Walfertan Processors Pty Limited v Upper Hunter Shire Council (No 4) - [2010] NSWLEC 108

Land and Environment Court

of New South Wales

CITATION: Walfertan Processors Pty Limited v Upper Hunter Shire Council & Ors (No 4) [2010] NSWLEC 108

PARTIES: APPLICANT
Walfertan Processors Pty Limited
FIRST RESPONDENT
Upper Hunter Shire Council
SECOND RESPONDENTS (APPELLANTS)
Darley Australia Pty Ltd
William John Bourke

FILE NUMBER(S): 11319 of 2008

CORAM: Pain J

KEY ISSUES: APPEAL :- section 56A appeal of commissioners' decision in class 1 proceedings - whether commissioners erred in considering environmental impacts of alterations and additions to existing effluent disposal system from tannery to determine if not designated development by virtue of cl 35 Sch 3 of EP&A Regulation - whether failure to consider intensification of existing use provisions of EP&A Act in relation to tannery - whether errors of fact can be raised as questions of law - whether issue not referred to in judgment gave rise to failure in consideration of cl 35 - whether findings of fact concerning development consents gave rise to error of law in application of cl 35 - whether commissioners should have held development was designated - whether commissioners took into account irrelevant matters - whether commissioners acted irrationally - whether absence of reference to an issue of lawful commencement in judgment was a failure to give reasons - whether failure to give reasons for findings in judgment

LEGISLATION CITED: Aboriginal Land Rights Act 1983
Environmental Planning and Assessment Act 1979 s 106, 107, 109(2)
Environmental Planning and Assessment Regulation 2000 cl 35 Pt 2 Sch 3
Income Tax Assessment Act 1936 (Cth)
Land and Environment Court Act 1979 s 56A, 57
Local Government Act 1919
Protection of the Environment Operations Act 1997
Shire of Scone Interim Development Order No 1
State Environmental Planning Policy No 62 cl 4 Sch 1

CASES CITED: Ashfield Council v Armstrong [2002] NSWCA 269; (2002) 112 LGERA 105
Avon Downs Pty Ltd v Commissioner of Taxation (Cth) (1949) 78 CLR 353
Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481
Baida & Ors v Waste Recycling and Processing Service of NSW [1999] NSWCA 139; (1999) 130 LGERA 52
Bankstown City Council v Mohamad El Dana [2009] NSWLEC 68
Capricornia Prospecting Pty Ltd v Donnelly [2002] NSWCA 254
Chambers v McLean Shire Council [2003] NSWCA 100; (2003) 57 NSWLR 152
Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233
Dosan Pty Ltd v Rockdale City Council [2001] NSWLEC 252; (2001) 117 LGERA 363
Health Care Complaints Commission v Karalasingham [2007] NSWCA 267
Hill v Bankstown City Council [2007] NSWLEC 401; (2007) 154 LGERA 418
Hope v Bathurst City Council (1980) 144 CLR 1
JPR Legal Pty Ltd v Marrickville Council [2009] NSWLEC 156
Minister Administering the Crown Lands Act v Bathurst Local Aboriginal Land Council [2009] NSWCA 138; (2009) 166 LGERA 379
Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2009] NSWCA 352; (2009) 171 LGERA 56
Murlan Consulting Pty Ltd v Ku-ring-gai Council [2009] NSWCA 300; (2009) 170 LGERA 162
NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509
Segal v Waverley Council [2005] NSWCA 310; (2005) 64 LGERA 177
Thaina Town (on Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300; (2007) 156 LGERA 150
The Village McEvoy Pty Ltd v Council of the City of Sydney (No 2) [2010] NSWLEC 17
Vines v Djordjevitch (1955) 91 CLR 512
Walfertan Processors Pty Limited v Upper Hunter Shire Council & Ors [2009] NSWLEC 1260

DATES OF HEARING: 1 March 2010
2 March 2010
3 March 2010
4 March 2010
5 March 2010

DATE OF JUDGMENT:
31 August 2010

LEGAL REPRESENTATIVES:
APPLICANT
Mr A Galasso SC
SOLICITOR
Wotton & Kearney
FIRST RESPONDENT
Mr P Jayne (solicitor)
SOLICITOR
Sparke Helmore Lawyers
SECOND RESPONDENTS (APPELLANTS)
Mr P Larkin with Mr C Norton
SOLICITORS
Halletts Solicitors

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

31 August 2010

11319 of 2008 Walfertan Processors v Upper Hunter Shire Council & Darley Australia Pty Limited & Anor (No 4) (s 56A appeal)
JUDGMENT

1 Her Honour: Darley Australia Pty Limited and William Bourke (the Second Respondents) have commenced this appeal under s 56A of the Land and Environment Court Act 1979 (the Court Act) in relation to a decision of Senior Commissioner Moore and Commissioner Taylor in Walfertan Processors Pty Limited v Upper Hunter Shire Council & Ors [2009] NSWLEC 1260 (Walfertan No 2) to grant conditional development consent to the Applicant (Walfertan Processors Pty Ltd) (Walfertan) for effluent disposal facilities and associated irrigation at a tannery in Aberdeen. The Upper Hunter Shire Council (the Council) has not taken part in this s 56A appeal. Section 56A appeals can only be made in relation to questions of law.

2 Walfertan owns the combined landholdings of a former abattoir and a tannery on a large site close to Aberdeen in rural NSW. It operates the tannery in the tannery building. The abattoir is no longer in operation. Walfertan applied for development consent for changes in the treatment of effluent disposal from its tannery operations and that is the development application (DA) before the Court.

3 A brief chronology of the proceedings follows:

20 May 2009 Day 5
21 May 2009 Day 6
10 June 2009 Day 7
17 June 2009 Day 8

4 The Statement of Agreed Facts (SOAF) filed in the Class 1 proceedings said in part:

5.17 In 1973 the Aberdeen Tannery (“the Tannery”) was established on the Tannery Land and has been operated by the Applicant since about 1990.

5.18 The Tannery was first established to utilise hides generated by the Aberdeen abattoir which is immediately adjacent to the Tannery Land.

5.19 After taking over the Tannery operation, the Applicant lodged development application DA 26/92 to upgrade the effluent treatment facilities on the Tannery land. Council granted consent to this application on 27 May 1992.

5.20 The Tannery currently produces approximately 550 kL of effluent per day and has its own Environment Protection licence 4449 (“the Tannery EPL”). The resulting effluent is broadly divided into effluent from “salted hides” (also known as washed back hides) and effluent from “green hides”.

5.21 Under the Tannery EPL, the Applicant has a licence to process more than 10,000 hides per year, and to discharge by irrigation up to 250 kL of effluent per day onto its existing irrigation area. The remaining 300 kL of effluent is evaporated from the Tannery’s Rouchel Road dams and “salt sacrifice area”. The storage, evaporation and irrigation areas for the Tannery wastewater are all located

on Lot 55 of DP 739487

Judgment of Commissioners in

Walfertan No 2

5 At [7] in Walfertan No 2 the Commissioners state that the former abattoir and the tannery have generated liquid effluent that has been disposed of within the tannery land. The tannery also disposes of its solid waste on the site. Walfertan has lodged a DA to change the existing arrangements for the disposal of effluent from the tannery. The focus of the case is the present and proposed future effluent disposal at the tannery. The new proposal for tannery effluent disposal is summarised at [8]-[11] and includes the separation of the effluent stream into a high concentration stream and a low concentration stream with different disposal methods for each. The proposal includes the use of part of the tannery’s existing effluent disposal system and also renovating and reusing the old abattoir effluent disposal system [10].

6 The Commissioners identify four remaining matters at [15]-[19] that required determination. This appeal relates to the first of these, being whether the proposed development is designated development as defined under the Environmental Planning and Assessment Act 1979 (the EP&A Act) and therefore required an environmental impact statement (EIS) inter alia before it could be approved. If Walfertan’s proposed development does not come within the exception in cl 35 Sch 3 of the Environmental Planning and Assessment Regulation 2000 (the Regulation) the proposal is designated development and does require an EIS before development consent can be granted.

7 Clause 35 Sch 3 of the Regulation states:

35 Is there a significant increase in the environmental impacts of the total development?

Development involving alterations or additions to development (whether existing or approved) is not designated development if, in the opinion of the consent authority, the alterations or additions do not significantly increase the environmental impacts of the total development (that is the development together with the additions or alterations) compared with the existing or approved development.

8 At [25]-[26] and [30] the Commissioners state:

25 There are two propositions that we state, at the commencement of this discussion, that we consider necessarily follow from the terms of the clause and that are relevant in our consideration of how it is to be applied in these circumstances. The first is that, as submitted by the second respondents, the existing or approved development to be considered, for construction of the term “existing”, is existing development that is lawfully existing – that is that it is development which is operating subject to an approval granted by the relevant consent authority – that is, in this case, the council.

26 The second is that there is nothing in the terms of cl 35 that requires that the geographic location of the existing development and that of the proposed development be entirely corresponding. As a consequence, we accept that the proposed total development over the whole of the tannery lands now subject to this application can be compared with the total development that might be existing or approved over the whole of the tannery lands but may also be compared with the existing or approved development confined to the activities of the tannery.
…

30 To permit us to undertake the necessary comparative assessment of whether or not there would be any significant increase in the environmental impacts of the total development that would result if we were to approve this application, we consider it appropriate, in the first instance, to undertake an examination of what is presently taking place on the tannery lands, whether approved otherwise, and how those activities are proposed to be changed.

9 At [27] they note that evidence was provided of all relevant development or building applications approved by the Council concerning Walfertan’s operations. Four development consents granted in 1983, 1989, 1990 and 1992 are identified. A building application was lodged in 1973 and noted as approval date unknown.

10 A description of what is presently undertaken in relation to effluent disposal and what is proposed is set out at [32]-[35]:

32. At the present time, there are a number of treatment ponds used for disposal of the abattoir effluent that are not presently being used by the tannery. The present tannery application proposes to refurbish part of this pond system for incorporation in the new overall tannery effluent disposal process. These ponds are on a portion of the site downhill and slightly to the north-east of the tannery but in close proximity to the tannery building.

33. These ponds are connected by drainage channels to a storage dam that also has a nearby overflow dam. These effluent transportation channels are protected from having any overland stormwater flow adding additional volume to the effluent disposal system by uphill contour embankments that are designed to carry the stormwater away from any of the effluent transportation or storage elements. These have the effect of diverting the stormwater into clean water rural dams or into the drainage line known as Bakers Gully, running from the south-east to north-west across the north-eastern portion of the site.

34. The abattoir effluent disposal process then spray irrigated effluent from this dam on to an area known as the eastern irrigation area. The tannery now proposes to pipe effluent to the tannery’s final holding dam from which the effluent will be irrigated on the eastern irrigation area. The pipeline will follow the route of the former open effluent drainage channel.

35. An area to the east of the tannery within the site is known as Mantons. It is currently being used for irrigation of portion of the present effluent from the tannery. The owners of the tannery acquired this land from the council in 1997. However, no development consent has been demonstrated to exist permitting its present use for effluent disposal by irrigation.

11 Use of the area known as Manton’s is to cease; [35]-[36]. Continued use of an area called the Rouchel Road dams is identified at [37]. The Commissioners conclude at [43] that as a result of the separation of the waste streams the volume of material that will be disposed of using the Rouchel Road dams will be reduced significantly. Use of an area known as Salt Sacrifice for disposing of solid waste by-products of the tannery’s processes is also to cease; [45]. There is discussion of the agreement of experts about various operational matters apart from odour which is discussed at [47]-[53]. At [54] the Commissioners conclude that no other significant technical disagreement exists as an impediment to the granting of approval on the merits.

12 The Commissioners then consider cl 35 Sch 3 of the Regulation. At [59] they do so on the most restrictive case for Walfertan of considering the existing or approved activities of the tannery without considering the abattoir waste disposed of in the past. They analyse the four development consents granted in 1983, 1989, 1990 and 1992 at [62]-[86] to determine what was permitted.

13 At [87]-[88] of their judgment, the Commissioners stated:

87 As a consequence of all this development application and related material, we are of the view that a number of factual observations should be made. These are as follows:

With respect to all of the development consents relating to on-site disposal of effluent, there is no specific condition of consent that incorporates conditions relating to the composition of the waste whether solid or liquid;

With respect to all of the development consents relating to on-site disposal of effluent, there is no specific condition of consent that incorporates conditions relating to dilutions rates of whatever might be within the waste;

With respect to all of the development consents relating to on-site disposal of effluent, there is no specific condition of consent that incorporates conditions precluding on-site disposal of solid waste and such on-site disposal of solids is, in fact, specifically diagrammatically depicted in the flow chart appended to the 1992 Statement of Environmental Effects;

The document entitled Volumes Requiring Irrigation in appendix 2 to the Statement of Environmental Effects accompanying the 1992 development application does not propose any limit on the volume of liquid effluent to be disposed of but, if it were read to be proposing a limit, postulates that the volume of liquid effluent capable of being disposed of safely on the site under then average rainfall conditions would be 2.75 times the volume proposed to be permitted under the present application.

88 As a consequence of these factual observations and what we have earlier discussed concerning the present operation of the tannery’s effluent disposal process (ignoring Mantons), we are of the view that a number of conclusions can be drawn. These are:

First, the disposal of waste, solid and liquid, other than discharge of effluent to the sewer (at its most restrictive for the applicant and expressing no view as to whether this restriction actually applies or not) is unregulated by any relevant condition of development consent except for requirements contained in:

o condition 2 of the 1983 consent concerning the amenity of the neighbourhood;

o condition 3 of the 1983 consent requiring compliance with Department of Industrial Relations and Technology conditions (if imposed);

o conditions 4 of the 1983 consent requiring a Clean Air Act licence and that any conditions of such a licence would form part of the consent;

o condition 2 of the 1992 consent requiring submission of quarterly review statements on the operation of the effluent treatment system; and

o condition 4 the 1992 consent requiring, in effect, a pollution reduction program acceptable to the EPA to be aimed at prevention of further degeneration of the irrigation area. EPA approval of this pollution reduction program was to be obtained prior to the release of the building application arising from this development consent.

Second, as a consequence of what is set out above, it is not possible to determine what would be the permitted environmental impacts of the existing or approved development except that the comparatively unrestricted nature of these conditions, to the extent that they might be valid, means that those environmental impacts are potentially significantly high as the degree of regulation and control provided by the conditions of development consent is very permissive.

Third, the absence of any certain relevant concentration, composition or volumetric restriction coupled with the limited present monitoring regime required by the EPA licence reinforces the second conclusion we have drawn above.

Fourth, if there is some volumetric restriction to be imputed from the 1992 development consent, this volumetric limit is at least 2.75 times the limit proposed to be conditioned for this application.

Fifth, the regime proposed by the conditions of consent as agreed to by the parties and as determined by us as discussed below is a significantly restrictive regime.

Sixth, the present effluent disposal activities of the applicant (ignoring Mantons) are unsatisfactory both in their impact on the surrounding community and their likely impact on the tannery's own land to the extent that this impact can be assumed given the unsatisfactory monitoring regime currently applying.

Finally, the regime proposed by the conditions to attach to a development consent arising from this application, although applying to different land areas to those subject of the presently approved effluent disposal activities of the applicant, is one that inevitably lead to a position where the development together with the additions or alterations will not only not significantly increase the environmental impacts of the total development that is presently approved but must, in our view, in fact, decrease the maximum potential environmental impacts necessarily inherent from the present approved development.

14 The Commissioners conclude at [89] that Walfertan has the benefit of the exception in cl 35 Sch 3 of the Regulation without the need to rely on any development consent or entitlement of the abattoir and that no EIS is required. I have set out the judgment in some detail as it is necessary in a s 56A appeal to ensure that the context for the Commissioners’ decision making is clear. That generally requires a consideration of the judgment as a whole.

Evidence

15 The Second Respondents relied on parts of the transcript of the proceedings before the Commissioners. The extensive exhibits from those proceedings were also tendered. A number of these were referred to in the course of this appeal.

Walfertan’s existing and proposed effluent disposal changes

16 Further detail about the proposed changes in the effluent disposal system ought be noted to enable an understanding of the issues in this appeal. As noted above at par 5, the proposal before the Commissioners is described broadly in the judgment at [11]. Paragraphs [31]-[45] describe the present effluent disposal practices of the tannery and the proposed changes to them.

17 Walfertan’s counsel provided in oral submissions a detailed explanation of the existing and proposed procedural stages of effluent disposal by reference to exhibit 17 showing the geographical features and boundaries of the total site (TS 3 March 2010 p 167 line 34 – p 179 line 47). Development consent is sought to construct an irrigation pipe within the existing open channel between the wastewater treatment system on lot 53 DP 739487 and the 107ha area of lot 159 DP 712988 (the eastern irrigation area). The proposal includes use of substantial additional areas for irrigation and subsequent cropping, being lot 159 (blue area below the dam, exhibit 17) and part of lot 53 (grey area, exhibit 17). Irrigation of other areas known as Manton’s and Salt Sacrifice used previously is to cease in whole or for certain waste disposal and these areas are to be rehabilitated; [36], [45] Walfertan No 2.

18 It is also useful to note that Walfertan’s DA lodged with the Council originally sought to vary the development consent for the abattoir that once operated on the site. This DA was changed to one seeking consent for the use of lot 159 and lot 53 for effluent disposal/irrigation purposes.

Grounds of appeal

19 There was considerable discussion during the hearing over about five days about the grounds of appeal and these were amended more than once. In the Second Further Amended Summons Commencing an Appeal (the amended summons) filed in Court on the fourth day of hearing the Second Respondents submitted that:

1. The Commissioners:

(a) Erred in failing to hold that the application was for designated development; and/or

(b) Should have held that the application was for designated development.

2. The Commissioners erred in incorrectly applying cl 35 of Sch 3 of the Environmental Planning and Assessment Regulation 2000 (“the EP&A Regulation”), in the following ways:

(a) The Commissioners erred in construing and wrongly applied the following consents:

DA 64/83 granted 21 December 1983 (the 1983 Consent);

DA 57/89 granted 20 November 1989 (the 1989 Consent);

DA 57/90 granted 15 October 1990 (the 1990 Consent); and

DA 26/92 granted 18 May 1992 (the 1992 Consent);

and thus failed to identify the “existing or approved development” and its impacts. (see Error 1)

(b) The Commissioners failed to apply ss 106, 107 and 109(2) of the Environmental Planning and Assessment Act 1979 and make the comparison required by cl 35 of Sch 3 of the EP&A Regulation on the basis that either:

(i) There was no “existing or approved development”, or

(ii) Alternatively, if there was “existing or approved development” that that development was not unlimited,

and thus failed to take into account relevant matters. (see Error 2)

(c) In applying cl 35 of the EP&A Regulation, the Commissioners took into account irrelevant matters; namely the impacts of present activities which were not impacts of the lawfully existing or approved development; (see Error 2)

(d) Having found that it was “not possible to determine what would be the permitted environmental impacts of the existing or approved development” (at [88]) the Commissioners erred in finding that they was satisfied of the matters in cl 35 in the absence of evidence enabling the comparison required by cl 35 to be made. (see Error 3)

(e) The process of reasoning of the Commissioners in holding that they were satisfied of the matters in cl 35 in the absence of evidence enabling the comparison required by cl 35 to be made was irrational. (see Error 4)

3. … (This ground is not pressed)

4. The Commissioners failed to give reasons for concluding that there was an “absence of any certain relevant concentration, composition or volumetric restriction” (Judgment, par 88) on the operation of the tannery, despite the provisions of ss.76A and 109 of the

Environmental Planning & Assessment Act.

20 The first ground of appeal concerning an error of law in not finding that the development was for designated development will follow if one of the Second Respondents’ grounds of appeal in ground 2 is upheld. Ground 1 does not need to be separately considered but is the substantive issue that underlies this appeal.

21 Four errors of law were the focus of the Second Respondents’ extensive written and oral submissions. Walfertan disputes that any errors of law are identified, rather only errors of fact. The errors of law were: misconstruction of development consents (error 1), failure to consider whether the tannery had existing use rights or had lawfully commenced (error 2), no evidence to enable the Commissioners to make the comparison required by cl 35 Sch 3 of the Regulation (error 3) and irrationality (error 4). These four errors are identified next to the five appeal grounds identified in 2(a)-(e) of the amended summons (I note fourteen appeal grounds were identified at the outset of the hearing).

22 Appeal ground 3 was not pressed. Appeal ground 4 is a separate ground identified for the first time at the hearing separately from the five grounds in 2(a)-(e). There are consequently six grounds of appeal requiring consideration.

(i) Appeal ground 2(b) (error 2)

23 As the Second Respondents’ counsel suggested that ground 2(b) in the amended summons should be considered first I will do so. The ground alleges a failure to apply the provisions in the EP&A Act (ss 106, 107, 109(2)) in making the required comparison under cl 35 Sch 3 of the Regulation. This ground challenges the Commissioners’ decision because according to the Second Respondents:

24 The sections of the EP&A Act referred to concern existing use rights inter alia. Section 106(a) provides:

In this Division,

existing use

means:

(a) the use of a building, work or land for a lawful purpose immediately before the coming into force of an environmental planning instrument which would, but for Division 4A of Part 3 or Division 4 of this Part, have the effect of prohibiting that use,

(1) Except where expressly provided in this Act, nothing in this Act or an environmental planning instrument prevents the continuance of an existing use.

(2) Nothing in subsection (1) authorises:

(a) any alteration or extension to or rebuilding of a building or work, or

(b) any increase in the area of the use made of a building, work or land from the area actually physically and lawfully used immediately before the coming into operation of the instrument therein mentioned, or

(c) without affecting paragraph (a) or (b), any enlargement or expansion or intensification of an existing use, or

(d) the continuance of the use therein mentioned in breach of any consent in force under this Act in relation to that use or any condition imposed or applicable to that consent or in breach of any condition referred to in section 80A (1) (b), or

(e) the continuance of the use therein mentioned where that use is abandoned.

(1) Nothing in an environmental planning instrument operates so as to require consent to be obtained under this Act for the continuance of a use of a building, work or land for a lawful purpose for which it was being used immediately before the coming into force of the instrument or so as to prevent the continuance of that use except with consent under this Act being obtained.

(2) Nothing in subsection (1) authorises:

(a) any alteration or extension to or rebuilding of a building or work, or

(c) without affecting paragraph (a) or (b), any enlargement or expansion or intensification of the use therein mentioned, or

(e) the continuance of the use therein mentioned where that use is abandoned.

(i) lawful commencement

25 The Second Respondents submitted that according to the SOAF at 5.17 (par 4 above) filed by the Council and Walfertan the tannery commenced operation in 1973. The Shire of Scone Interim Development Order No 1 (the IDO) then in force specified that certain industries including a tannery could not operate in zone 1(a) without development consent. This omission meant the Commissioners failed to properly consider cl 35 Sch 3 of the Regulation because it requires comparison with lawful existing or approved development and the Commissioners did not identify this.

26 There is no mention of existing use rights or lawful commencement of the tannery in the judgment. The Commissioners therefore overlooked or failed to deal with fundamental matters raised at the hearing according to the Second Respondents’ counsel. As outlined above in the summary of the judgment the Commissioners did refer to four development consents granted in the 1980s and 1990s (par 12-13 above) and a building application made in 1973 (par 9 above).

Was issue of lawful commencement raised before the Commissioners?

27 A preliminary question raised by Walfertan before this ground can be considered substantively is whether the issues underlying this ground of appeal were raised at all or sufficiently before the Commissioners so that they are in legal error in not considering the issues in their judgment. An appeal on a question of law not raised before a Commissioner cannot generally be raised in a s 56A appeal, see Bankstown City Council v Mohamad El Dana [2009] NSWLEC 68 at [44]-[53] where Biscoe J considered a number of authorities which supported such an approach including Lloyd J in Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233 at [37]-[40]. I note a different conclusion was reached in Hill v Bankstown City Council [2007] NSWLEC 401; (2007) 154 LGERA 418 by Jagot J at [19]-[21] where her Honour held that a new issue could be raised on appeal if it was in the interests of justice to do so. Her Honour took into account in making her determination that there were no factual issues in dispute to which the question of law related.

28 Written submissions of the Second Respondents filed in the hearing before the Commissioners were tendered (exhibit 4.4). The written submissions dated 5 June 2009 refer to lawfully existing development in relation to the abattoir operation. For example, par 8 states “the existing or approved development” does not include an unlimited right to irrigate abattoir effluent. At par 9, “the existing development” means the lawfully existing development pursuant to ss 107 and 109 of the EP&A Act. Written submissions dated 10 June 2009 par 1 refer to the comparison of existing and approved development for the cl 35 comparison being in relation to the disposal of abattoir waste. The abattoir is described as having had existing use rights and that the use has been abandoned. The basis for the Commissioners’ consideration of the comparison required by cl 35 was ultimately the tannery operation not the abattoir.

Second Respondents’ submissions

29 The Second Respondents submitted the issue of lawful commencement was raised adequately in oral submissions before the Commissioners and should properly be the subject of this appeal. The Second Respondents raised the issue of whether Walfertan had established lawful commencement for the tannery during the seventh day of the hearing, as identified in extracts from the transcript of 10 June 2009 referred to in argument. The issue was raised then because the Commissioners directed that the cl 35 issue be considered after the expert evidence had been dealt with in order to enable a proper understanding of the development for which Walfertan sought consent.

30 As referred to in the transcript of the proceedings before the Commissioners, a subpoena was issued to the Council requiring production of development consents. These were tendered in the proceedings and are those referred to in the judgment. No consent earlier than 1983 was produced in answer to the subpoena. Consequently, the required development consent necessary to prove the tannery had been lawfully commenced in 1973 as required by the IDO was not provided to the Court. The presumption of regularity in Dosan Pty Ltd v Rcokdale City Council (2001) 117 LGERA 363 relied on by Walfertan was rebutted by the evidence before the Commissioners.

31 The transcript for 17 June 2009 was referred to where reference was made to the lack of the plan to which the IDO applied. The Senior Commissioner responds that he understood the issue as if there was an existing use right that depicted the area to which it might apply. This suggests the Commissioners were aware of this issue. It was an issue they should have but failed to deal with in their judgment. Consequently they have failed to identify the approved or lawfully existing development in relation to the tannery, which analysis is essential for undertaking the analysis required under cl 35 Sch 3. Vines v Djordevitch (1955) 91 CLR 512 at 519-520 is High Court authority that a party wishing to rely on existing use rights has the onus of proof of demonstrating their existence.

32 In reply the Second Respondents’ counsel referred to Baida & Ors v Waste Recycling and Processing Service of NSW [1999] NSWCA 139; (1999) 130 LGERA 52 where the Court of Appeal (Mason P, Sheller JA concurring, Powell JA dissenting) upheld an appeal against the decision of the trial judge refusing to infer that the council omitted to grant itself consent to operate a waste disposal site. It held the appellants bore the onus of proving that no relevant consent existed. This onus did not shift. However where the appellant established sufficient evidence from which a negative proposition could be inferred, the respondent then carried an evidentiary burden. It was proper to infer in that case that a relevant consent or evidence of one would have been produced and there was none. The appellants were residents who unsuccessfully sought orders in this Court restraining the use of land as a putrescible solid waste depot. The depot had operated since 1974 on land resumed by the council for the purpose of a rubbish depot. The council operated the depot from 1974 to 1977. The trial judge inferred that no development consent was granted to the respondent. None was in evidence but other actions by the council as the consent authority such as granting a lease to the respondent were considered. He did not consider the appellants had failed to exclude the possibility that the council may have resolved to grant consent to itself and therefore held against the applicant at first instance. According to the Second Respondents the facts and findings in that matter have direct relevance to the Class 1 merit appeal the subject of this s 56A appeal.

Walfertan’s submissions

33 Walfertan submitted the issue of lawful commencement of the tannery was not properly raised at the hearing before the Commissioners and cannot be the subject of this appeal. The Statement of Contentions filed by the Council on 12 January 2009 did not mention existing use rights or lawful commencement. This issue was not raised by the Council in the course of the hearing, the Council accepting through its planner Mr Casson that the tannery development was lawful. This is clear from the joint planning report prepared before the commencement of proceedings. Walfertan’s counsel’s response on 10 June 2009 during the hearing before the Commissioners was the same as in the appeal before me, namely that the tannery use commenced in the 1960s or 1970s, the statement of environmental effects (SEE) (prepared in August 2008) states what volume of hides are processed per week and there has been no proposed change to that volume. It is important that no issue has been raised about the authority for the current operation by the Council. Lawful authority to operate the tannery is asserted by Walfertan and the consent authority accepts that assertion. There was no reason for the Commissioners to consider the issue of lawful commencement or existing use rights in light of the issues presented to them.

34 Walfertan further submitted that the Second Respondents cannot reverse the onus of proof they bear of demonstrating the lack of existing use rights by a bare assertion made orally at the hearing and reliance on an IDO which suggests that development consent was required in 1973 to shift the onus of proof away from the Second Respondents onto Walfertan. There were no written submissions from the Second Respondents which raised the issue of lawful commencement in relation to the tannery. There was evidence of four development consents which clearly relied on the existing situation at the time of the applications being made. The presumption of regularity must apply to these, see Dosan Pty Ltd v Rockdale City Council [2001] NSWLEC 252; (2001) 117 LGERA 363 per Lloyd J at [138]-[151] and the Court of Appeal in Ashfield Council v Armstrong [2002] NSWCA 269; (2002) 112 LGERA 105 per Davies AJA (Mason P and Handley JA agreeing) at [40]. There was also in evidence a building application dated 1971 which the Commissioners could have regard to. While there was no evidence that was granted, the fact that it existed on the Council’s files is suggestive that there was an earlier development consent.

35 Development consents granted by the Council in 1983, 1989, 1990, 1992 were amending an existing situation and did not stand on their own. The 1983 consent relied on the existence of a tannery building for example. The Commissioners’ approach was correct and properly reflected the issues presented by the parties.

Finding

Whether lawful commencement issue can be raised in this appeal

36 At the outset of these proceedings the former abattoir operation was relied on by Walfertan as underlying the proposed changes to effluent disposal for which consent was sought. The abattoir was the focus of written submissions of the Second Respondents which submissions referred to the issue of whether the abattoir had existing use rights. The Commissioners determined in the course of the proceedings not to consider the former abattoir. The effluent from the tannery operation alone became the focus of the proceedings. No written material presented to the Commissioners by the Second Respondents raised the issue of the need to establish lawful commencement for the tannery. The Second Respondents’ counsel raised orally on Day 7 of the hearing that the issue of whether the tannery had been lawfully commenced needed to be considered in light of the IDO.

37 The passages of transcript referred to by the Second Respondents make clear the issue was raised before the Commissioners and they were aware of it. The issue was addressed by Walfertan’s counsel in oral submissions to the Commissioners, as outlined above at par 29.

38 Rather than considering this ground as whether lawful commencement for the tannery was properly raised before the Commissioners, this issue is more accurately characterised as whether the Commissioners should have considered lawful commencement for the tannery on the basis that the onus of proof of the existence of lawful commencement and/or existing use rights under the EP&A Act had shifted to Walfertan in the circumstances of the hearing. As submitted by Walfertan, the Council as the consent authority raised no issue about the lawfulness of the tannery operation at any stage of the proceedings. The Council identified in par 5.17 of the SOAF that the tannery was established on the land in 1973. The Council planner Mr Casson did not raise any issue concerning lawful commencement of the tannery. At par 2.2 of the joint planning report filed 18 March 2009 before the hearing commenced on the question of whether the development was designated development in light of cl 35 Sch 3 he considered that “… the proposal will not result in a significant increase in the total impact of the development”. At the commencement of the hearing there was no reason for the Commissioners to consider the issue at all in light of what was before them.

39 The conduct of hearings by commissioners requires that they must generally determine matters on the basis of the evidence and submissions that are presented by the parties. While Class 1 merit appeals can be inquisitorial to some degree in the way such proceedings are conducted, they are adversarial in that the Court must generally rely on the parties to define the issues and to bring forward relevant evidence. That approach is important for practical reasons because commissioners cannot be expected to divine parties’ intentions in proceedings in the absence of clear identification of issues to be raised before them, particularly where parties are legally represented as they were in this case. I consider there were additional difficulties in the identification of issues occasioned by the very late joinder of the Second Respondents as a party just prior to the hearing commencing. Having been originally set down for three days the matter proceeded for eight days heard intermittently over three months.

40 It was open to the Commissioners to consider the issue of lawful commencement did not require their determination, given the issues they had to address in relation to cl 35 Sch 3 (their approach to cl 35 is considered below at par 47-48), the evidence before them and the inferences that they could draw from that. They were entitled to consider that the onus of proof identified in Vines v Djordjevitch submitted by the Second Respondents as falling on Walfertan was satisfied by the production of the 1983 consent which was for the redevelopment of an existing activity in the tannery building as that is what that consent sought to vary. That there was existing activity was further confirmed by subsequent development consents. A presumption of regularity referred to in the submissions of Walfertan at par 34 and 35 above could apply in these circumstances to the Commissioners’ consideration of the matters before them. There were references in the evidence to the tannery operating and having existing use rights. In addition to the SOAF and the planners’ joint report prepared before the hearing which raised no issue, the Council officer’s report for the assessment of the 1992 DA refers to the tannery as an “existing use” in the relevant zone. The SEE prepared for the 1992 DA also refers to an existing waste water treatment plant.

41 I do not consider the formal consideration of the presumption of regularity as applied in Dosan was required. The existence of a development consent in 1983 which was intended to amend an existing situation suggests as a practical matter that the use was continuing in 1983.

42 The debate before me on this ground of appeal has been far more extensive than before the Commissioners, as can be clearly seen from the relatively brief transcript references in the Class 1 hearing to which I was taken by the Second Respondents’ counsel compared to the lengthy submissions made at the s 56A appeal hearing. The case of Baida relied on by the Second Respondents provides no assistance to the determination of this matter. That case concerned enforcement proceedings, taken I presume in the Court’s Class 4 jurisdiction, and was conducted entirely differently to the Class 1 proceedings I must consider here.

43 That there was no need to consider this issue would have been confirmed by the agreement of the Council and Walfertan raising no issue about the lawful commencement of the tannery. The absence of a development consent earlier than those referred to in the judgment was not a matter the Commissioners were bound to consider as relevant to the analysis required by cl 35 Sch 3, contrary to the Second Respondent’s submissions.

Error not material in any event

44 If, contrary to my finding above, there is an error of law because the Commissioners failed to consider whether the tannery had lawfully commenced such error must be material to the decision being impugned, as held by Basten JA (Giles JA and Bergin J agreeing) in Health Care Complaints Commission v Karalasingham [2007] NSWCA 267 at [16] and cited by Basten JA in B & L Linings Pty Ltd vChief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481 at [125]. Walfertan submitted that the error of law, if any, was not material to the issue before the Commissioners in relation to cl 35. The proper approach to the question in cl 35 Sch 3 of the Regulation does not depend on whether lawful commencement for the tannery was established. None of the proposed alterations and additions relate to changes in the tannery operation at the factory, rather the development proposal relates to an alteration and/or addition to the process of effluent disposal from the unaltered tannery process. It is therefore unnecessary for the comparison required by cl 35 Sch 3 of the Regulation to take into account the operations in the tannery building as these were not the subject of the application before the Commissioners. Such a finding simply reflects the nature of Walfertan’s DA which proposed changes to the effluent disposal processes for effluent from the existing tannery operation.

45 The Second Respondents submitted this was not based on a proper approach to the comparison required by cl 35. Clause 35 requires a comparison with the total development which must include the tannery operation. It was necessary to establish the legality of the tannery operation in order to consider the effluent disposal issue and to undertake the comparison under cl 35 that requires the total development to be considered.

46 Additionally Walfertan’s submission that moving from unrestricted to restricted use must necessarily involve lesser impacts is not automatically correct as a matter of logic.

Finding on whether material error

47 In order to address this argument of Walfertan’s it is necessary to determine whether the approach by the Commissioners to the comparison of impacts required by cl 35 Sch 3 was correct. If there was a failure to establish that the tannery had been lawfully commenced, the question arises of whether that activity is relevant to the comparison required by cl 35. This issue was discussed at length by the parties before the Commissioners at the hearing. I was taken to several transcript references where the parties discussed with the Commissioners a one box/two box analogy as a means of characterising the development requiring comparison for the purposes of cl 35, for example TS June 10 2009 pp 28-31. It is implicit in the Commissioners’ findings that they accepted the submissions of Walfertan that the comparison did not require consideration of the existing tannery building operation as that was unaltered and was not part of the development application. Their approach to cl 35 Sch 3 is identified in their judgment at [25], [26] and [30], set out in par 8.

48 The Second Respondents argued before the Commissioners and me that as cl 35 requires a comparison between the alterations and additions of the total development compared with the existing or approved development, then the tannery must be considered. In oral submissions in reply its counsel gave examples which were said to demonstrate that the approach of the Commissioners was wrong. I did not find any of the examples compelling as they were directed to circumstances different to this case and therefore to what the Commissioners had to consider. The DA before them was seeking changes to the existing method of disposal of effluent. The tannery operation was not the subject of the application. Consequently, the amount of effluent from the tannery operation and its content was not the subject of the DA. While cl 35 requires analysis of the impacts of the total development described as the development together with the alterations and additions, in this case the development the subject of the DA is entirely alterations and additions to an existing effluent disposal system. The comparison the Commissioners considered should be undertaken for the purposes of cl 35 is set out in [26] of the judgment and was in relation to the use of the tannery lands, as identified by them in [26].

49 The Commissioners undertook that comparison based on the existing and proposed changes in the area of tannery land utilised for treatment of the effluent, with a substantially wider area proposed to be used by Walfertan (the blue area and part of the grey area in exhibit 17) to that used previously (the orange and green areas in exhibit 17). A greater level of treatment was proposed for the effluent. Other areas, Manton’s and Salt Sacrifice, are no longer proposed to be used and are proposed to be rehabilitated. The Commissioners found the existing effluent disposal was generally unrestricted in [88] on the areas that were in use and that was the comparison of the total development they applied to the proposed alterations and additions. There is no mistake in their approach to cl 35 in the context of the DA before them.

50 Even if the Second Respondents’ argument that Walfertan had failed to show that the tannery had not commenced lawfully was upheld, it is not a material error which vitiates the Commissioners’ decision in relation to the application of cl 35 Sch 3 of the Regulation to the proposed development before them. The Second Respondents are unsuccessful on this part of this ground of appeal. There is no failure of the Commissioners amounting to an error of law in not referring to lawful commencement in their judgment.

(ii) intensification of use

51 An alternative argument of the Second Respondents was that, assuming there were existing use rights or lawful commencement from 1973 for what was proposed, s 107(2) and s 109(2) of the EP&A Act prevented any expansion or intensification of the use from 2 February 1986 levels when amendments to the EP&A Act prevented any further intensification of an existing use without development consent. This argument contends that the Commissioners erred in regarding the use as unlimited, as they did in several places in the judgment.

Second Respondents’ submissions

52 The onus falls on Walfertan to negative that there was intensification of use because of cl 35 and the application of Vines. The Commissioners considered the issue of whether there were limitations on the use under the 1992 development consent. They failed to address the issue of whether there had been unacceptable intensification of use by determining the level of intensity of use as at 2 February 1986, after which time intensification without development consent was unlawful. On the evidence there was a debate about whether there was intensification and a failure to apply s 109(2) and hence there was a failure to apply the relevant law. The written submissions of the Second Respondents provided to the Commissioners addressed intensification in the context of the abattoir’s operations.

53 The Second Respondents submitted that the 1992 development consent for effluent treatment facilities applies only to lot 221 of DP 559887 and lots 54 and 55 of DP 729487 being some small areas near the tannery building and the Salt Sacrifice/Rouchel Road dams area. The documents make clear that in 1992 the tannery was not producing more than 58 kL/day of effluent. Yet the Commissioners were considering an operation producing 550 kL/day according to the SOAF par 5.20, an almost 340 per cent increase in total effluent referred to in the 1992 consent.

54 Further, the only environment protection licence which Walfertan has for the disposal of effluent applies to the Manton’s paddock and authorises the disposal of 250 kL/day under the Protection of the Environment Operations Act 1997 (the POEO Act) subject to conditions which prohibit the generation of any potentially offensive odour. The balance of effluent disposed of, 300 kL/day, is said to be evaporated from the Rouchel Road dams and Salt Sacrifice area. This is not authorised by any environment protection licence and is therefore unlawful and also exceeds the total amount authorised by the 1992 consent.

Walfertan’s submissions

55 The evidentiary onus is on the Second Respondents to prove the assertion, and not on the Applicant to disprove the assertion that there was unacceptable intensification of use beyond 1986 levels. Walfertan submitted there is no evidence that the use was expanded or intensified without authority after 2 February 1986. Its counsel referred to the documents filed in support of the 1992 DA to support that submission. These include a diagram titled Aberdeen Process Flow Chart (Appendix 3 Statement of Environmental Effects April 1992) which shows the factory effluent being produced as 500 kL/day. Additionally Fig 2 labelled Walfertan Effluent Treatment System Existing demonstrates the existing system. Each of these documents appear in exhibit 2.3 vol 2 of 2 at tab 25. These documents clearly suggest that more than 58 kL/day of effluent was being produced, rather the amount of effluent was 500 kL/day. Other references support a conclusion that well in excess of 500 kL/day was being produced.

56 Walfertan submitted that the evidence establishes that there was no intensification of use, rather there has been a decrease to 400 kL/day as identified in the August 2008 SEE (exhibit volume 1A Tab 10 p2 at 6). As the Commissioners’ judgment correctly states in [87] and [88] there was no constraint upon the generation of effluent from the facility in any of the consents.

Finding

57 There is no reference to any issue concerning intensification of use in excess of 1986 levels when the 1992 development consent was approved or at any other time in Walfertan No 2. The Second Respondents referred to the issue being raised by its counsel before the Commissioners on 10 June 2009 (TS p 26) in the course of discussion between the parties and the Commissioners about what was the approved or existing development. Part of the Second Respondents’ arguments raised in reply rather than in chief was that there was a failure to give reasons in relation to whether there was intensification, essentially the issue raised in ground 4. The conclusion expressed above that the Commissioners acted appropriately in the circumstances of the hearing in not referring to the issue of lawful commencement would also appear relevant to this ground given the limited manner in which it was raised before them.

58 Further, it is debateable whether this ground of appeal can be considered in this s 56A appeal in the terms it is raised by the Second Respondents. The basis for the Second Respondents’ argument on intensification is that the Commissioners incorrectly construed documents related to the 1992 consent but the errors identified in argument are factual findings made by the Commissioners. The question arises of whether the Second Respondents have identified a question of law or whether the matters raised are findings of fact and not appealable in a s 56A appeal. I deal with this issue more comprehensively in the next ground of appeal which raises the construction of the 1992 development consent by the Commissioners in relation to a different aspect at par 84 to par 94. My finding there that the findings of primary fact by the Commissioners are not open to be reviewed in this s 56A appeal applies also to this part of ground 2(b).

59 If I am wrong and this ground is a question of law which can be raised in this appeal it is necessary to consider the submissions made concerning the operation of the 1992 consent as disclosed in the Commissioners’ judgment. Much of the s 56A appeal hearing was spent considering the documents in evidence before the Commissioners with conflicting submissions from the parties as to whether or not the correct factual conclusions were reached by the Commissioners. I found the analysis of evidence presented by the Second Respondents generally confusing. The conclusions of fact which the Second Respondents argued should have been made by the Commissioners were not generally self-evident (a matter further suggesting they are not issues which can be considered in a s 56A appeal as referred to in the previous paragraph).

60 As submitted by Walfertan, the SEE for the 1992 DA proposal identified in Appendix 2 table Volumes Requiring Irrigation (located at exhibit 2.3 vol 2 of 2 tab 25) that the maximum volume of liquid capable of being irrigated on the area is 275 kL per year (also calculated in the Commissioners’ judgment at [85]). In 2006 the operation was described as the tannery producing 550 kL of effluent per day in an application for proposed variations to an environmental protection licence held by Walfertan (exhibit 1A tab 8 p 1). While later in time, also before the Commissioners was the SEE dated August 2008 for alterations to the wastewater treatment system for DA 86/92 in which the tannery operation was described as generating 400 kL/day of effluent (exhibit 1A tab 10 p 2). The evidence of the existing level of effluent disposal at the time of the 1992 development consent suggests that the level was far greater than the level the Second Respondents submitted the documents identify. This material does not suggest the Commissioners failed to properly identify that there was any unlawful intensification of use at the time the 1992 consent was granted or thereafter.

61 For completeness I note that the Second Respondents’ written submissions on this ground state that the Salt Sacrifice area activities are unlawful under the POEO Act. There is no reference to any relevant evidence or conclusions in the judgment on that issue. In the absence of grounding these submissions in relation to what happened at the hearing before the Commissioners, I agree with Walfertan’s submissions that it should not be considered in this appeal. Further, Walfertan submitted that without properly characterising those activities for the purposes of the POEO Act and in the absence of any evidence that the activities conducted on the Salt Sacrifice area do fall outside the POEO Act I am unable to deal with that submission in this appeal. I agree.

62 The Second Respondents’ written submissions at par 54-60 in relation to this ground also state that there was no evidence which permitted the Court to differentiate between the impacts of the unlawful aspects of the current use and the balance of impacts. The Commissioners found erroneously in [88], bullet point 3, that there was “the absence of any certain relevant concentration, composition or volumetric [sic] restriction” when restrictions can be found in the 1992 consent. Even if there were existing use rights these were restricted by the EP&A Act and effluent could not be disposed of in unlimited quantities. This is largely the issue raised in ground of appeal 2(d) (error 3 in the written submissions).

63 This ground of appeal fails.

(ii) Appeal ground 2(a) (error 1)

64 Appeal ground 2(a) states that the Commissioners misconstrued all four development consents referred to in the judgment. As a result the Second Respondents assert that the Commissioners wrongly considered the comparison required by cl 35 Sch 3 of the Regulation because the existing or approved development and its impacts was not identified. The Second Respondents’ submissions focussed on two of the four development consents as having been misconstrued in relation to effluent disposal, being those consents granted in 1992 and 1993. Two consents granted in 1989 and 1990 do not deal with the topic of effluent control and their consideration in the judgment is not specifically criticised yet the ground identifies all four development consents. I was unable to identify any specific or general criticism of the 1989 or 1990 consents in the Second Respondents’ arguments on this ground and will not consider these at all. That leaves the 1983 and 1992 development consents to be considered.

65 The 1983 consent is considered in some detail by the Commissioners at [62]-[68] of the judgment. The consent sought was for a factory for fleshing treatment and water treatment and a tree planting program according to the application form. The conditions attached to the consent are set out in [64]. A letter dated 9 December 1983 from the General Manager of Walfertan to the then Scone Council enclosed a specification dated 9 August 1983 in support of the application. The judgment states that the wastewater treatment plant contains no details of any limit proposed for the volume, composition or concentration of effluent to be produced by the wastewater treatment plant at [66]. At [67] the letter states that the concept for the fleshing treatment plant is to give the potential to improve the processing of by-products with on-site treatment of fleshings and a proposal to pump fleshings in an enclosed pipe from the fleshing machine in the tannery to the treatment plant. The Commissioners conclude that no documents for the 1983 approval deal with the disposal or the composition of the effluent to be emitted.

66 The 1992 consent is referred to in some detail at [77]-[86] of the judgment. The judgment states that the 1992 application was for redevelopment of the treatment plant. The 1992 DA and accompanying SEE are reproduced at exhibit 2.3 Vol 2 of 2 tab 25. The SEE identified four phases. Phase 1 for odour control was the only phase for which development consent was sought in the 1992 DA. Other phases identified were the upgrading of effluent disposal facilities by redevelopment of the treatment plant blower room and chemical dosage room. The judgment refers to the contents of the SEE accompanying the DA at [80]-[82]. The conclusions in the SEE are set out at [83] and include that the anticipated impacts are all geared to redressing current environmental difficulties. A number of appendices in the SEE are identified at [84]. At [85] the Commissioners state:

Appendix 2 is entitled Climatic Conditions and includes a page entitled “Volumes Requiring Irrigation”. It includes information from which it is possible to calculate, on the then average rainfall for the area, what is the maximum irrigated effluent postulated by this document. The relevant calculations extracted by us appear in the table below and show that in excess of 275 megalitres is postulated by this document as the maximum capable of being irrigated on the area of the then tannery land. This is approaching three times the volume of effluent proposed to be permitted under the present application.

(an extract from a table in the SEE is then included in the judgment which is referable to this calculated volume)

67 In [86] the Commissioners reproduce a document called “Process Flow Chart” and state that this shows dewatered solid waste is to be disposed of on site. The input of effluent from the factory into the process is identified as 500 kL/day in that document.

68 At [87] of the judgment the Commissioners made several factual observations having considered each of the consents and identified whether they dealt with effluent disposal or not (see par 13 above). The fourth bullet point identifies their factual conclusion in relation to the 1992 development consent based on their observations in [85], which conclusion the Second Respondents criticise.

Second Respondents’ submissions

69 According to the Second Respondents the Commissioners misconstrued the 1983 consent because the letter dated 9 December 1983 annexes a document titled “Specification for the erection of a waste treatment plant, a hide fleshing processing plant and a tree planting program”. The documents were not before the Court (I discern from this statement that the documentary chain is not complete), but were submitted to be part of the application before the Council. The description of the proposed waste water treatment plant anticipates a process whereby all waste was to be disposed of off site. Solids extracted from screening are to be collected for commercial resale or transfer to the council operated dump. Sludge from the waste water pond is to be piped to a disposal vehicle loading area to be loaded onto disposal vehicles and removed from the site. The Commissioners should have held that on the true construction of the 1983 consent it provided for effluent disposal by transport off site. Rather they held at [87], third bullet point, that no specific condition of consent incorporates conditions precluding on site disposal of solid waste.

70 The 1992 development consent was misconstrued because the assumption of the Commissioners at [85] that an annual volume of 275 ML/year of undiluted effluent as the maximum capable of being irrigated is authorised by the 1992 consent is incorrect and unsupported by evidence. Paragraphs 18-22 and 24 of the written submissions identify in detail how the entry in a table of volumes requiring irrigation in Appendix 2 of the SEE which accompanied the DA was misconstrued by the Commissioners. Further, there was no authorisation of spray irrigation under the 1992 consent such as is proposed for the development before the Court. The Second Respondents agreed with Walfertan that the 1992 consent did not concern effluent disposal.

71 Relying on Hope v Bathurst City Council (1980) 144 CLR 1 at 7-8 per Mason J, the Commissioners misconstrued the ordinary meaning of the bracketed figure of “(755) M³/day” - where the placement of the brackets indicates a negative value - and no other conclusion than the negative value was reasonably open. This gives rise to an error of law per Hope v Bathurst, see also Chambers v McLean Shire Council [2003] NSWCA 100; (2003) 57 NSWLR 152 at [51]–[54]; Minister Administering the Crown Lands Act v Bathurst Local Aboriginal Land Council [2009] NSWCA 138; (2009) 166 LGERA 379 (Bathurst LALC) at [70]–[74]; Capricornia Prospecting Pty Ltd v Donnelly [2002] NSWCA 254 at [45]; Avon Downs Pty Ltd v Commissioner of Taxation (Cth) (1949) 78 CLR 353 at 360.

72 The Commissioners also misconstrued the 1992 development consent by considering irrelevant matters when construing the consent. The 1992 DA sought development consent for Phase 1 (odour control) out of four stages referred to in the SEE. The Commissioners refer to stages other than odour control at [82]-[84] of the judgment which were not the subject of Council approval. It was therefore an error to consider this material for the purposes of construing the consent. These matters were irrelevant for construing the consent as the approval of odour control was unrelated to effluent and irrigation and could therefore provide no basis for the Commissioners drawing any conclusion about effluent irrigation. The 1992 consent was irrelevant to the issue of effluent irrigation.

73 The Second Respondents criticised parts of [87] and [88] which are the conclusions reached by the Commissioners concerning the development consents. The fourth bullet point in [87] identifying their factual conclusion in relation to the 1992 development consent is incorrect. The reference to “… all development consents relating to on-site disposal of effluent …” at [87] of the judgment is a wrong approach because no such development consent exists.

74 Alternatively (par 25 written submissions) the misconstruction of the 1992 consent resulted in a finding of fact unsupported by evidence which is an error of law, relying on Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139.

Walfertan’s submissions

75 Walfertan argued there was no error of law disclosed in this ground of appeal. An error of fact, if there be any, is not an error of law and cannot be the subject of a s 56A appeal. No errors of law are identified in [87]- [88].

76 In any event, the criticism of the analysis of the 1983 and 1992 consents lacks any foundation. The 1992 consent is to upgrade effluent treatment facilities for Phase 1 odour control and was building on an existing situation whereby a 19ha irrigation area was already operating. The 1992 development consent relates to lot 221, lots 54 and 55 (irrigation areas). That consent is proposing to change an existing circumstance as can be seen from consent condition 4 and the SEE filed in support of the DA. Condition 4 states:

Submission of a firm proposal to reduce the waste water nutrient loads to an acceptable level (acceptable to the EPA) such that further degeneration of the irrigation area will be prevented. Details of the proposal to be approved by the EPA prior to the release of the Building Application.

77 The criticism of the Commissioner’s reasoning is fixed on the finding in [87] fourth bullet point that “if” there was some volumetric restriction to be imputed from the 1992 development consent, the limit would be 2.75 times the limit proposed. At [87] fourth bullet point the Commissioners use the conditional conjunction “if” to indicate the difficulty with a volumetric condition being imported from the SEE. This was necessary because there was an absence of any certain relevant concentration, composition or volumetric restriction, as found in the third component in [88]. Regardless of whether the SEE had a limit of 2.75 (which is not accepted) this was volumetric, hence the use by the Commissioners of the conditional conjunction “if” and the basis for the finding in the fourth bullet point at [87].

78 Whether the SEE is relevant to the construction of the 1992 consent is questionable as it is not a document incorporated by the development consent expressly or impliedly. Its examination by the Commissioners does not lead to any failure in their assessment of the question raised by the application of cl 35 Sch 3 in any event.

79 The Second Respondents’ analysis of the 1992 consent and the Commissioners’ findings at [85] in relation to the SEE in Appendix 2 table titled “Volume Requiring Irrigation” is faulty in that it fails to examine the remainder of the table. This identifies a total available irrigation area (13ha), a need for an irrigation area of 8.75ha in decile 9 conditions and a safety factor of 1.48. It is clear from the table that spray irrigation of effluent was clearly contemplated by the 1992 consent (which the Second Respondents accepted in their submissions in reply par 8). The Appendix 2 table identifies that in excess of 275 megalitres is the maximum capable of being irrigated on the area of the tannery land. It is not identifying the amount intended to be irrigated.

80 The Second Respondents’ submissions also fail to engage with the following matters:

81 Even if the Second Respondents are correct that the Commissioners misread the table, the Commissioners could not have held that no disposal of effluent by irrigation would occur, or that the true figure would be likely to be less than 59 per cent for the proposed development. The only permissible finding was that the 1992 consent authorised spray irrigation of untreated effluent using only rainfall as dilution under both normal and decile 9 conditions. It is a finding which neither hinders or progresses any relevant matter the subject of the judgment.

82 In relation to the 1983 consent, the Commissioners did not interpret it incorrectly in light of the documents that were before the Court. It was clear that the 1983 consent was addressing an existing situation of the tannery operation.

Second Respondents’ submissions in reply

83 In reply the Second Respondents (par 9 written submissions in reply) stated that on the assumption stated by Walfertan the volumetric limitation applied. That limitation had to be factored into the comparison required by cl 35 Sch 3 of the Regulation, as did the spatial limitations inherent in the 1992 consent and differences arising from the composition and strength of effluent (par 10 submissions in reply). In further reply, the Second Respondents submitted that Walfertan’s criticism of the Second Respondents for comparing effluent volumes without considering composition, strength and impact applied equally to the Commissioners’ reasoning. While comparison of volumes can be meaningless, the Commissioners should have accepted that it was necessary to consider the composition, strength and impact of the effluent authorised for disposal under the 1992 consent as part of the analysis of the impacts of the existing or approved development required by cl 35 Sch 3 of the Regulation and compare it to the proposal. They did not do so and there was no evidence to enable them to do so. This amounts to an error of law.

Finding on appeal ground 2(a)

84 The Second Respondents essentially argue that every wrong finding of fact (assuming there are any) related in some way to the construction of the development consents by the Commissioners and gives rise to a question (error) of law which can be raised in this appeal. This is because the construction of the development consents is necessary to enable the Commissioners to define the existing or approved development and undertake the comparison required by cl 35 Sch 3 of the Regulation.

85 The authorities relied on by the Second Respondents such as Hope and Chambers v McLean are not authority that every finding of fact necessary to establish a factual basis for the application of a statutory phrase amounts to a question of law. Those cases had to consider the meaning of a particular word in a statutory phrase as a matter of statutory construction, which is not the matter raised in this ground of appeal. In Hope the High Court was considering the operation of a rating provision in the Local Government Act 1919 (NSW) which required consideration of a statutory definition of “rural land”. Mason J stated at 7 that many authorities can be found to sustain the proposition that the question whether facts fully found fall within the provisions of a statutory enactment properly construed is a question of law. Where all the material facts are found and the issue is whether the facts fall within a statutory provision that is a question of law. A different circumstance arises where a statute uses words according to their common understanding and at issue is whether the facts as found fall within these words. He referred to NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 where Kitto J at 511-512 observed that whether certain operations were mining operations upon a mining property as specified in a section of the Income Tax Assessment Act 1936 (Cth) was a mixed question of law and fact.

86 In Chambers v McLean the relevant factual reference was to whether minimum performance criteria were met and it was held this must be determined objectively; Ipp JA (Sheller and Giles JJA agreeing) at [48]. The Court was considering in an appeal from this Court the meaning of “area” in cl 4 Sch 1 of State Environmental Planning Policy No 62 a statutory term or phrase which required a finding of fact to be made in relation to elevation Australian Height Datum (AHD) in the context of estuarine pond-based aquaculture defined as within an area that is above 1m AHD and below 10m AHD. This finding of fact was held to be a jurisdictional fact as it governed the question whether minimum performance criteria were met and therefore whether the development was prohibited.

87 A much older authority, Avon Downs, to which the Second Respondents referred required consideration of a section of the Income Tax Assessment Act 1936 by a single judge of the High Court (Dixon J). The general principles enunciated at 360 focus on the role of the commissioner for taxation in applying the relevant provision to the effect that it was for the commissioner to be satisfied of the matters raised by the provision. The bases on which his decision could be reviewed included if he failed to address the question required by the statute, gave rise to a mistake of law and other orthodox judicial review grounds. These principles provide no assistance in this matter in identifying why the numerous errors of fact said to have been made by the Commissioners give rise to an error of law.

88 The issue of what can be considered in an appeal in relation to a question of law from this Court has been considered more recently by the Court of Appeal in Murlan Consulting Pty Ltd v Ku-ring-gai Council [2009] NSWCA 300; (2009) 170 LGERA 162 and Bathurst LALC. Bathurst LALC was cited by the Second Respondents as supportive of their submissions, relying on [70]-[74], the judgment of Ipp JA. That case was an appeal to the Court of Appeal pursuant to s 57 of the Court Act in relation to a claim for Crown land under the Aboriginal Land Rights Act 1983 (the ALR Act). Section 57 states that appeals may be made in relation to a question of law (the same as s 56A).

89 Ipp JA was in the minority in holding that there was an error of law by the trial judge. The error of law concerned whether the trial judge had properly construed the meaning of the term “used or occupied” in the ALR Act. For current purposes it is useful to refer to [63] and [76] where he observed that all the relevant facts necessary for the disposal of the matter were found by the trial judge.

90 Basten and Tobias JJA held to the contrary, providing their own reasons for doing so. Tobias JA considered the power of the Court of Appeal under s 57(2)(b) at [165]-[167] referring to Thaina Town (on Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300; (2007) 156 LGERA 150 and the leading judgment of Spigelman CJ to the effect that the Court of Appeal could exercise this Court’s power where no new findings of primary fact are required at [103]. Thaina Town was an appeal against a costs order of this Court.

91 Basten JA considered the nature of an appeal made in relation to a question of law at [194]-[203]. Having reviewed numerous authorities he states at [197] that erroneous findings of primary fact nor the drawing of illogical or inappropriate inferences, will constitute an error of law. In that case his Honour held that the Minister bore the burden of satisfying the trial judge of the ultimate fact (whether Crown lands claimable) and therefore of establishing such primary facts and inferences as must be drawn from them in order for his decision to be upheld. At [204] his Honour stated:

In this case it will be necessary to consider whether the challenges to aspects of her Honour’s reasoning involved any decision on a question of law. Because the statutory phrase “not lawfully used or occupied” gains meaning from its statutory context, the proper construction of that phrase involves a question of law, despite the fact that each word, taken individually, may be treated as an ordinary English word and not as a term of art: see, eg,

[1980] HCA 16; 144 CLR 1 at 8 and 10 (Mason J);

[2001] FCA 954; 109 FCR 564 at [49]- [62] (Lindgren J). Nevertheless, to describe the word “use”, and by inference the phrase as a whole, as “protean” or adaptable to changing circumstances, is to concede the existence of a broad evaluative judgment to be made according to the facts of the particular case. The formation of such a judgment can involve an error of law, but the circumstances in which it will do so are limited. Such an error may arise where the facts as found are reasonably open to only one conclusion in application of the statutory language; see

(1940) 40 SR(NSW) 126 at 138 (Jordan CJ), or where relevant facts as found have been disregarded or accorded legally inappropriate weight: see

[1986] HCA 40; 162 CLR 24 at 40-41 (Mason J);

[2000] NSWCA 199; 49 NSWLR 653 at [56]- [63] and [120]-[128] (Spigelman CJ, Mason P and Priestley JA agreeing);

[2008] NSWCA 187 at [133] referring to Mason JA (in this Court) in

[1971] 1 NSWLR 547. Care must be taken not to allow disagreement with an outcome in the Court below to be transformed into an inference that, despite accurately and correctly expressing the legal test, and identifying the facts, the primary judge failed to apply the test as identified. Such an exercise may involve the use of an outcome which was reasonably open on the facts, to contradict an earlier statement as to the principles applied. It would be an unusual case in which this form of reverse engineering of the judgment below would be legitimate.

92 This passage suggests that if a decision made by a decision-maker in relation to a statutory provision is an error in fact finding there will be no error of law which can give rise to an appeal. While the onus in Bathurst LALC fell on the Minister to establish certain facts necessary for the application of particular terms in the ALR Act, which is not the same as the onus in Class 1 proceedings, the general principles discussed in relation to findings of primary fact at first instance as facts not reviewable on an appeal on a question of law apply in this s 56A appeal.

93 The passage of Basten JA in Bathurst LALC cited above was relied on by Hodgson JA in Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2009] NSWCA 352; (2009) 171 LGERA 56 at [16].

94 The determination of what was “the existing or approved development” as required by cl 35 Sch 3 of the Regulation in this case required the Commissioners to review a large amount of material in relation to the four consents as outlined in the judgment and make findings of primary fact based on those documents, as expressed in the judgment culminating in [87]. There is no construction issue raised concerning the application of the terms of cl 35 such as the meaning of the clause as a whole or of individual words in the phrase “compared with the existing or approved development”. The focus of the Second Respondents’ case is whether the Commissioners have correctly identified the existing or approved development through various findings of fact made in relation to the operation of two development consents, the 1992 consent in particular. The need to do so resulted in the Commissioners making a number of factual findings which are not reviewable in this appeal in my opinion.

95 If I am wrong and there is a question of law which arises from the impugned factual findings made by the Commissioners in parts of [87] and [88] which can be raised in this s 56A appeal, the Second Respondents have not established that an error of fact giving rise to an error of law has arisen in relation to the 1992 or the 1983 consent for the reasons identified by Walfertan at par 76-82 above.

96 The focus of much of the submissions of the Second Respondents that there were factual errors was the Commissioners’ consideration of the 1992 consent. I have to agree with Walfertan’s written submissions that the Second Respondents’ analysis of documents concerning the 1992 consent was confusing. Considerable time at the appeal hearing spent considering the documents relevant to the 1992 consent has failed to demonstrate to me any error in the manner in which the Commissioners considered these in the terms articulated by the Second Respondents. The submissions made in relation to the 1983 consent based in part on documents that were not apparently before the Commissioners (par 69) also failed to demonstrate any relevant error in the findings of fact made.

97 In reply the Second Respondents argued (par 83) there was a failure to consider the effluent authorised for disposal under the 1992 consent as part of the analysis of the impacts of the existing or approved development. The limited extent to which the 1992 consent dealt with effluent disposal is identified by the Commissioners. There is no demonstrated error in their analysis given the limited evidence before them, as identified by Walfertan. Their ability to consider the composition, strength and impact of effluent disposed of under the 1992 consent reflects the evidence before them.

98 The alternative argument of the Second Respondents that the misconstruction of the 1992 consent resulted in a finding of fact unsupported by evidence is also unsuccessful. Consideration of the judgment as a whole does not bear that out. The Commissioners articulate their findings of fact based on the evidence before them and the conclusions they make based on these. The Second Respondents’ arguments do not establish any such error. This ground of appeal fails.

(iii) Appeal ground 2(c) (error 2)

99 Appeal ground 2(c) is expressed as the taking into account of irrelevant matters when applying cl 35 Sch 3 of the Regulation. It is related to ground 2(b) as the error identified (error 2) is the same error for both grounds. I have found no error of law (as opposed to an error of fact) was raised at all or alternatively was not established in appeal ground 2(b). While there is substantial overlap between the grounds the Second Respondents argue that this ground remains as I understand it because of [30] and [39] of the judgment. These state:

30 To permit us to undertake the necessary comparative assessment of whether or not there would be any significant increase in the environmental impacts of the total development that would result if we were to approve this application, we consider it appropriate, in the first instance, to undertake an examination of what is presently taking place on the tannery lands, whether approved otherwise, and how those activities are proposed to be changed….

39 Although it is not a appropriate for us to express any view as to whether or not the escape from the site of odour, scummy foam or misted effluent from the dams by airborne carriage to adjoining properties is permitted in any fashion, these are clearly undesirable social and environmental impacts, particularly if they are preventable.

100 Paragraph [30] is particularly criticised by the Second Respondents as suggestive of an error of law because the Commissioners say “whether otherwise approved”. This was said to lead them into error in the analysis of the existing lawful development.

101 Walfertan submitted that the basis for the Commissioner’s finding was that the existing circumstance was uncontrolled so that alterations and additions which by their nature are limitations on those activities informed their analysis under cl 35. The test in cl 35 is whether the impact of alterations and additions will significantly increase the environmental impact of the total development. Further on a proper reading of [88], even if existing activities were taken into account, they were not material to the ultimate conclusion of the Commissioners. Where the existing situation is uncontrolled a controlled situation will always be better.

Finding

102 Given that at [25] (par 8 above) the Commissioners recognised and accepted the Second Respondents’ submission that the analysis of cl 35 Sch 3 of the Regulation requires that the existing development means development that is lawfully existing, I fail to see how any error arises in this ground of appeal. The Commissioners’ observation in [39] which is criticised in this ground is just that, an observation. I do not consider it plays any relevant role in the analysis undertaken by the Commissioners. The necessity in a s 56A appeal to consider the judgment as a whole and without adopting a fine-tooth comb approach applies to this ground of appeal.

103 Walfertan’s submissions highlight that the analysis of cl 35 by the Commissioners reflects their findings based on the evidence before them.

104 The Second Respondents have not demonstrated that the Commissioners have misdirected themselves to the existing or approved development for the purpose of cl 35 Sch 3 of the Regulation in relation to this ground of appeal. It follows that there has not been a legal error on the part of the Commissioners through the taking into account of an irrelevant matter for the purposes of appeal ground 2(c). This ground fails.

(iv) Appeal ground 2(d) (error 3)

105 This ground of appeal is expressed as:

the Commissioners having found that it was not possible to determine what would be the permitted environmental impact of the existing or approved development in [88] they erred in finding they were satisfied of the matters in cl 35 Sch 3 of the Regulation in the absence of evidence enabling the comparison required by cl 35 to be made.

Second Respondents’ submissions

106 The Second Respondents accepted there was some overlap between this ground and the matters raised in relation to error 2 (grounds of appeal 2(b) and (c)). As a consequence of their failure to apply s 106, s 107 and s 109 of the EP&A Act the Second Respondents submitted that the Commissioners were in no position to determine what were the “environmental impacts of the existing or approved development” for the purposes of cl 35 Sch 3 of the Regulation. In fact the Commissioners found (at [88], second bullet point) that it was “not possible to determine what would be the permitted environmental impacts of the existing or approved development”.

107 This confirms the failure of the Commissioners to apply cl 35 Sch 3 of the Regulation according to law. Further, it must be the case that if the Court could not be satisfied what the environmental impacts of the existing or approved development were, the Court could not have been satisfied that the impacts of the proposed development would not significantly increase those impacts.

108 In other words, in the absence of evidence to determine the impacts of the existing or approved development, the Court could not rationally be satisfied that the impacts of the proposed development would not be a significant increase, as there was no evidence to support that conclusion. To conclude otherwise, as the Commissioners did, was an error of law.

Walfertan’s submissions

109 Having addressed the evidence that was before the Court, it is hardly apposite to say that there was no evidence upon which the Commissioners could make the comparison required by cl 35 Sch 3 of the Regulation: contra Second Respondents’ written submissions on s 56A at par 62-67. The Commissioners have addressed the matters required by cl 35 Sch 3 of the Regulation and have given reasons for doing so adequately in the judgment. The evidence before them suggested that provided the tannery was producing no more than 500 kL/day of effluent there was no constraints on what could be irrigated over the irrigation area or Rouchel Road dams area. Clause 35 requires consideration of whether the alterations and additions will significantly increase environmental impact. If the proposed situation is more constrained than the existing, the answer to the cl 35 question is self-evident in large part. The passage in [88] of the judgment the focus of this ground of appeal has to be considered in the context of the cl 35 analysis the Commissioners were undertaking.

Finding on appeal ground 2(d)

110 This ground is expressed as the failure of the Commissioners to apply cl 35 Sch 3 of the Regulation as evidenced in [88] in the absence of evidence to enable appropriate conclusions to be drawn. This argument was based in part on the failure of the Commissioners to consider s 106-s 109 of the EP&A Act. I have held in relation to appeal ground 2(b) that there was no failure by the Commissioners to consider s 106, s 107 and s 109 of the EP&A Act. Further, as submitted by Walfertan’s counsel, the Commissioners’ reasoning in the judgment as a whole considered the evidence before them and did enable the Commissioners to make the necessary comparison required by cl 35 Sch 3. At [59] they take the most restricted case for Walfertan, being the tannery activities alone excluding the abattoir. Further use of the areas of Manton’s and Salt Sacrifice were dropped from the application.

111 In light of these findings it was open to the Commissioners to find as they did in relation to the operation of the development consents and reach the conclusions that they did in [88].

112 Another basis of criticism in this ground is that the Commissioners could not be rationally satisfied that the impacts of the proposed development would not be a significant increase. As it is clear from the judgment when viewed as a whole that they were so satisfied and provide reasons for their conclusion based on an analysis of the evidence there is no basis for so holding. This part of the argument in this ground of appeal overlaps with the next ground of appeal 2(e) which raises irrationality of decision-making. The Second Respondents accept that they cannot succeed on that ground in light of Azzopardi. That would also suggest this ground is unsuccessful.

(v) Appeal ground 2(e) irrationality (error 4)

113 The Second Respondents accepted that in light of the High Court in Azzopardi I am bound to hold that this ground of appeal is not available. Given this submission it is necessary that I refer only briefly to this ground.

Second Respondents’ submissions

114 The Second Respondents submitted that cl 35 Sch 3 of the Regulation requires a comparison of the impacts of the “existing or approved” development with the impacts of the proposed development. If, as the Commissioners found at bullet point 2 in par [88], “it is not possible to determine what would be the permitted impacts of the existing or approved development”, then it must follow that the Court cannot be satisfied that the test in that clause is met. Walfertan failed to provide sufficient information to permit the Commissioners to determine what the impacts of the “existing or approved” development were, and the Commissioners were bound to conclude that they were not satisfied of the relevant matter in cl 35, with the result that Walfertan could not rely on that clause to make the development non-designated.

115 The Commissioners should have held that the Court had no jurisdiction to determine the application, and dismissed the appeal.

116 However, the Commissioners proceeded to consider why, as a matter of logic, they could be satisfied of the matter required by cl 35 Sch 3 of the Regulation even though they could not determine the impacts of the “existing or approved” development.

117 That purported process of logic relied, in particular, upon the propositions which have been specifically rebutted above, together with the other errors of logic. The Commissioners' decision is irrational, both in totality and at each step of the reasoning. Errors infect that reasoning process at each step and the conclusion reached necessarily also amounted to an error.

Walfertan’s submissions

118 Walfertan submitted that no irrationality was demonstrated by the Commissioners’ reasoning in the judgment particularly when this was considered as a whole. What the Commissioners did was not irrational, in fact it was quite rational and it was quite self-evident (TS 4 March 2010 p 274 line 47).

Finding on appeal ground 2(e)

119 I am bound to hold that this ground must fail in light of Azzopardi. I so hold.

(vi) Appeal ground 4

120 Appeal ground 4 states that there was a failure to give reasons for one conclusion in the judgment in [88] namely that there was an absence of any certain relevant concentration, composition or volumetric restriction on the operation of the tannery despite the provisions of s 76A and s 109 of the EP&A Act. Section 76A requires development consent to be obtained if required under an environmental planning instrument and s 109 states that no development consent is needed for existing uses unless these are intensified or expanded, inter alia.

Second Respondents’ submissions

121 The Court was provided with an annotated version of [88] with a large number of errors identified as arising as a result of several grounds of appeal. The submissions of the Second Respondents were that a number of the statements in [88] lacked foundation in the evidence including the one specified in the appeal. This resulted in a failure to give reasons as identified in this ground of appeal. The failure to give reasons was also raised in the relation to ground 2(b)(i) as no mention is made in the judgment of whether the tannery had lawfully commenced in 1973 and ground 2(b)(ii) as no mention is made in the judgment of intensification of use at the time development consent was granted in 1992 or at any other time. Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 (15 May 2009) was relied on as a recent decision of the Court of Appeal (McColl JA, Ipp JA and Bryson AJA concurring) in which the relevant authorities on the duty to give reasons were discussed and confirmed.

Walfertan’s submissions

122 Walfertan submitted there was no demonstrated failure to give reasons by the Commissioners. Their reasoning is clear when the judgment is considered as a whole.

Finding

123 When determining a s 56A appeal the judgment as a whole is considered so that the Commissioners’ reasoning is assessed in context. That observation is important as this ground focusses on a particular part, albeit conclusive, of a lengthy judgment in [88]. The concern expressed in many judgments in s 56A appeals that a fine-tooth comb approach is not appropriate is pertinent in relation to this ground of appeal.

124 The duty of Commissioners to give reasons has been considered and confirmed by Tobias JA in Segal v Waverley Council [2005] NSWCA 310; (2005) 64 LGERA 177 at [65]-[77] and [99(a), (b)]. The need to consider that duty in the context of merit review proceedings in Class 1 appeals heard by commissioners who are not judicial officers and are not required to be legally trained has also been considered on numerous occasions, see JPR Legal Pty Ltd v Marrickville Council [2009] NSWLEC 156 at [40] and The Village McEvoy Pty Ltd v Council of the City of Sydney (No 2) [2010] NSWLEC 17 at [26]-[30]. The duty of a judge to give reasons was considered in Pollard at [65]-[77], the authority relied on by the Second Respondents. The Court of Appeal was reviewing an ex tempore judgment of a District Court judge and the manner in which it dealt with evidence before him. McColl JA held at [56]-[60] as follows in relation to the obligation to give reasons:

56 The Court is conscious of not picking over an ex tempore judgment and, too, of giving due allowance for the pressures under which judges of the District Court are placed by the volume of cases coming before them ( Maviglia v Maviglia [1999] NSWCA 188 (at [1]) per Mason P). However a trial judge’s reasons must, “as a minimum...be adequate for the exercise of a facility of appeal”: Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 (at 260) per Kirby P; (at 268 – 269) per Mahoney JA; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 (at 444) per Meagher JA. A superior court, “considering the decision of an inferior tribunal, should not be left to speculate from collateral observations as to the basis of a particular finding”: Soulemezis (at 280) per McHugh JA applying Wright v Australian Broadcasting Commission [1977] 1 NSWLR 697 (at 701, 713).

57 The giving of adequate reasons lies at the heart of the judicial process. Failure to provide sufficient reasons promotes “a sense of grievance” and denies “both the fact and the appearance of justice having been done”, thus working a miscarriage of justice: Mifsud v Campbell (1991) 21 NSWLR 725 (at 728); Beale (at 442) per Meagher JA.

58 The extent and content of reasons will depend upon the particular case under consideration and the matters in issue: Mifsud (at 728) per Samuels JA; Hull v Thompson [2001] NSWCA 359 (at [53]) per Rolfe AJA (Sheller JA and Davies AJA agreeing). While a judge is not obliged to spell out every detail of the process of reasoning to a finding ( Yates Property Corporation Pty Limited (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156 (at 171) per Mahoney JA, (at 182) per Handley JA), it is essential to expose the reasons for resolving a point critical to the contest between the parties: North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435 (at 442) per Kirby ACJ; Soulemezis (at 259) per Kirby P, (at 270) per Mahoney JA, (at 280) per McHugh JA; applied in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56; (2003) 216 CLR 212 (at [40]) per Gleeson CJ, Gummow and Heydon JJ.

59 The reasons must do justice to the issues posed by the parties’ cases: see Moylan v Nutrasweet Co [2000] NSWCA 337 (at [61]) per Sheller JA (Beazley and Giles JJA agreeing). Discharge of this obligation is necessary to enable the parties to identify the basis of the judge’s decision and the extent to which their arguments had been understood and accepted: Soulemezis (at 279) per McHugh JA. As Santow JA (with whom Meagher and Beazley JJA agreed) explained in Jones v Bradley [2003] NSWCA 81 (at [129]) it is necessary that the primary judge “ ‘enter into’ the issues canvassed and explain why one case is preferred over another”; see also Flannery v Halifax Estate Agencies Ltd t/as Colleys Professional Services [1999] EWCA Civ 811; [2000] 1 All ER 373 (at 377-378) per Henry, Laws LJJ and Hidden J.

60 Various observations have been made about the extent to which reasons should deal with the evidence. None is exhaustive; the test of adequacy, as I have earlier said, is relative…

125 The findings of McColl J were made in the context that there was documentary evidence which arguably supported a party’s case which was not considered in a satisfactory way in the judge’s reasons. At issue in the proceedings was whether the parties had formed a binding contract and the evidence disclosed competing versions of the agreement which had to be considered in order to discharge the judicial obligation to give reasons. There was a failure to discharge that obligation. A new trial was ordered as the process of fact finding miscarried. Those circumstances are unlike those before me in this s 56A appeal.

126 As submitted by Walfertan, the Commissioners’ judgment identifies the need to apply cl 35 Sch 3 of the Regulation and certain necessary findings are made which enable that clause to be applied. Appropriate and relevant findings are made to support a conclusion by the Commissioners. The argument that there is a failure to give reasons for the conclusion that there was an absence of any certain concentration, composition or volumetric restriction is not borne out when the entirety of the Commissioners’ analysis of the 1983 and 1992 development consents and their conclusions in [87]-[88] are considered as a whole.

127 In relation to the two additional areas where the Second Respondents argued there was a failure to give reasons, I held above in relation to appeal ground 2(b)(i) concerning lawful commencement that there was no obligation on the Commissioners to consider that issue. There cannot therefore be any failure to give reasons on that topic in their judgment which gives rise to an error of law.

128 In relation to appeal ground 2(b)(ii), concerning the failure to consider intensification of use I did not uphold that appeal ground because inter alia there was no demonstrated error in the analysis of the 1992 consent which the intensification of use argument focussed on. There can be no failure to give reasons on the part of the Commissioners in relation to the intensification of use in these circumstances which gives rise to an error of law.

129 Part of the Second Respondents’ arguments concerning the failure to give reasons in reliance on the principles in Pollard set out above is that they consider matters were raised by them which should have been identified in the Commissioners’ reasoning. As Pollard identifies, reasons “must do justice to the issues posed by the parties’ cases” and whether reasons are adequate must depend on each case. For the reasons stated I consider the reasons provided in Walfertan No 2 are adequate. In light of these findings this ground must also fail.

130 As identified in par 20 above, ground of appeal 1 raises whether the Commissioners erred in not finding that the development was designated. It follows from my findings that grounds of appeal 2(a)-(e) were unsuccessful that no such error of law arises. The Second Respondents’ s 56A appeal should be dismissed.

Orders

131 The Court makes the following orders:

CITATION:	Walfertan Processors Pty Limited v Upper Hunter Shire Council & Ors (No 4) [2010] NSWLEC 108
PARTIES:	APPLICANT Walfertan Processors Pty Limited FIRST RESPONDENT Upper Hunter Shire Council SECOND RESPONDENTS (APPELLANTS) Darley Australia Pty Ltd William John Bourke
FILE NUMBER(S):	11319 of 2008
CORAM:	Pain J
KEY ISSUES:	APPEAL :- section 56A appeal of commissioners' decision in class 1 proceedings - whether commissioners erred in considering environmental impacts of alterations and additions to existing effluent disposal system from tannery to determine if not designated development by virtue of cl 35 Sch 3 of EP&A Regulation - whether failure to consider intensification of existing use provisions of EP&A Act in relation to tannery - whether errors of fact can be raised as questions of law - whether issue not referred to in judgment gave rise to failure in consideration of cl 35 - whether findings of fact concerning development consents gave rise to error of law in application of cl 35 - whether commissioners should have held development was designated - whether commissioners took into account irrelevant matters - whether commissioners acted irrationally - whether absence of reference to an issue of lawful commencement in judgment was a failure to give reasons - whether failure to give reasons for findings in judgment
LEGISLATION CITED:	Aboriginal Land Rights Act 1983 Environmental Planning and Assessment Act 1979 s 106, 107, 109(2) Environmental Planning and Assessment Regulation 2000 cl 35 Pt 2 Sch 3 Income Tax Assessment Act 1936 (Cth) Land and Environment Court Act 1979 s 56A, 57 Local Government Act 1919 Protection of the Environment Operations Act 1997 Shire of Scone Interim Development Order No 1 State Environmental Planning Policy No 62 cl 4 Sch 1
CASES CITED:	Ashfield Council v Armstrong [2002] NSWCA 269; (2002) 112 LGERA 105 Avon Downs Pty Ltd v Commissioner of Taxation (Cth) (1949) 78 CLR 353 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481 Baida & Ors v Waste Recycling and Processing Service of NSW [1999] NSWCA 139; (1999) 130 LGERA 52 Bankstown City Council v Mohamad El Dana [2009] NSWLEC 68 Capricornia Prospecting Pty Ltd v Donnelly [2002] NSWCA 254 Chambers v McLean Shire Council [2003] NSWCA 100; (2003) 57 NSWLR 152 Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233 Dosan Pty Ltd v Rockdale City Council [2001] NSWLEC 252; (2001) 117 LGERA 363 Health Care Complaints Commission v Karalasingham [2007] NSWCA 267 Hill v Bankstown City Council [2007] NSWLEC 401; (2007) 154 LGERA 418 Hope v Bathurst City Council (1980) 144 CLR 1 JPR Legal Pty Ltd v Marrickville Council [2009] NSWLEC 156 Minister Administering the Crown Lands Act v Bathurst Local Aboriginal Land Council [2009] NSWCA 138; (2009) 166 LGERA 379 Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2009] NSWCA 352; (2009) 171 LGERA 56 Murlan Consulting Pty Ltd v Ku-ring-gai Council [2009] NSWCA 300; (2009) 170 LGERA 162 NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 Segal v Waverley Council [2005] NSWCA 310; (2005) 64 LGERA 177 Thaina Town (on Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300; (2007) 156 LGERA 150 The Village McEvoy Pty Ltd v Council of the City of Sydney (No 2) [2010] NSWLEC 17 Vines v Djordjevitch (1955) 91 CLR 512 Walfertan Processors Pty Limited v Upper Hunter Shire Council & Ors [2009] NSWLEC 1260
DATES OF HEARING:	1 March 2010 2 March 2010 3 March 2010 4 March 2010 5 March 2010
DATE OF JUDGMENT:	31 August 2010
LEGAL REPRESENTATIVES:	APPLICANT Mr A Galasso SC SOLICITOR Wotton & Kearney FIRST RESPONDENT Mr P Jayne (solicitor) SOLICITOR Sparke Helmore Lawyers SECOND RESPONDENTS (APPELLANTS) Mr P Larkin with Mr C Norton SOLICITORS Halletts Solicitors