Denoci Pty Ltd v Liverpool City Council

[2020] NSWLEC 102

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Denoci Pty Ltd v Liverpool City Council [2020] NSWLEC 102

Hearing dates:

18 June 2020

Date of orders:

30 July 2020

Decision date:

30 July 2020

Jurisdiction:

Class 1

Before:

Preston CJ

Decision:

The Court orders:

(1)   The appeal is dismissed.

(2)   The appellant is to pay the respondent’s costs of the appeal.

Catchwords:

APPEAL - appeal against Commissioner’s decision on questions of law – whether misconstruction of the proposed development and land on which it was to be carried out– whether the species impact statement failed to comply with Chief Executive’s requirements – whether misconstruction and misapplication of cl 7.6 of Liverpool Local Environmental Plan (LLEP) – whether misconstruction of term ‘environmentally sensitive area’ in cl 7.31 LLEP – whether failure to give reasons – whether denial of procedural fairness – whether misconstruction and misapplication of fifth control in Liverpool Development Control Plan – whether misapplication of statutory test in s 4.15(3A) of the Environmental Planning and Assessment Act 1979 – whether failure to consider proposed offsets through purchase of biodiversity credits from registered biobank sites – no errors of law

Legislation Cited:

Biodiversity Conservation (Savings and Transitional) Regulation 2017

Environmental Planning and Assessment Act 1979 s 4.15

Land and Environment Court Act 1979 ss 39, 56A

Liverpool Development Control Plan 2008

Liverpool Local Environmental Plan 2008

State Environmental Planning Policy No 1 – Development Standards

Threatened Species Conservation Act 1995

Cases Cited:

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 121

Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139

BGP Properties Pty Ltd v Lake Macquarie City Council (2004) 138 LGERA 237

Botany Bay City Council v Pet Carriers International Pty Ltd (2013) 201 LGERA 116; [2013] NSWLEC 147

Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure (2013) 194 LGERA 347; [2013] NSWLEC 48

Denoci Pty Limited v Liverpool City Council [2019] NSWLEC 1643

Forgall Pty Ltd v Greater Taree City Council [2015] NSWCA 340

Forgall Pty Ltd v Greater Taree City Council (2015) 209 LGERA 160; [2015] NSWLEC 61

Housing Commissioner of NSW v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378

Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118

Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86; [2013] NSWCA 180

Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24

Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355

Randwick Municipal Council v Manousaki (1988) 66 LGRA 330

RebelMH Neutral Bay Pty Ltd v North Sydney Council [2019] NSWCA 130

Segal v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310

Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc (2014) 86 NSWLR 527; [2014] NSWCA 105

Category:

Principal judgment

Parties:

Denoci Pty Ltd (Appellant)
Liverpool City Council (Respondent)

Representation:

Counsel:
Mr M Wright SC (Appellant)
Mr I Hemmings SC (Respondent)

Solicitors:
Landerer & Company (Appellant)
Marsdens Law Group (Respondent)

File Number(s):

2020/13841

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Land and Environment Court

Jurisdiction:

Class 1

Citation:

[2019] NSWLEC 1643

Date of Decision:

24 December 2019

Before:

Chilcott C

File Number(s):

2018/314325

Judgment

A Commissioner refuses development consent

1. Denoci Pty Ltd (Denoci) wishes to develop land at 11 Progress Avenue, Prestons (the subject land) for two warehouse buildings. As a first step, Denoci lodged a development application with Liverpool City Council (the Council) seeking consent for site earthworks and the removal of vegetation to accommodate the future footprint of the two warehouse buildings. These earthworks and vegetation removal were proposed on only part of the subject land (the subject site). The subject land was 3.77ha and the subject site was 1.2ha.

2. Denoci appealed under s 8.7 of the Environmental Planning and Assessment Act 1979 (EPA Act) against the Council’s deemed refusal of the development application for earthworks and vegetation removal. The appeal was heard by Commissioner Chilcott. On 24 December 2019, the Commissioner dismissed the appeal and refused consent to the development application for earthworks and vegetation removal: Denoci Pty Limited v Liverpool City Council [2019] NSWLEC 1643.

The developer appeals on questions of law

3. Denoci appealed under s 56A(1) of the Land and Environment Court Act 1979 (the Court Act) against the Commissioner’s decision and orders on questions of law. The various grounds of appeal can be grouped as follows:

1. Misconstruction of the proposed development grounds: The Commissioner misconstrued the proposed development and the land on which it was to be carried out by focusing only on the development to be carried out on the subject site and not the subject land. This led the Commissioner into two errors:

1. the Commissioner found that the proposed development did not seek to avoid or mitigate the impacts of the proposed development because all of the vegetation on the subject site would be removed (ground 1); and

2. the Commissioner applied the objectives of the relevant IN3 Heavy Industrial Zone only to the subject site and not to the subject land (ground 14).

2. The inadequacy of the SIS ground: the Commissioner erred in law in finding that Denoci’s species impact statement (SIS) did not comply with the Chief Executive’s requirements by not undertaking targeted surveys for the threatened flora species, Hibbertia fumana, in its flowering period (ground 2).

3. The clause 7.6 grounds: the Commissioner, in finding that the proposed development was inconsistent with cl 7.6 of Liverpool Local Environmental Plan 2008 (LLEP):

1. misconstrued and misapplied cl 7.6 (grounds 3 and 4);

2. failed to give reasons for the finding (ground 5); and

3. took into account legally irrelevant factors or made a manifestly unreasonable decision (ground 6).

4. The clause 7.31 grounds: the Commissioner, in finding that the site was an “environmentally sensitive area” for the purposes of cl 7.31(3)(g) of LLEP:

1. misconstrued the term “environmentally sensitive area” in cl 7.31(3)(g) (ground 7);

2. failed to give reasons for the finding (ground 8); and

3. denied Denoci procedural fairness as the absence of compliance with cl 7.31 of LLEP was not a matter raised by the Council or the Commissioner or in contention between the parties (grounds 10 and 11).

5. The DCP fifth control ground: the Commissioner, in finding that the proposed development was not compliant with the fifth control in section 4 of Part 1 of Liverpool Development Control Plan 2008 (LDCP);

1. misconstrued the development and the land on which it was to be carried out and misapplied the fifth control and

2. misapplied the statutory test in s 4.15(3A) of the EPA Act (ground 9).

6. The offsets grounds: the Commissioner failed to consider Denoci’s proposed purchase of biodiversity credits from registered biobank sites to offset the impacts of the proposed development on biodiversity (grounds 12 and 13).

Misconstruction of the proposed development grounds

4. Denoci proposed to clear all of the vegetation and carry out earthworks within the footprint of the proposed warehouse buildings on that part of the subject land referred to as the subject site. The vegetation on the remainder of the subject land would be retained. Denoci proposed to offset the impacts caused by the removal of vegetation on the subject site by the purchasing of biodiversity credits from registered biobank sites.

5. Denoci submitted that the proposed development the subject of the development application involved not only the removal of vegetation and carrying out of earthworks on the subject site but also the undertaking of measures to avoid, mitigate and offset impacts on biodiversity on the subject land as a whole. The proposed development was described in the development application and supporting documents, including the SIS, and the expert report of Mr Humphries, the ecologist called by Denoci at the hearing.

6. Denoci contended that the proposed development avoided impacts on biodiversity by not undertaking vegetation removal or earthworks on the subject land outside of the subject site. The development application proposed preserving 2.53ha of vegetation on the subject land as an onsite conservation area to be registered as a biobank site to replace the current s 88B covenant.

7. Denoci contended that the proposed development would also avoid or mitigate impacts by retaining a 40m wide corridor of vegetation on the subject land that would provide connectivity between the vegetation in Maxwell’s Creek and the vegetation on an adjacent Lot 10, Lyn Parade.

8. Denoci contended the SIS and Statement of Environment Effects accompanying the development application also identified a number of mitigation measures, including: pre-and during construction mitigation measures; long-term management strategies; vegetation clearance and fauna management protocols; weed management measures; dust management; noise management; and erosion of sediment controls.

9. The development application proposed to offset the impacts that could not be avoided or mitigated, essentially from the removal of vegetation and carrying out of earthworks on the subject site, by purchasing biodiversity credits from registered biobank sites.

10. Notwithstanding these avoidance, mitigation and offsetting measures proposed in the development application, the Commissioner found that the proposed development “does not avoid impacts and nor does it seek to mitigate impacts” (at [52]). Denoci argued that this finding focused only on that part of the proposed development involving “the removal of all vegetation on the subject site”, rather than looking at the whole of the proposed development on the subject land, including all of the avoidance, mitigation and offsetting measures proposed.

11. Denoci submitted that the Commissioner’s finding that the proposed development neither avoided nor mitigated impacts on biodiversity was made without considering these avoidance, mitigation and offsetting measures proposed in the development application. The Commissioner’s failure to consider the proposed avoidance, mitigation and offsetting measures involved a failure to take into consideration a mandatory relevant matter, being the development application and supporting documents. Implicit in “determining a development application” pursuant s 4.15(1) of the EPA Act is consideration of the whole of the development which the development application proposed. The Commissioner failed to do so. Alternatively, Denoci submitted that the Commissioner’s finding that the proposed development did not avoid or mitigate impacts on biodiversity was manifestly unreasonable.

12. Denoci submitted that this focus of the Commissioner on only what was proposed on the subject site, and not on what was proposed on the subject land, also caused the Commissioner’s consideration of the zone objectives to miscarry. The land was zoned IN3 Heavy Industrial under LLEP. Clause 2.3(2) of LLEP required the Commissioner to have regard to the objectives for development in the zone when determining the development application in respect of land within that zone. The objectives of the relevant IN3 Zone are essentially to encourage industrial uses. There is no objective expressly providing for retention and management of vegetation on land in the IN3 Zone.

13. The Commissioner rejected Denoci’s submission at the hearing that “its proposed development should be approved because to do otherwise would be contrary to the intent of the zoning of the subject land, including the subject site, and contrary to the objectives of that zone” (at [143]). The Commissioner gave three reasons.

14. First, the Commissioner considered that the proposed development involved retention of vegetation on the subject land:

“The Applicant’s Proposed Development is for earthworks, including the removal of vegetation, on the Subject Site, and it has proposed the retention of the remaining EEC vegetation on the Subject Land as an offset for the removal of the vegetation on the Subject Site.

In my assessment, the Applicant, by the nature of its own proposed development, has recognised that retention, and indeed protection and good management, of remnant native vegetation on land zoned that is IN3 Heavy Industrial is a legitimate purpose for such land in circumstances where that vegetation is environmentally significant, including that the vegetation is listed as an EEC.” (at [145] and [146]).

15. Secondly, the previous development consent that had approved the subdivision of the land to create the Lot on which the current development was proposed required retention and management of vegetation on the land:

“I also note that the consent for the subdivision which created the Subject Land was itself a consent that recognised that retention and management of remnant EEC vegetation for environmental purposes, was a legitimate use of land that is otherwise zoned for industrial purposes.

The retention of the EEC vegetation on the Subject Site, in recognition of its environmental sensitivity and significance is, in my assessment, not antithetical to the current zoning of the Subject Land, including the Subject Site. This is evidenced by previous consents granted in respect of the Subject Land.” (at [148] and [149]).

16. Thirdly, the Commissioner considered that, although in most cases it can be expected that consent will be granted to use land for a purpose for which it is zoned, this is subject to the design of the development resulting in acceptable environmental impacts, citing BGP Properties Pty Ltd v Lake Macquarie City Council (2004) 138 LGERA 237; [2004] NSWLEC 399 at [118] and [119]. The Commissioner considered that the proposed development would not result in acceptable environmental impacts. The Commissioner therefore found that the objectives of the zone did not preclude refusing consent in order to retain the native vegetation on the subject site:

“However, for the purposes of this appeal, having had regard to the objectives for development in the IN3 zone applicable to the Subject Site in determining the Applicant’s proposed development, I see no reason that this zoning should, per se:

(1) preclude the retention of native vegetation on the Subject Site, particularly in circumstances where that vegetation is documented to contain floristics and other identifiable qualities that merit its recognition:

(a) as being “environmentally significant land” under LLEP, and;

(b) as an EEC under the TSC Act, and;

(2) give rise to any difficulty in the Court determining the Applicant’s Proposed Development by way of refusal because it is not compliant with relevant provisions of LLEP and LDCP, including cll 7.6 and 7.31 of LLEP, and a control under section 4 of LDCP.” (at [151]).

17. Denoci submitted that these reasons revealed that the Commissioner misconstrued the proposed development and focused only on that part of the development involving the removal of vegetation on the subject site in his consideration and application of the objectives of the IN3 zone. In [149] and [151] of the judgment, the Commissioner erroneously considered “the retention of the EEC vegetation on the subject site” and “the retention of the native vegetation on the subject site”, when the development application did not propose retention of the vegetation of the subject site. Rather, the development application proposed removal of the vegetation on the subject site but retention of vegetation on the remainder of the subject land. Denoci submitted that the Commissioner erred in failing to consider the objectives of the IN3 zone in relation to the development actually proposed.

18. Denoci submitted that the Commissioner further erred in his application of BGP Properties Pty Ltd v Lake Macquarie City Council. The proposed development would be consistent with the objectives of the zone and hence there would be an assumption that development which is consistent with the zoning will be permitted: BGP Properties Pty Ltd v Lake Macquarie City Council at [117].

19. The Council submitted that, on a fair reading of the whole of the Commissioner’s judgment, the Commissioner did not misconstrue the proposed development or the land on which it was proposed to be carried out. The Council referred to the Commissioner’s findings:

1. distinguishing between the subject site and subject land (such as at [3]-[12]), including identifying that the subject site is located within the eastern portion of the subject land (at [10]),

2. that the proposed development involves clearing all of the vegetation across 1.2ha of the subject site, including 1.04ha of native vegetation (at [13], [14], [24(2)]);

3. that the existing corridor of vegetation through the subject land provides connectivity between the vegetation in Maxwell’s Creek and the vegetation on Lot 10 (at [105]), that the existing corridor comprises a narrower corridor of 180m length and 50m width at the eastern portion (all of which is proposed to be retained) and a broader corridor of 220m in length and 120m width (which includes the subject site) (at [106]); and that the removal of vegetation on the subject site will extend the narrower, 50m wide corridor element from 180m to 340m in length and reduce the broader corridor element to around 60m in length along its northern boundary (at [107]);

4. that the vegetation on the subject site is substantially an endangered ecological community (EEC), is resilient and remains in moderate to good condition and is viable, is environmentally significant, and holds important ecological connectivity value in relation to vegetation along Maxwell’s Creek and the vegetation on Lot 10 (at [112]);

5. that the proposed development does seek to retain, protect and incorporate remaining vegetation on the subject land into the proposed development, although the development application is not specific as to the extent that existing trees and native vegetation are to be retained, protected and incorporated into the proposed development (at [124(2), (3), (7) and (9)] and [130(3)]); and

6. that the proposed development

1. does not maintain bushland and wildlife corridors of high conservation value (at [119(2)(a)]); and

2. by removing vegetation on the subject site and reducing the width of the vegetation corridor, will reduce the effectiveness of the vegetation in producing an ecological corridor through the subject site (at [133(4)]) and negatively affect the quality of the connectivity provided by the vegetation across the subject site as part of the corridor through the subject land (at [136(3)(c)]).

20. The Council submitted that the Commissioner’s introductory statement in [52] that “the Applicant’s proposed development, which involves the removal of all vegetation on the Subject Site, does not avoid impacts, and nor does it seek to mitigate impacts” needs to be read in the context of the Commissioner’s later findings, which establish that the Commissioner well understood what was the proposed development and the land on which it was proposed to be carried out. The Commissioner’s statement that the proposed development does not avoid or mitigate impacts was referring to that part of the proposed development involving the removal of all vegetation on the subject site. The Commissioner understood that native vegetation was to be retained on the remainder of the subject land (see, for example, [124(7)], [130(3)] and [133](4)]).

21. The Commissioner understood that Denoci proposed to offset the clearing of vegetation on the subject site in two ways: first, by retaining and managing the remaining vegetation on the subject land, including by the preparation and implementation of a vegetation management plan (see at [137(4)] and [145]) and, secondly, by the purchase of biodiversity credits from registered biobank sites (at [51(2)], [52], [53(3)], [137(4) and (5)]). The Commissioner considered that it was unnecessary to evaluate Denoci’s proposals to offset the impacts on biodiversity of the proposed development because he had concluded that the proposed development ought not to be approved (at [140]).

20. The Council submitted that this discussion revealed that the Commissioner understood the applicant’s proposed measures to avoid, mitigate and offset the impacts of the proposed development on biodiversity. The Commissioner clearly did take into account the whole of the development proposed in the development application.

21. For similar reasons, the Council also disputed that the Commissioner erred in his consideration and application of the objectives of the IN3 zone to the proposed development. The Council noted that the Commissioner had correctly identified the need to consider the zone objectives under cl 2.3(2) of the LLEP (at [45] and [142]) and had quoted the objectives of the IN3 zone at [45]. The Commissioner then properly considered the objectives in determining Denoci’s development application.

22. The Council submitted that the Commissioner did not misconstrue the development the subject of the development application. The Commissioner understood that the development application proposed the removal, not the retention, of the vegetation on the subject site. The Commissioner’s reference to the retention of the vegetation on the subject site in [149] and [151] did not reveal misunderstanding of what was proposed by Denoci. Rather, the Commissioner was answering Denoci’s argument that the proposed development involving removal of the vegetation on the subject site should be approved because to do otherwise would be contrary to the objectives of the IN3 zone (the argument that the Commissioner summarised in [143]). The Commissioner was saying that doing otherwise – not approving the proposed development of removing the vegetation and hence retaining the vegetation on the subject site – would not be antithetical to the zoning. This was a concise answer to Denoci’s arguments.

23. The Council submitted that the Commissioner did not err in his reference to BGP Properties Pty Ltd v Lake Macquarie City Council. The Commissioner had cited McClellan CJ’s findings in that case in support of the Commissioner’s conclusion that the carrying out of the proposed development, although consistent with the objectives of the IN3 zone, would not result in acceptable environmental impacts. This was the proviso that McClellan CJ had noted. A consent can be expected to be granted to an application to use a site for a purpose for which it is zoned “provided of course the design of the project results in acceptable environmental impacts”: at [118]. In this case, the Commissioner concluded that the proposed development would not result in acceptable environmental impacts.

24. I find that Denoci has not established that the Commissioner erred in the ways alleged in ground 1 or ground 14. As the Council has submitted and I have summarised above, the Commissioner correctly identified the development the subject of the development application and the land on which the proposed development was proposed to be carried out. The Commissioner correctly identified that parts of the subject land would be cleared of vegetation, which was the subject site of 1.2ha, with the larger area of the subject land remaining uncleared. The Commissioner identified the vegetation to be cleared on the subject site, which was part of an EEC, and a vegetation corridor connecting the vegetation on Maxwell’s Creek with the vegetation on the adjacent Lot 10. The Commissioner made factual findings of the environmental impacts of the clearing of this vegetation on the subject site.

25. The Commissioner properly considered the development application made by Denoci and the whole of the development proposed in that development application. The Commissioner’s consideration of the mitigation hierarchy of avoid, mitigate and offset was done in the context of the whole of what was proposed in the development application. The Commissioner’s introductory statement in [52] needs to be considered in the context of all of his findings in the judgment. The Commissioner identified the measures Denoci had proposed to avoid impacts on biodiversity, including retaining and managing the native vegetation on the subject land outside of the subject site. The retention of the remaining vegetation on the subject land would maintain a vegetation corridor, albeit of a reduced width, connecting the vegetation on Maxwell’s Creek with the vegetation on Lot 10. The Commissioner acknowledged that Denoci proposed to mitigate impacts on this retained vegetation, including through a vegetation management plan. The Commissioner identified that Denoci proposed to offset the impacts from clearing the vegetation on the subject site, not only by retaining the remaining vegetation on the subject land but also by purchasing biodiversity credits from registered biobank sites.

26. The Commissioner’s consideration of the proposed development therefore does not reveal any of the errors alleged by Denoci. The Commissioner did not misconstrue the development proposed by Denoci or the land on which the development was to be carried out. The Commissioner did not fail to consider the development application made by Denoci.

27. The Commissioner did not make a manifestly unreasonable decision that the proposed development as a whole did not avoid or mitigate the impacts; rather his finding that there was no avoidance or mitigation of impacts was confined to that part of the proposed development involving the removal of vegetation on the subject site. That finding was factually correct. On a proper reading of the judgment as a whole, the Commissioner did not extrapolate that finding to the whole of the proposed development of the whole of the subject land.

28. I reject ground 1.

29. For similar reasons, I find the Commissioner did not err in his construction or application of the objectives of the IN3 zone to the proposed development. The Commissioner did not misconstrue the development proposed by Denoci or the land on which the development would be carried out. The Commissioner’s consideration of the zone objectives was done with the understanding that the proposed development involved the removal of vegetation only on the subject site and not elsewhere on the subject land. Indeed, in [145], the Commissioner expressly acknowledges that the proposed development involved the retention of the remaining vegetation on the subject land as an offset for the removal of the vegetation on the subject site.

30. The Commissioner’s reference in [149] and [151] to retention of the vegetation on the subject site did not reveal that the Commissioner misunderstood the proposed development. The Commissioner knew that the proposed development involved the removal, not the retention, of all of the vegetation on the subject site. The Commissioner’s reference to retention of vegetation on the subject site was in answer to Denoci’s argument that the proposed development should be approved and the subject site cleared because that would be consistent with the objectives of the IN3 zone. The Commissioner did not “embrace” this argument (at [144]). The Commissioner considered that the retention of the environmentally significant vegetation on the subject site would not be “antithetical” to the objectives of the IN3 zone. Furthermore, the Commissioner considered that merely because a use of land is for a purpose for which the land is zoned did not necessarily mean that the development must be approved; the development must still result in acceptable environmental impacts (at [151], [152]). In this regard, the Commissioner did not misunderstand or misapply what McClellan CJ had held in BGP Properties Pty Ltd v Lake Macquarie City Council.

31. I reject ground 14.

Inadequacy of the SIS ground

34. Denoci prepared an SIS to assess the ecological impacts of the proposed development. The proposed development involved removal of 1.04ha of the Castlereagh Swamp Woodland, listed as an endangered ecological community under the then applicable Threatened Species Conservation Act 1995 (TSC Act). The clearing also had the potential to impact a flora species, Acacia pubescens, listed as vulnerable under the TSC Act. An SIS was required if the development was likely to significantly affect an EEC or threatened species.

35. In the preparation of the SIS, the proponent was required to seek the requirements of the Chief Executive of the Office of Environment and Heritage. Section 111(1) of the TSC Act provided:

“The person applying for the licence (or, if the species impact statement is being prepared for the purposes of the Planning Act, the applicant for development consent or the proponent of the activity or, if the species impact statement is being prepared for the purposes of the Plantations and Reafforestation Act 1999, the applicant for authorisation under that Act) must request from the Chief Executive and must, in preparing the species impact statement, comply with any requirements notified to the person by the Chief Executive concerning the form and content of the statement.”

36. The Chief Executive notified the requirements by letter dated 17 July 2018. Section 4.3 concerned specific survey requirements, including for the critically endangered flora species, Hibbertia fumana:

“In addition to any surveys carried out to assess the subject species, the following targeted surveys must be undertaken:

Hibbertia fumana and microchiropteran bats

Hibbertia fumana is cryptic and difficult to detect, particularly when not in flower. As such, surveys must be undertaken while the species is budding or flowering, which usually occurs between September and December. Targeted surveys should be undertaken using field traverses as per the “NSW Guide to Surveying Threatened Plants” ( and samples should be sent to the Royal Botanic Garden Sydney for confirmation.”

37. The proponent’s ecologist did undertake a targeted survey for Hibbertia fumana, but not “whilst the species is budding or flowering, which usually occurs between September and December”, which was the time period specified by the Chief Executive’s requirements.

38. Denoci’s ecologist, Mr Humphries, recorded the surveys undertaken:

“The subject site and subject land were subject to a targeted survey for Hibbertia fumana and this species was not recorded.

Whilst these surveys were initially not undertaken during the likely flowering time of the species (assumed to be spring), additional surveys were taken on 7 and 12 March 2019 and are shown collectively in Figure 4.1 in the Cumberland Ecology SIS March 2019. Further, the field ecologists who undertook the survey of the subject site have previously undertaken surveys for Hibbertia fumana including locating, identifying and tagging individuals outside of the species optimal flowering period, using vegetative characters to identify the species. This work included distinguishing individuals from co-occurring individuals of the morphologically similar Hibbertia puberula subsp puberula using vegetative characters described by Toelken and Miller (2012). Cumberland Ecology botanists have been involved in projects locating additional individuals of Hibbertia fumana in a new area at the location of one of the populations and expanding the known extent of occurrence of the population.

Further specimens of all Hibbertia species recoded at the subject site have been lodged with the RBG for determination but a response had not been obtained from the RBG at the date of this Statement due to relocation of the Plant Identification Services to Mount Annan.”

39. The collected specimens sent to the Royal Botanical Gardens were later identified as all being of a different and more common Hibbertia species, Hibbertia aspera, and not Hibbertia fumana.

40. The joint expert report of the ecologists, Mr Humphries for Denoci and Ms James for the Council, recorded their agreement that:

“CER 4.3 identifies specific targeted survey requirements for Hibbertia fumana within its known flowering period (September to December). There has been no survey undertaken across the subject lands during this time period. Targeted survey was undertaken in June and August 2018 and March 2019 by Cumberland Ecology staff who had experience in identifying the species at Moorebank using vegetative features.”

41. The joint expert report recording the experts’ disagreement that:

“We disagree re adequacy of targeted survey for Hibbertia fumana in compliance with CER 4.3.

We disagree that there could be a specific impact on CPLS & Hibbertia fumana or other threatened species not adequately surveyed at least within the subject site and subject land.”

42. Dealing with the contention that “(b) The site may also contain Hibbertia fumana, which is listed as a critically endangered species on Schedule 1 of the TSC Act…”, the joint expert report recorded the following areas of agreement and disagreement:

“We agree CER 4.3 identified specific targeted survey requirements for Hibbertia fumana within its known flowering period.

We agree that targeted survey was taken in June and August 2018 and March 2019 by Cumberland Ecology staff who have had experience in identifying the species at Moorebank using vegetative features. We agree the three specimens of Hibbertia sent to the Royal Botanic Gardens in March 2019 have now been determined as Hibbertia aspera.

We disagree that the species could be present within the subject site in view of the dense scrub/small tree layout restricting available habitat and potential persistence in the soil as single rootstock…”

43. The experts gave their reasons for the areas of disagreement as follows:

“TJ [Teresa James]: Targeted survey was undertaken in June and August 2018 and March 2019 (outside of known flowering period) by Cumberland Ecology staff who had experience in identifying the species and its one known location (Moorebank) using vegetative features. It can be easily confused with other Hibbertia species including H.aspera (OEH Threatened Species Profile) that is recorded from the subject site/land. The species is known from relatively open & disturbed habitat at Moorebank and is known to produce seed and sucker. It is also listed as critically endangered (CE). It is reasonable, therefore, to assume presence for assessment purposes.

RH [Robert Humphries]: Specimens of Hibbertia identified as H.aspera in the Cumberland Ecology SIS was sent to the Royal Botanic Gardens in March 2019 for confirmation of identification. On 9 May 2019, Andrew Orme, Identification Technical Officer, provided written confirmation that the specimens were all Hibbertia aspera subsp aspera (Attachment A).

Based on the above, whilst “possible”, I considered it “unlikely” that H.fumana may be present at the site other than the reason that a similar revegetation type occurs at the subject site to where it has been recorded at Moorebank. Just because a particular vegetation type exists and a threatened species has been recorded in that vegetation type does not make it reasonable to assume that the species is present for assessment purposes (and then to provide an offset for a species that has not been confirmed to be present or impacted). In my 30+ years of experience as an ecologist, specialising in the management and recovery of threatened species, I have found that threatened flora species are typically restricted to a small area of the available/potential habitat i.e. they do not occur in every patch of a particular vegetation type.

In EIA it is usual to identify a potential habitat based on known habitat preferences and nearby records, and then do a targeted survey of this potential habitat for the species. Whilst in this case, the survey was not undertaken during the known flowering period, it is agreed that it was done by ecologists experienced in the recognition of this species using vegetative features and was not recorded. On this basis there is no reasonable requirement to assume that the species is present…”

44. Dealing with the contention that “v. The targeted flora survey within the subject land was limited by the timing in June (most species not flowering), the dry conditions when the survey was undertaken, and the low survey effort. A targeted survey has not been undertaken for Hibbertia fumana and specific survey requirements (4.3) are therefore not met”, the joint export report recorded the following areas of agreement and disagreement:

“We agree that targeting threatened flora survey was limited to June and August 2018 and March 2019 as part of the SIS.

We agree, that in addition to the surveys undertaken as part of the SIS, there have been numerous previous surveys that have included the subject land (Lot 11) including surveys and monitoring undertaken by Conacher Travers (January & June 1999 & March & September 2000), ERM (March & April 2003), Clements et al (November 2003 & November 2006, March & November 2007 and June 2009) which cover multiple years and seasons.

We disagree that previous surveys were adequate and without limitations.

We agree that no surveys of the subject land are documented between 2009 and 2016 in the SIS.

We agree that it is unlikely that other more visible and non-cryptic threatened flora species identified as ‘subject species’ in the SIS are present and have not been detected considering the level of surveys.

We disagree that several of the species, however, prefer more open conditions for growth and reproduction than is currently present across much of the subject site and could survive within the soil and seed or rootstock until conditions are suitable.”

45. The experts gave their reasons for the areas of disagreement as follows:

“TJ: The adequacy of previous surveys and the reliance afforded to them is questionable. The early surveys were undertaken after recent severe disturbances as documented in Conacher Travers (1999) with much of the current subject site identified as Heathland with shrubs 1-2m high. There was also a long period (2009-2018) without documentation of species. More recent survey was predominantly during winter months and there has been no survey for Hibbertia fumana within the flowering period (as required by CERs). This is not considered best practice or sufficient for reliable assessment of impacts in respect of site with high conservation significance.

RH: The subject land is quite unusual in the length of data available for consideration compared to most other impact assessments (including for Major Projects such as coal mines, wind farms and other infrastructure projects with vastly more extensive impacts) which typically may have only 2-3 years’ worth of survey data. To suggest that the body of survey data for the subject lands spreading over 20 years is unreliable and leads to uncertainty because there has been a long period of no survey is inconsistent with normal/traditional requirements and expectations of consent and determining authorities and published impact assessment guidelines. In my 30+ years’ experience as an ecologist, with over 15 years working for Government agencies and being responsible for the review and determination of environmental impact assessment reports (SISs, licences, requests for concurrence covering 100s of minor to major projects) where I have also been responsible for the development of guidelines and standards relating to an impact assessment I have never seen such an extraordinary requirement expressed.

However, it is agreed, that despite the number of surveys that have been undertaken on the subject land, there is always the ‘possibility’ (although ‘unlikely’ in this case given the length of survey data) that there may be some species that are not evident above ground, because of the current structure/density of vegetation that may, subject to some type of disturbance, e.g. a fire, regeneration from seed stored in the soil or rootstocks. However, an environmental impact assessment (EIA) is not required to continually assess and survey for the threatened species over a 10 year period or assess what may be at a site at some point in the future if the structure of the vegetation becomes more open. An EIA assesses the condition of the site (and thus its significance) at the time of the assessment, unless an assessment is undertaken immediately after a disturbance such as slashing or fire.

OEH advice (refer to survey and assessment guidelines, DECC 2004, OEH 2016), is that environmental impact assessment should not be taken immediately after such disturbance, or if unavoidable, the vegetation habitat values should be assessed as they were, if known, prior to the disturbance.

The subject land was not assessed after such disturbances, rather the site has been actively regenerating since disturbances, (clearing or partial clearing) in around 1999.”

46. The Commissioner considered this evidence and disagreement between the experts, in their individual and joint expert reports, about the adequacy of the targeted surveys for Hibbertia fumana (including at [73]-[79]). The Commissioner found at [80]:

“Having reviewed the Applicant’s SIS and the evidence of the ecology experts in their joint report:

(1) I accept the agreement of the experts that the Applicant’s proposed development would have a significant impact on local populations of both the Downy Wattle and the Cumberland land;

(2) I find that:

(a) the species Hibbertia fumana had not been adequately targeted in surveys undertaken in relation to the Applicant’s SIS, for the straight forward reason that no surveys were undertaken of the species at the correct time of year and the CERs specified that those surveys must be undertaken, and as a consequence;

(b) the SIS has not complied with the requirement in the CERs section 4.3 concerning the need for the SIS to included targeted surveys of this species.”

47. The Commissioner repeated this finding at [155(3)]:

“The species Hibbertia fumana has not been adequately targeted in surveys undertaken in relation to the Applicant’s SIS, and as a consequence:   

(a) the Applicant’s SIS has not complied with the requirement in the CERs section 4.3 concerning the need for the SIS to included targeted surveys of the species Hibbertia fumana;

(b) the Applicant’s SIS has not satisfied the requirements of the Chief Executive of NPWS, and is not a sufficient basis to confirm that there will not be a significant impact on the species Hibbertia fumana.”

48. Denoci submitted that the Commissioner erred in making these findings in two ways. First, Denoci argued that the Chief Executive’s requirement 4.3 should not be read literally. The purpose of requirement 4.3 was in fact achieved by what was done. Although Denoci’s botanists did not undertake targeted surveys in the flowering period, as required by Chief Executive’s requirement 4.3, the botanists who undertook the surveys were experienced in identifying Hibbertia fumana using vegetative features. The parties’ ecologists have agreed that the botanists who undertook the surveys “had experience in identifying the species at Moorebank using vegetation features”. The surveys undertaken by these botanists achieved the purpose of the requirements which was to undertake targeted surveys on the site for Hibbertia fumana.

49. Secondly, Denoci argued that the Commissioner failed to consider the evidence of Mr Humphries, in his individual expert report quoted above, about the adequacy of the surveys for Hibbertia fumana. The Commissioner only referred in [80] of the judgment to “the Applicant’s SIS and the evidence of the ecology experts in their joint report”.

50. The Council submitted that neither of the alleged failures relied on by Denoci is an error on a question of law. The Commissioner did not misconstrue the Chief Executive’s requirement 4.3. The requirement was not merely to undertake targeted surveys for Hibbertia fumana but to do so at a particular time of the year, the flowering period of the species. It was agreed that the targeted surveys were not undertaken in this period. The Commissioner’s finding that the SIS had not satisfied the Chief Executive’s requirements in this regard was a finding of fact. Denoci’s argument that the Commissioner should have found that the SIS achieved the purpose of the requirements, having regard to Mr Humphries evidence, is simply an assertion that a different finding of fact ought to have been made. Not making that asserted finding of fact did not involve any error on a question of law. Even if the Commissioner’s finding of fact could be said to be perverse or unreasonable, or the reasoning whereby the finding of fact was reached was demonstrably unsound, there would still not be an error on a question of law: RebelMH Neutral Bay Pty Ltd v North Sydney Council [2019] NSWCA 130 at [73]; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156; Randwick Municipal Council v Manousaki (1988) 66 LGRA 330 at 333-334.

51. In any event, the Council submitted that the Commissioner did not err in fact. The parties’ experts agreed that the targeted surveys had not been undertaken in the flowering period as required by the Chief Executive’s requirement 4.3. They disagreed as to whether the surveys undertaken by Denoci were adequate. The Council’s expert, Ms James, disagreed with Denoci’s expert, Mr Humphries, that the survey undertaken by Denoci’s botanists, even if they were experienced in identifying Hibbertia fumana from their work at the Moorebank site, was adequate. Ms James said that Hibbertia fumana can be easily confused with other Hibbertia species, including Hibbertia aspera which was recorded on the subject site and subject land. The survey undertaken by Denoci’s botanists was mainly during winter months and not within the flowering period. This was not considered best practice or sufficient for a reliable assessment.

52. The Council noted that the Commissioner was aware of Mr Humphries’ assertion that the survey was adequate because the botanists who undertook the survey had experience in identifying Hibbertia fumana using vegetative features. The Commissioner recorded that the SIS stated that “the botanists who had undertaken the surveys were familiar with this species and had undertaken previous surveys for it at the only two known locations of Hibbertia fumana and said that: ‘It is considered that adequate identification characters were present at the time of the survey for identification of Hibbertia fumana’” (at [78] of the judgment).

53. The Commissioner nevertheless found that the surveys for Hibbertia fumana that had been undertaken were inadequate “for the straight forward reason that no surveys were undertaken at the correct time of year and the CERs specified that those surveys must be undertaken” (at [80(2)(a)]).

54. The Council submitted that “the Commissioner was alive to the contest on the possibility of finding the species out of season, recognised that some of the applicant’s experts may even have found some before, but nevertheless concluded that, consistent with the CERs, a targeted survey during the right season was required. That was a finding of fact open to him.”

55. I find that Denoci has not established that the Commissioner erred on a question of law in finding that the SIS had not complied with the Chief Executive’s requirement 4.3. As the Council has submitted, neither alleged failure of the Commissioner involved error on a question of law.

56. As to the first, the Commissioner did not misconstrue the Chief Executive’s requirements. Section 4.3 not only required targeted surveys for Hibbertia fumana to be undertaken, but for those surveys to be undertaken at a particular time of year “whilst the species is budding or flowering, which usually occurs between September and December”. The reason the Chief Executive gave for requiring targeted surveys to be undertaken in the flowering period was that “Hibbertia fumana is cryptic and difficult to detect, particularly when not in flower.” The undertaking of targeted surveys in the flowering period was an essential condition for the requirement of targeted surveys of Hibbertia fumana.

57. Denoci’s argument, advanced by Mr Humphries and in the SIS, that targeted surveys for Hibbertia fumana at times of the year other than during the flowering period are sufficient, if undertaken by botanists with experience in identifying Hibbertia fumana, was not to the point. Such surveys by such experienced botanists cannot satisfy the essential condition of the Chief Executive’s requirement 4.3 that the targeted surveys be undertaken in the flowering period. In this regard, the targeted surveys undertaken by Denoci’s botanists could not be said to satisfy the purpose of the Chief Executive’s requirement 4.3, contrary to Denoci’s argument. The purpose of requirement 4.3 included undertaking targeted surveys during the flowering period, not just undertaking targeted surveys at any time. This was not done.

58. As to the second, the Commissioner did not fail to consider Mr Humphries’ evidence that the targeted surveys were adequate because they were undertaken by botanists with experience in identifying Hibbertia fumana. The Commissioner may not have expressly referenced Mr Humphries’ individual expert report in [80] of the judgment, but that does not establish that he did not consider Mr Humphries’ evidence. First, the Commissioner elsewhere referred to Mr Humphries’ individual expert report (see, for example, [57] and [58]) and noted that the SIS formed part of Mr Humphries’ expert report (at [58]). The Commissioner said he had “relied on the evidence of the experts in their individual and joint reports” (at [73]). Secondly, the substance of what Mr Humphries said in his individual expert report about the adequacy of the targeted surveys that had been undertaken was repeated by Mr Humphries in the joint expert report. Thirdly, the Commissioner expressly stated that he had considered the joint expert report (at [73], [79] and [80]), and what Mr Humphries and Dr James said in that report about the adequacy of targeted surveys that had been undertaken. Fourthly, the Commissioner summarised the nub of Mr Humphries’ evidence, which was that the targeted surveys were adequate because they were undertaken by botanists who were familiar with the species and had undertaken previous surveys for it at the only two known locations of Hibbertia fumana (at [78]).

59. In these circumstances, the Commissioner did not fail to consider Mr Humphries’ evidence about the adequacy of the surveys for Hibbertia fumana.

60. I reject ground 2.

The clause 7.6 grounds

61. Clause 7.6 of LLEP provides:

“(1) The objectives of this clause are as follows—

(a) to maintain bushland, wetlands and wildlife corridors of high conservation value,

(b) to identify areas of significance for revegetation to connect to or buffer bushland, wetlands and wildlife corridors,

(c) to protect rare and threatened native flora and native fauna,

(d) to ensure consideration of the significance of vegetation, the sensitivity of the land and the impact of development on the environment prior to the giving of any development consent.

(2) Before determining an application to carry out development on environmentally significant land, the consent authority must consider such of the following as are relevant—

(a) the condition and significance of the vegetation on the land and whether it should be substantially retained in that location,

(b) the importance of the vegetation in that particular location to native fauna,

(c) the sensitivity of the land and the effect of clearing vegetation,

(d) the relative stability of the bed and banks of any waterbody that may be affected by the development, whether on the site, upstream or downstream,

(e) the effect of the development on water quality, stream flow and the functions of aquatic ecosystems (such as habitat and connectivity),

(f) the effect of the development on public access to, and use of, any waterbody and its foreshores.”

62. In this case, the subject site was identified as “environmentally significant land” on the Environmentally Significant Land Map within LLEP (at [94]). Clause 7.6 therefore applied to Denoci’s application to carry out development on this environmentally significant land.

63. The Commissioner found at [119] that the proposed development did not comply with the provisions of cl 7.6 of LLEP:

“Having considered (at [102] to [118], above) the matters set out in cl 7.6(3) of LLEP, I have:

(1) also addressed the provision of cl 7.6(1)(c) that consideration be given to the significance of vegetation, the sensitivity of the land and the impact of development on the environment prior to the giving of any development consent;

(2) concluded that the Applicant’s proposed development:

(a) does not maintain bushland and wildlife corridors of high conservation value, which is an objective of cl 7.6 of LLEP; and

(b) does not protect rare and threatened native flora and native fauna, which is also an objective of cl 7.6 of LLEP;

(3) further concluded that the Applicant’s proposed development:

(a) does not comply with the provisions of cl 7.6 of LLEP for reasons provided above at [2];

(b) has the potential for adverse impacts on an environmentally sensitive area, which is a matter I am required to consider under the provisions of cl 7.31(3)(g) of LLEP;

(c) does not ensure that the Applicant’s proposed earthworks, for which development consent is required, will not have a detrimental impact on environmental functions and processes, or features of the surrounding land, being the potential impacts on the ecological connectivity functions and processes between vegetation along Maxwell’s Creek and the vegetation on Lot 10 Lynn Parade, and so is in contravention of the objective of cl 7.31(1)(c) of LLEP;

(d) for reasons provided above (at [a], [b] and [c]), does not comply with the provisions of cl 7.31 of LLEP;

(4) finally concluded that, because it does not comply with the provisions of both cll 7.6 and 7.31 of LLEP, the Applicant’s Proposed Development should not be approved.”

64. Denoci argued that the Commissioner erred in his consideration of cl 7.6 in three respects.

65. First, Denoci contended that the Commissioner misconstrued and misapplied cl 7.6. Denoci noted that the reasons for the Commissioner’s finding in [119(3)(a)] that the proposed development does not comply with the provisions of cl 7.6 are stated to be “provided above at (2)”. The reasons provided in [119(2)] reflect the language of two of the objectives of the clause, in cl 7.6(1)(a) and (c), not the considerations in cl 7.6(2).

66. Denoci submitted that cl 7.6 required the Commissioner, in determining Denoci’s development application, to consider the matters of relevance in cl 7.6(2). The Commissioner did not do so, instead only considering the objectives in cl 7.6(1). Denoci submitted that the Commissioner thereby erred in law. Any noncompliance with cl 7.6 has to flow from noncompliance with the considerations in cl 7.6(2) not the objectives in cl 7.6(1). Denoci submitted that the Commissioner thereby misconstrued or misapplied cl 7.6.

67. Denoci also argued that the Commissioner erred in his consideration of cl 7.6 by failing to have regard to Denoci’s proposal to purchase biodiversity credits from registered biobank sites. One of the matters the Commissioner was required to consider was “the condition and significance of the vegetation on the land and whether it should be substantially retained in that location” (cl 7.6(2)(a)). Denoci contended that, although the Commissioner considered this matter in [102]-[118], his consideration was limited to the joint expert report, and the evidence of Ms James, and did not refer expressly to Mr Humphries’ individual expert report. Mr Humphries’ evidence was that if the vegetation on the subject site were to be retained, it would degrade slowly, gradually reduce and eventually lose its conservation value. Instead of retention of the vegetation on the subject site, Denoci proposed to offset the loss of vegetation on the subject site by purchasing biodiversity credits from registered biobank sites. Mr Humphries had said in his individual expert report:

“It is argued that the considerations in cl 7.6(2) have been considered by the application and are reflected in the proposed on-site offset area that will provide permanent protection and fully funded long term management of a viable patch of the vegetation comprising the EEC and habitat for threatened species that are assumed to be the basis of the ESL layer as discussed in Contention 2.”

68. Denoci submitted that Mr Humphries’ evidence was relevant to the consideration of cl 7.6(2)(a) and the Commissioner erred in ignoring it.

69. Secondly, Denoci submitted that the Commissioner failed to give adequate reasons to explain how the proposed development was inconsistent with cl 7.6. Denoci argued that the Commissioner’s findings that the proposed development did not comply with cl 7.6 were limited to those in [119(2)(a) and (b) and (3)(a)]. These paragraphs articulate the Commissioner’s findings but do not give reasons for the findings. Denoci noted that the issue in relation to cl 7.6 was a principal contested issue and one of the fundamental grounds on which the Commissioner’s judgment rested: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 at [111]-[112]. The Commissioner was required to articulate his reasons on that issue. Denoci argued that the Commissioner also was required to refer to the evidence that was important or critical to the determination of the principal contested issue: Segal v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310 at [44], [45], [62], [92] and [99]. The Commissioner failed, however, to refer to Mr Humphries’ evidence and the proposal to purchase biodiversity credits from registered biobank sites.

70. Thirdly, Denoci contended that the Commissioner took into account a legally irrelevant matter or made a manifestly unreasonable decision regarding cl 7.6. Denoci had argued before the Commissioner that cl 7.6 of LLEP had been abandoned by the Council. Denoci had argued that the Council’s approval of industrial development on the surrounding lands amounted to an abandonment of cl 7.6 of LLEP. Denoci submitted that the effect of the abandonment was twofold. First, it affected the viability of the EEC and endangered species on the subject land. Second, little or no weight should be given to cl 7.6 in evaluating Denoci’s development application.

71. The Commissioner did not accept Denoci’s argument that cl 7.6 had been abandoned, saying at [100(3)]:

“I do not embrace these submissions of the Applicant for the following reasons: (3) for reasons provided below in relation to my consideration of the objectives of the IN3 Heavy Industry zoning of the Subject Land (see below at [142] and following), I do not accept the Applicant’s submission that the grant of consent for development on land with an IN3 zoning, in circumstances where that land contains areas mapped as environmentally significant land, should be interpreted as an abandonment of the provisions of cl 7.6 by the Respondent Council. Indeed, the circumstances of the current appeal in which the Respondent has vigorously contended the appeal on the basis of, inter alia, the provisions of cl 7.6 would suggest anything other than an abandonment of the provisions of that clause.”

72. Denoci argues that “the Commissioner was in error in dealing with the issue of abandonment by assessing the Respondent Council’s ‘present conduct’ in relation to the current DA as opposed to the ‘historical conduct’ of the Council in its application of cl 7.6 of LLEP 2008. Further, by considering the level of ‘vigour’ in which the Council chose to contest the application of the LLEP 2008 the Commissioner erred in his determination of the weight attributed to the clause 7.6. The Council’s reliance on the clause and its ‘vigour’ in doing so were legally irrelevant factors and the Commissioner was in error to take them into account.”

73. In the alternative, if cl 7.6 had not been abandoned and needed to be considered as a relevant matter, Denoci argued that “the Commissioner’s finding in relation to the weight attributed to cl 7.6 of the LLEP 2008 in evaluating the development application was manifestly unreasonable”, citing Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24 at 41. Denoci noted that in the ten years after LLEP had commenced, the surrounding land had been developed for industrial uses, consistent with the IN3 zoning, notwithstanding that the land had been mapped as “environmentally significant land” for the purposes of cl 7.6 of LLEP. Denoci submitted that “the only conclusion open to the Commissioner was that the clause has been so inconsistently and infrequently applied that it has been abandoned.” On that basis, Denoci submitted, the Commissioner erred “in giving determining weight or any weight to cl 7.6” of LLEP.

72. The Council disputed that the Commissioner misconstrued or misapplied cl 7.6. The Commissioner’s statements in [119(2) and (3)] were his conclusions. Those conclusions built upon the Commissioner’s discussion earlier in the judgment, including in [45(2)], [95]-[98] and [102]-[118], as the Commissioner expressly stated in [119]. Both the terms of the discussion in those paragraphs, and the headings used in the discussion, establish that the Commissioner expressly considered the matters of relevance in cl 7.2(2).

73. The Commissioner quoted the whole of cl 7.6 in [45(2)] and repeated the objectives of cl 7.6 in [96]. The Commissioner noted that the provisions of cl 7.6 “guide the consent authority in its determination of an application to carry out development on ‘environmentally significant land’” (at [95]). The Commissioner recorded the requirement in cl 7.6(2) (although the Commissioner misstated the subsection as 7.6(3)) that the consent authority must consider such of the matters identified in cl 7.6(2) as are relevant to the determination of an application and identified the first three matters in cl 7.6(2)(a)-(c) as being relevant to Denoci’s development application (at [97]).

74. The Commissioner then considered each of these matters in cl 7.6(2)(a)-(c) in [102]-[118]. The heading before [102] repeated the language of the matter in cl 7.6(2)(a), the heading before [113] repeated the language of the matter in cl 7.6(2)(b) and the heading before [117] repeated the language of the matter in cl 7.6(2)(c). These are the three matters in cl 7.6(2) of relevance to the proposed development of the subject site and subject land.

75. The Commissioner stated that his conclusions in [119] had been reached “having considered (at [102] to [118], above) the matters set out in cl 7.6(3) [sic, cl 7.6(2)] of LLEP”. The conclusions in [119] include the conclusion in [119(2)] that the proposed development did not achieve the objectives in cl 7.6(1)(a)-(c) and the conclusion in [119(3)(a)] that the proposed development did not comply with cl 7.6. These conclusions supplement, not displace, the Commissioner’s earlier conclusions about the relevant matters in cl 7.6(2)(a)-(c) expressed in the earlier discussion in [102]-[118].

76. The Council submitted that this analysis makes plain that the Commissioner did consider the relevant matters in cl 7.6(2) in forming his conclusion in [119] that the proposed development did not comply with cl 7.6.

77. The Council submitted that Denoci’s argument that the Commissioner misconstrued and misapplied cl 7.6 was based on an erroneous focus only on what the Commissioner said in [119(2)(a) and (b) and (3)(a)]. Such limitation ignores the Commissioner’s earlier discussion of the whole of cl 7.6 and of the relevant matters in cl 7.6(2).

78. The Council disputed Denoci’s argument that the Commissioner needed to consider Denoci’s proposal to purchase biodiversity credits from registered biobank sites when considering cl 7.6(2)(a). It was open to the Commissioner to deal with the issue of offsets separately to his consideration of cl 7.6.

79. The Council also disputed Denoci’s argument that the Commissioner did not consider Mr Humphries’ evidence, but limited his consideration to the joint expert report and Ms James’ evidence. The Council submitted that no error of law is revealed by the Commissioner not referring in this section of the judgment dealing with cl 7.6 to all of the evidence that he considered. In circumstances where the Commissioner elsewhere in the judgment has referred to other evidence, including Mr Humphries’ evidence, no inference should be drawn that the Commissioner did not consider that other evidence: RebelMH Neutral Bay Pty Ltd v North Sydney Council at [98].

80. The Council submitted that Denoci’s argument that the Commissioner failed to give adequate reasons falls away once it is recognised that the Commissioner’s reasons are not confined to only the conclusions in [119(2)(a) and (b) and (3)(a)] but extend to the earlier referred to paragraphs of the judgment, including [102]-[118]. The reasoning process in all of these paragraphs identifies the relevant matters in cl 7.6(2)(a)-(c) that the Commissioner considered and apprises the parties of the broad outline and the constituent facts of the reasoning on which the Commissioner has acted, citing Soulemezis v Dudley (Holdings) Pty Ltd at 273. No failure to give reasons constituting an error of law is established.

81. The Council disputed that the Commissioner considered legally irrelevant factors or made a manifestly unreasonable decision in concluding that the proposed development did not comply with cl 7.6. First, the statement of the Commissioner in [100(3)] that the Council’s vigorous defence of the appeal on the basis of cl 7.6 would suggest anything other than an abandonment of that clause is not a legally irrelevant matter. To be a legally irrelevant matter, the statute must expressly or impliedly require the consent authority not to take the matter into consider: see Minister for Aboriginal Affairs v Peko-Wallsend at [40]. Neither the EPA Act nor LLEP expressly or impliedly required the Commissioner not to consider the conduct of the Council in defending the appeal on the basis of cl 7.6.

82. Secondly, the Council submitted that Denoci’s argument, that cl 7.6 had been abandoned, was flawed. The Council, by its prior application of cl 7.6, cannot affect the identification of the relevant matters to be considered. A matter is a relevant matter if the statute expressly or impliedly requires the decision maker to take the matter into account. Here, s 4.15(1)(a)(i) requires the consent authority, in determining a development application, to take into consideration the provisions of any environmental planning instrument, which includes the provisions of LLEP, including cl 7.6. The provisions of cl 7.6 are thereby made a relevant matter that the consent authority is bound to take into consideration. The Council, by its conduct in applying or not applying cl 7.6 in determining prior development applications, can have no effect on cl 7.6 being a relevant matter.

83. The Council submitted that Denoci’s argument of abandonment was founded on cases dealing with different statutory instruments and different clauses, being State Environmental Planning Policy No 1 – Development Standards and cl 4.6 of the Standard Instrument – Principal Local Environmental Plan. They have no relevance or application to the issue of abandonment of cl 7.6 of LLEP.

84. In this context, the statement of the Commissioner in [100(3)] that cl 7.6 had not been abandoned was not a legally irrelevant matter.

85. The Council submitted that Denoci’s argument that the Commissioner made a manifestly unreasonable decision by misattributing too much weight to cl 7.6 is baseless. The weight to be given to the relevant matters which are required to be taken into account in determining the development application was a matter for the Commissioner: Minister for Aboriginal Affairs v Peko-Wallsend at [41]. A decision can only be set aside for failure to give adequate weight to a relevant matter on the ground of manifest unreasonableness. This ground will only be made out if the decision is so unreasonable that no reasonable person could have come to it. The Council submitted that the Commissioner’s decision on cl 7.6 does not answer this description.

86. I find that Denoci has not established any of grounds 3, 4, 5 or 6. I agree with and adopt the Council’s submissions.

87. First, the Council did not misconstrue or misapply cl 7.6. As the Council has explained, the Commissioner correctly identified the requirements of cl 7.6, including identifying the relevant matters in cl 7.6(2)(a)-(c) that the Commissioner needed to consider in determining Denoci’s application to carry out the proposed development. The Commissioner considered each of these matters. The conclusions expressed in [119(2)(a) and (b) and (3)(a)] are but a few of the findings made by the Commissioner regarding cl 7.6 and do not confine the Commissioner’s consideration of cl 7.6. The Commissioner did not limit his consideration to only the objectives in cl 7.6(1); he clearly considered the matters in cl 7.6(2)(a)-(c) as well, as his discussion in [102]-[118] evidences. His conclusion that the proposed development did not comply with cl 7.6 extended to both the objectives in cl 7.6(1) and the relevant matters in cl 7.6(2).

88. The Commissioner did not misapply cl 7.6(2)(a) by not considering Denoci’s proposal to purchase biodiversity credits from registered biobank sites to offset the impacts on biodiversity of the proposed development. As the Council submitted, the Commissioner was not legally obliged to consider that proposal when considering the matter in cl 7.6(2)(a). Furthermore, the proposal to offset the loss of biodiversity by the purchase of biodiversity credits was inconsistent with the matter in cl 7.6(2)(a). Clause 7.6(2)(a) requires the consent authority to consider whether the vegetation on the land, having regard to its condition and significance, should be substantially retained in that location. Denoci’s proposal assumed the removal, not the retention, of the vegetation on the subject site and the offsetting of that loss of vegetation on the subject site by purchasing biodiversity credits from registered biobank sites. This proposal to remove vegetation from the site and offset its loss was inconsistent with substantially retaining the vegetation on the land, which was the matter in cl 7.6(2)(a).

89. Secondly, Denoci has not established that the Commissioner’s reasons on cl 7.6 are inadequate. Denoci’s argument of inadequacy of reasons was founded on the Commissioner’s reasons being confined to [119(2)(a), (b) and (3)(a)]. The Commissioner’s reasoning was not so confined. The reasoning process extended over many paragraphs in the judgment, including [102]-[118]. As the Council submitted, the reasoning process in all of these paragraphs, correctly identified the provisions of cl 7.6 and the matters to be considered, and apprised the parties of the broad outline and constituent facts of the reasoning on which the Commissioner acted. The Commissioner referred to such of the evidence as was relevant to the factual findings he made on cl 7.6 . He did not need to refer to all of the evidence adduced in the proceedings in his discussion of cl 7.6. The Commissioner was not legally obliged to refer to the particular parts of Mr Humphries’ evidence that Denoci identified in the Commissioner’s reasons for his findings on cl 7.6.

90. Thirdly, the Commissioner did not take into account a legally irrelevant matter or make a manifestly unreasonable decision in finding that the proposed development did not comply with cl 7.6. As the Council submitted, the statement of the Commissioner in [100(3)] was not a legally irrelevant factor. Neither the EPA Act nor LLEP required the Commissioner not to take the matter stated by the Commissioner in [100(3)] into account. Clause 7.6 of LLEP could not be abandoned by the Council. Section 4.15(1)(a)(i) made cl 7.6 of LLEP a relevant matter that the Commissioner was bound to take into consideration in determining Denoci’s development application. The Council, by its conduct in applying or not applying cl 7.6 in determining prior development applications, could not change cl 7.6’s status as a relevant matter. The Commissioner was correct in not accepting Denoci’s argument that cl 7.6 had been abandoned. The cases relied on by Denoci to establish abandonment had no relevance to the issue of abandonment of cl 7.6.

91. The Commissioner’s decision that cl 7.6 had not been abandoned and hence to consider and give weight to cl 7.6 cannot be said to be manifestly unreasonable. As the Council submitted, the weight to be given to cl 7.6 was a matter for the Commissioner. Only if the Commissioner’s attribution of weight to cl 7.6 was so unreasonable that no reasonable person could have done so could the Commissioner’s decision be said to be manifestly unreasonable. The Commissioner’s decision did not satisfy this test. Even if Denoci’s argument that the Council had consistently and infrequently applied cl 7.6 in granting consent to industrial development on surrounding lands were to be factually correct, it was still reasonably open to the Commissioner to apply cl 7.6 in determining Denoci’s development application to develop the subject land.

92. I reject grounds 3, 4, 5 and 6.

The clause 7.31 grounds

95. Clause 7.31 of LLEP requires development consent to be obtained before carrying out earthworks (c 7.31(2)) and specifies the matters that the consent authority must consider before granting consent for earthworks (cl 7.31(3)). One of those matters in cl 7.31(3)(g) is “the proximity to and potential for adverse impacts on any watercourse, drinking water catchment or environmentally sensitive area”.

96. Denoci’s development application sought consent to carry out earthworks after the subject site had been cleared of vegetation. The Commissioner had regard to cl 7.31 in determining Denoci’s application.

97. The Commissioner identified that the grant of consent for the earthworks proposed by Denoci was subject to the provisions of cl 7.31 (at [88]). The Commissioner quoted the whole of cl 7.31 (at [45(3)]) and repeated the objectives of cl 7.31(1) (at [89]). The Commissioner noted that cl 7.31(2) requires that development consent be obtained for earthworks, except in certain circumstances, identified in cl 7.31(2)(a) and (b) (at [90]). The Commissioner noted that neither of the circumstances in 7.31(2)(a) or (b) are satisfied by Denoci’s development application, so that the proposed earthworks required consent.

98. The Commissioner noted that before granting consent for earthworks, the consent authority, or the Court on appeal, must consider the matters in cl 7.31(3), including the matter in cl 7.31(3)(g) (at [92]). The Commissioner found that the subject site on which the earthworks were proposed to be carried out was an “environmentally sensitive area” for the purposes of cl 7.31(3)(g). The Commissioner’s reason for so concluding was that the subject site had been mapped as “environmentally significant land” under cl 7.6. The Commissioner found at [93] and [94]:

“The Parties agreed that the Subject Site is mapped as environmentally significant land on the Environmentally Significant Land Map (sheets ESL-10 and ESL-13) within LLEP.

As a consequence, I am satisfied that the Subject Site is an “environmentally sensitive area” for the purposes of cl 7.31(3)(g), as a consequence of it being mapped as on “environmentally significant land” on the Environmentally Significant Land Map within LLEP.”

Alleged misconstruction of cl 7.31 and inadequate reasons

99. Denoci submitted that this conclusion revealed error in two respects: first, the Commissioner conflated the different terms of “environmentally significant land” in cl 7.6 and “environmentally sensitive area” in cl 7.31(3)(g), and, secondly, the Commissioner failed to give reasons for his conclusion.

100. Denoci submitted that the first error could be expressed as misconstruction of the term “environmentally sensitive area” in cl 7.31(3)(g), or asking the wrong question or failing to ask the right question raised by cl 7.31(3)(g). The Commissioner did not consider the meaning of an “environmentally sensitive area” for the purposes of cl 7.31(3)(g) or its intent within the context of cl 7.31 which is dedicated to “earthworks”. Denoci submitted that no reasonable inference could be drawn from the map prepared for the purposes of cl 7.6 identifying “environmentally significant land” in order to determine whether the subject site on which the earthworks were proposed to be carried out was an “environmentally sensitive area” for the purposes of 7.31(3)(g).

101. The expression “environmentally sensitive area” is not defined in LLEP, either in cl 7.31 or the Dictionary to LLEP. Denoci submitted that the expression “environmentally sensitive area” should be construed consistent with the language and purpose of all of the provisions of LLEP: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]. The Commissioner, however, did not construe the term by reference to the language of LLEP viewed as a whole. The Commissioner appeared to have concluded that the expression “environmentally sensitive area” has the same meaning as the expression “environmentally significant land” in cl 7.6. This approach was in error and contrary to established principles of statutory construction.

102. Denoci noted that the Commissioner did not consider any evidence in relation to the origins of the “environmentally significant land” mapping for the purposes of cl 7.6. The Commissioner was therefore unable to determine whether, having regard to such evidence, an inference could be drawn that the subject site could also be an “environmentally sensitive area” for the purposes of cl 7.31(3)(g). Denoci noted that there was no evidence tendered in the proceedings, by either Denoci or the Council, as to whether the subject site was an “environmentally sensitive area”.

103. In these circumstances, Denoci submitted that it was not open to the Commissioner to draw the inference that, as a consequence of the subject site being mapped as “environmentally significant land” for the purposes of cl 7.6, it was “environmentally sensitive area” for the purposes of cl 7.31(3)(g).

104. Denoci submitted that the second error was that the Commissioner’s reasons in [93] for his finding at [94] “are wholly inadequate to explain how, in what manner and to what extent the subject site was an ‘environmentally sensitive area’ for the purposes of cl 7.31(3)(g) of LLEP 2008”. The issue in relation to cl 7.31 was one of the fundamental grounds on which the Commissioner’s decision rested and the Commissioner was required to articulate his reasons on that issue. The Commissioner made an error of law in not doing so.

105. The Council submitted that the Commissioner did not misconstrue cl 7.31(3)(g), or ask himself the wrong question or fail to ask himself the right question raised by cl 7.31(3)(g). “Environmentally sensitive area” is not defined for the purposes of LLEP. It was open to the Commissioner to make a factual finding as to whether the subject site met that description. The subject site had been mapped as “environmentally significant land” for the purposes of cl 7.6. The Commissioner drew an inference from the fact that the subject site was mapped as “environmentally significant land” that it could also be described as “environmentally sensitive area” for the purposes of cl 7.31(3)(g). That factual inference was open to the Commissioner. It was based on the evidence of the mapping of the subject site as “environmentally significant land”.

106. In these circumstances, the Council submitted that the Commissioner did not conflate the two terms of “environmentally significant land” and “environmentally sensitive area”. The Commissioner was aware of the distinction between the two terms. His finding that the subject site was an “environmentally sensitive area” simply drew on the fact that the subject site had been mapped as “environmentally significant land”.

107. The Council submitted that the fact that the reasons given by the Commissioner for his conclusion were brief did not mean that the reasons were inadequate. The Commissioner’s conclusion was an obvious and easily explained conclusion, for which no extended reasons were required.

108. I find that Denoci has not established either ground 8 or ground 9 regarding the Commissioner’s conclusion that the subject site was an “environmentally sensitive area” for the purposes of cl 7.31(3)(g).

109. The Commissioner did not misconstrue the term “environmentally sensitive area” in cl 7.31(3)(g), or ask the wrong question or fail to ask the right question raised by cl 7.31(3)(g). The Commissioner identified that cl 7.31(3)(g) required the consent authority, or the Court on appeal, before granting development consent for earthworks, to consider certain matters, including the matter in cl 7.31(3)(g) (at [92]). The Commissioner quoted cl 7.31(3)(g). The Commissioner correctly identified that the term used in cl 7.31(3)(g) was an “environmentally sensitive area” and that this was a different term to that used in cl 7.6 of “environmentally significant land”.

141. Secondly, the finding that Mr Humphries did not contest Ms James’ evidence that removal of vegetation on the subject site, and the reduction in the width of the vegetation corridor, would reduce the effectiveness of the remaining vegetation in providing an ecological corridor through the subject site, was a finding of fact that was open on the evidence.

142. Thirdly, the Commissioner’s findings in [133(5)] were based on findings of fact and were reasonably open to the Commissioner.

143. The Council submitted that the Commissioner did not misconstrue or misapply s 4.15(3A) of the EPA Act. The Commissioner considered the proposed development as “an alternative that may be a reasonable solution in terms of the fifth control” (at [136]). This was an application of s 4.15(3A). The Council submitted that the Commissioner did not misconstrue the proposed development. The Commissioner was not required to consider Denoci’s proposal to purchase biodiversity credits from a registered biobank site. That was not an alternative solution on the subject land.

144. I find that Denoci has not established ground 9 that the Commissioner misconstrued or misapplied the fifth control in section 4 of Part 1 of LDCP or s 4.15(3A) of the EPA Act. I agree with and adopt the Council’s submissions.

145. The various errors that Denoci claimed the Commissioner made in his findings in [133(2) and (4) and (5)] are only factual and are not on a question of law. Denoci’s arguments are that the Commissioner made wrong findings of fact or preferred one experts’ evidence over another. There is no error of law in making a wrong finding of fact or preferring one expert’s evidence over another. Even if a finding of fact is perverse or unreasonable, or the reasoning whereby the finding of fact was demonstrably unsound, this would still not be an error on a question of law: RebelMHNeutral Bay Pty Ltd v North Sydney Council at [73]; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 121 at 356; Azzopardi v Tasman UEB Industries Ltd at [155]; Randwick Municipal Council v Manousaki at [333]-[334]. Having said that, Denoci has not established that the Commissioner did err in fact in making the findings that the Commissioner made.

146. The Commissioner also did not err on a question of law in his consideration of s 4.15(3A) of the EPA Act. He correctly identified the provisions. He considered the proposed development as an alternative that may be a reasonable alternative solution in terms of the fifth control. He did not misconstrue the proposed development. He understood that the proposed development retained the remaining bushland on the subject land, outside of the subject site where all of the vegetation was to be removed. Yet, the Commissioner considered that the removal of the vegetation on the subject site may adversely affect the long term viability of the retained vegetation on the subject land. In these circumstances, the proposed development would not achieve the objectives of the fifth control. This reasoning process does not reveal that the Commissioner misconstrued or misapplied s 4.15(3A) of the EPA Act.

147. I reject ground 9.

The offsets grounds

151. Grounds 12 and 13 concern the Commissioner’s failure to consider, and to give reasons for any consideration of, Denoci’s proposal to purchase biodiversity credits from registered biobank sites. This was one of the ways that Denoci proposed to offset the adverse impacts on biodiversity that would be caused by the clearing of all of the vegetation on the subject site. The biodiversity credits were to be purchased under the former Biodiversity Banking and Offsets Scheme. This was a voluntary biodiversity offset scheme under which landowners committed to enhancing and protecting biodiversity values on their land could enter into a biobanking agreement to generate biodiversity credits that could be sold to developers of other land to offset the impacts on biodiversity values that would occur as a result of development of that other land. The funds generated by the sale of the biodiversity credits could be used to conserve and manage the biobank site. The other way proposed by Denoci to offset the adverse impacts of clearing of vegetation on the subject site was to retain the remaining vegetation on the subject land outside of the subject site.

152. The Commissioner stated in [140]:

“As I have found that the Applicant’s proposed development does not satisfy the provisions cll 7.31 and 7.6 of LLEP, and is not compliant with the fifth control in section 4 of Part 1 of LDCP, and as I have concluded that the Proposed Development should be approved, it is unnecessary for me to further consider whether the impacts on biodiversity of the Applicant’s proposed development should be offset by the purchase of offsets from registered biobank sites.”

153. Denoci noted that this statement contained a typographical error – the Commissioner meant to say that the development should not be approved rather than that it should be approved.

154. Denoci submitted that the Commissioner erred in law in failing to consider its proposal to purchase biodiversity credits from registered biobank sites. Denoci submitted that this was a mandatory relevant consideration that the Commissioner was required to consider. Denoci advanced a number of bases for it being a mandatory relevant consideration.

155. First, the proposal to purchase biodiversity credits was part of the development proposed in Denoci’s development application. The Commissioner was required to consider and to determine the development application under s 4.15 and s 4.16 of the EPA Act.

156. Secondly, the Commissioner was required by s 4.15(a)(iii) of the EPA Act to consider LDCP in determining the development application. Control 2 in section 4 of Part 1 in LDCP provided that “Where impacts on threatened biodiversity are unavoidable, offsetting utilising the NSW Government Biobanking Scheme will be required where practicable.” The Commissioner was required to consider this control.

157. Thirdly, the Commissioner was required by s 4.15(1)(e) of the EPA Act to consider the public interest. An aspect of the public interest was the NSW Biodiversity Banking and Offset Scheme and Biobanking Assessment Methodology.

158. Fourthly, the Commissioner was required under s 39(4) of the Court Act to consider “any other relevant Act”, which would include the TSC Act. The Biodiversity Banking and Offset Scheme under the TSC Act continued to apply to development applications made on or before 24 November 2019 (which Denoci’s development application had been), notwithstanding the repeal of the TSC Act, by virtue of cl 27(1) and cl 28(1) of the Biodiversity Conservation (Savings and Transitional) Regulation 2017.

159. Fifthly, the issue of whether the impacts on biodiversity of the proposed development should be offset by the purchase of biodiversity credits from registered biobank sites was a principal contested issue in the proceedings. The Commissioner was required to address and decide the principal contested issues: Segal v Waverley Council at [43].

160. Denoci contended that, notwithstanding that the Commissioner was required to consider its proposal to purchase biodiversity credits from registered biobank sites for these reasons, the Commissioner declined to do so.

161. Denoci submitted that had the Commissioner addressed its proposal to purchase biodiversity credits, the Commissioner’s findings in relation to cl 7.6 and cl 7.31 of LLEP may well have been different. At the least, it could not be said that the proposal to purchase biodiversity credits “would have had no bearing upon the outcome” arrived at by the Commissioner in relation to cl 7.6 and cl 7.31 of LLEP, citing Segal v Waverley Council at [43].

162. The Council contested that Denoci’s proposal to purchase biodiversity credits from registered biobank sites to offset the impacts on biodiversity by the removal of vegetation on the subject site was a mandatory relevant consideration for the Commissioner. Such a proposal for offsetting by purchase of biodiversity credits was not referred to expressly in s 4.15 of the EPA Act, cl 7.6 or cl 7.31 of LLEP or section 4 of Part 1 of LDCP. The generic considerations in those statutory provisions do not impose a legal duty to consider the issue of offsets at the level of particularity argued by Denoci. The Commissioner was required to take into account, in determining the development application, the considerations in s 4.15 of the EPA Act, cl 7.6 and cl 7.31 of LLEP, and section 4 of Part 1 of LDCP. But the duty to consider these matters did not import a duty to consider particular facts that might be relevant to these matters. It was permissible for the Commissioner to consider these matters in the terms in which the matters were expressed in the EPA Act, LLEP and LDCP.

163. The Council submitted that Denoci’s proposal to purchase biodiversity credits to offset the impacts on biodiversity by the clearing of the subject site was merely a permissible consideration, not a mandatory relevant consideration. A permissible consideration is one “which the decision-maker may weigh or disregard without committing an error of law”: Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86; [2013] NSWCA 180 at [9].

164. Accordingly, whilst the Commissioner could have considered the particular facts about Denoci’s proposal to purchase biodiversity credits if the Commissioner had wanted to do so, the Commissioner was not under a legal duty to do so. Hence, it cannot be said that the Commissioner committed an error of law in failing to consider Denoci’s proposal to purchase biodiversity credits: Segal v Waverley Council at [56].

165. The Council contested Denoci’s submission that consideration of Denoci’s proposal to purchase biodiversity credits might have affected the outcome of the Commissioner’s decision. The purchase of biodiversity credits would only offset the adverse impacts on biodiversity by the clearing of the vegetation on the subject site. Offsets do not reduce the impacts of a development, but only compensate for residual impacts that remain after avoidance and mitigation measures have been put in place: Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure (2013) 194 LGERA 347; [2013] NSWLEC 48 at [147], [183].

166. As to Denoci’s argument that the issue of whether the impacts on biodiversity of the proposed development should be offset by the purchase of biodiversity credits was a principal contested issue, the Council submitted that the Commissioner was not obliged to decide every issue. A decision maker may decide a case in a way which does not require the determination of a particular issue: Housing Commissioner of NSW v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 at 385.

167. The issue of offsets was one such matter. The Commissioner, having found that the proposed development did not satisfy the provisions of cl 7.6 and cl 7.31 of LLEP and the fifth control in section 4 of Part 1 of LDCP, and that consent should not be granted to Denoci’s development application, found it was unnecessary to consider the issue of whether the impacts on biodiversity of the proposed development should be offset by the purchase of biodiversity credits. The Council submitted that the Commissioner was entitled to decide the case in this way, which did not require the determination of this issue.

168. I find that Denoci has not established ground 12 or ground 13 that the Commissioner failed to consider and decide the issue concerning the offsetting of the impacts on biodiversity by the purchase of biodiversity credits.

169. I accept that the issue of whether the impacts on biodiversity of the proposed development should be offset by the purchase of biodiversity credits was raised as an issue in the proceedings, although it was not a principal contested issue. The principal contested issues were those raised expressly by the Council in its amended statement of facts and contentions and at the hearing. The six contentions raised by the Council in its amended statement of facts and contentions were summarised by the Commissioner in [49], none of which directly raised the issue of the proposed offsetting of the impacts on biodiversity by the purchase of biodiversity credits. The adequacy of the proposed offset site on the subject land, containing the remaining vegetation on the subject land after removal of the vegetation on the subject site, was raised as a particular to contention 2 concerning the significant effect on endangered ecological communities and vulnerable and endangered species. The proposal in the SIS to purchase biodiversity credits for the loss of the Castlereagh Swamp Woodland EEC on the subject site was noted in another particular, but no contention was raised about the proposal.

170. The Commissioner recorded that the Council had narrowed these contentions to be threefold (at [50]). Again, none of the “three principal issues” directly raised the issue of proposed offsetting by the purchase of biodiversity credits.

171. The Commissioner recorded that Denoci had submitted that there were two principal issues requiring resolution in the appeal, the second of which was whether the adverse impacts of the partial clearing of the subject land could be offset by the purchase of biodiversity credits (see at [51(2)]). However, this reframing by Denoci of the issues to advance its case did not make the issue of offsetting by the purchase of biodiversity credits a principal contested issue in the proceedings. Rather, Denoci was advancing an argument in favour of the resolution of the principal contested issues, particularly contention 2 concerning the significant effect the proposed development would have on the Castlereagh Swamp Woodland EEC and the vulnerable and endangered species on the subject land, in a particular way.

172. In these circumstances, the issue of whether the impacts on biodiversity of the proposed development could be offset by the purchase of biodiversity credits could be described as being a “species” of argument within a genus of a principal contested issue. In Segal v Waverley Council, Tobias JA proposed a taxonomical classification of issues in proceedings. Each of the principal contested issues in proceedings is a genus and the various arguments in favour of or against the resolution of the issue in a particular way are species: at [99(a)].

173. In the present case, the issue of whether the adverse impacts on biodiversity by the clearing of vegetation on the subject site should be offset by the purchase of biodiversity credits was a species, an argument advanced by Denoci in favour of determining the principal contested issues, particularly contention 2 that the proposed development will have a significant adverse effect on EECs and vulnerable and threatened species on the subject land, in a way favourable to Denoci, being to grant consent to the proposed development.

174. Viewing the issues in this way, it was unnecessary for the Commissioner to consider and decide each of the species of issues, including the issue of offsetting by the purchase of biodiversity credits, provided that the Commissioner considered each genus, being each of the principal contested issues: Segal v Waverley Council at [99(b)].

175. The Commissioner did decide each genus, each principal contested issue, and addressed each genus in his reasons. It was unnecessary for the Commissioner to consider and decide, and give reasons addressing, each species, each argument in favour or against the resolution of the genus in a particular way.

176. It was also unnecessary for the Commissioner to consider and decide Denoci’s argument that the adverse impacts on biodiversity would be offset by the purchase of biodiversity credits because of the way the Commissioner decided the appeal. The Commissioner decided, in effect, that the proposed development did not sufficiently avoid or mitigate the adverse impacts on biodiversity on the subject land, resulting in too great residual impacts that would need to be offset (see, for example, [52], [119(2)], [133] and [136]). As a consequence, the Commissioner concluded that the proposed development should not be approved (at [119(4)], [139(2)] and [140]). This conclusion made it unnecessary for the Commissioner to determine the adequacy of the proposed offsetting of the significant residual impacts by the purchase of biodiversity credits.

177. Because the purchase of biodiversity credits under the Biodiversity Biobanking and Offset Scheme was voluntary, the mechanism for obliging Denoci to purchase biodiversity credits would have been to impose a condition of development consent for the proposed development. This would have required the grant of consent to the development, including to the clearing of vegetation on the subject site that would cause the significant residual impacts on biodiversity. The Commissioner’s decision not to grant consent meant that he did not need to address the appropriateness and adequacy of imposing a condition of consent requiring the purchase of biodiversity credits to offset the significant residual impacts on biodiversity.

178. Denoci’s argument that the issue of offsetting by purchasing biodiversity credits was a mandatory relevant consideration, on various bases, did not advance grounds 12 and 13. As the Council submitted, the issue as framed by Denoci – whether the impacts on biodiversity of the proposed development should be offset by the purchase of biodiversity credits from registered biobank sites – cannot be said to be a mandatory relevant consideration under s 4.15 of the EPA Act, s 39(4) of the Court Act, cl 7.6 and cl 7.31 of LLEP, or section 4 of Part 1 of LDCP. Those statutory provisions frame generic matters that a consent authority, or the Court on appeal exercising the functions of the consent authority, is bound to take into consideration in determining a development application, but they do not required consideration of these generic matters at the level of particularity argued by Denoci. It would be permissible for the Commissioner, in taking these generic matters into consideration, to consider Denoci’s proposal to purchase biodiversity credits to offset the impacts on biodiversity of carrying out the proposed development, but the Commissioner was not bound to consider that proposal. As a consequence, the Commissioner, in deciding not to consider Denoci’s proposal to offset the impacts on biodiversity by purchasing biodiversity credits, did not commit an error of law.

179. Even if Denoci’s proposal to offset the impacts on biodiversity by purchasing biodiversity credits could be said to be a mandatory relevant consideration, the obligation to consider the proposal to purchase biodiversity credits did not arise because of the way in which the Commissioner decided the appeal. As I have earlier explained, the Commissioner found that the proposed development should not be approved. The proposed development, by not sufficiently avoiding or mitigating the impacts on biodiversity on the subject land, would result in such significant residual impacts on biodiversity that consent should not be granted. In this event, the issue of offsetting the significant residual impacts did not arise. Hence, the Commissioner found “it is unnecessary for me to further consider whether the impacts on biodiversity of the Applicant’s proposed development should be offset by the purchase of offsets from registered biobank sites” (at [140]). Having decided the appeal in this way, any obligation to consider the issue of whether the impacts on biodiversity should be offset by the purchase of biodiversity credits did not arise.

180. As Denoci has not established that the Commissioner was legally obliged to consider and decide the issue of whether the impacts of biodiversity should be offset by the purchase of biodiversity credits, there was no obligation to give reasons for any such consideration.

153. I reject grounds 12 and 13.

Conclusion and orders

182. Denoci has not established any of the grounds of appeal. The appeal should be dismissed. Costs should follow the event.

183. The Court orders:

1. The appeal is dismissed.

2. The appellant is to pay the respondent’s costs of the appeal.

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Amendments

31 July 2020 - Correction to MNC of the decision under review on coversheet.

06 August 2020 - Case cited added to coversheet.

07 August 2020 - Correction of typographical error in [1].

Decision last updated: 07 August 2020