Miltonbrook Managements Pty Limited v Shellharbour City Council

[2004] NSWLEC 185

Reported Decision: (2004) 134 LGERA 1

Land and Environment Court

of New South Wales

CITATION:	Miltonbrook Managements Pty Limited v Shellharbour City Council [2004] NSWLEC 185
PARTIES:	APPLICANT Miltonbrook Managements Pty Limited RESPONDENT Shellharbour City Council
FILE NUMBER(S):	10957 of 2003
CORAM:	Pain J
KEY ISSUES:	Question of Law :- whether development application including artificial waterbodies is designated development - whether applicant barred from raising legal issues determined in earlier proceedings relating to very similar development application - whether artificial water bodies are in high watertable area - whether designated development because development is an extractive industry
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979, s 4, s 77A Environmental Planning and Assessment Regulation 2000, cl 4 of Schedule 3
CASES CITED:	Ashfield Municipal Council v Armstrong [2003] NSWCA 353; Boles v Esanda Finance (1989) 18 NSWLR 660; Hollis v Shellharbour City Council and Miltonbrook [2002] NSWLEC 83 ; Penrith City Council v Waste Management Authority and Anor (1990) 71 LGRA 376
DATES OF HEARING:	13/02/04
EX TEMPORE JUDGMENT DATE :	02/13/2004
LEGAL REPRESENTATIVES:	APPLICANT Mr J Ayling SC SOLICITORS Kearns & Garside RESPONDENT Mr T Robertson SC SOLICITORS Kells

JUDGMENT:

IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

10957 of 2003

Pain J

13 February 2004
MILTONBROOK MANAGEMENTS PTY LIMITED
Applicant
v
SHELLHARBOUR CITY COUNCIL
Respondent
Judgment

1. This judgment is in relation to two preliminary points of law raised in these Class 1 proceedings. The two preliminary questions provided to the Court were as follows:
(i) Whether the proposed development is properly characterised as the construction of “artificial waterbodies” within the meaning of that expression in Sch 3 of the Environmental Planning and Assessment Regulation 2000 (the EP&A Regulation).
(ii) Alternatively, whether the proposed development is properly characterised as the carrying out of an “extractive industry” within the meaning of that expression in the EP&A Regulation.
2. It became clear after hearing argument that question 1 as posed is not the question in issue. Rather, the real issue is whether or not the current development application made by the Applicant is for designated development pursuant to s 77A of the Environmental Planning and Assessment Act 1979 (the EP&A Act) because of:
(a) the application of cl 4 of Sch 3 of the EP&A Regulation, and
(b) the proper characterisation of the development

It is this question that I will address in place of question 1 as originally drafted.

Question 1 -Is the current proposal designated development?
3. The Council argued that by virtue of cl 4(1)(a)(i) and (ii) of Sch 3 the proposal was designated. The Applicant argued that the proposal should not be characterised as designated development because the stormwater management system was not an independent use of the land to which Sch 3 applied.

(a) application of cl 4(1)(a)(i) and (ii) of Sch 3
4. The Applicant has filed with the Council a development application for a subdivision and related works, including a stormwater management system. This is detailed in the Statement of Agreed Facts filed by the parties (Exhibit 2) at par 3. A plan of the system of artificial water bodies proposed as part of the subdivision was before the Court in Exhibit 1. The proposed development involves the creation of numerous artificial water bodies as follows:
(a) village ponds 1 and 2;
(b) a series of ponds 1 to 6; and
(c) an artificially constructed section to be known as Hazelton Creek.

5. The proposal before me is very similar to the stormwater management system contained in the modified development application in relation to which I made findings in Hollis v Shellharbour City Council and Miltonbrook [2002] NSWLEC 83 at [108] - [114] to the effect that, applying cl 4(1)(a)(i) of Sch 3, that application did not appear to be designated development. Clauses 4(1)(a)(i) and (ii) of Sch 3 are relevant to the matters before me and provide as follows:
(1) Artificial waterbodies:
(a) that have a maximum aggregate surface area of water of more than 0.5 hectares located:
(i) in or within 40 metres of a natural waterbody, wetland or an environmentally sensitive area, or

(ii) in an area of high watertable or acid sulphate, sodic or saline soils, or

…

6. There are four differences identified by the Council in relation to pond size and shape and the width of boardwalks between the current proposal and the amended proposal considered by me in Hollis . These differences are so minor as to be immaterial.
Can the Council raise issues which were or could have been raised in Hollis in these proceedings?

7. These Class 1 proceedings have resulted from the refusal by the Council of the Applicant’s new development application which was lodged by the Applicant following my decision in Hollis . Several of the legal issues now raised before me by the Council were also considered in my judgment in Hollis . Additional arguments in relation to cl 4(1)(a)(i) concerning the artificially constructed section called Hazelton Creek not put in Hollis are also raised by the Council. The high water table argument which raises issues under cl 4(1)(a)(ii) of Sch 3 of the EP&A Regulation was not raised in Hollis . The first issue which therefore arises is whether these arguments can be raised at all given my decision in Hollis .

8. The Council argues that, as this is a new development application, the question whether or not a development is designated is a jurisdictional fact which arises for decision by the Court on the facts before it on each occasion. On this basis, my decision in Hollis is not conclusive of the matters which now arise before me and, accordingly, these matters must be considered by me in relation to the new development application.

9. The Applicant argues that Hollis was conclusive on the matters raised in it so that these matters cannot be considered in later proceedings which seek to raise the issues already dealt with in Hollis . Further, the Applicant argues that the new arguments now sought to be raised by the Council could have been raised in Hollis .

10. These proceedings are in Class 1 of the Court’s jurisdiction. The Council is the respondent in these proceedings because it has refused the Applicant’s development consent. Hollis concerned Class 4 proceedings in which the Council was the respondent having approved a very similar development application, also made by the current Applicant, which was then under challenge by a third party objector. While the Class 4 proceedings in Hollis and the current Class 1 proceedings before me are clearly different in nature, the same parties are before me and the legal issues in relation to cl 4(1)(a)(i) in both matters are the same.

11. Applying the decision of Samuels JA in Boles v Esanda Finance (1989) 18 NSWLR 660, applied by the Court of Appeal in Ashfield Municipal Council v Armstrong [2003] NSWCA 353 (5 December 2003) to which I was referred by the Applicant, I note that the judgment at par 19 - 22 is to the effect that parties are estopped from bringing an action which will result in a judgment which conflicts with another judgment. I consider that the issues as to legality now posed by the Council in relation to cl 4(1)(a)(i) arose directly in Hollis . The arguments sought to be raised in these proceedings could and should have been raised there. My conclusion in Hollis in relation to cl 4(1)(a)(i) of Sch 3 of the EP&A Regulation must stand.

12. I therefore consider the argument made by the Applicant in relation to the artificial creek construction, about which I made no finding in Hollis , cannot be raised here as these arguments could have been raised in the previous proceedings as they also concerned the application of cl 4(1)(a)(i) of Sch 3 of the EP&A Regulation. To entertain these arguments now could mean my decision in Hollis cannot stand. The fact that a matter concerns a matter of jurisdictional fact does not overcome the substance of my decision in Hollis .

The high water table argument (cl 4(1)(a)(ii))

13. The remaining argument to consider concerns the high water table argument in relation to cl 4(1)(a)(ii) of Sch 3.

14. The Council argued that there was evidence to demonstrate that there were artificial water bodies in areas of high water table as defined by Sch 3 of the EP&A Regulation. The definition of water bodies contained in cl 4 of Sch 3 of the EP&A Regulation is as follows:
“waterbody” means:
(a) a natural waterbody, including:
(i) a lake or lagoon either naturally formed or artificially modified, or
(ii) a river or stream, whether perennial or intermittent, flowing in a natural channel with an established bed or in a natural channel artificially modifying the course of the stream, or
(iii) tidal waters including any bay, estuary or inlet, or
(b) an artificial waterbody, including any constructed waterway, canal, inlet, bay, channel, dam, pond or lake, but does not include a dry detention basin or other stormwater management construction that is only intended to hold water intermittently.


15. High water table is defined in cl 38 of Sch 3 to mean "those areas where the groundwater depth is less than 3 metres below the surface at its highest seasonal level". It is agreed that Pond 1 is an artificial waterbody within 40m of a natural waterbody. It was argued by the Council that those artificial water bodies located in high water table areas as specified in cl 4(1)(a)(ii) should be aggregated with pond 1 in order to determine if the 0.5ha threshold in cl 4 of Sch 3 is met.

16. As I have already noted, this ground was not raised in Hollis and I have made no previous findings in relation to it. As the decision whether or not a development is designated is one of jurisdictional fact, is it reasonable that the Council raise this ground now or should it have been raised earlier in Hollis ? I think it is reasonable that this ground be raised here as it is a new and discrete ground of argument not raised in Hollis and is not necessarily an argument the Council should have been aware of at the time of that decision. I will, accordingly, consider the competing arguments in relation to the high water table issue.

17. My previous finding in Hollis that village pond 2 and ponds 2, 3, 4 and 6 are not artificial water bodies to which cl 4 of Sch 3 of the EP&A Regulation applies stands. Their surface areas therefore cannot be added to any waterbodies falling under cl 4(1)(a)(ii) of Sch 3.

18. The Council submitted that village pond 1 could be considered to be located within an area with a high water table so that cl 4(1)(a)(ii) of Sch 3 would apply to it. As shown in annexure B of the Statement of Agreed Facts, the maximum surface area of village pond 1 is 1,430m2. If this is added to pond 1, which the parties agree is an artificial body within 40m of a natural body with a maximum surface area of 3,335m2, the threshold area of 0.5ha referred to in cl 4 of Sch 3 of the EP&A Regulation is not reached.

19. The issue then becomes whether pond 5, which is an artificial water body as defined in Sch 3 of the EP&A Regulation, is in an area of high water table as defined in Sch 3. Only if pond 5 is aggregated with pond 1 and village pond 1 is the 0.5ha threshold reached.

20. The Court was provided with evidence of test pit measurement results and analysis as the parties put forward conflicting evidence as to whether there was a high water table being an area where ground water is less than 3m in depth, at pond 5. The evidence before the Court included results from test pits made by Douglas Partners in May 2000 to detect groundwater in and around pond 5 and comments by an expert hydrologist, Dr Martin, on those tests. The Court was also provided with the results of further tests made by Douglas Partners on 3 to 4 February 2004 of the test pits at pond 5 and comments on those results by Dr Short, another expert hydrologist.

21. The Douglas Partners test results for May 2000 indicated that at test pit 121, which was in the area of the proposed pond 5, groundwater was located at 2.8m. A nearby test pit outside the area proposed for pond 5, being pit number 123, found no groundwater at 3m. At test pit 122, groundwater was found at 3m.

22. Dr Martin is of the opinion that the Douglas Partners testing carried out in May 2000 reliably and correctly showed minimum groundwater levels at each investigation site. However, he considered that groundwater levels may be significantly higher at times to that shown in the Douglas Partners May 2000 results as the pits were exposed for only a limited time, may not have been stabilised and seasonal variations may mean that groundwater levels may at times be higher than those found.

23. The samples for the ten test pits in the area to be covered by pond 5 were taken on 2 to 4 February 2002 by Douglas Partners. These show that only one test pit had a reading of less than 3m, being 2.6m. The other nine pits had results ranging from 3m to 3.8m in depth.

24. Dr Short was of the opinion that the test results carried out by Douglas Partners in February 2002 provided values for depth of groundwater below ground level closely similar to the higher seasonal levels that may be expected on the site at pond 5.

25. While I note that Dr Martin interpreted the May 2000 test results as likely to be conservative, meaning the water table was likely to be higher at certain times of the year than that found in the May 2000 test results, I also consider that these results are inconclusive, particularly when compared with the more extensive February 2004 testing undertaken. When the far more extensive testing by Douglas Partners in February 2004 and Dr Short’s view that these results were likely to reflect the higher seasonal levels of groundwater are considered, it would appear more likely than not that pond 5 is not in an area with a high water table and should not be aggregated together with village pond 1 and pond 1. Accordingly, the threshold of 0.5ha specified in cl 4 of Sch 3 to the EP&A Regulation is not met by the Applicant’s proposed development.

(b) Characterisation as designated development

26. The Applicant argued that I should revisit that portion of my decision in Hollis in which I characterised the proposed development as designated development because the stormwater control system was an independent use of the site. For the reasons I have already stated, I consider my decision in Hollis is final on the matters raised therein as the development now proposed is virtually identical to that which I considered in Hollis . Accordingly, it is not open to the Applicant to raise the issue of characterisation as it seeks to do here.

Answer to Question 1
27. The answer to question 1 is that this proposal is not designated development for the purposes of cl 4 of Sch 3 of the EP&A Regulation. I make no finding on the issue of characterisation of the development for the reasons given in the previous paragraph.

Question 2 - Is the proposal an extractive industry as defined in Sch 3 of the EP&A Regulation?
28. The Council argues that the proposed development involves the carrying out of an extractive industry as defined in Sch 3 of the EP&A Regulation. Clause 19 of Sch 3 of the EP&A Regulation relevantly states:
(1) Extractive industries (being industries that obtain extractive materials by methods including excavating, dredging, tunnelling or quarrying or that store, stockpile or process extractive materials by methods including washing, crushing, sawing or separating):
…
(b) that disturb or will disturb a total surface area of more than 2 hectares of land by:
…

(iii) storing or depositing overburden, extractive material or tailings, or

(c) that are located:
(i) in or within 40 metres of a natural waterbody, wetland or an environmentally sensitive area, or

…

(2) This clause does not apply to:
…
(e) artificial waterbodies, contaminated soil treatment works, turf farms, or waste management facilities or works, specifically referred to elsewhere in this Schedule

…
29. The Statement of Agreed Facts makes it clear that part of the proposed development requires material to be excavated for the construction of various ponds and this material will be placed on more than 2ha of land as fill. The Council argued that as “industry” is not defined in Sch 3 of the EP&A Regulation or in s 4 of the EP&A Act, it should be given its plain and ordinary English meaning. The Council argued that the plain English meaning of “industry” was that contained in the Macquarie Dictionary, namely “systemic work or labour”. Such a broad definition was argued by the Council to be intended when Sch 3 of the EP&A Regulation was drafted. The Council argued that the types of development, in particular, maintenance dredging, which cl 19(2) of Sch 3 of the EP&A Regulation excludes from being extractive industries make it clear that such a broad definition of “industry” was intended as these are not “industry” in a narrow sense.

30. The Council further argued that the proposed development is an extractive industry because the fill excavated from ponds does not fall within the exclusion of artificial water bodies identified in cl 19(2)(e) of Sch 3 of the EP&A Regulation. The Council argued that the exception contained in cl 19(2)(e) for artificial water bodies applies only to the extractive industry set out in cl 19(1)(b), being the construction of dams or ponds, and does not apply to the deposition of extracted material.

31. On the other hand the Applicant argued that industry should not, in the context of Sch 3 of the EP&A Regulation, have such a broad definition applied to it. The Applicant argued that the building of a stormwater management system is not an industry and that “industry” in the context of Sch 3 should be interpreted as it would generally be in a town planning context so that it refers to commercial activities carried on through industrial processes. The Applicant argues that a stormwater management system which supports the subdivision is not an industry in town planning terms.

32. I agree with the Applicant that this proposal for a subdivision and related works, including the stormwater management system, is not an industry within the meaning of “extractive industry” contained in Sch 3 of the EP&A Regulation. While, as the Council has pointed out, there is no applicable definition of the term industry within the context of cl 19 of Sch 3, I do not think the drafting of Sch 3 supports such a broad definition as the Council argues. Schedule 3 appears in the regulations to the major planning Act which applies in New South Wales and its interpretation needs to reflect the fact that the purpose of the Act is to regulate town planning. I agree with the Applicant that industry should be interpreted as it would generally be in a town planning context so that it refers to commercial activities carried on through industrial processes.

33. I note that the Council sought to rely on the Court of Appeal decision in Penrith City Council v Waste Management Authority and Anor (1990) 71 LGRA 376 which the Council argued supported the broad approach argued for by the Council. In my view a close examination of that case shows that it does not assist the Council. The provisions of Sch 3 of the EP&A Regulation have, of course, been altered substantially since the decision in Penrith so that the approach taken by the Court of Appeal would not be identical now in any event.

34. The Court of Appeal in Penrith had to apply the definition of "extractive industries" which was then contained in Sch 3 of the EP&A Regulation and which stated that “an undertaking which depends for its operation on the mining of extractive material from the land on which it is carried on”. The Court of Appeal rejected the argument put in that case that the waste depot was not properly characterised as an extractive industry, and hence, would not fit within the definition of such industries.

35. The fact that in answer to the argument that the Court’s approach could mean that every building site which involved the extraction of material from the land could be designated, the Court of Appeal stated in Penrith that each case must be considered as a question of fact and degree does not support the Council's interpretation of industry. The Court of Appeal did not, because of the factual circumstances of the case before it, need to address the meaning of industry as it now appears in cl 19 of Sch 3 of the EP&A Regulation. Schedule 3 no longer includes the wording considered by the Court of Appeal in relation to the definition of "extractive industries".

36. Accordingly, I do not consider the decision in Penrith can be taken to support the Council's submission that industry is to be so broadly defined. In my view, the removal and deposition of fill for the purposes of the proposed development cannot be regarded as an industry and cannot, therefore, be an extractive industry.

37. It is not necessary that I deal with the argument put by the Council in relation to cl 19(2)(e).

Answer to Question 2

38. In relation to question 2, the answer must be that the proposed development is not an extractive industry within the meaning of cl 19 of Sch 3 of the EP&A Regulation.

39. As I am making findings of law it is not necessary that I make any orders, except to note that Exhibits 1 and 2 should remain on the Court file.