Claymin Pty Limited v Mulwaree Shire Council [1998] Nswlec 163 (21 July 1998)

[1998] NSWLEC 163

Land and Environment Court

of New South Wales

CITATION:	CLAYMIN PTY LIMITED v. MULWAREE SHIRE COUNCIL [1998] NSWLEC 163 (21 July 1998) [1998] NSWLEC 49
PARTIES:	CLAYMIN PTY LIMITED v. MULWAREE SHIRE COUNCIL [1998] NSWLEC 163 (21 July 1998)
FILE NUMBER(S):	10258 of 1998
CORAM:	Talbot J
KEY ISSUES:	:-
LEGISLATION CITED:	SEPP 37
CASES CITED:	in Vaughan-Taylor v David Mitchell-Melcann Pty Ltd (1991) 25 NSWLR 580; Nymboida S.C. v Skar Industries Pty Ltd & Anor unreported No 40101 of 1996 ; Helman v Byron S.C. (1995) 87 LGERA 349; (Minister for Immigration Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93 at 112; in Brickworks Ltd v Warringah Corporation (1963) 108 CLR 568 at 577 ; North Sydney M.C. v Lycenko & Associates Pty Ltd (1988) 67 LGRA 247 ; and CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
DATES OF HEARING:	10 July 1998
DATE OF JUDGMENT:	07/21/1998
LEGAL REPRESENTATIVES:	Mr J B Maston (Barrister) Mr C R Ireland (Solicitor)

JUDGMENT:

Following the decision by the Court of Appeal in Vaughan-Taylor v David Mitchell-Melcann Pty Ltd (1991) 25 NSWLR 580, SEPP 37 was introduced to facilitate the continued operation of existing mines and extractive industries without the necessity for development consent during a moratorium period (c.f. Nymboida S.C. v Skar Industries Pty Ltd & Anor unreported No 40101 of 1996 Pearlman J 7 March 1997).

When SEPP 37 commenced on 18 June 1993, the applicant was using an area of 16.188ha at Marulan for the purpose of mining clay by open cut.

The applicant caused the development to be registered as a “continued operation” and operated the extractive industry during the moratorium period, which expired on 18 September 1995. The operation did not continue beyond the moratorium period.

In the meantime, the applicant lodged Development Application No. 2732 on 22 July1994.

The development application referred to SEPP 37, the continued mining of clay by open cut methods and removal of over burden, and classified the proposed development as non-designated development.

It is agreed between the parties that the development described in the development application is not designated development described in Sch 3 to the EPA Regulation 1994 pursuant to cl 49 of the regulation

Clause 20(1)(b) of SEPP 37 provides that development for the purpose of an extractive industry in respect of a continued operation is declared to be designated development, inter alia, if the carrying out of the development is, in the opinion of the consent authority or the Director of Planning (on a reference under subcl (3)) likely to significantly affect the environment, taking into account various matters listed as relating to current impact, current and past performance, future impact and any guidelines published by the Department of Planning.

On 4 August 1994, the respondent advised the applicant as follows:-

Following an on-site inspection of the proposal by Council’s Director of Engineering and Planning Services and Manager of Planning Services, as well as consideration of Clause 20(1)(b) of State Environmental Planning Policy No 37 - Continued Mines and Extractive Industries, you are advised that Council is of the opinion that the proposal is “designated development”. Consideration of Schedule 3 of the Environmental Planning and Assessment Act and Regulation also helped Council in determining the proposal to be “designated development”.

However, notwithstanding the above advice, the council continued to process the development application after 4 August 1994 without any reference to the requirements for designated development. Indeed it acted to the contrary and entered into correspondence with the applicant regarding the merits of the application based only upon a consideration of a Statement of Environmental Effects, responses received from Government departments and local residents and further material submitted on behalf of the applicant.

The council finally determined the development application on 24 April 1997. The Notice of Determination dated 29 April 1997 advised the applicant that the development application had been determined by the refusing of consent due to the following reasons:-

1. The proposed development will have an adverse impact onto the protected waterways of Bungonia Creek.

2. The Erosion and Sedimentation Plan submitted fails to provide sufficient information as to the proposed methods of rehabilitation/remediation of the site.

3. The applicant has failed to provide Council with sufficient details to fully assess the proposal within a reasonable time frame.

The Court notes that none of the reasons refer directly, or by inference, to designated development.

An appeal against the refusal of the development consent pursuant to s 97 of the EPA Act was filed in this Court on 16 April 1998.

The respondent council submits that the development application was, and is, for designated development under cl 20(1)(b) of SEPP 37 and s 29 of the EPA Act 1979.

For the purposes of SEPP 37, a “continued operation” means development for the purposes of an extractive industry that was lawfully commenced before the coming into effect of an environmental planning instrument that permitted the carrying out of that development only with development consent and which has not been abandoned, does not have the benefit of a development consent, and would be prevented from extending, having its area increased or enlarging, expanding or intensifying because of s 109(2) of the EPA Act.

Mulwaree Local Environmental Plan 1995 was made on 26 November 1995. It maintained the pre-existing position that development of an extractive industry is permissible with consent.

The respondent council has raised the following question of law to be determined as a preliminary point:-

Whether the Application may be granted consent without the preparation and exhibition of an Environmental Impact Statement (EIS).

The Applicant’s Argument

Mr Maston points to the two sources of power to deal with the development application, namely under SEPP 37 or alternatively pursuant to the LEP.

He contends that the letter dated 4 August 1994 which purports to be notification of the council’s opinion made pursuant to cl 20(1)(b) in accordance with cl 22 of SEPP 37 is so hopelessly flawed that it cannot be regarded as the formation of the requisite opinion pursuant to cl 20(1)(b).

Furthermore, because the applicant did not make its appeal against the determination by the consent authority within twenty eight days after the development application was finally determined on 24 April 1997 as required by cl 24(2) of SEPP 37, the SEPP no longer applies to the development application for the continued operation.

Alternatively, cl 19 of SEPP 37 allows a person to make a development application after the moratorium period for consent to carry out development for the purpose of an extractive industry in relation to land on which a continued operation is or was carried out.

The Respondent’s Argument

The council points out that Development Application 2732 was, in terms, an application made pursuant to SEPP 37. Mr Ireland, for the council, does not rely on any change to the physical nature of the proposed development itself. He relies solely on the fact that the application was initiated and nominated as an application made pursuant to SEPP 37 and that any amendment to enable the applicant to pursue the application under the provisions of the LEP amounts to a fundamental change, rendering it a new application.

The council also relies on its decision, or formation of opinion, on 4 August 1994 as a final determination of whether an EIS was required to be exhibited. Thus it is not a decision which can be remedied on appeal. Mr Ireland seeks to support this argument by the decision of the Court of Appeal in Helman v Byron S.C. (1995) 87 LGERA 349. He says, once the council determined, pursuant to cl 20 of SEPP 37, that the carrying out of the development is likely to significantly affect the environment, that is the end of the matter ( Minister for Immigration Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93 at 112). The applicant did not notify the consent authority in writing that it disagreed with the opinion pursuant to cl 20(3). Accordingly it did not become necessary to refer the application to the Director of Planning for a determination of the matter. Therefore, according to the council, it is now too late to disagree.

The Effect of SEPP 37

Part 2 of SEPP 37 allows a person to carry out a continued operation during the registration period and the moratorium period subject to the limitations specified in Pt 4.

Part 5 of SEPP 37 deals with the machinery for making a development application for consent to carry out development for the purpose of an extractive industry in relation to land on which a continued operation is or was carried out.

Clause 18 specifically applies Pt 5 to “a development application made before the end of the moratorium period”. Clause 19 makes it clear that a person may make a development application in relation to land on which a continued operation is or was carried out “after the moratorium period”. The subject development application was lodged on 22 July 1994, being approximately fourteen months prior to the expiration of the moratorium period.

The LEP did not have effect until 26 November 1995, which is a date after the moratorium period had expired.

The development application dated 22 July 1994 was made pursuant to cl 18 of SEPP 37.

It is acknowledged by both parties that, at the date of commencement of SEPP 37, the land was used for the “continued operation” of an “extractive industry” within the meaning of those terms in cl 5 of SEPP 37. It was therefore open for the council on 22 July 1994 to accept, consider and determine a development application for consent to carry out development for the purpose of the continued operation of the extractive industry pursuant to cl 18 of SEPP 37.

Clause 24(2) of SEPP 37 arguably does no more than afford the protection provided by SEPP 37 to the continued operation pending the determination of an appeal to this Court, provided the appeal is lodged within 28 days after the application is finally determined by the council. Following cessation of the activity, it has no relevant application to the physical continuation of the extractive industry. However, as noted previously, because the appeal was not made within 28 days, it is contended by the applicant that SEPP 37 has ceased to apply to the development application.

Setting aside for the moment whether the opinion of council that the carrying out of the development is likely to significantly affect the environment and is thus declared to be designated development pursuant to cl 20 of SEPP 37 has effect, it is appropriate to determine whether that opinion is one of the functions and discretions which the council had in respect of the matter the subject of the appeal and contemplated by s 39(2) of the Land and Environment Court Act 1979, although it is not strictly necessary, having regard to the view reached in respect of the effect of cl 24(2), which I will deal with subsequently.

Subclause 20(2) of SEPP 37 requires the consent authority to inform the applicant as soon as practicable after the receipt of the development application to which Pt 5 applies if, in the consent authority’s opinion, the development the subject of the application is designated development because of subcl (1)(b). This, the council purported to do in its letter dated 4 August 1994.

In the light of the way in which council officers subsequently processed the development application, it is hardly surprising that the applicant made no protest pursuant to cl 20(3).

Decisions such as Kurtovic at p 112 and the observations by Windeyer J in Brickworks Ltd v Warringah Corporation (1963) 108 CLR 568 at 577 are not, in my opinion, helpful to the resolution of the question. In that type of case, the issue was whether a decision maker could resile from an earlier position where a power had been exercised by the decision maker or it had represented that it had exercised the power. In the present case, the function of the council was to form an opinion. The communication of that opinion had the effect of declaring the development to be designated development pursuant to cl 20(1).

The decision of the Court of Appeal in Helman is not authority for the proposition that the requirements of s 77 of the EPA Act cannot be satisfied subsequent to the lodgment of the development application. The failure to exhibit a fauna impact statement and to thereby afford the opportunity for public comment drew the Court to the conclusion that the decision to grant development consent was invalid. It was the late lodgment of the fauna impact statement which bypassed a statutory requirement that such a document be available for inspection and consideration by the public. While the decision maker had the benefit of the statement, the objectors had no opportunity to consider it or make submissions based on it. In the result, Handley JA found there had been something akin to a denial of natural justice (p 359).

Although the subject decision of the council that the development should be regarded as designated development still stands, it is nevertheless in my opinion a question that may be readdressed by the Court on an appeal in accordance with s 39(2). If the Court confirms the opinion then, provided SEPP 37 still applies to the development application, the application must be refused by reason of the failure to comply with the provisions of s 84 and the following relevant sections of the EPA Act, or at least the final determination should be deferred until there has been compliance. On the other hand, if it is the opinion of the Court that development is not likely to significantly affect the environment, taking into account only the matters specified in cl 20(1)(b)(i), (ii) and (iii), the Court could proceed to consider the merits.

However, as I foreshadowed, it is my opinion that the question can be resolved in a simple and uncomplicated way by applying the plain meaning of cl 24.

The development application, at the time it was made, was in respect of a continued operation. The council’s contention is that the development application has not been amended and accordingly remains an application in respect of a continued operation made pursuant to SEPP 37. In my opinion it clearly remains an application in respect of a continued operation as defined in SEPP 37. The real question is whether it remains an application to which SEPP 37 continues to apply.

Clause 24 of SEPP 37 reflects the general purpose of the instrument to facilitate the resolution of problems arising from the decision of the Court of Appeal in Mitchell Melcann . The effect of cl 24(2) is to discontinue the benefits arising from application of the Policy where an appeal is not made within twenty eight days after the development application is finally determined by the council. Accordingly, once the twenty eight days expires, the development application can not be regarded as an application for development consent for a continued operation pursuant to SEPP 37. Thereafter, any benefit arising from the application of the SEPP to the continued operation is lost.

However, the development application remains on foot and the appeal is extant.

Mr Ireland submitted on behalf of the respondent council that an interpretation of the effect of cl 24 which had the result that the application is no longer in respect of designated development would be inconvenient, absurd and non-purposive. He relied on the authority of North Sydney M.C. v Lycenko & Associates Pty Ltd (1988) 67 LGRA 247 and CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384.

The then President of the Court of Appeal in Lycenko opined that it would be remarkable if the Court develops its own rules simply because it considered the consequence of the plain meaning of the rule enacted to be “manifestly absurd” or “unreasonable”. He went on to observe that absurdity is sometimes confined to the eye of the particular beholder. That observation, in my opinion, is apposite in this case.

The designation of extractive industries in Sch 3 of the EPA Regulation specifically excludes continued operations within the meaning of SEPP 37 in respect of which an application for development consent has been made before the end of the moratorium period. The parties are agreed that the proposed development is not designated as an extractive industry by reference to Sch 3 to the EPA Regulation. Accordingly the proposed development, the subject of the development application made by the applicant in these proceedings, can only be classified as designated development pursuant to cl 20 of SEPP 37.

The Court accepts that the purpose of SEPP 37 is to facilitate the continued operation of mines and extractive industries adversely affected by the decision in Mitchell Melcann . The intention of cl 24(2) is to limit the period of protection provided by SEPP 37 to circumstances where an applicant for development consent diligently pursues an appeal. The consequences of failure to make an appeal within twenty eight days has no effect on the right of the applicant to appeal to the Court within twelve months after a date calculated by reference to s 97 of the EPA Act. The only consequence is that the SEPP does not continue to apply. Part 5 of SEPP 37 applies to a development application for consent to carry on a continued operation where it is made before the expiration of the moratorium period. A declaration pursuant to cl 20 must, by its nature, only apply to a development application to which Pt 5 applies. The failure to appeal within the nominated twenty eight days removes the application of Pt 5, including cl 20.

If the council had originally formed the opinion that the carrying out of development is not likely to significantly affect the environment, taking into account only the matters referred to in cl 20(1)(b), where development is otherwise designated for the purposes of Sch 3 to the regulation, Mr Ireland’s argument would lead to the result that the development would, in the present circumstances, not be treated as designated development. In the context of the purpose of SEPP 37, that, indeed, would be an absurd and unintentional result.

By taking a purposive approach to the application of the provisions of SEPP 37, the Court must determine the application for development consent in this appeal on the basis of the designation in Sch 3 to the regulation, irrespective of any opinion previously formed pursuant to cl 20 of SEPP 37. That must be so even if it means that the exception to the designation of extractive industries and mines in Sch 3 to the EPA Regulation must be read down to apply only where SEPP 37 continues to apply to a development application.

It being an agreed fact that the proposed development does not fall within any category of designated development under Sch 3 it is correct that the Court consider the application for development consent notwithstanding the lack of an EIS.

The answer to the preliminary point of law raised by the respondent council must be that development consent may be granted without the preparation and exhibition of an EIS.

The formal finding of the Court is that the answer to the question raised by the respondent as a preliminary point of law is “Yes”.

Neither party raised the prospect of an argument that there are exceptional circumstances within the meaning of the Practice Direction, and accordingly it is appropriate in these class 1 proceedings that there be no order as to costs in respect of the determination of the preliminary question.

The exhibits may be returned.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 11 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE R N TALBOT.

ASSOCIATE