Verde Terra Pty Limited & Ors v Central Coast Council ABN 73149644003

[2023] HCATrans 168

[2023] HCATrans 168

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S78 of 2023

B e t w e e n -

VERDE TERRA PTY LIMITED

First Applicant

MANGROVE MOUNTAIN LANDFILL PTY LIMITED

Second Applicant

MANGROVE PROPERTIES (NSW) PTY LIMITED

Third Applicant

and

CENTRAL COAST COUNCIL ABN 73149644003

First Respondent

ENVIRONMENT PROTECTION AUTHORITY ABN 43692285758

Second Respondent

Application for special leave to appeal

GAGELER CJ
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON TUESDAY, 21 NOVEMBER 2023, AT 9.30 AM

Copyright in the High Court of Australia

____________________

GAGELER CJ:   In accordance with the protocol for remote hearings, I will announce the appearances for the parties.

MR B.W. WALKER, SC appears with MR P.W. LARKIN, SC, MS J.E. STUCKEY‑CLARKE, and MR G.S. TSANG for the applicants.  (instructed by Ashurst)

MR S.J. FREE, SC appears with MR M.J. ASTILL for the first respondent.  (instructed by MBM Legal and Conveyancing)

GAGELER CJ:   I note that there is a submitting appearance for the second respondent.  Yes, Mr Walker.  Can you hear me, Mr Walker?  Mr Walker, I think you might be on mute.

MR WALKER:   Yes, I am afraid I well knew that, your Honour, but reversing it was evading me.  I hope your Honours can now hear me.

GAGELER CJ:   We can now, thank you.

MR WALKER:   I am sorry.  Your Honours, the point that warrants a grant of special leave in this concerns a matter of general doctrine, though, of course, with respect to a particular statutory setting, and obviously the facts of the case.              The point of general doctrine which, in our submission, really matters, is of practical and pervasive application, concerns the decisions of courts reached after consensus between the parties and demonstration jointly by them to the court that an order should be made to settle their differences in areas which are of self‑evident public significance.

I do not mean that simply in the administration of justice according to the rule of law, I mean according to matters which are regarded as the kind of public concern – particularly with ownership and other aspects of land – so as to lend themselves to what I will call judgments in rem as opposed simple private effects by reason of res judicata.

It is clear that the footing of the argument in the Court of Appeal involved acceptance in large part of the principal approach taken by the New South Wales Court of Appeal, and for long regarded as governing in this area.  As your Honours will see in the reasons of Justice White for the court, on page 187 of the application in his Honour’s paragraph 38, there the reference to PE Bakers v Yehuda 15 NSWLR 437 includes Justice White’s accurate description of an understanding of the principal holding in Yehuda.  The decisions concerning and affecting development consent in New South Wales, which has parallels in pari materia all around the Commonwealth: 

will operate in rem, as well as in personam.

To quote from his Honour.  That is because development consent supplies the regime by that which is lawful to be done by anybody on land is regulated.  It is for those reasons that, to borrow from property law, consents run with the land.  For example, the self‑evident planning significance and the public interest in it of regulating the permitted use of land and compliance with conditions prescribing how that use or work should be carried out is of the kind of concern that caused the Court of Appeal in Yehuda, the Court of Appeal in this case, no difficulty.  That will produce, after a contest, a judgment in rem.

If it produced a judgment in rem in this case, then, if I can take your Honours back – out of convenience, in the same reasons – to page 178, paragraph 6, there is what might be called the jurisdictional provision that provides the footing in the particular statutory setting and factual circumstances for this question of doctrine to arise.

GORDON J:   And that clause can affect third parties, Mr Walker?

MR WALKER:   Absolutely, because that is a clause by which there may be administratively in the court the alteration or addition to approved consent, and that will then govern, as a matter of what might be called the law concerning that land and will govern everyone in that regard.  In particular – and though this is really an extra for us – it will govern a consent authority party to the administrative process which would produce that.  Now, in this case ‑ ‑ ‑

GORDON J:   Can I ask one question about that?  What is your answer to paragraph 41, which is three paragraphs after paragraph 38 that you took us to, on application book 187?

MR WALKER:   That is an erroneously compressed and, so far as citation of authority is concerned, a matter which is simply wrong and it is high time for the Court to revisit it, although I am perhaps stretching it to say that the Court has ever really visited it.  Let me explain:  Goucher v Clayton is a case about a patent in which, in perhaps a familiar commercial setting, the party claiming there had been an infringement, managed, presumably by weight of commercial persuasiveness, to procure, by consent, a default judgement, even in advance of any pleadings.

Your Honours can see immediately, even for the purposes of res judicata, let alone in rem effect, there would be problems.  That is not a case that bears any resemblance to what happens where parties, having a difference concerning, in this case, whether there had been a contravention of a development consent, agreed that there had been a contravention and agreed that there should and could be orders made by the court to enforce the consent conditions, to remedy their breach and a demonstration, both by submissions and tender of materials to the court that those orders should be made.

Wytcherley v Andrews is, perhaps, telling.  It is a probate case.  Now, probate has its own regimes concerning effects on parties not parties in court, and citation, and the like.  Leaving those details aside, in Wytcherley v Andrews the same point is made succinctly at the foot of the reasons of Lord Penzance when, and I quote, his Lordship says the parties who are willing to stand by while a contest is going on are bound by the decision of the court, but they:

are not compelled to abide by a compromise.

When no decision is, in fact, come to by the court  That is, again, diametrically opposed to what happens in the usual public law case where a judge will simply not make orders by consent because the parties consent but will make orders if consenting parties persuade the court that it is proper to do so.  That, in our submission, is a modern approach which ought to inform the impulse plainly felt by Mr Justice Hope in Yehuda as being that which is mandated by the approach to matters of public interest such as the planning regime governing the use of land and court decisions concerning the validity of steps taken such as the granting of development consent, the imposition of conditions, or the enforcement of them.

One only need add for good measure that the Duchess of Kingston’s Case is as bizarrely remote from the questions of principle involved in this area as might be imagined.  Leaving aside the extraordinary fact that the Duchess benefited from a privilege preventing her from being burned in the hand and imprisoned because she was a peeress, and that appears to be a status she achieved by the marriage which was bigamous, one has already a strange set of affairs with an action which is now antique – jactitation of marriage – where the findings included that there had in fact been a marriage ceremony which led to her conviction in the laws of polygamy.

GAGELER CJ:   Mr Walker, were the orders that were made by the primary judge on 29 August 2014 orders that the primary judge gave independent consideration to?

MR WALKER:   Yes, and your Honours will see in paragraph 14, on page 180, which is just before where those orders – the relevant parts – are set out.  In paragraph 14, Justice White notes – and the record is plain in this regard – that the parties sought together to persuade by submissions – it does not say so here, but there were tendered materials, plans and the like – that the orders should be made.  It was not in any sense a rubber stamp, and in our submission, that is a familiar phenomenon in our courts concerning judicial review of administrative action, which is not – fortunately – a jurisdiction where the court must keep alive the contest in order to have the power to settle in the self‑evidently satisfying way of granting an order that has an effect in rem.

In other words, the notion that a regulation would be set aside as beyond power, but only in favour of the party who had originally sought that and obtained consent of the Minister to do so, is extremely dangerous in terms of the proper understanding and application of public law such as a regulation.  That is why, if such a case reached a state of affairs which ought to be welcomed, not resisted, by the court and doctrine of the parties agreeing in where the law produces an outcome then, in our submission, so long as the court satisfies itself through, on the joint or, if you like, consensual submission of the parties that the orders should be made, then of course it should be given in rem effect.

Now, the danger, in our submission, of the obviously very brief reasoning that your Honours see in paragraphs 38 to 41 on pages 187 to 188 is that they would appear by, in our submission, a misreading of an obiter comment by Justice Hope in Yehuda simply to forbid, prohibit, preclude any in rem effect being given to an order that alters, elucidates, enforces or remedies a development consent in proceedings brought for that purpose if they can be described as being by consent.

The authorities in question are, not a single one of them, a case where there has been . . . . . the consent, independent consideration by the court as to whether what the parties consent to ought properly to be done.  That is the first thing.  Two of them, at least – maybe all three of them – are imbued with flavours of fraud of the kind that does not concern our case at all:  orders procured by fraud can obviously and should obviously be set aside; there is no suggestion of that at all in this case.

GAGELER CJ:   Mr Walker, can I just ask this?  The question is whether the order, or part of it, amounted to an approval within the meaning of the statutory provision.

MR WALKER:   Your Honour, can I rephrase it slightly, please?

GAGELER CJ:   Please do, yes.

MR WALKER:   It is not so much whether the order amounts to an approval, although you could be forgiven to thinking I am about to quibble – I hope not.  The jurisdictional provision that you see in paragraph 6 on page 178, posited something called “existing or approved development” – you will see that in the opening lines and in the closing line of that clause.  And so, the question is whether the work, development, including work which is required by way of ordered remediation, in the auditing question – see page 181, paragraph 18 – was approved within the meaning of that jurisdictional provision.  That jurisdictional provision is the platform from which there can then be sought so-called alterations or additions.

So, the question simply came down to this:  was the work to be done pursuant to the orders, work which was part and parcel of existing or approved development?  For our purposes, it is “approved development”.  Our argument does depend upon, as the court below noted, demonstrating that the relation of these remedial enforcement orders – that is, remedial of the breach of the development consent – are themselves to be regarded as approved.

We say manifestly so because there is no relation in the regime binding by law concerning what a person can do and cannot do on land governed by an environmental planning instrument – as this land is.  And so, it follows that anything which is ordered to be done either to enforce by restraint or to remedy by positive work, a breach of a development consent with its conditions is of course work that is approved – that is, development that is approved.

We are not asking whether the court is a consent authority – we would lose that – but we are asking whether that epithet “approved” applies to work which the court has ordered must be done in order to comply with the development.  If we are right in that, as to the reading of that jurisdictional provision, then it becomes significant that the Council proposes to challenge by way of resisting the capacity to grant an alteration or addition – to challenge the outcome by way of enforcement and remedy to which they had consented and joined in persuading the court should be made by the orders in 2014.

GAGELER CJ:   Mr Walker, the court was exercising the judicial review Class 4 jurisdiction of the Land and Environment Court Act, as I understand it.

MR WALKER:   Yes, more specifically, the power of enforcement under section 124.

GAGELER CJ:   I see.  Thank you.

MR WALKER:   Your Honours, it is for those reasons that this is a vehicle which is very likely to recur.  It is a vehicle which is perhaps striking but all the more appropriate for a grant of special leave in that the Council appears, as it were, first time around and second time around, and is obviously an authority of public significance.  In our submission, the way in which doctrine has been stated in such terse and, in our submission, unsatisfactory terms in paragraphs 38 to 41 of the reasons, urgently requires correction by the Court.

The paragraph which is quoted in paragraph 39 explains why his Honour – giving the unanimous view of the Court of Appeal in 1988 – regarded it as critical that there be, as a matter of policy of the law an in rem effect given to orders concerning the validity of development consents and their conditions.

The exceptions start with the reference to “obtained by consent” and that has been the hook, we apprehend, for what then follows in paragraph 41.  That is the misunderstanding.  His Honour was not saying that there could never be in rem effect given to an order that the court is persuaded, by consent – that is, by joint submission, ought to be made – his Honour was there referring to consent of the kind that would set the planning laws at nought.  Your Honours see that in the next line – just as fraud or collusion would.  That is consent without judicial examination – that is, the judge had rubber‑stamped – and we are not here to defend the notion of judges as rubber stamps to give rise to in rem effects.

It is an understanding of that explanation by Mr Justice Hope – particularly as the passage ends up by referring to matters being “properly litigated” simply by notifying an authority.  That is the analogy with the proper litigation in public law of matters urged by the parties jointly – by consent, if you like – where the court still, in order to litigate properly, still requires to be satisfied, independently – not setting aside its own judgment.

It is for those reasons that, in our submission, that this case is an important one for common law doctrine; it is important in an area which is of great practical significance and the decision against us is supported by authorities which are, in our submission, both threadbare and either outmoded or inapplicable to the conditions that pertain here.

If it please your Honours.

GAGELER CJ:   Thank you, Mr Walker.  Mr Free.

MR FREE:   Your Honours, the principle of doctrine as described in paragraph 41 of the judgment of Justice White in the Court of Appeal we would say is correct and there are good reasons why judgments obtained by consent are treated differently in terms of their status, including because of the same principles which underlie the court’s reluctance to grant declarations by consent – the absence of adjudication following full contest is a significant consideration.

But we would say one thing about our learned friends’ reliance on that point of doctrine as being a matter of general importance, they have pointed out, quite correctly, that in public law the treatment of adjudications by consent attracts different considerations.  In the judicial review context, rather, there is, in a sense, never a true judgment by consent – the court requires independent persuasion that a decision ought be set aside before it will do so.  That is not akin to the other judgments by consent alluded to in Yehuda and Spencer and Bower.

In terms of the application in this particular case, our learned friends correctly point the judge in 2014, in making the consent orders, did receive submissions and received evidence and was persuaded as to the appropriateness of making the orders.  So, there is a sense in which this is not a case of pure consent in any event.  So, that somewhat weakens the broader doctrinal point.  But in terms of the resolution of this appeal, if special leave, were granted, the issue – even if the applicant overcomes the problem of, is it a judgment in rem, rather than a judgment in personam, the tension then turns to what is the nature of the judgment manifested in the 2014 consent orders.

If your Honours can go to page 218 of the application book, you will see the argument of the applicant set out in paragraph 2 of the reply – this is really where they will need to get to for this doctrinal argument to have any impact on the outcome of this case, and that is to characterise the 2014 consent orders as having:

determined the status of a thing in public law, namely, that:

(a)the works required under them fell within the scope of the 1998 Consent; and

(b)conversely, the scope of the 1998 Consent was wide enough to encompass those works.

That is a rehash of an argument that was rejected, we would say, in the reasoning of Justice White and the Court of Appeal.  It was premised on the idea that applying Tomlinson, the scope of the 1998 consent had somehow merged in the 2014 consent orders, and in our submission, that is to confuse the thing which was the matter of judgment, the subject of judgment in the 2014 consent orders.  The court, as you have heard, was issue under remedial power.  If I could take your Honours to the provision, it appears in the end of our learned friend’s submissions, on page 204 of the application book.  The relevant provision, which was at the time section 124 of the EPA Act, it is:

Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach.

That was the power exercised by the court in making the 2014 consent orders, it is a power directed to people – so, people are the subject of those remedial orders, in this case, that includes Verde Terra.  It is unlike a development consent, it is not a thing that runs with the land.  It is a remedial order issued to an individual specifically to respond to a breach of the Act.

If your Honours can go, please, to page 180 of the application book, the judgment of Justice White in the Court of Appeal, his Honour explains the subject matter of the 2014 consent orders and the scope of the works required under those orders, and he gives, as one example – you will see in paragraph 16 of the judgment, at the bottom of 180:

The Consent Orders –

that is, the 2014 consent orders, contemplated:

waste being brought onto the land –

involving “55 truck movements per day on average”.  Now, as his Honour notes in paragraph 17, the original 1998 consent:

limited truck movements of 14 per day.

His Honour goes on to observe in paragraph 19 it was clear that the 2014 consent orders required words which were, in “scope, scale and size” greater than what had been approved by the 1998 consent.  So, factually this was, to pick up a phrase my learned friend used, a quite strange state of affairs where in 1998, consent was granted for some excavation of a golf course which included some fill being put on the golf course.  What in fact happened was, in breach of that order, greatly in excess of the permitted amount of waste was deposited on that land.

Then, in 2014, in response to an admitted breach, so it was admitted that that work had been carried out in breach of the 1998 consent, that resulted in the remedial action and the consent orders which in fact required and also authorised work vastly in excess of the 1998 consent.  So, it is factually unusual, but in terms of the legal exercise which was going on, it is clear that in making the consent orders in 2014 the court was not varying or re‑interpreting or expanding the earlier consent.

It was only engaged with two exercises under section 124 of the Act.  The first was:  had there been a breach of the Act because of the breach of the earlier consent or activities not authorised by that consent?  That was the only sense in which it was concerned with the scope of the 1998 consent.  The second step in that exercise, having found a breach, is:  what is the appropriate remedial response?  For whatever reasons, the court accepted the submission of the parties in 2014 that it could order that work which in fact went, on any view, well beyond what was authorised by the 1998 development consent.

That is not an exercise of expanding or reinterpreting the approval.  It is a distinct remedial response.  So, our learned friends’ argument, which depends upon reading those consent orders as determining the status of the 1998 consent, we would submit, is wrong and that is what will stand in the way of any ultimate success, even if they succeed on the argument at the level of doctrine about the nature of judgments by consent.

GAGELER CJ:   Mr Free, you mention in your written submissions a proposed notice of contention.  Can you explain what the argument would be on that?

MR FREE:   Yes, your Honour.  If I could take you to clause 35 of the Schedule 3 of the EPA Regulation, which is at page 178 of the application book.  It would have two limbs.  One is a question of construction of clause 35, so your Honour has already raised with my learned friend the notion of approved development.  Just to explain the context, and we would say the context is critical to an understanding of what clause 35 is for, this is, in effect, disapplying a definition of designated development, so various types of development including, relevantly, extractive industries and waste operations are classified as designated development.

That attracts a whole series of requirements in terms of environmental assessment.  There has to be an environmental impact statement to seek approval for such development.  There is a requirement for public notification, members of the public can object.  If they object, they acquire merits appeal rights, so, if approval is granted to the designated development, an objector has a right to appeal to the Land and Environment Court in its merits jurisdiction.

So, that is what would ordinarily apply to designated development.  What is driving all of this is our learned friends are seeking a new consent, that is, the 2018 application, and they are trying to avoid the obligations of assessment as designated development.  And that is why they rely on clause 35.  And they want to say, we do not have to do an environmental impact statement for the application we now lodge.  We do not have to notify publicly, and objectors will not have a right because all we are doing is making alterations or additions to approved development.

So, that is calling in aid, effectively, works that have been required to be done to remedy an earlier breach and treating them as a form of approved development.  And the argument on the notice of contention, your Honour, would be that properly understood, mandatory works to remedy a breach, although they carry with them the lawful authority to carry out those works, do not constitute approved development within the meaning of clause 35.

GORDON J:   And do not alter the underlying approval.

MR FREE:   Exactly, your Honour.  So, that is the key point that would be raised on contention, and if your Honours could go in the judgment of Justice White to the bottom of page 188 of the application book.  And, in paragraphs 46 and 47, his Honour, effectively in obiter, says:

I do not accept that “approved” necessarily means approved by a consent authority.  I would accept that if the 2014 orders had been made by the judge after a contested hearing so that they operated in rem, the development “approved” by the orders would fall within cl 35.  That is not because the Council’s cause of action merged in the judgment so that the development is to be taken to be within the 1998 development consent –

So, just pausing there, that is rejecting what seems to be the main argument our learned friends ultimately rely on:

but because the development approved by the orders would be binding on the world.

His Honour says in the next paragraph:

A prior approval of designated development by a consent authority is binding on the world (unless overturned on appeal).  An approval by the Land and Environment Court of designated development after a contested hearing is binding on the world (again, subject to appeal).  Either would fall within the words “approved development” in cl 35.

So that, with respect, we would say, by way of contention, is wrong:  it is equating what the Court did in 2014, which was to remedy a breach as being an act of approval of designated development.  So, that we would also raise by way of contention if leave were granted, your Honour. 

One of the points, your Honours, we would call in aid about the distinct nature of the Court’s powers under section 124, it is, as your Honour the Chief Justice observed, the court sitting in the Class 4 jurisdiction.  The authorities have emphasised the extreme breadth of the Court’s remedial powers, so it is a very distinct exercise from an approval of consent for development; certainly, a very different exercise from the Court’s sitting in its merits review jurisdiction.

There are other forms of approval under the Act where, by way of the nature of the development or other processes, approval can be obtained.  So, we do not mean to suggest it is unique to what a consent authority does, but all of them have the characteristics that they are an assessment of environmental impacts, a balancing of interests and a grant, either by force of the Act or by decision of a consent authority; a grant of approval radically different, we would say, from a remedial order.

If your Honours please, those are our submissions.

GAGELER CJ:   Thank you, Mr Free.  Mr Walker.

MR WALKER:   Thank you, your Honours.  It is paragraph 46 and 47 on page 188 and 189 which answer both the contention point and what has been said concerning the possible application of clause 35 upon which we rely.  The question is whether the development – meaning, the work – is approved for the purposes of that jurisdictional gateway to the approval of a consent which is an additional alteration of an existing or approved development.

That, in our submission, is satisfyingly answered by the reasoning of the Court of Appeal in those paragraphs of Justice White’s reasons, in

particular, we rely not in this Court on the question of merger – I have not mentioned that as a special leave point, although it was an argument below – but rather on the fact that because it is a judgment in rem, it binds the world.

Justice White had no doubt about that, subject only to this question of consent, which is what makes the case an appropriate vehicle for an important question, travelling far beyond simply planning law in New South Wales.  It is for those reasons, in our submission, that the case – notwithstanding the foreshadowed contention, and perhaps particularly in light of that – presents an appropriate vehicle for the point that we wish to ventilate.

May it please the Court.

GAGELER CJ:   Thank you, Mr Walker.  The peculiar statutory setting makes this an inappropriate vehicle for examining the question of general importance which the applicant seeks to raise concerning the distinction between a judgment in rem and a judgment in personam.  Special leave to appeal is refused with costs.

The Court will now adjourn until 10.30 am.

AT 10.06 AM THE MATTER WAS CONCLUDED