Environmental case briefs May 2008

08 May 2008

Commonwealth
New South Wales
Victoria
Queensland
Western Australia
South Australia
Tasmania
Northern Territory
Australian Capital Territory

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Commonwealth

The first two of the following three decisions of the Federal Court of Australia (in two cases of the Full Court) are significant in that both decisions emphasise that the right of third parties to challenge decisions made under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) is only a right to seek judicial review of the lawfulness of the decision-making process. It is not a right to seek a merits-based review of the desirability of the ultimate decision made or a right to ask the court to stand in the shoes of the decision maker.

The final decision reported on is significant because it emphasises that the minister, even when succeeding in litigation brought to challenge a decision made under the EPBC Act, may not recover full ‘party-party’ costs as would normally be the case. A proponent of an action which seeks to intervene in the proceedings in support of the minister may be at even greater risk of not recovering its costs.

‘Significant impact’ under the EPBC Act is not a jurisdictional fact

In Anvil Hill Project Watch Association Inc v Minister for the Environment and Water Resources [2008] FCAFC 3, decided on 14 February 2008, the Full Court of the Federal Court (Justices Tamberlin, Finn and Mansfield) held unanimously that a finding by the minister or the minister’s delegate under the EPBC Act as to whether a proposed action has, will have, or is likely to have, a significant impact on a matter protected by that Act is not a finding as to a jurisdictional fact (which would have the consequence that a court would be empowered to make its own finding as to the existence of that fact in substitution for the relevant decision maker).

The case was an appeal from a first-instance judgment of the Federal Court which dismissed an application by the Anvil Hill Project Watch Association Inc seeking to challenge a determination by the minister’s delegate that the construction and operation of an open-cut coal mine and colliery at Anvil Hill, New South Wales, was not a ‘controlled action’ within the meaning of the EPBC Act (with the consequence that the project could proceed without further approval under the EPBC Act): see Anvil Hill Project Watch Association Inc v Minister for the Environment and Water Resources (2007) 97 ALD 398, [2007] FCA 1480.

Section 75(1) of the EPBC Act requires the minister to decide whether an action referred to the minister is a ‘controlled action’ and, if so, which of the ‘controlling provisions’ in that Act apply to that action. The Anvil Hill Project Watch Association Inc had submitted at first instance and on appeal to the Full Court that it is a precondition to the minister’s exercise of discretion under that section that the proposed action (objectively) has, will have, or is likely to have, a significant impact on a protected matter. In other words, it was alleged that the actual, future or likely existence of such an impact is a jurisdictional fact.

The Full Court considered decisions of the New South Wales Court of Appeal which had held that certain decisions were not decisions as to the existence of a jurisdictional fact, and continued (at paragraph 32) ‘There is even less indication of the existence of a jurisdictional fact in the language of section 75(1) of the [EPBC] Act in the present case. Section 75(1) requires the minister to make a decision. The exercise of this power is not contingent upon a pre-existing, objectively determined fact. The language of the provision does not contemplate that a challenge may be brought against the minister’s decision on the basis of different or additional evidence which may be adduced before a court.’

The Full Court went on to note that there would be serious practical difficulties attending the ‘jurisdictional fact thesis’, not least that a challenge could be mounted against the minister’s decision pursuant to section 75(1) immediately after the decision was made, possibly involving substantial delays ‘which would be inconsistent with [the EPBC Act’s] purpose of adopting an efficient and timely environmental assessment and approval process’.

Port Phillip Bay dredging plan survives challenge on ESD, process and relevance

In Blue Wedges Inc v Minister for the Environment, Heritage and the Arts [2008] FCA 399, decided on 28 March 2008, Justice North of the Federal Court dismissed a challenge made by the environmental organisation Blue Wedges Inc against Minister Garrett’s approval under the EPBC Act of a proposal for channel-deepening in Port Phillip Bay, Victoria.

The proposal would involve dredging 22.9 million cubic metres of material, including approximately 2.11 million cubic metres of contaminated material which will be dumped in a bunded area on the floor of the bay.

Justice North rejected the applicant’s submissions that the minister had:

• failed to take account of the principles of ecologically sustainable development
• taken those principles into account in an incorrect manner when considering social impacts
• failed to consult with certain relevant ministers, and
• had failed to take account of certain relevant considerations.

In each case, his Honour found that the minister’s decision to act as he did was a reasonable one or that nothing in the EPBC Act required that particular consideration to be taken into account. In any event, his Honour found, ‘each of these matters was dealt with in detail in the assessment documentation which was before the minister’.

Justice North’s decision was accompanied by a statement from the judge reiterating that it is not the function of the court in proceedings under the EPBC Act to undertake an independent merits review of the proposal under challenge.

Successful minister and proponent did not recover the usual costs

In Wilderness Society Inc v Hon Malcolm Turnbull, Minister for Environment and Water Resources [2008] FCAFC 19, decided on 4 March 2008, the Full Court of the Federal Court (Justices Branson, Tamberlin and Finn) held unanimously that, notwithstanding their success both at first instance and on appeal, the minister and the relevant proponent, Gunns Limited (Gunns), should not be awarded their full costs on the customary ‘party-party’ basis.

The case concerned a challenge to the minister’s approval under the EPBC Act of Gunns’ proposed pulp mill in Tasmania. The challenge failed both at first instance and on appeal to the Full Court, but the question of costs was reserved for separate determination.

In relation to the minister’s costs, the Full Court had regard to the fact that, at least on appeal, ‘it was of general importance both to the minister and to the public that the law concerning the proper construction of the provisions of the EPBC Act with which [the] appeal was concerned should be clarified’. The court also noted that ‘the [Wilderness Society] was concerned, along with a large segment of the Australian community, to avoid harm to the Australian environment. The [Wilderness Society] was not seeking financial gain from the litigation; rather it appropriately sought to resolve a dispute, which had engaged the emotions of many, concerning the proper administration of the EPBC Act in the court rather than elsewhere…’ Accordingly, the minister was awarded only 70 per cent of his costs.

In relation to Gunns’ costs, the court noted that, although Gunns was ‘a proper party to the proceedings’ (because it was Gunns’ proposed pulp mill that was the subject of the minister’s challenged decision), no conduct of Gunns was challenged by the Wilderness Society, the minister was the appropriate contradictor, Gunns had no reason to believe that the minister would not deploy appropriate legal resources to defend the appeal, and ‘Gunns played a larger role in the appeal than was necessary’. Accordingly, Gunns was awarded only 40 per cent of its costs.

The decision emphasises that there may be significant financial consequences to a proponent of defending EPBC Act proceedings brought by a public-interest organisation, even when that defence is successful.

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New South Wales

Environment Protection Authority v Hogan [2008] NSWLEC 125

This case in the Land and Environment Court dealt with liability of company directors and managers for environmental offences. It was discussed in the Freehills Environment Update April 2008.

A summary of the update is provided here.

Under section 169 of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act), a director or other person concerned with the management of a corporation may be personally liable for environmental offences committed by the corporation. Two exceptions to this liability are:

• if the person was not in a position to influence the conduct of the corporation, or 
• if the person used all due diligence to prevent the contravention.

Riverside Earthmoving Pty Ltd (Riverside) permitted the disposal of virgin excavated natural material (VENM) at its unlicensed waste disposal facility, which was to be used as capping material. Management was of the opinion that VENM was not a ‘waste’ as defined by the POEO Act, and hence the unlicensed disposal of VENM did not constitute an offence. In support of his argument he pointed to the fact that Schedule 1 of the POEO Act defines ‘waste facilities’ in a manner that excludes VENM from the calculation of tonnages for various classes of facility. However the court disagreed with this interpretation.

Mr Hogan, the General Manager, was found to have ‘a lack of understanding of the system of environmental regulation in New South Wales and his personal responsibilities under the POEO Act as the general manager of a corporation.’ He was therefore held to be personally liable for the offence committed by Riverside. The penalty imposed was $18,000 on Mr Hogan personally.

It was held that Riverside had inadequate environmental due diligence procedures to mitigate against committing an environmental offence. This was coupled with ‘insufficient experience’ in managing environmental risk and ‘inadequate training to ensure [environmental] legal compliance.’

While the case considered company director and manager environmental liabilities under New South Wales legislation, the principles it considered are equally applicable to most Australian states and territories.

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Victoria

Environmental audit overlays and permit conditions that deal with contaminated land

Norman & Tinney v Yarra CC provides significant insight into the following:

• how to apply the ground of unreasonableness in deciding on the validity of a planning permit condition which deals with land contamination issues
• how Environmental Audit Overlay (EAOs) in planning schemes are be interpreted and applied, and 
• how immaterial risks of land contamination are considered.

The plaintiff sought approval for minor works to their residential property. The works included (among other things) demolition of a carport, erection of a small shed and installation of a roller door. The property was subject to an EAO, which requires a certificate or statement of environmental audit to be procured before works commence for a sensitive use, but the only permit trigger for the works was contained in the Heritage Overlay. In addition, the Responsible Authority imposed a planning permit condition requiring the permit holder to obtain a certificate or statement of environmental audit in relation to the works. The developer challenged the permit condition on the basis that was not fairly and reasonably related to the permitted development.

The Tribunal decided the case in the developer’s favour. In doing so, the Tribunal stated the test as to whether the condition is a ‘reasonable one … [is] if the condition stands out as being excessive, misguided or draconian, it can potentially be deleted on the basis that it is unreasonable’. On these facts, the Tribunal concluded that:

• the site had been used for residential purposes for many decades, meaning that there was minimal risk of contamination
• there was no immediately abutting commercial use that might create a material risk of contamination
• the works were relatively minor, meaning that there was minimal risk of exposure to contamination
• the works involved minimal disturbance to the soil on the property (again suggesting that there was minimal risk of exposure to contamination)
• the works were part of the ongoing residential use of the property (this was suggested as an important consideration)
• the EAO was imposed over a relatively large area
• there was no evidence that there was any known environmental material risk to this particular site, and
• the total cost of the works were between $2,000–$3,000 and the cost of obtaining an environmental audit would be approximately $20,000–$30,000.

This meant that the purpose of the EAO (which was to ‘ensure that potentially contaminated land is suitable for a use which could be significantly adversely affected by contamination’) was not impugned or frustrated by not requiring an environmental audit for the proposed works.

The case suggests that environmental laws of general spatial application (such as EAOs) will be applied flexibly where the circumstances require.

The case suggests that regardless of whether an EAO applies to a property at which development is proposed, that will not automatically validate a planning permit condition which requires a certificate or statement of environmental audit to be carried out in respect of those works. The reasonableness of the condition and its nexus with the proposed development are still the key tests in ascertaining the validity of such conditions.

Industrial waste facility convicted for causing an environmental hazard

Waste Management Pty Ltd (WM) has been convicted of causing an environmental hazard under section 27A(1)(c) of the Environment Protection Act 1970.

The charge was a result of an incident at WM’s waste treatment facility in Campbelltown. Chemicals were mixed as part of a chemical treatment process, and this resulted in an industrial-scale fire. Evidence suggested that the company was aware at the time of mixing that there was a significant risk that fire would result from the mixing.

WM was ordered to pay $50,000 to the Merri Creek Management Committee Inc and $10,000 for EPA costs. The case highlights the need for managers to adequately manage environmental risk.

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Queensland

Court imposes $95,000 fine for sediment pollution

A Townsville developer has been fined $95,000 in the Townsville Magistrates Court, having pleaded guilty to one charge of wilfully and unlawfully causing environmental nuisance, and one charge of contravention of a condition of a development approval.

The charges were laid following the completion of works without a council-approved sediment and erosion control plan, as required under the company’s development approval for the site, that resulted in the release of sediment and other construction materials to a tributary of the Ross River. No conviction was recorded.

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Western Australia

Kalgoorlie Mining Company Fined

The Department of Environment and Conservation (DEC) has issued a Kalgoorlie mining company a $25,000 modified penalty under section 99A of the Environmental Protection Act 1986 (EP Act) for allegedly causing environmental harm. It is alleged by the DEC’s Environmental Enforcement Unit that between 26 and 27 February 2006, the company at its Kalgoorlie facility caused a spill of process water from a containment pond. The DEC allege that the spill impacted on native vegetation, causing environmental harm under section 50B(2) of the EP Act. The company will be prosecuted if the fine is not paid within 28 days from when the penalty was issued.

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South Australia

Sea level rise litigation

The Supreme Court of South Australia has rejected an appeal by property developer Northcape Properties Pty Ltd (Northcape) against the decision by the Yorke Peninsula District Council (council) to refuse to grant development consent to an 80 lot subdivision in the coastal area of Marion Bay.

One of the grounds for refusal outlined by the council was that the development did not comply with various objectives of the council’s Development Plan. Among other things, the development did not adequately take into account the effect of sea level rise over of the next 100 years.

Justice Debelle found that sea level rise (predicted to be 0.3m over the next 50 years) would result in a 30–40 metre coastline retreat, and infringe on the development’s proposed erosion buffer.

Justice Debelle concluded that the proposal ‘offends so many of the goals and objectives of the Development Plan that development consent must be refused. The proposal is on any view an attempt to develop the land to the greatest extent possible without due regard to the ecological sensitivity of the area and the need to preserve natural features.’

The decision may have significant implications for future coastal developments. In light of a trend that is seeing many local councils include climate change objectives in planning instruments, there is a potential for future coastal developments to face the same issue.

This case is a clear indication of judicial willingness to construe climate change provisions in a way that will give full effect to their objectives. It serves as a reminder to developers of the need to be certain of the impacts of such provisions on their development in the early stages.

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Tasmania

None this quarter.

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Northern Territory

None this quarter.

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Australian Capital Territory

None this quarter.

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