Not all that glitters is gold: what is required when determining a party’s independent state of satisfaction

In 4nature Incorporated v Centennial Springvale Pty Ltd [2016] NSWLEC 121, the Land and Environment Court of NSW has found that an approval for an extension to Centennial Springvale’s coal mine underneath the Newnes State Forest in the Blue Mountains was lawful, and the Planning Assessment Commissioner reached an independent state of satisfaction before it granted the development consent.

Facts

4nature Incorporated (Appellant) brought the case in response to a ministerial decision, made by the Planning Assessment Commissioner (PAC). The PAC granted development consent regarding an underground mine to the Centennial Springvale Pty Limited (First Respondent), pursuant to section 89E of the Environmental Planning and Assessment Act 1979 (Cth), as the development was considered to be state significant.

The PAC did not publicise a statement of reasons for the grant of consent.

The parties did not disagree that the land to which the development consent related to included land within the Sydney Drinking Water Catchment, as defined in clause 7 of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 (the “Catchment SEPP”).

The crux of the Appellant’s complaint was that the development consent should be declared invalid, as the PAC did not reach an independent state of satisfaction as to whether the carrying out of the project would have a neutral or beneficial effect on water quality before it granted the consent, as required by clause 10(1) of the Catchment SEPP. As such a satisfaction was a pre condition to the exercise of the PAC’s power to approve the project, the consent should be declared invalid.

Issues for determination

There were three grounds pleaded by PAC:

• Whether the PAC attained the requisite state of satisfaction that the carrying out of the project would have a neutral or beneficial effect on water quality as required by clause 10(1) of the Catchment SEPP.
• Whether the PAC misdirected itself as to the law to be applied in the consideration and determination of the consent.
• Whether the PAC failed to take into account a mandatory relevant consideration, namely, whether pursuant to clause 10(1) of the Catchment SEPP the project would have a neutral or beneficial effect on water quality.

Reasoning

Justice Pepper thought it was appropriate to discuss the first two grounds of challenge together, given that if the Appellant did not succeed on the first ground, it was not possible for it to succeed on the second ground.

In relation to the first two grounds, Her Honour did not accept the Appellant’s submissions that the material before the PAC demonstrated that there was no neutral or beneficial effect on water quality within the meaning of clause 10(1) of the Catchment SEPP. The legal principle in relation to the “satisfaction” required by the PAC pursuant to clause 10(1) to grant approval was a state of mind that had to be reasonably open to it and formed on a correct understanding of the law¹ . Her Honour also made reference to the recent case of Minister Administrating the Crown Lands Act v New South Wales Aboriginal Land Council ², which articulated the legal principle at [12]-[13]:

It is trite law that a state of satisfaction of a public officer which is legally flawed cannot satisfy the pre-condition to the engagement of a statutory power…as later explained in Buck v Bvone, the opinion will not be lawfully formed, if in reaching it, the officer has failed to consider matters that he or she was required to consider, or taken into account matters which he or she was required to disregard.

Her Honour stated that as clause 10(1) of the Catchment SEPP does not specify a base case which to assess the neutral or beneficial effect on water quality against, the clause must be construed having regard to its text, with recourse to its wider statutory context and by reference to the general purpose and policy underpinning both the clause and the Catchment SEPP.

Therefore, it was up to the decision maker, that is the PAC, to identify the appropriate baseline and to form the view that he or she was satisfied that the carrying out of the development would have a neutral or beneficial effect on water quality compared to the existing water quality as at the date of its determination to grant consent. It was equally open to the decision maker in assessing whether the impact of the proposed development on water quality was neutral or beneficial to have, if relevant, regard to the project as a whole.

Her Honour also emphasised that despite the PAC not providing an explicit statement of satisfaction, this cannot be inferred as the PAC did not reach the requisite state of satisfaction nor that this state of satisfaction was reached invalidly. There was abundant material before the PAC, and it was repeatedly informed of the application of the “neutral or beneficial effect” test in previous reports, reviews and at meetings.

Therefore, Her Honour concluded that the Appellant failed on grounds one and two.

In relation to the third ground of challenge, and noting her discussions as per ground one and two above, Her Honour concluded that there was no direct evidence that the PAC did not consider the “neutral or beneficial effect” test. Furthermore, the fact that there was no direct evidence of the PAC having independently analysed the results of the First Respondent’s modelling, does not mean that the PAC did not take this information into account in the relevant sense.

¹ R v Connell; Ex parte The Hetton Bellbird Collieries [1944] HCA 42; Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21

² [2016] NSWCA 253