannot be “complying development” for the purposes of the Codes SEPP unless it is permissible, with consent, under an environmental planning instrument applying to the land on which the development is carried out: cl 1.18(1)(b). That requirement applies equally to the Medium Density Housing Code. Both the General Housing Code and the Medium Density Housing Code are limited in their application to particular zoning areas. The General Housing Code applies to zones R1, R2, R3, R4 and RU5. The Medium Density Housing Code applies to zones R1, R2, R3 and RU5. Ryde Council submitted that this means that land that is environmentally sensitive is able to be protected if it is specified as “Zone E2 Environmental Conservation”, such as has been done under the Ryde LEP. The General Housing Code and the Medium Density Housing Code can also be “disapplied” in respect of a particular area by omitting the particular form of development as development that is permissible with consent in a particular zone (subject to limitations imposed by s 3.20(2) and (4) of the EPA Act and by the Standard Instrument (Local Environmental Plans) Order 2006, cll 4, 5 and 6).

52. Secondly, cll 1.17A and 1.19 of the Codes SEPP provide that, to be complying development, the development cannot be carried out on various types of land identified as having some environmental value. The State Government accepted that, in express terms, cll 1.17A and 1.19 of the Codes SEPP only exclude as complying development, development on land which is critical habitat and not on land on which threatened species, populations or ecological communities, or their habitats, occur. Nevertheless, those provisions of the Codes SEPP exclude other categories of land on which threatened species, populations or ecological communities, or their habitats, might occur.

53. Clause 1.17A(1) provides that to be complying development, the development must not be on land that is critical habitat (cl 1.17A(1)(b)) but also on land that is or is part of a wilderness area (within the meaning of the Wilderness Act 1987) (cl 1.17A(1)(c)), that is identified as an item of environmental heritage by an environmental planning instrument or on which is located an item that is so identified (cl 1.17A(1)(d)(iii)) or that is within an environmentally sensitive area (cl 1.17A(1)(e)). An “environmentally sensitive area” is defined to include wetlands of State or international significance (paragraphs (c) and (e)), land identified in an environmental planning instrument to be of high biodiversity significance (paragraph (g)), land reserved under the National Parks and Wildlife Act 1974 or land to which Part 11 of that Act applies (paragraph (h)), and land reserved or dedicated under the Crown Lands Act 1989 for the preservation of flora, fauna, geological formations or for other environment protection purposes (paragraph (i)).

54. Threatened species, populations or ecological communities, or their habitats, might occur in these wilderness areas, environmental heritage areas, and environmentally sensitive areas. By cl 1.17A, development on these wilderness areas, environmental heritage areas and environmentally sensitive areas cannot be complying development.

55. Clause 1.19 of the Codes SEPP provides that to be complying development specified for the General Housing Code or the Rural Housing Code development must not be carried out on a variety of identified lands that protect environmental values, including land reserved for a public purpose by an environmental planning instrument (cl 1.19(1)(b)), land subject to a biobanking agreement under Part 7A of the TSC Act or a property vegetation plan approved under the Native Vegetation Act 2003 (cl 1.19(1)(d)), land identified by an environmental planning instrument as being within a buffer area, a river front area, an ecologically sensitive area, environmentally sensitive land or a protected area (cl 1.19(1)(e)) and land in a foreshore area (cl 1.19(1)(g)). Threatened species, populations or ecological communities, or their habitats, might occur in these areas. By cl 1.19(1), development of these areas cannot be complying development.

56. Thirdly, to be complying development it is necessary for the development to meet the standards specified for that development in the relevant development code: cl 1.17(1) of the Codes SEPP. Under the General Housing Code, those standards specifically contemplated that a permit or development consent may be required for the removal or pruning of certain trees and regulate the required setback from “protected trees”: see now cl 3.33 and also the definition of “protected tree” in cl 1.5. Substantially similar provisions appear in the Medium Density Housing Code: cl 3B.61. The Environmental Planning and Assessment Regulation 2000 requires information regarding these matters to be included with the application for a complying development certificate: cl 126(1) and cl 4(2)(b) of Schedule 1. Other standards dealing with matters such as minimum setback from roads and boundaries and minimum lot size also regulate the effect of the construction of structures on the environment: see, in the current version of the Codes SEPP, cll 3.10 and 3B.24.

57. The State Government noted that the Amending SEPP and consequential amendments did not propose any changes to these current provisions of the Codes SEPP, which operate, in various ways, to protect critical habitat or threatened species, populations or ecological communities, or their habitats. The State Government submitted that the briefing notes were accurate in stating that the proposed Amending SEPP and consequential amendments do not propose any changes to the current provisions within the Codes SEPP.

58. In so far as the briefing notes summarised the effect of these current provisions of the Codes SEPP as being “to ensure that critical habitats or threatened species, populations or ecological communities, or their habitats, are not adversely affected by development carried out under the State Policy”, this should not be read as saying that the current provisions “guarantee” or “assure” that there will be no such adverse effect, but rather that the current provisions are directed to protecting critical habitat or threatened species, populations or ecological communities, or their habitats, from such effects. The State Government submitted that the statements in the briefing notes should not be construed as seeking to characterise the legal effect of all of the current provisions of the Codes SEPP. It would be a “large statement” to say that the current provisions of the Codes SEPP, taken together, ensure, in the sense of guarantee or assure, that no development undertaken under the Codes SEPP will adversely affect critical habitat or threatened species, populations or ecological communities, or their habitats. The State Government submitted that the departmental staff writing the briefing notes and the Secretary reading them should not be taken as having understood the current provisions of the Codes SEPP as having such legal effect.

59. The second context in which the State Government submitted that the statements in the briefing notes about the current provisions of the SEPP ensuring no adverse effect need to be construed is the analysis in the body of each briefing note. The State Government submitted that the briefing notes need to be read as a whole and considered fairly: Minister for Immigration and Ethnic Affairs v Wu Shan Liang at 291.

60. The first briefing note correctly noted that development can only be complying development if it is permitted in the relevant zone and meets the development standards in the applicable code. Tab C to the first briefing note again noted that complying development can only be carried out if it is a permissible use under the relevant local environmental plan. Tab C pointed out that complying development is not permitted on land which is identified as an “environmentally sensitive area” (evidently a reference to cl 1.17A(1)(e) of the Codes SEPP). The definition of “environmentally sensitive area” in cl 1.5 of the Codes SEPP was quoted. Tab C repeated that the draft amendment does not propose any changes to the current provisions of the Codes SEPP.

61. The second briefing note recorded that complying development is not permitted in “ecologically sensitive areas or on environmentally sensitive lands which includes land reserved under the National Parks and Wildlife Act 1974 and land identified as being critical habitat under the Threatened Species Conservation Act 1995”.

62. Attachment A to the second briefing note recorded that complying development is only permitted where a council permits the development type in the zone under its local environmental plan. Attachment A stated that the consequential amendments will allow manor houses and multi dwelling houses (terraces) as complying development in local environmental plans that are Standard Instruments, where the development type has not currently been expressly permitted.

63. Attachment A recorded that complying development must comply with specific development standards, which “manage the location, scale and form of development on a site”. Attachment A noted that development standards for both exempt and complying development also ensure that development is of minimal environmental impact.

64. Attachment A referred expressly to cl 1.17A of the Codes SEPP and noted that complying development cannot be carried out on land that is identified as “environmentally sensitive land”, instead of the term “environmentally sensitive area” that is used in cl 1.17A. Nevertheless the definition of the term “environmentally sensitive area” in the Codes SEPP was quoted in Attachment A.

65. Attachment A also referred expressly to cl 1.19 of the Codes SEPP and noted that “complying development under the Housing Code or the Rural Housing Code cannot be carried out on land identified by an environmental planning instrument as being within an ecologically sensitive area or on an environmentally sensitive land”.

66. Having referred expressly to cll 1.17A and 1.19 of the Codes SEPP, Attachment A stated that: “The restrictions under cl 1.17A and 1.19 will also apply to the Medium Density Housing Code”.

67. Attachment A stated that the proposed Amending SEPP “does not make any changes to the provisions that currently ensure that exempt or complying development does not adversely affect critical habitat or threatened species, populations or ecological communities, or their habitats, or marine vegetation.”

68. The State Government submitted that the analysis in the body of the briefing notes and in the attachments to each specifically considering the requirement to consult under s 34A of the EPA Act provide a fair summary of the current provisions of the Codes SEPP that operate to protect critical habitat or threatened species, populations or ecological communities, or their habitats. This analysis did not state that the current provisions guarantee or assure the protection from all adverse effects of critical habitat or threatened species, populations or ecological communities, or their habitats, but rather summarised the degree of protection that the current provisions afford. In the context of this analysis, the statements in the briefing notes about the current provisions of the Codes SEPP would not be construed as saying that the current provisions do ensure, in the sense of guarantee or assure, that critical habitat or threatened species, populations or ecological communities, or their habitats, are not adversely affected by development carried out under the Codes SEPP.

69. The third context in which the State Government submitted the statements in the briefing notes need to be considered is the discussion in the other attachments to the briefing notes. The first briefing note attached the EIE explaining the intended effect of the proposed Amending SEPP and the draft Medium Density Design Guide. Although the Secretary did not identify these documents as containing reasons for her first decision, the documents were expressly referred to in the first briefing note and were attached to it and they were available for the Secretary to read and consider. The EIE expressly noted that the proposed medium density housing types that constitute complying development under the Medium Density Housing Code are intended to be of the same scale as, and have significant similarities with, a dwelling house that can currently be carried out as complying development under the General Housing Code in the Codes SEPP. The EIE noted that, consistent with other complying development generally and complying development specified for the General Housing Code, proposed complying development cannot be carried out on land listed in cll 1.17A and 1.19 of the Codes SEPP, including various types of environmentally sensitive land. The EIE noted that, consistent with cl 1.18 of the Codes SEPP, the proposed complying development must be permissible with consent on land on which it is to be carried out. The new development type of manor house would be made permissible on any land where multi dwelling housing or a residential flat building is permitted.

70. The State Government submitted that this discussion in the EIE put into context the statement in the briefing note that the proposed Amending SEPP would not change the current provisions of the Codes SEPP. The proposed medium density housing under the Medium Density Housing Code will be similar in scale, location and built upon area as a dwelling house that can be carried out as complying development under the General Housing Code. The environmental impact of the proposed medium density housing is therefore likely to be similar to the environmental impact of dwelling houses.

71. The State Government submitted that, when viewed in these three contexts, the statements in the briefing notes involve no misunderstanding of the statutory scheme, which had been described, in the briefing notes and attachments, accurately and in some detail. The briefing notes were referring to the fact that the Codes SEPP contained a series of interrelated provisions that could be seen (as a whole) to be directed to possible adverse effects on the matters referred to in s 34A(2) of the EPA Act, which provisions were to be applied equally to the Medium Density Housing Code.

49. The reasoning that the Secretary should be taken to have adopted was not, as Ryde Council submitted, that the current provisions of the Codes SEPP obviated any possibility of adverse effects on the matters referred to in s 34A(2) of the EPA Act, but rather that the potential for such adverse effects to come to pass remain the same under the proposed amendments:

“that is, the Codes SEPP already provided for a similar approval process; in respect of structures of a similar ‘bulk and scale’ and associated development; and with the potential to be equally deleterious to the environment, including matters concerning threatened species. Given that state of affairs, the Secretary could readily conclude that the amendments made by the Amending SEPP were unlikely to affect the matters specified in s 34A(2) of the Act one way or the other.”

73. The State Government submitted that Ryde Council, rather than seeking to read the briefing notes as a whole and in context, has “cherry picked extracts to suit its case”. The State Government continued:

“Needless to say, that fails to abide by the well known statements of principle to the effect that a Court exercising a supervisory jurisdiction should not be concerned with looseness in the language or unhappy phrasing of the reasons of an administrative decision maker; and that 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: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 (Brennan CJ, Toohey, McHugh and Gummow JJ). That applies with particular force where (as here) one is dealing with a statement by an administrative officer which was not, and not intended to be, a statement of reasons for a decision that is a broad administrative evaluation rather than a jducial decision: Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173 at [25], (French CJ, Bell, Keane and Gordon JJ).

74. The State Government submitted that even if the Secretary’s first decision or second decision were to be infected by a legal error (which it disputed), any such error would not result in the invalidity of the Amending SEPP or subsequent SEPPs, by reason of the application of the principle in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, citing De Angelis v Pepping [2015] NSWCA 236 at [98]-[99] and Huntlee Pty Ltd v Sweetwater Action Group (2011) 185 LGERA 429; [2011] NSWCA 378 at [94].

75. The State Government submitted that any non-compliance with s 34A(2) of the EPA Act by the Secretary not consulting with OEH concerning the Amending SEPP did not have the consequence of invalidating the Amending SEPP. This is because there is no necessary nexus between any failure to consult under s 34A by the Secretary and the making of the Amending SEPP by the Governor under s 37 of the EPA Act. The State Government submitted that, as Sackville AJA noted in Huntlee Pty Ltd v Sweetwater Action Group at [95], the only legislative constraints upon the Governor making a SEPP in accordance with the advice of the Executive Council (see Interpretation Act 1987 s 14), are s 26 (now s 3.14) setting out the contents of an environmental planning instrument and the terms of s 37 (now s 3.29) of the EPA Act. The State Government submitted that these requirements were met. As they are the only requirements for validity, the Amending SEPP and subsequent SEPPs are valid.

Ryde Council’s response to the State Government’s argument

76. Ryde Council contested that the Secretary considered and adopted as her reasons the matters of context referred to by the State Government. The State Government’s reliance on other provisions of the Codes SEPP and material attached to the briefing notes was said to be an attempt to defend the Secretary’s decisions by reference to reasoning not disclosed in the briefing notes.

77. Identifying the reasons for a decision is a question of fact, citing Minister for Immigration and Citizenship v Khadgi (2010) 190 FCR 248; [2010] FCAFC 145 at [71]. Here, the State Government pleaded that the Secretary’s reasons for the two decisions were “those set out in the [respective] minute”: Amended response to summons, [15]. The reasons in the briefing notes are expressed in ordinary language and are clear. The amendments did not “propose any changes to the current provisions within the State Policy which ensure that exempt and complying development does not adversely affect critical habitat or threatened species, populations or ecological communities, or their habitats, or marine vegetation” (quoting from Tab C to the first briefing note). Ryde Council submitted that it is apparent from a fair reading of the reasons in context that this was thought to be because of the terms of cll 1.17A and 1.19 of the Codes SEPP. Ryde Council submitted that that fair reading is confirmed, as a matter of fact, by subsequent correspondence in which the Department’s General Counsel stated in a letter to Ryde Council’s solicitor dated 24 April 2018: “Because the current exclusions for complying development in clauses 1.17A and 1.19 of the Codes SEPP will automatically apply to the code, the Secretary formed the view that no consultation was required. The Department believes that these exclusions are sufficient to protect critical habitats, threatened species, populations or ecological communities or their habitats.”

78. Ryde Council submitted that even if the Secretary’s reasons did include the matters of context referred to by the State Government in the Codes SEPP and in the material attached to the briefing notes, they reveal further errors. The State Government had submitted that the current provisions of the Codes SEPP afford three layers of protection for critical habitat or threatened species, populations or ecological communities, or their habitats: zoning, cll 1.17A and 1.19 of the Codes SEPP, and development standards.

79. As to zoning being able to prohibit the proposed complying development, Ryde Council’s response was threefold. First, the briefing notes do not disclose this reasoning. Secondly, it concerns a future potential to rezone land to prohibit the proposed medium density housing but the concern of s 34A(2) is with the current potential of the proposed Amending SEPP to adversely affect the matters referred to in s 34A(2). Thirdly, it shifts the responsibility to assess the adverse effects on the matters referred to in s 34A(2) of the Codes SEPP from the Secretary to individual councils.

80. As to cll 1.17A and 1.19 of the Codes SEPP, Ryde Council noted that the State Government distinguished between the existing protections under cll 1.17A and 1.19 (in the sense of land that was, at the times of the Secretary’s decisions, already declared to be an environmentally sensitive area under cl 1.17A(1)(e)) and the potential for councils to make LEPs in the future declaring certain land to be an environmentally sensitive area. Ryde Council submitted that the potential for future designation of land as an “environmentally sensitive area” is not disclosed in the reasoning in the briefing notes; it concerns a future potential and not the current potential of the Amending SEPP to adversely affect the matters referred to in s 34A(2); and it shifts the obligation to assess the adverse effects to individual councils.

81. As to development standards in codes under the Codes SEPP, Ryde Council submitted that such reasoning is not disclosed in the briefing notes and is not particularly relevant to the matters referred to in s 34A(2) of the EPA Act.

82. Ryde Council responded to the State Government’s submission that the proposed complying development under the Codes SEPP would be of similar bulk and scale to the already complying development of dwelling houses under the Codes SEPP. Ryde Council noted that this reasoning was not disclosed in the briefing notes. In so far as it was discussed in the EIE, the EIE does not set out the Secretary’s reasons for the first and second decisions. Ryde Council further submitted that the obligation under s 34A(2) of the EPA Act is to consider the potential adverse effects on the matters referred to in s 34A(2) of the proposed medium density housing, not the existing forms of complying development under the Codes SEPP.

83. Ryde Council disputed the State Government’s submission that the Secretary’s errors did not result in the invalidity of the Amending SEPP. Ryde Council submitted that the answer to the question of whether non-compliance with s 34A(2) of the EPA Act results in the invalidity of the Amending SEPP depends on the language of s 34A(2) and its place in the statutory scheme. Ryde Council noted that the language of s 34A(2) is mandatory (“must”) and fixes a precondition (“before an environmental planning instrument is made”).

84. The use of the word “must” suggests that strict compliance with the section is required, citing Director General, NSW Department of Industry and Investment v Mato Investments Pty Ltd (2014) 87 NSWLR 465; [2014] NSWCCA 132 at [61]-[63].

85. The fact that consultation is a precondition to making an environmental planning instrument also suggests that strict compliance is required: Director General, NSW Department of Industry and Investment v Mato Investments Pty Ltd at [64]. The precondition goes to the making of an environmental planning instrument, which includes a State environmental planning policy. The requirement is not simply a precondition to the Secretary or the Minister recommending something, but rather to the making of the environmental planning instrument.

86. The process of consultation required is set out in “unusual detail” in s 34A(3)-(5) of the EPA Act. There is an implied duty to consider comments made through the consultation process under s 34A(6) of the EPA Act.

87. Section 24(1) of the EPA Act provides that “an environmental planning instrument may be made in accordance with this Part for the purposes of achieving any of the objects of this Act”. This Part is Part 3 of the EPA Act, which includes s 34A. The objects of the EPA Act in s 5 include:

“(vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species and ecological communities, and their habitats, and

(vii)  ecologically sustainable development”

88. “Ecologically sustainable development” has the same meaning it has in s 6(2) of the Protection of the Environment Administration Act 1991, which includes the principle that the conservation of biological diversity and ecological integrity is to be a fundamental consideration.

89. Ryde Council submitted that the importance of consultation with the OEH about a State environmental planning policy that will or may adversely affect critical habitat or threatened species, populations or ecological communities, or their habitats, in the statutory scheme is highlighted, by analogy, by the discussion in Helman v Byron Shire Council (1995) 87 LGERA 349 at 355, 356-357, 358-359. The Secretary’s non-compliance with s 34A(2) of the EPA Act has denied OEH the opportunity to have input into whether the proposed Amending SEPP will or may have adverse effects on critical habitat or threatened species, populations or ecological communities, or their habitats.

90. Ryde Council submitted that the legislative history of the amendment of the process for preparing and making a State environmental planning policy supports its construction. Prior to the Environmental Planning and Assessment Amendment Act 2008 (“the 2008 Amending Act”):

1. under s 34A, the Secretary (then the Director General of Urban Affairs and Planning) was required to consult with the Director General of National Parks and Wildlife before preparing a State environmental planning policy (as opposed to that consultation having to occur “before the environmental planning instrument is made”, as is the case under the current s 3.25 of the EPA Act);

2. after that consultation was completed, the Secretary could then prepare a draft State environmental planning policy and submit it to the Minister: s 37(1) and (2) of the EPA Act;

3. the Minister was expressly empowered to, on submission by the Secretary of a draft State environmental planning policy, recommend to the Governor the making of a State environmental planning policy (s 39(1) of the EPA Act); and

4. the Governor was empowered to make a State environmental planning policy “in accordance with the recommendation under [s 39]”: s 39(4) of the EPA Act.

91. Ryde Council submitted that, with the passage of the 2008 Amending Act, the link between the Minister’s recommendation and the Governor’s making of the State environmental planning policy was severed, such that the Minister was given no express power to make a recommendation to the Governor, and the Governor was not required to make a State environmental planning policy in accordance with the Minister’s recommendation. The severance of that link says nothing about the link between the Secretary’s decision and the Governor’s making of the State environmental planning policy. Indeed the 2008 Amending Act, while severing that link, also repealed and replaced s 34A such that the Secretary was required to consult with the Director General of the Department of Environment and Climate Change “before an environmental planning instrument is made”. This suggests that the legislature intended to strengthen the link with the Secretary’s decision.

92. Ryde Council submitted that Huntlee Pty Ltd v Sweetwater Action Group is not authority to the contrary. First, the provisions therein considered were in a subordinate instrument made under the EPA Act, a State environmental planning policy, while the provision here in question is in the EPA Act, s 34A.

93. Secondly, in that case, the breach of the provision was in the preparation of the State environmental planning policy which affected the recommendation of the Minister, which was said to affect the Governor’s making of the State environmental planning policy. Here, the breach is of a precondition to the making of the State environmental planning policy. There was no issue in that case as to the formation of the Minister’s opinion under s 34A or the resulting effect on the resulting State environmental planning policy.

94. Thirdly, the statement by Sackville AJA in [95] was not part of the ratio of the case. The case is authority only for what it decided. The case “can have no wider ratio decidendi that what was in issue in the case”: Coleman v Power (2004) 220 CLR 1; [2004] HCA 39 at [79]; All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289 at [45]; Lazarus v ICAC (2017) 94 NSWLR 36; [2017] NSWCA 37 at [87].

95. Ryde Council therefore submitted that non-compliance with s 34A of the EPA Act does result in invalidity of the Amending SEPP.

The Secretary’s decisions are not invalid

96. Ryde Council’s challenges to the Secretary’s first and second decisions not to consult with OEH about the Amending SEPP and consequential amendments depend on construing a limited number of statements in the briefing notes as being legally inaccurate and as being material to the Secretary’s decisions. Most of the impugned statements are to the effect that the current provisions of the Codes SEPP “ensure that critical habitat or threatened species, populations or ecological communities, or their habitats, are not adversely affected by development carried out under the State Policy”. I do not consider that these statements should be construed in the literal way contended for by Ryde Council or that they were material to the Secretary’s decisions not to consult with OEH.

97. First, the senior officers of the Department of Planning and Environment writing the briefing notes, and the Secretary of the Department considering them in order to make a decision under s 34A(2) as to whether to consult with OEH on the proposed Amending SEPP and consequential amendments, may be assumed to bring knowledge and expertise to their consideration of the current provisions of the EPA Act and the Codes SEPP concerning complying development.

98. Consent authorities under the EPA Act have been held to have brought to bear their general knowledge of the planning law and environmental planning instruments in their consideration and determination of development applications: see Parramatta City Council v Hale (1982) 47 LGRA 319 at 346 (“general knowledge”); Somerville v Dalby (1990) 69 LGRA 422 at 429 (“individual expertise and local knowledge”); Clifford v Wyong Shire Council (1996) 89 LGERA 240 at 249 (“local knowledge”); Currey v Sutherland Shire Council (1998) 100 LGERA 365 at 373 (“general knowledge of their principal planning instrument”); Franklins Ltd v Penrith City Council and Campbells Cash & Carry Pty Ltd [1999] NSWCA 134 at [26] (“general knowledge of their principal planning instrument”); Manly Council v Hortis (2001) 113 LGERA 321 at 333 (“general awareness of the LEP”) and Gee v Sydney City Council (2004) 137 LGERA 157 at 170-171 (“local knowledge” and understanding of the obligations under a particular provision of the LEP).

99. Here, the departmental officers and the Secretary are to be taken as having general knowledge and familiarity with the planning system established under the EPA Act and environmental planning instruments made under the EPA Act, the concept of complying development under the EPA Act, and the Codes SEPP which provides for different developments or classes of developments to be complying development.

100. The consideration of the departmental officers and the Secretary of the current provisions of the EPA Act and the Codes SEPP concerning complying development, and the proposal to make low rise medium density housing complying development, was not limited to that contained in the briefing notes. The consideration is part of a process that begun before the briefing notes were drafted.

101. Again, consent authorities under the EPA Act have been held to be entitled to give prior consideration to relevant matters. The consideration and determination of a development application is not necessarily confined to the occasion when the consent authority determines the development application, and may include a lengthy process of consideration: Parramatta City Council v Hale at 347; Boulton v Burwood Municipal Council (1988) 66 LGRA 131 at 135; Somerville v Dalby at 429.

102. Here, the departmental officers and the Secretary are also to be taken as having particular knowledge and familiarity with the policy proposal for low rise medium density housing to be made complying development. As the EIE stated, a discussion paper and background paper “Options for Low Rise Medium Density Housing as complying development” was exhibited by the Department from 22 November 2015 until 1 March 2016, prior to the briefing notes being prepared.

103. In writing and considering the statements in the briefing notes concerning the current provisions of the Codes SEPP, the departmental officers and the Secretary respectively, are to be taken to have understood these statements in light of their knowledge and familiarity with the current provisions of the EPA Act and the Codes SEPP concerning complying development and the proposal to make low rise medium density housing complying development.

104. As the State Government has submitted, the current provisions of the EPA Act and the Codes SEPP concerning complying development do afford protection from adverse effects by development carried out under the Codes SEPP directly for critical habitat and indirectly for threatened species, populations or ecological communities, or their habitats, through the mechanisms of zoning of land, cll 1.17A and 1.19 of the Codes SEPP, and the development standards for complying development. These mechanisms do not go so far as to “guarantee” the protection from all adverse effects of critical habitat or threatened species, populations or ecological communities, or their habitats, but nevertheless they do afford a considerable degree of protection from such adverse effects. The departmental officers and the Secretary should be taken to have kept in mind the degree of protection from adverse effects by development carried out under the Codes SEPP afforded by the current provisions of the EPA Act and the Codes SEPP in writing and considering the statements that the current provisions of the Codes SEPP “ensure” that critical habitat or threatened species, populations or ecological communities, or their habitats, are not adversely affected by development carried out under the Codes SEPP.

96. Secondly, the impugned statements in the briefing notes need to be read fairly and in the context of the discussion in the whole of the briefing notes. As Kirby J said in Minister for Immigration and Ethnic Affairs v Wu Shan Liang:

“The reasons under challenge must be read as a whole. They must be considered fairly. It is erroneous to adopt a narrow approach, combing through the words of the decision-maker with a fine appellate tooth-comb, against the prospect that a verbal slip will be found warranting the inference of an error of law.”

106. Similarly, Brennan CJ and Toohey, McHugh and Gummow JJ referred to what the Full Court of the Federal Court said in Collector of Customs v Pozzolanic (1993) 43 FCR 280 at 287:

“It was said that a court should not be ‘concerned with the looseness in the language…nor with unhappy phrasing’ of the reasons of an administrative decision-maker. The Court continued: ‘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.’

These propositions are well settled. They recognise 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. In the present context, any court reviewing a decision upon refugee status must beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision.”

107. It is appropriate to infer that the Secretary read and considered the briefing notes and the attachments to the briefing notes. Such an inference is consistent with the purpose and practice of briefing notes. As Mortimer J found in Stambe v Minister for Health [2019] FCA 43 at [74]:

“As a general principle, I consider it reliable and appropriate to infer, consistently with the purpose and practice of ministerial briefing notes, that a Minister reads a briefing note with which she or he is provided, where that briefing note is intended to provide the Minister with sufficient information to make a decision about whether or how to exercise a statutory power. Sometimes there may be evidence which assists the drawing of such an inference, such as handwriting, or marks such as circles or underlining, by the Minister on the contents of a briefing note itself. Such evidence is not necessary for the inference to be available and drawn, but it may be persuasive.”

108. Here, there is evidence supporting drawing that inference: the Secretary circled the word “Approved” and signed and dated both the first and second briefing notes.

109. The State Government admitted in its Amended Response to Summons, [15] that the reasons for the first and second decisions are “those set out in” the first and second briefing notes respectively. This admission referred to the whole of the briefing notes and not just the limited number of statements challenged by Ryde Council. Those briefing notes refer to various attachments, which contained a fuller consideration of the current provisions of the EPA Act and the Codes SEPP concerning complying development and the proposed Amending SEPP and consequential amendments. For the first briefing note, the attachments were the EIE detailing the proposed amendments to the Codes SEPP (Tab A), the draft Medium Density Design Guide (Tab B) and a consideration of the requirement to consult under s 34A of the EPA Act (Tab C). For the second briefing note, the attachments were a consideration of the requirement to consult under s 34A of the EPA Act (Attachment A), an analysis of NSW LEPs requiring amendments to insert new terms (manor houses and multi dwelling housing (terraces)) (Attachment B) and a Table of LEPs requiring consequential amendments (Attachment C). Whilst the State Government did not expressly admit that the Secretary’s reasons included what was stated in the attachments to the briefing notes, the attachments nevertheless were referred to in the briefing notes and were provided for the Secretary’s consideration. In particular, the Secretary was directed to Tab C to the first briefing note and Attachment A to the second briefing note for the consideration of the requirement to consult under s 34A of the EPA Act. In effect, the discussion and information in the attachments were incorporated by reference into the briefing notes.

110. The impugned statements in the briefing notes need to be read with the discussion and information provided in the body of the briefing notes and in the incorporated attachments. As the State Government has submitted, this discussion and information provided a fair summary of the operation and effect of the current provisions of the EPA Act and the Codes SEPP concerning complying development and its impact on critical habitat or threatened species, populations or ecological communities, or their habitats. I adopt the State Government’s submissions summarising the operation and effect of the current provisions of the EPA Act and Codes SEPP concerning complying development and its impact on critical habitat or threatened species, populations or ecological communities, or their habitats, set out earlier. This discussion and information reveals that the current provisions of the EPA Act and Codes SEPP do afford protection for critical habitat or threatened species, populations or ecological communities, or their habitats, from adverse effects by development carried out under the Codes SEPP, although this might fall short of ensuring, in the sense of guaranteeing, that there will be no adverse effects. The departmental officers writing the briefing notes and the Secretary considering them should be taken to have read and understood the impugned statements in the briefing notes in light of this discussion and information and as conveying that meaning.

111. Thirdly, any inaccuracy in the impugned statements affects only part of each statement and is not material to the decisions made by the Secretary. The central point being made by the impugned statements was that the proposed Amending SEPP and consequential amendments did not propose any changes to the current provisions of the Codes SEPP which operate to protect critical habitat or threatened species, populations or ecological communities, or their habitats, from adverse effects by development carried out under the Codes SEPP. The rationale was that, if the proposed Amending SEPP and consequential amendments would not change the protection from adverse effects afforded by the current provisions of the Codes SEPP, there is no need to consult with OEH about the proposed Amending SEPP and consequential amendments. That point remained good, regardless of what was the degree of protection from adverse effects afforded by the current provisions of the Codes SEPP. It was not material to the point being made whether the current provisions of the Codes SEPP did or did not “ensure”, in the sense of guarantee, that critical habitat or threatened species, populations or ecological communities, or their habitats, are not adversely affected by development carried out under the Codes SEPP. If the current provisions did “ensure”, in the sense of guarantee, protection from adverse effects, consultation was not needed because the Amending SEPP and consequential amendments would not change this guaranteed protected afforded by the current provisions, but if the current provisions afforded protection from adverse effects falling short of guaranteed protection, consultation was still not needed because the Amending SEPP and consequential amendments would not change this lesser degree of protection afforded by the current provisions.

112. In these circumstances, even if there be any legal inaccuracy in the part of the statements describing the protection afforded by the current provisions of the Codes SEPP, Ryde Council has not shown that those legally inaccurate statements materially affected the decisions made by the Secretary. The Secretary’s decisions not to consult with OEH turned on the Amending SEPP and consequential amendments not changing the current provisions of the Codes SEPP, not on whatever was the degree of protection from adverse effects afforded by the current provisions of the Codes SEPP.

113. This is a way of saying that any legal inaccuracy in the briefing notes was not material to the decisions made by the Secretary. As Bell, Gageler and Keane JJ recently affirmed in Minister for Immigration and Border Protection v SZMTA (2019) 93 ALJR 252; [2019] HCA 3 at [45], “A breach is material to a decision only if compliance could realistically have resulted in a different decision”. The challenger bears the onus of proof to establish the materiality of the breach: at [46]. Earlier in Hossain v Minister for Immigration and Border Protection (2018) 92 ALJR 780; [2018] HCA 34 at [30], Kiefel CJ, Gageler and Keane JJ held that “the threshold of materiality would not ordinarily be met in the event of a failure to comply with a condition if complying with the condition could have made no difference to the decision that was made in the circumstances in which that decision was made.”

114. The other statement challenged as legally inaccurate by Ryde Council was the statement in the second briefing note that “under the proposed Medium Density Housing Code, medium density developments will only be allowed in the areas zoned for medium density under the councils LEP…”. I find, that this statement was not legally inaccurate. Like the other statements, it must be read in context.

115. The second briefing note and attachment A both expressly stated that the consequential amendments will allow manor houses and multi dwelling housing (terraces) as new development types in the Medium Density Housing Code and “allow manor houses and multi dwelling housing (terraces) as complying development in LEPs that are Standard Instruments, where the development type is currently not expressly permitted but where residential flat buildings and multi dwelling housing is permitted in a council LEP. These consequential amendments will result in amendments to 20 LEPs in NSW.” One of these local environmental plans was Ryde LEP.

116. The EIE attached to the first briefing note had expressly identified that the proposed complying development was to be restricted to R1, R2, R3 and RU5 land use zones.

117. Viewed in this context, the statement was not inaccurate as asserted by Ryde Council. The proposed medium density housing would only be allowed in the land use zones where residential flat buildings and multi dwelling housing is, or would by the consequential amendments become, permitted, being the R1, R2, R3 and RU5 land use zones. This is what was being referred to in the second briefing note when it referred to “areas zoned for medium density under the councils LEP”.

118. The other aspects of the impugned statement in the second briefing note, that “threatened species issues will have been addressed at rezoning stage”, are immaterial. The reference to “threatened species issues” is fairly to be read as a shorthand reference to the fuller phrase in s 34A(2) of “critical habitat or threatened species, populations or ecological communities, or their habitats.” This fuller phrase had been referred to both earlier and immediately after the impugned statement in the briefing note, as well as in the consideration of s 34A in Attachment A. Use of the shorthand reference did not involve error, and in light of the references to the fuller phrase elsewhere, was not material.

119. The suggestion that threatened species issues will have been addressed at the rezoning stage was not shown to be inaccurate as a statement of fact or as being erroneous in law. The point being made was simply that land on which threatened species (etc) occur might have been zoned in such a way as to protect the threatened species (etc) from adverse effects of development carried out under the Codes SEPP. As the State Government submitted, land could be zoned E2 Environmental Conservation, in which zone medium density development and residential flat buildings may not be permitted with consent and hence the proposed medium density housing could not be complying development on land within that zone.

120. The second briefing note was not legally inaccurate in these aspects of the statement.

121. Having found that the impugned statements in the briefing notes are not legally inaccurate, Ryde Council’s grounds of review based on the allegedly inaccurate statements must fail. The Secretary did not misdirect herself, fail to consider any relevant matter, or make a manifestly unreasonable decision by considering these statements in making the first decision and second decision under s 34A(2) of the EPA Act not to consult with OEH about the proposed Amending SEPP and consequential amendments.

122. In light of this conclusion, it is not necessary to consider the State Government’s submission that, if there had been non-compliance with s 34A(2) of the EPA Act, the non-compliance would not have the consequence of invalidating the Amending SEPP and subsequent SEPPs. My preliminary view is that there is force in Ryde Council’s submission that, having regard to the language of s 34A and the scope and object of the EPA Act, a legislative purpose can be discerned that invalidity should be the consequence of non-compliance with s 34A, and that the Court of Appeal’s decision in De Angelis v Pepping is distinguishable. However, it is not necessary to decide this finally.

Conclusion and orders

123. Ryde Council has not established any of its grounds of review of the decisions of the Secretary under s 34A(2) of the EPA Act not to consult with OEH about the Amending SEPP and consequential amendments. The proceedings should be dismissed.

124. The parties accepted that the usual order for costs in judicial review proceedings should apply, namely that costs follow the event. Ryde Council should therefore pay the State Government’s costs of the proceedings.

125. The Court orders:

1. The proceedings are dismissed.

2. The applicant is to pay the respondent’s costs of the proceedings.

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Decision last updated: 15 April 2019