What has happened?
In a judgment delivered on 2 August 2017 (4nature Incorporated v Centennial Springvale Pty Ltd  NSWCA 191), the NSW Court of Appeal upheld an appeal from a decision of the Land and Environment Court to dismiss a challenge to a State Significant Development (SSD) consent granted for the continued operation of the Centennial Springvale colliery.
But for the grant of the SSD consent on 21 September 2015, approval to carry out continued mining operations would have lapsed within 9 days.
A key issue in the proceedings was the interpretation of a requirement contained in Clause 10 of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2001 (SDWC SEPP) that consent not be granted for development on land within the Sydney Water Catchment unless the consent authority was satisfied that:
“… the carrying out of the proposed development would have a neutral or beneficial effect on water quality.”
The case turned largely on the identification of the correct “comparator” for determining whether the carrying out of the development would in fact have a neutral or beneficial effect on water quality.
The Applicant (4Nature Inc) argued that the correct comparator was the quality of the water supply on the assumption that the development did not proceed (and the existing mining operations, including the related discharge of mine water, ceased).
The Respondents (Centennial Springvale, Springvale SK Kores, and the Minister) argued (and the Land and Environment Court agreed) that the correct comparator was that considered by the consent authority which was the quality of the water supply subject to the maximum permissible discharge of mine water under the current approvals.
Findings by the Court
The Court of Appeal agreed with the Applicants that the correct comparator was the quality of the water supply on the assumption that the development did not proceed. The Court held (at ) that (emphasis added):
“… Clause 10(1) requires the comparison of ‘water quality’ on two hypotheses; namely, where the development is carried out and where it is not … If current water quality is affected by a use which will terminate (as here) before the development commences, current quality will need to be adjusted to take account of that change ... Against that base case, the comparison must then address the anticipated effects of carrying out the proposed development.”
The Court held that the determination of this issue is a question of fact for the consent authority to determine and not a matter for judicial assessment.
In this case, however, the consent authority had applied the wrong test (by considering the wrong comparator) and so its power to issue a development consent, conditioned as it was on it being satisfied of the matters set out in Clause 10, had not been enlivened.
Ordinarily, in these circumstances the Court would have declared that the SSD consent granted for continued mining operations was invalid. However, having regard to “the consequences for the current operations of the respondents and the users of the coal supplied by the mine” the Court agreed to hear further submissions from the parties as to the Orders it should make.
This case turned on the construction of a clause contained within delegated legislation (ie Clause 10 in the SDWC SEPP). In response to certain submissions made by the Respondent, which found some support in the original judgment of the Land and Environment Court, the Court of Appeal emphasised that, notwithstanding any statements to the contrary contained in the judgment under appeal:
(a) “There is no general principle requiring laxity or flexibility in construing delegated legislation, or statutory instruments generally (at ); and
(b) There is no general proposition that the task of ascertaining the legal meaning of delegated legislation differs from the construction of primary legislation: .”
The specific implication of this case is that the potential effects on water quality of development on land within the Sydney Water Catchment, including with respect to the identification of the appropriate ‘comparator’, needs to be undertaken very carefully.
The broader lesson to be drawn from this case concerns the correct approach to construction of delegated legislation. The Court of Appeal has made it very clear that there is no general proposition that the statutory construction task is any less stringent when applied to delegated legislation than when applied to primary legislation.
For further information on this judgment and its potential implications for your development please contact Marcus Steele, Director, on (02) 8005-1411 or firstname.lastname@example.org.