Are critical infrastructure declarations and approvals reviewable?

Download
Subscribe

In the decision of Haughton v Minister for Planning and Macquarie Generation; Haughton v Minister for Planning and TRUenergy Pty Ltd [2011] NSWLEC 217, the Land and Environment Court held that critical infrastructure declarations and approvals are reviewable, even where Ministerial permission to bring proceedings has been refused.

The Court also indicated that ecologically sustainable development and anthropogenic climate change are not mandatory considerations.

The facts

On 26 February 2008, pursuant to section 75C (now repealed) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act), the Minister for Planning (Minister) formed the opinion the category of development referred to in the Schedule is essential for the State for economic and social reasons, and declared that projects falling within that category to be “critical infrastructure projects” (Declaration). The Schedule specified that development for the purpose of a facility for the generation of electricity with a capacity to generate at least 250 megawatts is a category of development to which the Declaration applies.

Under section 75C, the Minister was able to approve critical infrastructure projects without the need for recourse to other consent authorities and, generally, to adhere to the requirements set out in statutory planning instruments that otherwise would have controlled development on the subject land.

On 19 June 2009, Delta Electricity (Delta) lodged an application for concept plan approval under the (now repealed) Part 3A of the EPA Act (MP 09_0119) (Mount Piper Project). The Mount Piper Project will involve the installation and operation of up to 2,000 megawatts of new electricity generating capacity, fuelled by either gas or coal at the existing Mount Piper Power Station site.

On the same day, Macquarie Generation (Macquarie) lodged its own concept plan application seeking approval for the Bayswater B Power Station (MP 09_0118) (Bayswater Project). The Bayswater Project will be capable of generating up to 2,000 megawatts of electricity through the use of either five gas-fired combined cycle gas turbine (gas-fired) plants or two pulverised coal-firect ultra supercritical (coal-fired) thermal plants.

Both the Mount Piper Project and Bayswater Project (collectively, the Projects) will be capable of satisfying the electricity generation threshold prescribed by the Declaration.

On 12 January 2010, the Minister granted conditional concept plan approvals for the Projects (collectively, the Approvals) under section 75O (now repealed) of the EPA Act. Relevantly, section 75T (also repealed) provided that the Minister’s approval was required in order to bring proceedings to remedy or restrain a breach of Part 3A in respect of critical infrastructure projects. Before proceedings were commenced, the applicant sought the Minister’s approval which was refused.

Challenge to the approval

On 3 June 2010, the Applicant, Ned Haughton, a student and environmental activist, commenced proceedings against the Minister, Delta and Macquarie challenging the validity of the Declaration and Approvals. In December 2010, TRUenergy Pty Ltd (TRUenergy) acquired the Mount Piper Power Station from Delta and, thereafter, TRUenergy defended the proceedings in respect of the Mount Piper Project.

Having regard to the pleadings in the proceedings, the Court was required to determine the following issues, whether:

  1. the Applicant could bring the proceedings in light of section 75T of the EPA Act;
  2. the Minister, in making the Declaration, complied with the requirements of section 75C of the EPA Act;
  3. the Minister, in granting the Approvals, failed to consider mandatory relevant considerations, namely: ecologically sustainable development (ESD), and anthropogenic climate change, as elements of the public interest;
  4. the Minister, in granting the Approvals,  failed to enquire into the principles of ESD and the impact of the Projects on climate change;
  5. the Minister misconceived the nature of the functions under section 75O by disregarding the impacts of the Projects on climate change on the understanding that such consideration fell within the responsibility of another entity of the State or an entity of the Crown in the right of the Commonwealth; and
  6. the decisions to grant the Approvals were so arbitrary, illogical and unreasonable that no decision-maker in the position of the Minister would have so exercised the power.

Following the hearing of the proceedings, the Part 3A regime was repealed and replaced by a new framework for State significant development and State significant infrastructure. However, since the Savings and Transitional provisions of the amending legislation specify that Part 3A continues to be apply to the “transitional Part 3A projects”, which will include the Projects, the Part 3A provisions remained relevant to the validity of the Declaration and Approvals.

Decision

Privative clause and standing

The Minister, Macquarie and TRUenergy (collectively, the Respondents) submitted that the proceedings were incompetent as the Applicant had failed to obtain the Minister’s permission to bring them.

The Applicant, relying on the High Court Decision in Kirk v Industrial Court of New South Wales (2010) 239 CLR 531, submitted that State legislation cannot remove the jurisdiction of the Court to determine and enforce the jurisdictional limits of executive power. It was argued that the challenge to the decisions of the Minister to make the Declaration and grant the Approvals, if made good, amounted to a jurisdictional error. In this circumstance, the Applicant submitted that section 75T could not deprive the Court of its supervisory jurisdiction to restrain the exercise of executive power where that power has been exercised in breach of the jurisdictional limits imposed by the relevant statute. While the Applicant accepted that section 75T applied to non-jurisdictional errors, the provision must be read to accept a challenge that is brought to a decision of the Minister on the basis of jurisdictional error of law.  

The Court held that the ouster clause should be read down based on four interrelated matters, namely:

  1. the existence of a statutory entitlement under section 123 of the EPA Act for any person to bring proceedings, whether or not any right of that person has been infringed, should not be impinged by ousting the Court’s jurisdiction to determine whether an administrative error has been committed in the exercise of executive power;
  2. the Applicant has a sufficient right or interest to support the existence of a justiciable controversy, being that under section 75T the “gatekeeper” for taking proceedings is the very Minister whose actions are sought to be impugned, in order to maintain the proceedings;
  3. the position is supported by section 31(2) of the Interpretation Act 1987 (NSW) which states that any provision of an Act that is construed as being in excess of the legislative power of Parliament should be read down; and
  4. the well-accepted principle that statutes may only oust superior courts of jurisdiction if the intention to do so is clear and unmistakable.

Having determined that section 75T did not operate to oust the Land and Environment Court’s jurisdiction to hear the proceedings, the Court held that the Applicant had standing to bring the proceedings under section 123 of the EPA Act or, in the alternative, the common law.

The Declaration

The Applicant submitted that the Declaration was invalid on the following grounds:

  • the Minister did not form the opinion that the Projects were essential for the State in accordance with section 75C(1). In essence, the Applicant argued that the Minister was required to form an opinion in respect of each of the Projects rather than a category of project; and
  • no declaration was directed to the Projects as distinct from a category of development in accordance with section 75C(1).

The parties agreed that the formation of the opinion required by section 75C(1) was a jurisdictional fact upon which the Minister’s power to make a declaration under the subsection is conditioned. However, the Respondents denied that the Minister made an error of law in making the Declaration.

Ultimately, the Court held that the Declaration was valid. In reaching this conclusion, Craig J rejected the Applicant’s submissions on the basis that the language of section 75C(1) was “tolerably clear” that it relates to a “category of project which, in the opinion of the Minister, possesses the requisite qualities of essentiality”. His Honour said that the use of the word “category” supports a construction of section 75C(1) contrary to the requirement that a declaration may only be made in respect of a specific project or projects. Therefore, once the opinion of the Minister is formed in relation to a category of project, then provided the project falls within the category, the project may be the subject of the Declaration.    

ESD and Anthropogenic climate change

In granting the Approvals, the Applicant submitted that the Minister was bound, but failed, to consider the principles of ESD and the impacts of the Projects on climate change. These obligations were said to arise as elements of the “public interest”. In the alternative, it was argued that there was no evaluation by the Minister sufficient to demonstrate an understanding of the principles of ESD. While section 75O of the EPA Act does not expressly require ESD or the impacts of climate change to be considered, the Respondents accepted that there is an implied duty to consider the “public interest” as a mandatory consideration in light of the section 5 (“Objects”) of the EPA Act.

Applying recent case law on the relationship between ESD and the “public interest”,[1] Craig J indicated that, while ESD is a relevant consideration, it is not a mandatory consideration. The concept of ESD, with its four principles, was said to operate at a high level of generality and is not confined to any specific subject matter such as greenhouse gas (GHG) emissions or anthropogenic climate change. Instead, the “public interest” requires the Minister to balance considerations such as the effect flowing from the interaction between GHG emissions and climate change and the risks of an electricity shortfall. In any event, the Court held that the Minister did consider ESD principles because it was apparent that the Minister had:

  • considered the need for the Projects and assessed the consequences of the Projects not being undertaken;
  • quantified the GHG emissions as a means of achieving the relative contribution of the Projects to climate change;
  • considered whether the need would be satisfied by other means predicated to produce lower GHG emissions;
  • considered whether further design development or efficiency would produce lower GHG emissions in the event the Projects proceeded; and 
  • considered whether GHG emissions would be factored into valuation, pricing and incentives associated with the Projects.

Having regard to the environmental assessment reports for the Projects, the Director-General’s Report, a Ministerial briefing note and conditions in the Approvals, the Court held that the Minister did consider the impacts of the Projects on climate change, and the relationship between GHG emissions and their contribution to climate change.

Failure to make enquiries

As an alternative to the previous two grounds, the Applicant submitted that the Minister failed in his duty to make inquiries into the principles of ESD and the impacts of the Projects on climate change. The Minister argued that the relevant principle,[2] which requires there to be an express or implied obligation imposed on the decision-maker by statute to make the enquiry at particular level, had not been satisfied.

The Court held that, although the incremental impacts of the Projects on climate change could not be predicted, the relevant contributor to that impact (namely, GHG emissions) was sought to be quantified and mitigated in the implementation of the Approvals and, therefore, was addressed. On this basis, his Honour rejected this ground of the challenge.

Nature of Minister’s function

The Applicant argued that the Minister misconceived the nature of his function under section 75O as the Minister was erroneously led to believe by a briefing note and the Director-General’s Report that he could disregard the impacts of climate change in respect of the Projects because it was the responsibility of another entity to do so.

Having regard to the material before the Minister and, in particular, the environmental assessment reports for the Projects and the Ministerial briefing note, and the actions of the Minister granting the Approvals subject to conditions, the Court held that it was clear that the Minister did not disregard the impact of the Projects on climate change. In respect of the conditions of the Approvals, condition 2.2(b) of the Approvals required updated greenhouse assessment and condition 2.3 required reports on a triennial basis or with the future project application relating to viable greenhouse reduction and mitigation and offset options. 

Wednesbury unreasonableness

Premised on the well-known principle of Wednesbury unreasonableness,[3] the Applicant argued that the decisions to grant the Approvals were arbitrary, illogical and unreasonable that no reasonable decision-maker would have made the decision on the material before the Minister. 

Craig J noted that the test of Wednesbury unreasonableness is stringent and held that the Applicant failed to demonstrate the requisite level of proof.

Implications

Although the Part 3A regime has been repealed, the decision will continue to have implications for the numerous “transitional Part 3A projects” as it has paved the way for further third-party judicial review challenges to critical infrastructure projects in circumstances where jurisdictional error is alleged.

Further, new section 115ZK, which relates to critical State significant infrastructure under Part 5.1 of the EPA Act, is drafted in similar terms to section 75T so, it is arguable that the ouster clause in the new provision is also likely to be read down.  


[1] See Minister for Planning v Walker (2008) 161 LGERA 423 and Drake-Brockman v Minister for Planning (2007) 158 LGERA 349.
[2] See Preston CJ in Walsh v Parramatta City Council (2007) 161 LGERA 118.
[3] See Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223.


Click 'Download' to read the full article.

 


The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.


Related Content

Contacts

Christine Covington

Partner. Sydney
+61 2 9210 6428

Profile