Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2)
[2013] NSWLEC 38
•28 March 2013
Land and Environment Court
New South Wales
- Amendment notes
Medium Neutral Citation: Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38 Decision date: 28 March 2013 Jurisdiction: Class 4 Before: Pepper J Decision: Amended summons dismissed. Injunction granted by Sheahan J on 5 September 2012 discharged forthwith. Costs reserved.
Catchwords: JUDICIAL REVIEW: whether departmental decision approving pilot gas exploration program should be set aside for breaching ss 111 or 112 of the Environmental Planning and Assessment Act 1979 - whether Department failed to take into account a relevant mandatory consideration - whether Department failed to give proper, genuine and realistic consideration to a relevant mandatory matter.
JURISDICTION: whether impugned decision made under Pt 5 of the Environmental Planning and Assessment Act 1979 or the Petroleum (Onshore) Act 1991 - whether the Court has jurisdiction to determine a challenge to an approval made under the Petroleum (Onshore) Act 1991.
STATUTORY CONSTRUCTION: whether s 112 of the Environmental Planning and Assessment Act 1979 gives rise to a jurisdictional fact - meaning of "examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment" in s 111 of the Environmental Planning and Assessment Act 1979 - meaning of "likely to significantly affect the environment" in s 112 of the Environmental Planning and Assessment Act 1979 - proper construction of cl 228 of the Environment Planning and Assessment Regulation 2000.
EVIDENCE: whether expert evidence admissible to prove a breach of s 111 of the Environmental Planning and Assessment Act 1979 - whether expert evidence admissible to prove a breach of s 112 of that Act - whether expert evidence should be excluded or limited on some other basis - use of secondary sources by experts.
PRECEDENT: meaning of "plainly wrong" - status of appellate dictum on court at first instance.Legislation Cited: Environmental Planning and Assessment Act 1979, ss 5, 5A, 76(1), 77(3)(d1), 77A, 78A(8)(b), 79C, 90(1)(c3),110, 111, 112, 115, 123
Environmental Planning and Assessment Regulation 2000, cls 3, 4, 228, 27(g) of Sch 3
Environmental Planning and Assessment Regulation 1994, cl 82
Environment Protection and Biodiversity Conservation Act 1999 (Cth)
Evidence Act 1995, ss 60, 79, 135, 136
Interpretation Act 1987, ss 11, 35, 38
Land and Environment Court Act 1979, ss 20, 21C, 31
Petroleum (Onshore) Act 1991, ss 3, 9, 23, 115
State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007, cls 3, 6
Uniform Civil Procedure Rules 2005, r 31.19Cases Cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27
Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244
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Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Attorney-General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1
Attorney-General (NT) v Hand [1988] FCA 272; (1988) 16 ALD 318
Attorney-General (NT) v Minister for Aboriginal Affairs [1989] FCA 159; (1989) 23 FCR 536
Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485
Bailey v Forestry Commission of New South Wales [1989] NSWLEC 24; (1989) 67 LGRA 200
Barrick Australia v Williams [2009] NSWCA 275; (2009) 74 NSWLR 733
Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197
BHP Billiton Iron Ore Pty Ltd v National Competition Council [2007] FCAFC 157; (2007) 162 FCR 234
Blue Mountains City Council v Prospect County Council (1992) 74 LGRA 129
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Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; (2010) 78 NSWLR 393
Chen v Virgona [2008] NSWLEC 281
CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384
City of Botany Bay v New South Wales Land and Housing Corporation [2010] NSWLEC 160
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City of Sydney Council v Royal Botanic Gardens and Domain Trust [2004] NSWLEC 285
Commissioner of Patents v Sherman [2008] FCAFC 182; (2008) 172 FCR 394
Corowa v Geographe Point Pty Ltd [2007] NSWLEC 121; (2007) 154 LGERA 117
Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588
DEXUS Funds Management Ltd v Blacktown City Council [2011] NSWLEC 156
DMW v CGW [1982] HCA 73; (1982) 151 CLR 491
Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349
Drummoyne Municipal Council v Maritime Services Board (1991) 72 LGERA 186
Drummoyne Municipal Council v Roads and Traffic Authority of New South Wales [1989] NSWLEC 19; (1989) 67 LGRA 155
F Hannan Pty Ltd v Electricity Commission of New South Wales (1983) 51 LGRA 353
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
Fay v Roads and Traffic Authority of New South Wales (No 2) (1991) 25 ALD 201
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 87 ALJR 98
Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 291 ALR 399
Foster v Minister for Customs and Justice [2000] HCA 38; (2000) 200 CLR 442
Friends of King Edward Park Inc v Newcastle City Council [2012] NSWLEC 113
Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd [2012] NSWLEC 207
Gedeon v Commissioner of the New South Wales Crime Commission [2008] HCA 43; (2008) 236 CLR 120
Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504
Goldberg v Waverley Council [2008] NSWLEC 49
Guthega Development Pty Ltd v Minister Administering the National Parks and Wildlife Act 1974 (NSW) (1986) 7 NSWLR 353
HG v R [1999] HCA 2; (1999) 197 CLR 414
Huntlee Pty Ltd v Sweetwater Action Group Inc; Minister for Planning and Infrastructure v Sweetwater Action Group Inc [2011] NSWCA 378; (2011) 185 LGERA 429
Informax International Pty Ltd v Clarius Group Ltd [2011] FCA 183; (2011) 192 FCR 210
Jarasius v Forestry Commission of New South Wales [No 1] [1988] NSWLEC 11; (1988) 71 LGRA 79
Jugiong Quarries Pty Ltd v Water Administration Ministerial Corporation [1995] NSWLEC 74
Khan v Minister for Immigration and Ethnic Affairs [1987] FCA 457; (1987) 14 ALD 291
Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277
King v Great Lakes Shire Council (1986) 58 LGRA 366
Kivi v Forestry Commission of New South Wales (1982) 47 LGRA 38
Leichhardt Municipal Council v Maritime Services Board of New South Wales (1985) 57 LGRA 169
Liverpool City Council v Roads and Traffic Authority and Interlink Roads Pty Ltd (1991) 74 LGRA 265
Makita (Aust) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705
McCormack v Deputy Commissioner of Taxation Large Business and International [2001] FCA 1700; (2001) 114 FCR 574
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24
Minister for Immigration and Citizenship v Le [2007] FCA 1318; (2007) 164 FCR 151
Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; (2010) 243 CLR 164
Minister for Planning v Walker [2008] NSWCA 224; (2008) 161 LGERA 423
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Oxford English Dictionary, online edition
The Macquarie Dictionary, online editionCategory: Principal judgment Parties: Fullerton Cove Residents Action Group Incorporated (Applicant)
Dart Energy Ltd (First Respondent)
New South Wales Department of Trade and Investment, Regional Infrastructure and Services (Second Respondent)Representation: Mr I Hemmings and Ms V McWilliams (Applicant)
Mr R Lancaster SC and Ms A Hemmings (First Respondent)
Mr A Shearer (Second Respondent)
Environmental Defender's Office (Applicant)
Dart Energy Ltd (First Respondent)
New South Wales Department of Trade and Investment, Regional Infrastructure and Services (Second Respondent)
File Number(s): 40866 of 2012
INDEX
Topic
Paragraph Number
The Fullerton Cove Residents Action Group Opposes the Granting of PEL 458 Issued to Dart Energy by the Minister for Mineral Resources
1
Fullerton's Claims as Pleaded
32
Use of Expert Evidence in Judicial Review Proceedings
42
Issues for Determination
59
Jurisdiction
60
Statutory Framework
77
There Has Been No Breach of s 111 of the EPAA
84
Failure to Consider the ESG2 Guidelines
87
Failure to Obtain a Groundwater Assessment
113
Admissibility of Expert Evidence in Determining a Breach of s 111 of the EPAA
115
Alleged Failure to Consider the Impact of the Pilot Program on Shore, Migratory and Non-Migratory Birds, Amphibian Species and Species of Flora
175
Flora
200
Fauna
210
Cumulative Impact
222
There Has Been No Breach of s 112 of the EPAA
226
Section 112(1) of the EPAA Gives Rise to a Jurisdictional Fact
230
Plainly Wrong
278
Alleged Breaches of s 112
301
The ESG2 Guidelines
302
Designated Development
309
Factual Concessions Made by Fullerton
318
Groundwater
319
The Pacific Golden Plover and the Eastern Grass Owl
320
Cumulative Impact
326
Discretion to Refuse to Grant Relief
331
Costs
333
Orders
335
Judgment
The Fullerton Cove Residents Action Group Opposes the Granting of PEL 458 Issued to Dart Energy by the Minister for Mineral Resources
In Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197 I made the following observation (at [1]):
It is a matter of common knowledge that the exploration for, and use of, coal seam gas is contentious. This judgment will, however, do little to quell the current anxiety surrounding the coal seam gas mining debate. In this regard it must be understood that the merits, or otherwise, of the use of this resource are irrelevant to the issues raised for determination by these judicial review proceedings, concerning, as they do, only the lawfulness of the approval under challenge.
These remarks apply with equal force to the petroleum exploration licence, number 458 ("PEL 458"), presently under challenge. This is particularly so in circumstances where I have determined that the amended summons filed in Court on 12 October 2012 should be dismissed.
In large part, the background facts giving rise to these proceedings were uncontroversial and were contained in a joint statement of agreed facts, filed, upon the request of the Court, after the hearing had concluded.
On 6 June 2008, the Minister for Mineral Resources ("the Minister") granted PEL 458 to Macquarie Energy Pty Ltd ("Macquarie") under the Petroleum (Onshore) Act 1991 ("the PO Act") for a period of three years, for the purpose of exploration of petroleum. PEL 458 was granted subject to conditions.
Macquarie is a wholly owned subsidiary of Apollo Gas Ltd ("Apollo"). Apollo is a wholly owned subsidiary of the first respondent, Dart Energy Ltd ("Dart").
The First Schedule to PEL 458 sets out the exploration area which is the subject of PEL 458. Generally, PEL 458 covers 36 graticular blocks, or an area of approximately 2,000km², and extends down the New South Wales coast from Myall Lakes in the north, to Belmont in the south.
Condition 1 of the Second Schedule to PEL 458 required the written approval of the second respondent, the New South Wales Department of Trade and Investment, Regional Infrastructure and Services ("the Department"), subject to any stipulated conditions, before any "Category 3" development, including petroleum exploration borehole activities, could be commenced.
On or about 26 September 2011, Dart submitted a document titled "Pilot Appraisal Exploration Program: Review of Environmental Factors - PEL 458" ("the REF") to the Department in respect of the proposed drilling of two sets of pilot appraisal wells and production flow testing, otherwise known as the Pilot Appraisal Exploration Program ("the pilot program").
The pilot program is classified as "Category 3" development for the purposes of Condition 1 of the Second Schedule of PEL 458.
The pilot program site includes the following allotments:
(a) Lot 1582 in DP 1012434 and described as 397 Fullerton Cove Road, Fullerton Cove ("the south allotment");
(b) Lot 1322 in DP 589751 and described as 285 Cabbage Tree Road, Fullerton Cove ("the north allotment"); and
(c) Lot 1332 in DP 609173 and described as 183 Cabbage Tree Road, Fullerton Cove ("the north west allotment").
The pilot program site is located within PEL 458, at Fullerton Cove, north of Newcastle.
The carrying out of the pilot program as initially proposed included the drilling of the following four wells:
(a) two lateral pilot wells located on the north allotment ("the lateral wells"), which will be accessed through the north west allotment; and
(b) two vertical pilot wells located on the south allotment ("the vertical wells").
To enable the drilling of the two sets of pilot appraisal wells (each set comprising a lateral well and a vertical well), drilling and testing compounds need to be constructed for the wells. The sizes of these compounds are proposed to be as follows ("compound sites"):
(a) the platforms for the lateral wells are each 80m x 80m; and
(b) the combined platform of the vertical wells is 130m x 80m ("the southern compound site").
The Fullerton Cove locality is bounded by a number of national parks and state conservation areas, including the Hunter Estuary National Park, Tilligerry State Conservation Area, Worimi State Conservation Area and Worimi National Park.
The pilot program site:
(a) contains endangered ecological communities ("EECs"), including Relic Saltmarsh Flat;
(b) is adjacent to the Hunter Estuary National Park and the Hunter Estuary Wetlands ("the wetlands"), listed under the Ramsar List of Wetlands of International Importance; and
(c) is generally located above the Stockton and Tomago aquifers.
The compound sites:
(a) do not contain any EECs; and
(b) are not adjacent to the Hunter Estuary National Park and the wetlands.
The closest wells would be located more than 500m from the wetlands.
The carrying out of the pilot program is unquestionably an "activity" to which Pt 5 of the Environmental Planning and Assessment Act 1979 (NSW) ("the EPAA") applied.
The Department was the determining authority for the pilot program.
On 22 December 2011, Dart wrote to the Department providing additional information in respect of the pilot program. This additional information is elaborated upon below.
On 17 May 2012, Dart wrote to the Department providing the referral decision of the Commonwealth Department of Sustainability, Environment, Water, Population and Communities that the pilot program is not a controlled action under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) ("the EPBC Act").
On 25 May 2012, the Department prepared a minute entitled "PEL458 Dart Energy Fullerton Cove Pilot Appraisal: Part 5 Determination and Activity Approval" recommending that the Manager Environmental Operations: (a) determine that the pilot program was (i) not likely to significantly affect the environment; and (ii) not likely to significantly affect any threatened species, populations, ecological communities, or critical habitats; and (b) approve the pilot program ("the 25 May 2012 minute").
On 1 June 2012, the Department:
(a) made a determination under Pt 5 of the EPAA that the pilot program was not likely to significantly affect the environment and that therefore no environmental impact statement ("EIS") was required ("the Pt 5 determination"); and
(b) wrote to Dart, in accordance with Condition 1 of PEL 458, granting approval to conduct drilling of two sets of pilot appraisal wells for no more than 12 months of production flow testing and subject to other conditions ("the approval").
On 18 June 2012, Dart wrote to the Department seeking to vary the approval ("the variation"). The variation sought to:
(a) restrict the pilot program to a single inclined production well (with two boreholes on a single site) rather than the drilling of two sets of exploration wells (each set comprising a lateral well and a vertical well);
(b) reduce the area of the pilot program site such that it would include the south allotment only;
(c) amend the pilot program to require the construction of a single compound on the southern compound site only;
(d) reduce the numbers of drill pads from three to one;
(e) remove from the pilot program proposed wells on the north allotment; and
(f) reduce the total drilling period from an estimated three months to 50 days (seven weeks).
A departmental minute dated 13 July 2012 recommended approval be granted to the variation. The comments were as follows:
Drill pads and compounds will be reduced from three to one resulting in significant decreases in surface impact, waste generation and resource use.
In light of the fact that the revised proposal will reduce surface impact, the duration of the activity and will result in no additional water or gas production the variation can be approved without further assessment in accordance with the section 110E(a) of the EP&A Act 1979 "a modification of an activity, whose environmental impact has already been considered, that will reduce its overall environmental impact".
In making the recommendation it was determined that the proposed variation would not be likely to significantly affect the environment and not be likely to significantly affect any threatened species, populations, or ecological communities, or critical habitats.
On 17 July 2012, the Department wrote to Dart granting approval to the variation, subject to conditions.
At no point has an EIS in respect of the pilot program been prepared by Dart or considered by the Department.
The applicant, Fullerton Cove Residents Action Group Incorporated ("Fullerton"), filed a summons with the Court on 24 August 2012 and a notice of motion for interlocutory injunctive relief on 29 August 2012.
On 5 September 2012, Sheahan J in Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd [2012] NSWLEC 207 made an order setting the matter down for an early hearing and granting interlocutory relief to Fullerton restraining Dart from carrying out any development for the pilot program "beyond completion of the on-ground or above ground component in Phase (1), involving site preparation and drilling compound construction".
As will become apparent, the complexity of this matter, presumably not appreciated by the parties at the time it was before his Honour, was not apparent when the proceedings came before Sheahan J. As the proceedings unfolded, new factual and legal issues came to light, issues that were not readily apparent from a preliminary reading of the pleadings. By the time the hearing had concluded (in five days, not three, as had been estimated by the parties and as had been allocated by the Court), Fullerton had served five sets of written submissions; Dart four and the Department three.
Fullerton's Claims as Pleaded
Fullerton filed points of claim on 19 September 2012. Points of defence were filed by both Dart and the Department on 5 October 2012. Unlike the summons, the points of claim were never the subject of amendment. The significance of this is revealed below.
In its points of claim, Fullerton alleges breaches of ss 111 and 112 of the EPAA. During the hearing a claim that the pilot program was "designated development" pursuant to the EPAA and thus a type of development likely to have an impact on the environment thereby necessitating the preparation of an EIS, was abandoned by Fullerton.
Also, during the course of the hearing a dispute emerged between the parties as to the scope of the allegations pleaded in the points of claim. As a consequence it is necessary to set out the pleadings in some detail.
In respect of the breach of s 111 of the EPAA, Fullerton alleged (at paragraphs 21-28 of the points of claim):
21 Section 111 of the EPA Act required the determining authority, the Second Respondent, in its consideration of the Activity, to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of the Activity.
22 Clause 228(1)(a) of the Environmental Planning and Assessment Regulations 2000 (EPA Regulation) identified specific guidelines to be taken into account in considering the likely impact of the Activity.
23 The ESG2: Environmental Assessment Guidelines for exploration, mining and petroleum production activities subject to Part 5 of the Environmental Planning and Assessment Act 1979 were specific guidelines for the Activity, which came into force in March 2012 (the 'Guidelines').
24 By reason of paragraphs 22 and 23 above, the Guidelines were required to be considered in the assessment of the likely impacts that may arise from the Activity.
25 In breach of s 111, the Second Respondent erred in law in manifestly failing to consider the Guidelines.
26 In further breach of s 111, the Second Respondent erred in law in failing to take into account to the fullest extent possible all matters affecting or likely to affect the environment in that it failed to obtain, examine and take into account a groundwater assessment.
Particulars
i. No groundwater assessment was provided to the Second Respondent for the PAEP.
ii. Accordingly, as at 1 June 2012, there was insufficient information before the Second Respondent to enable it to comply with s 111 of the EPA Act.
27 In further breach of s 111, the Second Respondent erred in law in failing to take into account to the fullest extent possible all matters affecting or likely to affect the environment in that it failed to consider the impact of the Activity on:
a. Shorebirds, migratory and non-migratory species;
b. Amphibian Species; and
c. Other threatened or vulnerable species that may be affected by the carrying out of the Activity.
Particulars
i. The REF was supported by an ecological assessment 'draft version 5' dated 23 September 2011.
ii. The ecological assessment was inadequate in the information it provided and could not serve its required purpose for a Part 5 assessment.
28 By reason of the failure to comply with s 111 of the EPA Act before purportedly granting the Part 5 Approval, the Part 5 Approval is invalid.
In relation to non-compliance with s 112 of the EPAA, it was asserted by Fullerton that (at paragraphs 29-34 and 36-40 of the points of claim):
29 The Second Respondent purported to approve the Activity pursuant to Part 5 of the EPA Act.
30 As part of the assessment of the Activity, the Second Respondent carried out an Evaluation of Likely Significance of Potential Impacts on the Environment (the 'Evaluation').
31 The Evaluation concluded that the potential significance of impact by the Activity was "medium".
32 As at the date of the Evaluation, the Guidelines were in force.
33 Pursuant to the Guidelines, a "medium" level impact is considered significant.
Particulars
Guidelines, p.37.
34 In the premises, the Activity was likely to significantly affect the environment.
...
36 On 25 May 2011, the Second Respondent erred in law in concluding that the Activity was not likely to significantly affect the environment.
Particulars
a. Minute dated 25 May 2012.
b. Signed Part 5 assessment dated 25 May 2012
37 By reason of the above, the Second Respondent could not approve the Activity without first obtaining, or being furnished with, and EIS.
38 No EIS was prepared for the Activity.
39 In breach of s 112, the Second Respondent erred in law in purporting to approve the Activity without first obtaining, or being furnished with, an EIS.
40 By reason of the Second Respondent's failure to comply with section 112 of the EPA Act in purporting to grant the Part 5 Approval, the said Part 5 Approval is invalid.
From the outset, Dart and the Department took issue with the assertion made by Fullerton in opening, that the Department had breached s 111 of the EPAA by failing to take into account certain mandatory factors contained in ESG2: Environmental Impact Assessment Guidelines for exploration, mining and petroleum production activities subject to Part 5 of the Environmental Planning and Assessment Act 1979 released in March 2012 ("the ESG2 Guidelines"), as opposed to the Guidelines themselves, and by failing to take into account the likely effect of the pilot program on four flora and four fauna species, either individually or cumulatively. Neither allegation, Dart and the Department argued, had been properly, or at all, pleaded in the points of the claim. The respondents further contended that neither claim could properly be seen to fall within the omnibus description of an "error of law" contained in paragraphs 25, 26 and 27 of the points of claim.
In addition, Dart and the Department submitted that Fullerton had failed to plead, in determining whether the pilot program was an activity that was likely to significantly affect the environment for the purposes of s 112 of the EPAA, that this gave rise to a jurisdictional fact.
Similarly, the respondents stated that to characterise the failures of the Department pursuant to s 112 of the EPAA as an "error of law" was not only to misstate, but was to misconceive the duty, and any correlative non-compliance, imposed on the Department as the "determining authority" in that provision.
The complaint by the respondents that, as framed, the pleaded breaches of ss 111 and 112 of the EPAA amount to, in each instance, no more than "errors of law" is not frivolous. This is because, as Dart and the Department submitted with considerable force, if the debate is framed strictly in terms of "error of law" and a failure to have regard to certain mandatory considerations, the Court can only have regard to the material that was before the Department at the time the approval (and the variation) was granted. Reliance cannot be placed on new or extraneous material, and in particular, any scientific expert evidence, in any examination of the alleged breaches. Put another way, this material is irrelevant to the determination of the issues raised in the points of claim, and therefore, ought not be put before the Court.
Predictably, this gave rise to difficult questions concerning the admissibility of the scientific reports sought to be tendered by Fullerton, the corollary of which involved, as a threshold issue, the determination of the proper construction of both ss 111 and 112.
Use of Expert Evidence in Judicial Review Proceedings
Generally, extraneous evidence is not admissible in respect of a ground of review premised on a bare allegation of an error of law (Attorney-General (NT) v Hand [1988] FCA 272; (1988) 16 ALD 318 at [23] per Wilcox J and Waterford v Commonwealth [1987] HCA 25; (1987) 163 CLR 54 at 77-78 per Brennan J).
Moreover, and again stated no higher than at a high level of generality for present purposes, the circumstances in which extraneous evidence is admissible in judicial review proceedings is confined (Attorney-General (NT) v Minister for Aboriginal Affairs [1989] FCA 159; (1989) 23 FCR 536 at 539-540; McCormack v Deputy Commissioner of Taxation Large Business & International [2001] FCA 1700; (2001) 114 FCR 574 at [37]-[41]; DEXUS Funds Management Ltd v Blacktown City Council [2011] NSWLEC 156 at [9] and Friends of King Edward Park Inc v Newcastle City Council [2012] NSWLEC 113 at [74]). The issue must be tested by reference to the grounds of review in issue (Attorney-General (NT) v Minister for Aboriginal Affairs at 539 per Lockhart J). These grounds of review may give rise to a number of limited exceptions to the general rule stated above (Friends of King Edward Park at [74] and the authorities usefully collected thereat per Biscoe J).
Thus material that was not before the decision-maker may be admissible if, for example, the ground of review pleaded is that of manifest unreasonableness; a failure to make inquiries where the decision-maker was under a duty to do so, revealing information readily available and relevant to the determination to be made (Prasad v Minister for Immigration and Ethnic Affairs [1985] FCA 47; (1985) 6 FCR 155 and Minister for Immigration and Citizenship v Le [2007] FCA 1318; (2007) 164 FCR 151 at [65]-[67]); or possibly breach of procedural fairness based on a legitimate expectation that a decision-maker would follow particular procedures that were not followed (see Friends of King Edward Park at [75]-[82] and DEXUS at [9]).
But whether or not a decision-maker has failed to consider a mandatory relevant consideration is to be determined by reference to the record before the decision-maker, assuming of course that the consideration was required to be taken into account as a matter of statutory construction, and not by reference to additional material such as expert scientific evidence (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39-40; Foster v Minister for Customs and Justice [2000] HCA 38; (2000) 200 CLR 442 at [22]-[23] and Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349 at [126] and [132(1)-(5)]).
In the present case, the pleadings were certainly not drafted with the necessary felicity and precision that the respondents were entitled to. As the High Court stated in Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 291 ALR 399 (at [25]): "It is for the party making ... allegations ... to identify the case which it seeks to make and to do that clearly and distinctly". On any view, the points of claim were deficient in this respect.
However, when paragraphs 21-28 of the points of claim are read as a whole, and likewise paragraphs 29-40 (excluding paragraph 35 dealing with designated development that was not pressed by Fullerton Cove at the hearing), and when regard is had to the points of defence, it is clear that what is alleged is a breach by the Department of ss 111 and 112 of the EPAA, unconfined in scope, and that was understood as such by both Dart and the Department.
The respondents, and in particular Dart, strenuously contended that if Fullerton was to depart from the "long line of authority in this Court that the determination of whether an activity 'is likely to significantly affect the environment' for the purpose of s 112 so as to require an EIS is a matter for the determining authority and not for the court", it was required to do so expressly in its pleading by alleging that s 112 involves the determination of a jurisdictional fact. Dart relied in support on an affidavit of Ms Louise Camenzuli, a solicitor engaged by Dart, affirmed 5 October 2012, which demonstrated that Dart had sought particulars of the error of law alleged in paragraphs 36-40 of the points of claim. But in my opinion, neither the request nor the answer by the solicitor for Fullerton advanced the matter very far.
It is plain that the pleadings in respect of s 112 do not explicitly raise an assertion as to the existence of a jurisdictional fact. To this observation there are two responses. First, since 2010, there has been authority in this Court that has held that s 112 does give rise to a jurisdictional fact (Parks and Playgrounds Movement Inc v Newcastle City Council [2010] NSWLEC 231; (2010) 179 LGERA 346 at [132] per Biscoe J and Oshlack v Rous Water [2011] NSWLEC 73; (2011) 184 LGERA 365 at [5]-[6] per Biscoe J, although cf Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55 at [84] per Spigelman CJ which suggests it does not). Therefore, unless these decisions are plainly wrong (see a discussion of this test below in the context of determining whether there has been a breach of s 112), the position in this Court has been that, however pleaded, in order for the Court to determine whether or not s 112 of the EPAA has been breached, the Court must determine the existence of a jurisdictional fact. That is to say, in order to ascertain whether or not the Department unlawfully granted approval to the pilot program in the absence of having obtained an EIS, the Court must, on present authority, determine for itself if the activity the subject of the approval is "likely to significantly affect the environment".
Second, while not all errors of law are jurisdictional errors, the determination of a jurisdictional fact is the determination of a "form of jurisdictional error" (Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; (2010) 78 NSWLR 393 at [34] and Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144 at [59]) and thus the determination of an error of law.
The respondents sought to challenge the correctness of Parks and Playgrounds and asserted that there was no jurisdictional fact embedded within s 112 that would permit expert evidence not before the decision-maker to be admitted into evidence.
It is somewhat trite to note that this issue is a complex one and that in the absence of a detailed analysis of the jurisprudence on jurisdictional fact and an examination of the authorities concerning s 112 of the EPAA, it could not, at least for the purposes of an evidential ruling, be easily and quickly resolved.
In relation to the claimed breach of s 111 of the EPAA, the parties similarly joined issue as to whether or not expert evidence was admissible to decide whether or not the Department failed to take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of the pilot program.
Again, as the survey of the relevant s 111 authorities reveals (discussed in detail below), the position is, to date, somewhat equivocal and requires careful consideration of the case law to resolve the issue.
Accordingly, and despite admonishment by the High Court in Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588 against this course (at [83]), scientific evidence sought to be relied upon by Fullerton to prove the breaches alleged was, as a matter of prudence, provisionally admitted subject to relevance. This approach was adopted in order to ensure that the hearing of the proceedings concluded within a reasonable time given that the matter had been set down for three hearing days, with no possibility of extending the hearing time beyond five days, and because properly construing ss 111 and 112 of the EPAA was necessary in order to decide both issues of contravention and the receipt of the scientific evidence.
Dart submitted that taking a generous view of the scope of the claims made against it and provisionally admitting the scientific expert evidence, would result in prejudice to it in respect of the s 111 claim because no expert evidence had been prepared to meet this ground of review.
But this was, as Dart conceded, a calculated gamble by it given that Fullerton had filed and served expert evidence specifically addressing the question of whether, for example, there was "sufficient information contained in the Project Documentation to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment" by reason of the pilot program (one of the issues Dr Gavin Mudd, an environmental engineer, was asked to comment upon by Fullerton). Thus any unfairness flowing to Dart by electing not to adduce any evidence directly in response to that filed by Fullerton was, to a large extent, of its own making. Dart could have easily sought a ruling in advance of the hearing on the admissibility of the evidence. It did not do so.
As it transpired no prejudice resulted to Dart in light of the evidence elicited from both Dart's experts and those of Fullerton. This was so notwithstanding, and contrary to the arguments put by Fullerton, that the function and inquiry set out in ss 111 and 112 of the EPAA are not the same. On any reading of those provisions the obligation set out in s 111 is very different to that contained in s 112.
Issues for Determination
At the conclusion of the hearing the following issues had emerged for determination by the Court (although neither Dart nor the Department accepted that all of the issues identified below arose for determination on the pleadings):
(a) whether the Court had jurisdiction to hear and determine all the claims for relief in the amended summons;
(b) whether expert evidence was admissible in judicial review proceedings in support of the claim that the Department had breached s 111 of the EPAA;
(c) whether in breach of s 111 of the EPAA, the Department had failed to consider the ESG2 Guidelines;
(d) whether the Department had failed to obtain, examine and take into account a groundwater assessment in breach of s 111 of the EPAA;
(e) whether, in breach of s 111 of the EPAA, the Department had failed to consider the impact of the activity on shorebirds, amphibian species and other threatened or vulnerable species that may be affected by carrying out the pilot program;
(f) whether the Department was required by s 111 to take into account the likely effect of the pilot program on:
(i) Maundia triglochinoides;
(ii) Persicaria elatior;
(iii) Asperula asthenes;
(iv) Zannichellia palustris;
(v) the Eastern Grass Owl;
(vi) the White-fronted Chat;
(vii) the Green and Golden Bell Frog;
(viii) the Pacific Golden Plover; and
(ix) the cumulative effect of the activity as a whole;
(g) whether the fact referred to in s 112(1) of the EPAA, namely, that the pilot program is "an activity that is likely to significantly affect the environment" is a jurisdictional fact and therefore expert evidence was admissible to support the alleged breach by the Department of that provision;
(h) if it is a jurisdictional fact, whether the pilot program was "an activity that is likely to significantly affect the environment" thereby requiring an EIS to be obtained and considered by the Department prior to granting the approval to conduct the program;
(i) whether the impact of the pilot program on groundwater, the four flora and four fauna species identified above and the cumulative impact of the pilot scheme meant that it was an activity that was likely to significantly affect the environment and require an EIS; and
(j) whether the Court should, in the exercise of its discretion, grant any or all of the relief sought in the amended summons, including the injunctive relief.
Jurisdiction
A challenge to the jurisdiction of the Court was made by Dart. In short, Dart contended that the Court could not entertain a claim for, or grant relief in respect of, an approval granted not under the EPAA, but given pursuant to a condition of a petroleum licence issued under another Act. Put simply, Dart argued that because Fullerton challenged the validity of an approval to carry out a pilot program given under the PO Act, and not Pt 5 of the EPAA, the Court lacked jurisdiction to hear and determine the matter.
Condition 1 of PEL 458 relevantly provided as follows:
Environmental Assessment
1. This Licence is granted (or renewed, if applicable) under Part 3 of the Petroleum (Onshore) Act 1991. After consideration of the environmental impact as required by Section 111 of the Environmental Planning and Assessment Act 1979, it has been determined that the type of exploration activities listed in Category 1 and in certain circumstances Category 2 may be conducted on the licence area provided that
...
The type of activity listed in Category 3 requires notification to an Environmental Officer of the Department and will normally require an additional specific determination under Part 5 of the Environmental Planning and Assessment Act 1979. At least 4 weeks prior to the proposed commencement of any activity listed in Category 3, a Review of Environmental Factors in accord with Clause 228 of the Environmental Planning and Assessment Regulation 2000 must be submitted to the Department to enable a determination under Part 5 of the Environmental Planning and Assessment Act 1979 to be made. In these cases the Department will assess any potential impact under Parts 6 or 8A of the National Parks and Wildlife Act 1974. Exploration activities must not commence until the written approval of the Assistant Director, Environment of the Department, is obtained and subject to any conditions he may stipulate.
...
Category 3
- Petroleum exploration boreholes.
- Seismic surveys.
The pilot program is a "Category 3" activity under condition 1 of PEL 458 that requires both a Pt 5 determination under the EPAA and a separate approval under the PO Act.
The 1 June 2012 approval from the Department stated as follows:
PEL458: Approval to undertake Fullerton Cove Pilot Appraisal
In accordance with Condition 1 of PEL458 granted under the provisions of the Petroleum (Onshore) Act 1991, the titleholder is hereby granted approval to conduct drilling of two sets of pilot appraisal wells and production flow testing, subject to the conditions set out below. These conditions relate specifically to this approval. The conditions are in addition to those previously attached to PEL458 and prevail to the extent of any inconsistency. A breach of these conditions is an offence under the Petroleum (Onshore) Act 1991.
CONDITIONS
General Conditions
1. The activities must be carried out generally in accordance with the methods contained in:
a) "Pilot Appraisal Exploration Program, Review of Environmental Factors for Fullerton Cove - PEL458" Rev 3, dated 22/9/2011 submitted by Dart Energy.
b) Letter dated 22nd December 2011 from Dart Energy, addressing email from DRE, and accompanying reports: GCA Engineering Solutions - Erosion and Sediment Control and Stormwater Management for Pilot Well Drilling; Douglas Partners - Acid Sulphate Soil Management Plan; PEA Consulting - Supplementary Ecological Report.
Except as amended by the following conditions.
Thus Dart submitted that because s 20 of the Land and Environment Court Act 1979 ("the LEC Act") does not vest jurisdiction in the Court to hear and determine claims arising under the PO Act (and s 20(2) cannot assist Fullerton because the PO Act is not a "planning or environmental law" as that term is defined in s 20(3)), the matter cannot proceed in this Court.
Section 20 of the LEC Act relevantly provides as follows:
20 Class 4-environmental planning and protection and
development contract civil enforcement
(1) The Court has jurisdiction (referred to in this Act as "Class 4" of its jurisdiction) to hear and dispose of the following:
...
(c) proceedings under section 123 of the Environmental Planning and Assessment Act 1979,
(2) The Court has the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of the following proceedings:
(a) to enforce any right, obligation or duty conferred or imposed by a planning or environmental law or a development contract,
(b) to review, or command, the exercise of a function conferred or imposed by a planning or environmental law or a development contract,
(c) to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function,
(d) whether or not as provided by section 68 of the Supreme Court Act 1970-to award damages for a breach of a development contract.
...
(3) For the purposes of subsection (2), a planning or environmental law is:
(a) any of the following Acts or provisions:
Aboriginal Land Rights Act 1983 (other than Division 5 of Part 7),
Biological Control Act 1985,
Coastal Protection Act 1979,
Contaminated Land Management Act 1997,
Environmental Planning and Assessment Act 1979,
Environmentally Hazardous Chemicals Act 1985,
Part 5A or 5B of the Forestry Act 2012,
Heritage Act 1977,
Part 2 of Chapter 6, Chapter 7 or Chapter 15 of the Local Government Act 1993,
Schedule 3 to the Miscellaneous Acts (Planning) Repeal and Amendment Act 1979,
National Parks and Wildlife Act 1974,
Native Vegetation Act 2003,
Part 5 of the Olympic Co-ordination Authority Act 1995,
Ozone Protection Act 1989,
Pesticides Act 1999,
Plantations and Reafforestation Act 1999
Plumbing and Drainage Act 2011,
Protection of the Environment Administration Act 1991,
Protection of the Environment Operations Act 1997
Rural Fires Act 1997,
Threatened Species Conservation Act 1995,
Trees (Disputes Between Neighbours) Act 2006,
Uranium Mining and Nuclear Facilities (Prohibitions) Act 1986,
Waste Avoidance and Resource Recovery Act 2001,
Waste Recycling and Processing Corporation Act 2001, or
(b) any statutory instrument made or having effect thereunder or made for the purposes thereof, including any deemed environmental planning instrument within the meaning of the Environmental Planning and Assessment Act 1979,
as respectively in force at any time, whether before, on or after 1 September 1980.
In my opinion there are two principal reasons why the jurisdictional challenge must fail. First, the approval granted on 1 June 2012 gives rise to a determination under Pt 5 of the EPAA that is properly amenable to challenge in this Court pursuant to s 20 of the LEC Act. This conclusion requires further explanation.
Dart submitted that although the PO Act did not expressly confer upon the Minister or the Department the power to grant the 1 June 2012 approval to commence exploration activities, the approval was nevertheless an approval given under the PO Act insofar as it was an approval required by reason of condition 1 of PEL 458 issued by the Minister (in this respect the submission is correct, Pt 5 of the EPAA does not contain an approval function or power). Accordingly, it did not matter that a separate determination was made under Pt 5 of the EPAA (the 1 June 2012 determination) because the determination was part of, and not distinct from, the approval under the PO Act. But this is not a complete answer.
Part 3 of the PO Act deals with "Petroleum titles". Such titles are granted by the Minister under s 9 of that Act. A petroleum title may be subject to conditions imposed by the Minister and specified in the title (s 23 of the PO Act). Condition 1 to PEL 458 requiring the additional determination under Pt 5 of the EPAA is such an example. It is true that Dart has the benefit under the PO Act of a "petroleum title" as defined and issued under that Act. But, as stated in condition 1 of PEL 458, because the pilot program is a Category 3 activity, it requires "an additional specific determination under Pt 5 of the" EPAA and "exploration activities must not commence until the written approval of the Assistant Director, Environment of the Department is obtained and subject to any conditions he may stipulate".
The approval given by the Assistant Director (through the Manager, Environmental Operations) on 1 June 2012 was therefore nevertheless granted consequent upon the determination under Pt 5 of the EPAA of the same date. Not only is the pilot program an "activity" for the purposes of Pt 5 (see the definition of that term in s 110(1) of the EPAA), the approval given on 1 June 2012 is a "form of authorisation" for the purpose of the definition of "approval" contained in s 110(1) of that Part. The "determining authority" - the Department, through the Assistant Director's delegate - could not grant approval to commence the pilot program without first satisfying ss 112 and 111 of the EPAA. The two discrete discretionary exercises are therefore wholly separate.
As there is no doubt that the Court has jurisdiction to decide whether a determining authority (in this case the Department) has breached its duty to not "grant an approval in relation to an activity" that is likely to significantly affect the environment absent obtaining an EIS (s 112 of the EPAA), or to "examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of" the pilot program (s 111), it follows that the Court can entertain the claims made by Fullerton in its points of claim that there has been a breach of these provisions by the Department in granting the approval under the PO Act, either by reason of s 20(2) of the LEC Act or s 20(1)(c) of that Act.
Second, even if the above analysis is incorrect and the approval is not subject to a reviewable Pt 5 determination, s 21C(1) of the LEC Act expressly confers jurisdiction on the Court to hear and dispose of proceedings arising under the PO Act:
21C Class 8-mining matters
(1) The Court has jurisdiction (referred to in this Act as "Class 8" of its jurisdiction) to hear and dispose of proceedings arising under the Mining Act 1992 or the Petroleum (Onshore) Act 1991.
Although s 21C gives the Court jurisdiction in respect of Class 8 matters and these proceedings were commenced in Class 4 of the Court's jurisdiction, by operation of s 31 of the LEC Act the Court has the power to entertain the matter (Chen v Virgona [2008] NSWLEC 281 at [17]).
In reply, Dart argued that because the claim by Fullerton for relief involves no assertion of any right, cause of action or interest derived from the PO Act, s 21C of the LEC Act is not enlivened because "the proceedings" are not proceedings "arising under" the PO Act. Alternatively, Dart submitted that s 115 of the PO Act explicitly sets out the jurisdiction of this Court to hear and dispose of matters arising under that Act and this jurisdiction did not encompass judicial review proceedings of the type contemplated by the present case. Section 115 of the PO Act relevantly states:
115 Jurisdiction of Land and Environment Court
(1) The Land and Environment Court has jurisdiction to hear and determine proceedings relating to any of the following matters:
...
(m) any question or dispute as to:
(i) the validity of a petroleum title, or
(ii) the decision of the Minister in relation to an application for the granting, renewal or transfer of a petroleum title, or
(iii) the decision of the Minister to cancel a petroleum title,
...
(q) any other matter in respect of which jurisdiction is conferred on the Court by this Act.
(2) Nothing in this section limits or restricts the jurisdiction conferred on any other court by any other Act or law.
If, as I have accepted, the relevant approval is an approval given under the PO Act, then, in my view, the proceedings arguably "arise under" that Act and s 21C of the LEC Act is enlivened. Further, I do not accept, as Dart suggested, that s 21C of the LEC Act is subordinate to s 115 of the PO Act. The words in s 21C are plenary in scope and there is no express limitation on the jurisdiction of this Court in either that provision or s 115 of the PO Act that limits the Court's jurisdiction to hear and dispose of these proceedings.
Having said this, there was, however, considerable force in Dart's contention that, as pleaded, the allegations in the points of claim did not fall within the scope of s 115 of the PO Act, and in particular, s 115(1)(m) of that Act. The term "petroleum title" contained in s 115(1)(m) is defined in s 3 to mean "an exploration licence, assessment lease, production lease or special prospecting authority in force under this Act". There is no challenge whatsoever made to the decision to issue PEL 458 or its validity in the points of claim. Challenge is made only to the approval, albeit granted under the rubric of the PO Act, permitting the pilot program to commence.
Nonetheless, for the reasons given earlier, I am of the opinion that the Court has jurisdiction to hear and determine Fullerton's claims.
Statutory Framework
Section 5 of the EPAA sets out the Act's objects:
5 Objects
The objects of this Act are:
(a) to encourage:
(i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment,
(ii) the promotion and co-ordination of the orderly and economic use and development of land,
(iii) the protection, provision and co-ordination of communication and utility services,
(iv) the provision of land for public purposes,
(v) the provision and co-ordination of community services and facilities, and
(vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species, populations and ecological communities, and their habitats, and
(vii) ecologically sustainable development, and
(viii) the provision and maintenance of affordable housing, and
(b) to promote the sharing of the responsibility for environmental planning between the different levels of government in the State, and
(c) to provide increased opportunity for public involvement and participation in environmental planning and assessment.
Part 5 of the EPAA deals with "Environmental assessment" in relation to approvals given to carry out, for present purposes, activities such as the pilot program.
Section 111 contained in Pt 5 relevantly provides as follows:
111 Duty to consider environmental impact
(1) For the purpose of attaining the objects of this Act relating to the protection and enhancement of the environment, a determining authority in its consideration of an activity shall, notwithstanding any other provisions of this Act or the provisions of any other Act or of any instrument made under this or any other Act, examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity.
...
(4) Without limiting subsection (1), a determining authority must consider the effect of an activity on:
(a) critical habitat, and
(b) in the case of threatened species, populations and ecological communities, and their habitats, whether there is likely to be a significant effect on those species, populations or ecological communities, or those habitats, and
(c) any other protected fauna or protected native plants within the meaning of the National Parks and Wildlife Act 1974.
Section 115 of the EPAA provides that the Environmental Planning and Assessment Regulation 2000 ("the Regulations") "may make provision for or with respect to: (a) the factors to be taken into account when consideration is being given to the likely impact of an activity on the environment".
Clause 228 of the Regulations therefore relevantly provides (emphasis added):
228 What factors must be taken into account concerning the impact of an activity on the environment?
(1) For the purposes of Part 5 of the Act, the factors to be taken into account when consideration is being given to the likely impact of an activity on the environment include:
(a) for activities of a kind for which specific guidelines are in force under this clause, the factors referred to in those guidelines, or
(b) for any other kind of activity:
(i) the factors referred to in the general guidelines in force under this clause, or
(ii) if no such guidelines are in force, the factors referred to subclause (2).
...
(3) For the purposes of this clause, the Director-General may establish guidelines for the factors to be taken into account when consideration is being given to the likely impact of an activity on the environment, in relation to activities generally or in relation to any particular kind of activity.
(4) The Director-General may vary or revoke any guidelines in force under this clause.
Section 112 of the EPAA relevantly states:
112 Decision of determining authority in relation to certain activities
(1) A determining authority shall not carry out an activity, or grant an approval in relation to an activity, being an activity that is a prescribed activity, an activity of a prescribed kind or an activity that is likely to significantly affect the environment (including critical habitat) or threatened species, populations or ecological communities, or their habitats, unless:
(a) the determining authority has obtained or been furnished with and has examined and considered an environmental impact statement in respect of the activity:
(i) prepared in the prescribed form and manner by or on behalf of the proponent, and
(ii) except where the proponent is the determining authority, submitted to the determining authority in the prescribed manner,
...
(1B) Without limiting subsection (1), a determining authority must not carry out an activity, or grant an approval in relation to an activity, being an activity that is in respect of land that is, or is a part of, critical habitat or is likely to significantly affect threatened species, populations or ecological communities, or their habitats, unless a species impact statement, or an environmental impact statement that includes a species impact statement, has been prepared (in each case) in accordance with Division 2 of Part 6 of the Threatened Species Conservation Act 1995.
And for the purposes of ss 111 and 112, s 5A of the EPAA provides that:
5A Significant effect on threatened species, populations or ecological communities, or their habitats
(1) For the purposes of this Act and, in particular, in the administration of sections 78A, 79B, 79C, 111 and 112, the following must be taken into account in deciding whether there is likely to be a significant effect on threatened species, populations or ecological communities, or their habitats:
(a) each of the factors listed in subsection (2),
(b) any assessment guidelines.
(2) The following factors must be taken into account in making a determination under this section:
(a) in the case of a threatened species, whether the action proposed is likely to have an adverse effect on the life cycle of the species such that a viable local population of the species is likely to be placed at risk of extinction,
(b) in the case of an endangered population, whether the action proposed is likely to have an adverse effect on the life cycle of the species that constitutes the endangered population such that a viable local population of the species is likely to be placed at risk of extinction,
(c) in the case of an endangered ecological community or critically endangered ecological community, whether the action proposed:
(i) is likely to have an adverse effect on the extent of the ecological community such that its local occurrence is likely to be placed at risk of extinction, or
(ii) is likely to substantially and adversely modify the composition of the ecological community such that its local occurrence is likely to be placed at risk of extinction,
(d) in relation to the habitat of a threatened species, population or ecological community:
(i) the extent to which habitat is likely to be removed or modified as a result of the action proposed, and
(ii) whether an area of habitat is likely to become fragmented or isolated from other areas of habitat as a result of the proposed action, and
(iii) the importance of the habitat to be removed, modified, fragmented or isolated to the long-term survival of the species, population or ecological community in the locality,
(e) whether the action proposed is likely to have an adverse effect on critical habitat (either directly or indirectly),
(f) whether the action proposed is consistent with the objectives or actions of a recovery plan or threat abatement plan,
(g) whether the action proposed constitutes or is part of a key threatening process or is likely to result in the operation of, or increase the impact of, a key threatening process.
(3) In this section:
assessment guidelines means assessment guidelines issued and in force under section 94A of the Threatened Species Conservation Act 1995 or, subject to section 5C, section 220ZZA of the Fisheries Management Act 1994.
key threatening process has the same meaning as in the Threatened Species Conservation Act 1995 or, subject to section 5C, Part 7A of the Fisheries Management Act 1994.
There Has Been No Breach of s 111 of the EPAA
There are three limbs to the alleged breach of s 111 of the EPAA:
(a) first, that the Department manifestly failed to consider the ESG2 Guidelines;
(b) second, that the Department failed to take into account to the fullest extent possible all matters affecting or likely to affect the environment because it failed to obtain and take into account a groundwater assessment; and
(c) third, that the Department failed to take into account to the fullest extent possible all matters affecting or likely to affect the environment because the Ecological Assessment in the REF was inadequate because it failed to consider the impact of the pilot program on migratory and non-migratory shore birds, certain amphibian species and other species identified in expert ecological evidence.
Before turning to the application of s 111 to the facts of this case, it is necessary to consider the content of the duty imposed by the provision. The duty upon the determining authority, in this case the Department, to "examine and take into account to the fullest extent possible" the matters obliged to be considered by s 111 is, as the authorities have clarified, an obligation to examine and take into account the matters referred to in that section to the fullest extent reasonably possible (Guthega Development Pty Ltd v Minister Administering the National Parks and Wildlife Act 1974 (NSW) (1986) 7 NSWLR 353 at 366; Transport Action Group Against Motorways Inc v Roads and Traffic Authority [1999] NSWCA 196; (1999) 46 NSWLR 598 at [68]; Parks and Playgrounds at [158] and Oshlack v Rous Water (No 2) [2012] NSWLEC 111; (2012) 189 LGERA 243 at [65]-[68]). The duty is to conduct a proper examination of the relevant matters required to be considered, more than mere advertence is necessary. Fullerton bears a heavy burden in demonstrating that the Department failed to properly take into account a matter required for consideration under s 111 (Jugiong Quarries Pty Ltd v Water Administration Ministerial Corporation [1995] NSWLEC 74 at 14).
The conduct of the duty is informed by the factual circumstances surrounding its execution. That is to say, in the present case the fact that the proposed activity does not involve coal seam gas production other than for the purposes of a pilot program and requires the establishment of two pilot wells on a single drill site operational for a limited period of time (50 days) and subject to the conditions of PEL 458 and the 1 June 2012 approval (including the variation).
Failure to Consider the ESG2 Guidelines
By reference to cl 228(1)(a) of the Regulations, Fullerton contended that as a matter of inference, the Department had breached the duty imposed on it by s 111 by failing to consider the ESG2 Guidelines in assessing the likely impact of the activity. The Guidelines came into force in March 2012.
As stated in the Introduction to the ESG2 Guidelines, the Guidelines were developed to provide a framework for "industry" to use in assessing the potential environmental impact of activities requiring the preparation of an REF or EIS (footnotes omitted):
Introduction
The Mineral Resources Branch of NSW Trade & Investment is responsible for the administration of authorisations under the Mining Act 1992 and petroleum titles under the Petroleum (Onshore) act 1991. Authorisations are defined as exploration licences, assessment leases, mining leases, mineral claims and opal prospecting licences. Petroleum titles include exploration licences, assessment leases and production leases.
As part of this role, Mineral Resources has a statutory obligation under s.111 of the Environmental Planning and Assessment Act 1979 (EP&A Act) to "examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment" when determining certain applications in relation to authorisations and titles. This obligation applies where activities have not previously been approved under the former Part 3A or Part 4 of the EP&A Act, or assessed by another Government agency in accordance with Part 5.
In order to assess these impacts, Mineral Resources may require the authorisation/title holder to prepare a Review of Environmental Factors (REF) or Environmental Impact Statement (EIS).
These Guidelines have been developed to provide a framework for industry to use in assessing the potential environmental impact of activities requiring the preparation of a REF, EIS or other supporting documentation.
Relevantly, the ESG2 Guidelines stated that the REF must summarise the individual impacts of the activity and consider the total impact of the activity:
5 Summary of impacts
The REF must summarise the impacts of the activity (preferably in tabular form) and consider the total impact of the activity based on the classification of individual impacts as low, medium or high adverse, negligible or positive.
Note. When considering the likely environmental significance of the impacts associated with the proposed activity, applicants should consider:
- how extensive are the impacts?
- how adverse are the impacts on environmentally sensitive areas?
- how acceptable are the impacts considering the nature of the impacts?
In addition to medium and high impacts, consideration should also be given to the overall effects of the low impacts. Although impacts may be of only low to medium concern when considered individually, the total effect of the impacts could be substantial.
Further guidance is given below:
Extensive impacts are likely to be significant
In deciding if the impacts of an activity are likely to significantly affect the environment, the type, degree and range of each impact must be considered on its merits. If an impact is extensive in terms of spatial or time dimensions and intensity or severity there is potentially a high risk to the environment.
Impacts which adversely impact on environmentally sensitive areas are likely to be significant
The impacts of activities undertaken in environmentally sensitive areas are more likely to be significant than similar activities proposed in less sensitive locations. Relatively small activities carried out in sensitive locations can result in substantial impacts on the environment. A precautionary approach should be adopted for activities proposed in locations known to be environmentally sensitive, including careful investigation of alternatives and mitigation strategies. Activities that are likely to indirectly affect sensitive locations may also be considered to significantly affect the environment.
Impacts with a low level of acceptability because of the nature of the impacts are likely to be significant
When considering the impacts of an activity, the extent of the potential impacts is only one factor to be considered. Impacts that are not very extensive may still significantly affect the environment.
Any impact that results in a threat to the health or safety of individuals or the community has a low acceptability level. In considering the risks to the community, particular attention should be given to the welfare of children, the aged or any disadvantaged group.
The ESG2 Guidelines stipulate that the REF must describe certain stipulated matters:
6 Conclusions
The REF must describe whether:
- there is likely to be a significant effect on the environment (if so, an EIS is required)
- there is likely to be a significant effect on threatened species, populations, ecological communities or their habitats (if so, a SIS is required)
- the activity is in respect of land that is, or is part of, critical habitat (if so, a SIS is required)
In considering whether there is likely to be a significant effect on the environment, the applicant must describe whether the activity as a whole will have a significant effect on the environment and explain the reasons for this conclusion.
Note. The ranking of the potential significance of the individual impacts of an activity must be considered as well as the aggregation of all the impacts of the activity. The cumulative effect could result in the activity as a whole having a significant effect.
A medium or high level of impact is considered to be significant. Examples of activities that have the potential to have significant effect on the environment include, but are not limited to, circumstances where:
- the impacts from the proposed activity would result in a permanent and adverse change to the environment
- there is a low level of confidence in forecasting outcomes. In this case the risks may be high. If the risks to the environment are high, then impacts can be judged to have the potential to significantly affect the environment
- the risks of irreversible change may be high due to the environment's natural sensitivity and/or induced sensitivity because of cumulative impacts
- it is known that the environment is already stressed and therefore the acceptability of activity that will further degrade the environment may be significantly reduced.
The ESG2 Guidelines were also required to be taken into account, Fullerton submitted, in order to promote consistency in decision-making and because they represented best practice from an environmental perspective in the specific industries of petroleum exploration, mining and production.
Fullerton relied on the absence of any express reference to the ESG2 Guidelines in: the 25 May 2012 minute recommending that the Department determine that the pilot program was not likely to significantly affect the environment; the REF, which specifically referred to cl 228 of the Regulations; and the 1 June 2012 Pt 5 determination evaluation assessing the likely significance of the impact of the pilot program to invite the Court to draw the inference that the Guidelines had not been considered.
Fullerton specifically relied upon the Note contained in section 6 "Conclusions" of the ESG2 Guidelines. It argued that because the Note stated that "a medium or high level of impact is considered to be significant", in circumstances where the 1 June 2012 Pt 5 determination had assessed the environmental significance of the "activity as a whole" to be "medium", but had nevertheless concluded that no EIS was required, this demonstrated that the ESG2 Guidelines had not been considered adequately or at all by the Department.
Fullerton drew support from s 35(4) of the Interpretation Act 1987, which states that marginal notes, endnotes and footnotes are to be taken as part of an Act or instrument. However, given that the Guidelines are neither an "enactment" nor an "instrument" for the purpose of the Interpretation Act, I do not understand how s 35 assists Fullerton and in any event s 35(2)(c) of that Act suggests a contrary position.
Fullerton will succeed if it can demonstrate, first, that as a matter of statutory construction the Department was bound to take the ESG2 Guidelines into account in granting the approval (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39), and second, as a matter of inference, that no consideration was in fact given to the Guidelines by it.
In drawing such an inference the Court should bear in mind the articulation of the relevant principles made by McClellan J in Centro Properties Ltd v Hurstville City Council [2004] NSWLEC 401; (2004) 135 LGERA 257 at [36]-[37]):
36 In Weal v Bathurst City Council [2000] NSWCA 88; (2000) 111 LGERA 181, the Court of Appeal divided over a challenge to a development consent granted with respect to a proposed rail freight terminal. At issue was whether the council had considered the impacts of noise from the proposal.
37 Giles and Priestley JJA came to the view that the council's discretion had miscarried. Mason P came to the contrary view. However, as Priestley JA makes plain, the principles which govern the approach that a court should take in the event of a challenge were the subject of substantial agreement. A summary of those principles is useful and would include the following:
· the onus falls upon the challenger to satisfy a court that the relevant discretion has miscarried;
· when exercising its decision-making power, an administrative body must give "proper, genuine and realistic consideration" to the merit of the matter: see Khan v Minister for Immigration and EthnicAffairs (1987) 14 ALD 291 at 292; Paramanantham v Minister for Immigration and Multicultural Affairs (1998) 94 FCR 28 at 64. Mere advertence to a matter may not be sufficient: Zhang at NSWLR 601;
· a failure to take matters into consideration may be demonstrated where it can be shown that the decision-maker had inadequate personal acquaintance with the facts and issues: Hale at LGRA 319;
· legally sufficient consideration of a relevant issue may require consideration of conditions which could ameliorate any prospective harm to the environment from the development;
· generally speaking, understanding the scope of a problem is a prerequisite to a lawful decision with respect to it;
· when a challenge is based upon Wednesbury unreasonableness a stringent test is applied. Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611. The decision must be devoid of plausible justification: Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 290; Minister for Urban Affairs and Planning v Rosemount Estates Pty Ltd (1996) 91 LGERA 31;
· when it comes to a consideration of whether the decision-maker has properly weighed up relevant considerations which it has itself identified, a court must proceed with caution "lest it exceed its supervisory role by reviewing the decision on its merits": Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 42;
· where there is no direct evidence of a consent authority's consideration of a matter, it may be difficult for a challenger to establish a failure to consider a relevant matter or consideration of an irrelevant matter. Confined to drawing an inference, that inference should only be drawn after anxious consideration: Hale; Currey v Sutherland Shire Council (1998) 100 LGERA 365 at 373 ...
Regard must also be had to the level of particularity at which the subject matter that is said to be relevant and mandatory is to be considered. Section 111 of the EPAA must expressly or impliedly oblige the Department to inquire and consider the ESG2 Guidelines, assuming their consideration is mandatory, at the level of particularity demanded by Fullerton's submission (Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118 at [60]; Foster v Minister for Customs and Justice at [23] and Barrington-Gloucester-Stroud Preservation Alliance at [173]).
Unquestionably, pursuant to s 115 of the EPAA and cl 228(1)(a) of the Regulations, there is a statutory requirement contained in s 111 to consider various prescribed "factors" (to borrow the statutory language) when assessing the likely impact of an activity on the environment. Clauses 228(1) and (3) provide that the Director-General may establish guidelines identifying the factors that must be taken into account when assessing this impact in accordance with the hierarchy specified in cl 228(1).
However, when consideration is given to the language of cl 228(1)(a) of the Regulations it becomes apparent that this limb of the ground of review cannot succeed because cl 228(1) is not engaged by the ESG2 Guidelines.
First, I accept the submissions of Dart and the Department that the ESG2 Guidelines are not relevant "guidelines" for the purposes of cl 228 because they were not guidelines made by the Director-General of the Department of Planning. Having concluded this (for reasons that are elaborated upon below), I nonetheless reject Dart's argument that the Guidelines cannot properly be characterised as "specific guidelines" for the purpose of cl 228(1)(a) because they were prepared to guide the preparation of documents by "industry". The title of the ESG2 Guidelines makes it abundantly clear that the Guidelines are directed to "exploration, mining and petroleum production activities" which plainly encompasses the pilot program. As the "Introduction" states, the ESG2 Guidelines are auspiced under the Mineral Resources Branch of NSW Trade & Investment which is responsible for the administration of authorisations under the Mining Act 1992 and petroleum titles under the PO Act. Clearly the "industry" referred to in the Guidelines is the mining and petroleum industry. It is the very "industry" seeking to explore for gas under the pilot program.
But irrespective of their characterisation, the ESG2 Guidelines were not, as is necessary upon the proper construction of cl 228, guidelines made by the Director-General of the Department of Planning. Rather, they were made by, the Director-General of the NSW Department of Trade and Investment, Regional Infrastructure and Services, that is to say, the second respondent. Although cl 228(1) appears to be silent as to who must be the maker of the guidelines referred to therein, when that clause is read both as a whole having regard to its scope and purpose and in the wider context of both the Regulations and the EPAA, it becomes clear that the guidelines, whether general or specific, must be those promulgated by the Director-General referred to in subclauses (3) and (4). It would, for example, be anomalous if the Director-General of the Department of Planning could repeal guidelines made by the Director-General of another Department. The "Director-General" referred to in cl 228(3) is, by reason of the combined operation of cl 3 of the Regulations and the definition of "Director-General" and "Department" in s 4 of the EPAA, the Director-General of the Department of Planning (the definitions in the EPAA apply to the Regulations: see s 11 of the Interpretation Act).
(m) inconvenience arising from a jurisdictional fact conclusion is relevant to determining the legislative intention: Timbarra at [91], Woolworths at [63].
To this may be added:
(a) if a breach of the statutory provision said to contain a jurisdictional fact does not result in invalidity, the absence of "essentiality" suggests that the relevant provision does not incorporate "objectivity" and is therefore not a jurisdictional fact (Huntlee at [117]); and
(b) where an evaluative judgment or assessment is required to be made by the decision-maker, for example, the determination of the 'suitability' of a matter, this is less likely to be construed as specifying a jurisdictional fact or objective state of affairs (Pallas Newco at [56]-[58] and Huntlee at [118]).
There are several textual indicators that suggest that the intention of the legislature was that a determination that an activity is likely to significantly affect the environment in s 112(1) of the EPAA is a jurisdictional fact. First, and in my view, most critically, s 112(1) operates as a preliminary limitation, or condition precedent, on the exercise of power ("shall not...unless"). The "extrinsic or ancillary or preliminary nature of the fact" makes it more likely to be a jurisdictional fact (Timbarra at [44] and [50]-[60]; Pallas Newco at [46]-[49] and Barrick Australia v Williams [2009] NSWCA 275; (2009) 74 NSWLR 733 at [26].
This can be demonstrated in the present case, where the decision to approve the pilot program was not made pursuant to either ss 111 or 112 of the EPAA. Section 112(1) does no more than stipulate the circumstances in which a determining authority must obtain and consider an EIS. In other words, the relevant factual reference does not occur within the statutory formulation of power. That power is, as Dart and the Department emphasised in their submissions on jurisdiction, to be found elsewhere, namely, the PO Act. Thus the determination of the fact contained in s 112(1) is preliminary or ancillary to, and quite distinct from, the exercise of statutory power to grant approval to an activity or the carrying out of an activity by the determining authority. As was stated in Timbarra, "a factual reference in a statutory formulation relating to the instigation of a statutory decision-making process, is more likely... to turn on an objective fact, than is a factual reference arising in, or in relation to, the conduct of the decision making process itself" (at [50]).
Section 90(1)(c3), as analysed in Timbarra, is distinguishable from s 112(1) on this basis. The factual reference in the former provision occurs within the statutory formulation of the power to determine a development application ("in determining a development application, a consent authority shall..."). The exercise of the power - that is, the conduct of the decision-making process - is simultaneous with the determination of the fact. In s 112(1), by contrast, the exercise of the power is wholly separate from the determination of the factual matters proscribed in that section.
Second, the language of s 112 also tells in favour of jurisdictional fact. Similar to s 77(3)(d1) under consideration in Timbarra, what is presently required is a determination that an activity "is an activity that is likely to significantly affect the environment" and not, as stated in s 90(1)(c3), a consideration of "whether there is likely to be a significant effect on" the environment in the determination of a development application (emphasis added in each case). The latter calls for the decision-maker's opinion as to whether that fact will occur, whereas the former demands an objective determination of the existence of that fact. Moreover, not only must the fact that an activity is or is not likely to significantly affect the environment exist as a matter of fact, that fact is essential in the sense that its absence (or presence, if no EIS is furnished or considered) will invalidate the approval given or the activity carried out. The objective character of the assessment to be made in the chapeau to s 112(1) may be contrasted with the subjective "examination and consideration" required to be given to the EIS once obtained or furnished in s 112(1)(a). The latter exercise is demonstrably not one that gives rise to a jurisdictional fact.
Third, similar to s 77(3)(d1), s 112(1) offers no distinction between an activity that "is a prescribed activity" or "an activity of a prescribed kind", and "is likely to significantly affect the environment". Whether or not an activity is a "prescribed activity" is entirely an objective fact. It is any development of a class or description that is prescribed by the regulations for the purposes of the definition of "activity" in s 110(1)(k) of the EPAA. It is unlikely that Parliament intended any significant difference in the statutory treatment within s 112 between an activity that is a "prescribed activity" and an activity that is "likely to significantly affect the environment" (Timbarra at [62]). This analysis is also applicable to s 112(1B) (to which the reasoning in Timbarra at [61]-[64] is squarely on point).
Fourth, unlike s 90(1)(c3) ("in determining a development application, a consent authority shall take into consideration such of the following matters..."), the relevant fact in s 112(1) is not one of many considerations, rather it is a consequence of a single factual enquiry.
Fifth, having regard to the distinction sought to be drawn by Spigelman CJ in Timbarra (at [83]-[84]) between ss 77(3)(d1) and 90(1)(c3) for the purpose of eschewing any suggestion that a "decision" arose under the former pursuant to s 5A of the EPAA (thereby tending against a jurisdictional fact), with the greatest of respect to his Honour I do not agree that the terminology of "decision" has as clear an application to s 112(1), as it does to s 90 (assuming that this is what his Honour's remark was directed to). As the Chief Justice noted, s 90 is concerned with a list of considerations that the consent authority is required to take into account. But the same cannot be said of s 112(1) of the EPAA, notwithstanding the application of s 5A of the EPAA to that provision. There is, in my opinion, no determination or decision to be made in s 112(1) other than in respect of the single factual reference. Significantly, the provision does not state that "in determining to carry out an activity or grant an approval the determining authority shall not...". A determining authority may be required to decide if it has a valid application for, in this case, a pilot program to drill for gas, by reason of a determination that an EIS is required, but the initial decision is not, unlike s 90(1)(c3), made pursuant to s 112.
But, even if I am wrong, and a decision is required by a determining authority pursuant to s 112(1), this is but one indicator against the creation of a jurisdictional fact. It is not, of itself, definitive (Timbarra at [87]).
Contextually, the central importance of an EIS is reflected throughout Pt 5 of the EPAA, which is concerned with "Environmental assessment". As Spigelman CJ observed in Timbarra, "a species impact statement, when required, plays a critical role in the quality of the decision-making process, by ensuring that detailed information is available to primary decision-makers in a systematic and ordered way" (at [76] and see again at [94]). The comments resonate equally in the context of an EIS in Pt 5. This makes it more likely, in my opinion, that the legislature intended the assessment culminating in the requirement to prepare an EIS to be objectively ascertained and that the decision-maker's opinion is not determinative. Such a finding is in conformity with the objects and purpose of the Act (s 5 of the EPAA).
As in Timbarra, it was submitted by Dart and the Department that the fact that the obligation to prepare an EIS was "triggered by a formulation requiring the exercise of a broad judgment on a matter of potentially significant disputation" (Timbarra at [88]) and could result in inconvenience by a determining authority erroneously deciding that an EIS is not required creating the potential for any subsequent decision granting approval or carrying out an activity to be set aside (at [91]-[92]), militated against the finding of a jurisdictional fact.
Three responses may be given. First, it is not always the case that matters of judgment involved in determining facts, including matters of fact and degree, mean that the fact is not jurisdictional (see the examples given in Pallas Newco at [60]). Second, as the examination of the earlier case law above demonstrates, the exercise of judgment and the potential for inconvenience is no greater than that already present in any challenge to the reasonableness of a determining authority's conclusion that an EIS is not required because the activity is not likely to significantly affect the environment. And, third, "remedies on judicial review are discretionary and may be refused" (Timbarra at [93]).
I therefore find that s 112(1) of the EPAA gives rise to a jurisdictional fact that the Court must determine for itself on all the available evidence, including the expert evidence tendered by the parties, whether or not the pilot program is likely to significantly affect the environment.
Alleged Breaches of s 112
There are three ways in which it is alleged that the Department breached s 112(1) of the EPAA:
(a) first, because the overall potential impact of the activity was assessed as "medium" in the 1 June 2012 Pt 5 determination and the ESG2 Guidelines stated that a medium impact statement was "considered significant", and therefore, an EIS was required;
(b) second, the proposed activity is designated development and therefore an EIS was required because designated development was, by its very nature, an activity that was likely to significantly affect the environment; and
(c) third, the Court ought to be satisfied that the pilot program was likely to significantly affect the environment and that an EIS was required because of the likely impact of the activity on the:
(i) the Pacific Golden Plover;
(ii) the Eastern Grass Owl; and
(iii) the cumulative impacts of the pilot program.
The ESG2 Guidelines
Fullerton submitted that the pilot program was likely to significantly affect the environment because the assessment carried out by the Department for the purposes of the 1 June 2012 evaluation under Pt 5 of the EPAA concluded that the potential impact of the activity "as a whole" was "medium" and the ESG2 Guidelines designated a "medium" level of impact as "significant". It relied upon the Note in the ESG2 Guidelines that stated that, "a medium or high level of impact is considered significant."
For the reasons already discussed, I have concluded that the ESG2 Guidelines are not guidelines for the purposes of cl 228 of the Regulations and that they therefore cannot be determinative of the assessment by the Department of the pilot program for the purposes of s 111 of the EPAA and, it follows in my view, s 112.
Dart and the Department submitted that the Note was just that, namely, a note, that did not form part of the Guidelines. The respondents relied on s 35(2) of the Interpretation Act in this regard. But, as stated above, that Act assists neither party. The ESG2 Guidelines are not an "enactment" or an "instrument" attracting the operation of that Act.
More fundamentally, at their highest, the ESG2 Guidelines can only amount to a matter to be taken into account in the application of ss 111 and 112 of the EPAA. They do not amount to - the logical corollary of Fullerton's submission - a binding conclusive characterisation of the activity as "likely to significantly affect the environment" that fetters the determining authority's consideration of any other matter that may have a bearing on the discretionary assessment to be made under s 112. This is reinforced by the terms of the EPAA itself. Section 115(a) of the EPAA and cl 228(3) of the Regulations empower only the Director-General to make guidelines for the purposes of s 111 of the EPAA. Indeed, were the Department to rigidly rely on the ESG2 Guidelines to the exclusion of all other material in making its assessment under s 112(1), this would arguably result in jurisdictional error.
In addition, as found above, the ESG2 Guidelines themselves (as opposed to the "factors") are not a mandatory consideration and, in any event, the Department took the substance of the factors contained in the Guidelines into account in assessing the proposed activity. The table analysing "the extent and nature of the impacts during construction and operation" in the 1 June 2012 Pt 5 determination considered in detail the impacts, both beneficial and adverse, of the pilot program. There was additional consideration pursuant to s 5A of the EPAA of whether there would be a significant effect on threatened species, populations, ecological communities and their habitats by reason of the pilot program. While it is correct that the potential impact of the activity as a whole was assessed as "medium" this ranking was not uniform across all evaluative criteria comprising the overall assessment (ten were "low" and seven were "medium"). The Department was entitled to have regard to these individual rankings, as well as to the overall ranking of "medium", in concluding that the activity was not likely to significantly affect the environment (in fact the Note in the ESG2 Guidelines relied upon by Fullerton expressly required this).
Another difficulty with Fullerton's submission is, as noted in the context of s 111, that it ignores the purpose of the ESG2 Guidelines, which are directed towards the content requirements of a proponent's REF, and not the decision-making processes of the determining authority. That purpose is apparent from the express words in the introduction to the ESG2 Guidelines which states that the Guidelines "have been developed to provide a framework for industry to use in assessing the potential environmental impact of activities requiring the preparation of an REF, EIS or other supporting documentation".
I therefore do not consider that because the ESG2 Guidelines designated a potential impact assessment of "medium" as "significant" this required an EIS to be furnished to, and considered by, to the Department pursuant to s 112(1) of the EPAA.
Designated Development
As stated at the outset of this judgment, at the hearing Fullerton disavowed, as a discrete breach of s 112, any reliance on the assertion that the pilot scheme was designated development, and therefore, likely to significantly affect the environment requiring an EIS. Rather, Fullerton submitted that the pilot program fell within the class of development identified as "designated development" and that this demonstrated that it was "precisely the sort of Activity for which an EIS should be prepared". In support of this submission Fullerton relied on cl 4 and cl 27(g) of Sch 3 Pt 1 to the Regulations.
Clause 4 of the Regulations relevantly provides as follows:
4 What is designated development?
(1) Development described in Part 1 of Schedule 3 is declared to be designated development for the purposes of the Act unless it is declared not to be designated development by a provision of Part 2 or 3 of that Schedule.
Schedule 3 deals with development that is classified as "designated development" for the purposes of the EPAA. Clause 27(g) of Pt 1 of Sch 3 states that the following works constitute designated development, namely:
27 Petroleum works
Petroleum works:
...
(g) that are located:
(i) within 40 metres of a natural waterbody or wetland, or
(ii) in an area of high watertable or highly permeable soils, or
(iii) within a drinking water catchment, or
(iv) on a floodplain.
As Fullerton argued the pilot program is for the drilling of petroleum exploration wells; the pilot program is located within 40m of a wetland; the pilot program is located on a floodplain and the program is located in an area of high water table, and therefore, the pilot program fell within the definition of "petroleum works" and would otherwise be designated development requiring an EIS. This characterisation informed, Fullerton contended, the debate concerning the likely effect of the pilot program on the environment and reinforced the conclusion that the likely effect of the activity was, for the purpose of s 112, "significant". In short, the pilot program was "precisely the sort of activity for which an EIS should be prepared".
Further comfort was drawn by Fullerton from the EIS Guidelines published by the Department of Urban Affairs and Planning in 1996. Appendix C lists, the activities that may require an EIS, including "an activity...located in an area listed as being environmentally sensitive", "areas sensitive because of physical factors" such as "wetlands...or flood prone areas" and "areas where groundwater is at risk, for instance,...areas with a high water table".
But this comfort is, in my opinion, misplaced. It ignores the legislative reality that, first, the pilot program is an activity permissible without the need for development consent pursuant to s 76(1) of the EPAA and cl 6 of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 ("the Mining SEPP"). Second, that the pilot program, irrespective of cl 27(g) of Sch 3 of the Regulations, could not, in any event, be designated development under Pt 4 of the EPAA because Div 2 of Pt 4 and s 77A do not apply to the program as these provisions only apply to development that requires consent. And third, it is uncertain whether the pilot program, contrary to the submission of Fullerton, constitutes "petroleum works" and therefore falls within the definition of "designated development" contained in cl 4 of the Regulations.
The term "petroleum works" is not defined in the EPAA or the Regulations. The Mining SEPP defines "petroleum related works" in cl 3 as follows:
petroleum related works means any works, structures or equipment that are ancillary or incidental to petroleum production and includes all works, structures and equipment that a production lease under the Petroleum (Onshore) Act 1991, or a production licence under the Petroleum (Submerged Lands) Act 1982, entitles the lease or licence holder to construct, maintain or execute.
It is at least arguable therefore that "petroleum works" only refers to works, structures and equipment that are ancillary or incidental to petroleum production and does not apply to petroleum exploration such as the pilot program. Accordingly, if the pilot program is not "petroleum works" it cannot be designated development pursuant to cl 4 of the Regulations.
Ultimately I do not need to resolve this interpretation issue because the pilot program is not designated development. The question of whether or not the pilot scheme is an activity that is likely to significantly affect the environment is to be determined by the Court on all the evidence before it and not the construction of a term that has, for the reasons given above, and as was frankly conceded by Fullerton, no application to an activity impugned pursuant to Pt 5 of the EPAA.
Factual Concessions Made by Fullerton
In determining whether the pilot program was an activity that was likely to significantly affect the environment, Fullerton made a number of significant factual concessions consequent upon the oral evidence of the experts that are relevant to the remaining aspects of the challenge under s 112:
(a) first, that the absence of a deep groundwater assessment would not, of itself, lead the Court to conclude that the pilot program was likely to have a significant effect on the environment;
(b) second, Dr Mudd agreed that the Douglas Partners Interim Report dated March 2012 was an adequate assessment of shallow groundwater and that he no longer had any concern regarding impacts on shallow groundwater;
(c) third, to undertake the deep groundwater assessment contended for by Fullerton, Dr Mudd conceded that the same potential risks to the environment arose in drilling the necessary monitoring borehole as those that could potentially arise in engaging in the pilot program;
(d) fourth, that based on the seven-part test of significance undertaken by Dr Ambrose and Ms Ashby pursuant to s 5A of the EPAA, the pilot program was not likely to have a significant effect on any of the following individual flora species:
(i) Maundia triglochinoides;
(ii) Persicaria elatior;
(iii) Asperula asthenes;
(iv) Zannichellia palustris;
(v) the Green and Golden Bell Frog; and
(vi) the White-fronted Chat; and
(e) fifth, both Ms Ashby, Dr Ambrose and, significantly, Mr Paull agreed that, in their expert opinions, the pilot program was not an activity that was likely to significantly affect the environment. However, Mr Paull's opinion was qualified subject to the occurrence of the following events:
(i) catastrophic natural disasters;
(ii) significant equipment failures or malfunctions; and
(iii) changes in the future use of the pilot program site.
Groundwater
In light of the material before the Department (discussed above in detail in the context of the s 111 challenge), the evidence of Mr Blackam and Mr Naumann, and the concessions made by Dr Mudd and by Fullerton, I do not consider that the impact of the pilot program on groundwater (either shallow or deep) leads, of itself, to a conclusion that the activity is likely to significantly affect the environment.
The Pacific Golden Plover and the Eastern Grass Owl
It is convenient to deal with these two species of avifauna together. In respect of both, Fullerton's ultimate complaint, in light of the concession made by Mr Paull, is premised upon the fact that at no stage has a seven-part test of significance been carried out in respect of these two species pursuant to s 5A of the EPAA and that, therefore, it cannot be said that the pilot program activity will not significantly affect the environment.
Several preliminary observations should be made in respect of this observation. First, care must be taken in stating the test this way. To do so risks reversing the onus of proof. It is not for Dart and the Department to satisfy the Court that the pilot program is likely to significantly affect the environment.
Second, to repeat and distill the authorities referred to above, the term "likely" means something akin to "a real chance or possibility" and the term "significantly" is analogous to "important", "notable", "weighty" or "more than ordinary".
Third, for the purposes of making a determination under s 112 of the EPAA, as informed by s 5A of that Act, the Department can take into account any ameliorative measures to prevent, mitigate, remedy or offset the impact of the activity (Newcastle & Hunter Valley Speleological Society at [83] and Parks and Playgrounds at [34]). Ameliorative measures were set out in detail in the body of the REF (sections 3.3.9, 6.1.4, 6.3.4, 6.6.2, 6.7.2, 6.8.5, 6.10.2, 6.11.2, 6.13.1, 6.14.1, 6.15.1, 7 and 8), in the REF appendices for example, in Appendix 3 - Groundwater Assessment Methodology), the Ecological Assessment (Appendix 9, see sections 6.7 and 9.2), in the 22 December 2011 letter providing further information, and in the conditions attached to the PO Act approval itself.
In relation to the Eastern Grass Owl, without repeating (but nevertheless relying upon) the evidentiary discussion above in respect of s 111 of the EPAA, I accept and prefer the evidence of Dr Ambrose, over that of Mr Paull (for the reasons already given), that this vulnerable species was not present on the subject site (based on an absence of suitable habitat and any recordings of the Owl during the survey undertaken by him) and that its status would not be impacted by the drilling. Having regard to the evidence of Dr Ambrose, and when consideration is given to the material before the Department (as discussed above), I find that the pilot program would not be likely to significantly affect the environment by reason of its potential impact on the Eastern Grass Owl notwithstanding the absence of a seven-part test of significance. The absence of such a test is not determinative either generally or in the present case. I note again that Mr Paull did not conduct a seven-part test of significance on any flora or fauna species.
With reference to the evidence and material discussed above in the context of s 111, I have reached a similar conclusion with respect to the Pacific Golden Plover. Again I accept and prefer the evidence of Dr Ambrose to that of Mr Paull. The site offers unsuitable habitat for this species of migratory shorebird. It was for this reason that no seven-part test of significance was conducted by him. In my opinion, the pilot program would not be likely to significantly affect the environment by reason of its potential impact on the Pacific Golden Plover.
Cumulative Impact
Likewise, relying upon but not repeating the discussion above in the context of s 111 concerning the cumulative impact of the pilot program, in my opinion, it cannot be concluded that when regard is had to the total impact of the proposed drilling program, this leads inexorably, as Fullerton submitted, to the conclusion that overall the activity is likely to significantly affect the environment.
This is particularly so given the concessions made by Fullerton. Putting to one side the ESG2 Guidelines, the only genuine bases for finding that an EIS was necessary was the potential impact of two wells on a single drilling site for a period of 50 days on the Eastern Grass Owl and the Pacific Golden Plover, the evidence of the existence of which on the subject site was, particularly in the case of the Eastern Grass Owl, as Dr Ambrose demonstrated, limited given the lack of suitable habitat and the already disturbed nature of the area.
Based on this evidence, together with the material that was before the Department that, analysed the potential cumulative impact of the activity on the environment, I find that having regard to the cumulative impact of the pilot scheme the activity is not likely to significantly affect the environment as that phrase, and its components, are properly understood.
This view accords with that of Mr Paull, who, it must be recalled, ultimately agreed that the pilot program would not, in the absence of a catastrophic natural disaster, a significant equipment failure or malfunction, or a change in the future use of the pilot program site, be likely to significantly affect the environment. There was no evidence before the Court that any of these events would, or were likely to, eventuate.
It follows therefore that the challenge to the Department's decision under s 112 of the EPAA must be dismissed.
Discretion to Refuse to Grant Relief
Dart argued that on discretionary grounds, even if Fullerton were successful, the relief contended for by Fullerton should be refused in light of its delay in commencing proceedings.
In light of the rejection by me of the grounds of review underpinning any claim for relief, it is unnecessary for me to determine this argument.
Costs
Because this is an application in Class 4 of the Court's jurisdiction, costs would usually follow the event.
However, the parties have jointly requested that any consideration of who is liable for the costs of the proceedings be reserved. In the circumstances of this case, it is appropriate that this course be adopted.
Orders
In conformity with the reasons expressed above, the amended summons must be dismissed.
The costs of the proceedings are reserved.
The injunction granted by Sheahan J on 5 September 2012 in Fullerton (at [42(1)]) is discharged forthwith.
Within fourteen days the parties are to list the matter before me for a hearing on costs and the making of a consequential timetable in preparation for this hearing.
The exhibits are to be returned.
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Amendments
25 October 2013 - Admin error
Amended paragraphs: Index added before Judgment
04 April 2013 - Amended representative of first respondent
Amended paragraphs: Coversheet
Decision last updated: 25 October 2013
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