New South Wales Land and Environment Court says integrated development scheme is not a "one-stop shop" for an environment protection licence

In brief

The case of Crush and Haul Pty Limited v Environment Protection Authority [2023] NSWLEC 60 involved class 4 judicial review proceedings in the New South Wales Land and Environment Court (Court) challenging the refusal by the the New South Wales Environment Protection Authority (EPA) to grant an environment protection licence (EPL) for the scheduled activities of "extractive activities" and "crushing, grinding or separating" at a quarry in Dirty Creek, near Coffs Harbour.

Background

This decision follows the Court's judgment on 8 September 2022 in Environment Protection Authority v Crush and Haul Pty Ltd; Environment Protection Authority v Cauchi [2022] NSWLEC 113 (2022 Decision) to convict Crush and Haul Pty Limited (Crush and Haul) for its failure to hold an EPL. 

On 20 September 2022, Crush and Haul lodged an application for an EPL under section 53 of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act).

On 10 November 2022, the EPA issued a letter providing notice of its intention to refuse the application on the basis that Crush and Haul was not a "fit and proper person". 

That application was then deemed refused and on 21 November 2022 Crush and Haul commenced class 1 merit review proceedings. In class 1 proceedings, the Court metaphorically steps into the decision maker's shoes to make or remake the decision. 

Before the class 1 matter was heard, on 19 April 2023, Crush and Haul commenced class 4 judicial review proceedings seeking a declaration that the EPA is required, by operation of section 4.50(1) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act), to issue an EPL to Crush and Haul, subject to conditions that are not inconsistent with Development Consent No. 0328/16DA issued by Coffs Harbour City Council on 24 November 2020.

The following issues were considered by the Court:

• Whether by operation of section 4.50(1) of the EPA Act, the EPA was required to issue an EPL subject to conditions that are not inconsistent with the development consent.

• Whether the question of a fit and proper person in section 83 of the POEO Act, which is also a consideration in section 45(f) of the POEO Act, can be considered by the EPA after having issued general terms of approval for an integrated development application. 

• What relief, if any, the Court should grant in its exercise of discretion.

In short, the Court dismissed Crush and Haul's summons determining that the EPA was not required to issue an EPL subject to conditions that are not inconsistent with the development consent. 

No requirements to issue an EPL

The EPA was not required to issue an EPL subject to conditions that were not inconsistent with the development consent meaning that the EPA can consider whether an applicant for an EPL is a fit and proper person at the time such an application is made. 

The Court was required to undertake an exercise of statutory construction to determine whether the EPA was required to issue an EPL with conditions that were not inconsistent with the development consent.

In doing so, the Court found section 4.50(1) of the EPA Act does not compel the EPA to issue an EPL after a development consent is granted for integrated development. The Court said at [9]:

"...there arise distinct exercises of power by the approval authority in relation to the decision about the general terms of approval in relation to the development application … and the issue of an environment protection licence...". 

That is, there are separate exercises of power conferred on the approval authority to issue general terms of approval under the EPA Act and to issue an EPL under the POEO Act. The Court found that even if there was an inconsistency, the POEO Act provisions would prevail because of section 7(2)(a) of the POEO Act.

Furthermore, the Court said that if section 4.50(1) of the EPA Act were to be interpreted as though the integrated development scheme is a "one-stop shop", that would render "nugatory" the EPA's obligation to consider whether an applicant for an EPL was a "fit and proper person" at the time an EPL application was made (at [92]). Such an interpretation could result in the EPA being bound to issue an EPL to an environmental offender who was not the applicant for a development consent (at [94]). The Court said that result could not have been intended by Parliament and (at [100]):

"To impose an obligation on the EPA to issue an environment protection licence to an applicant it considers not to be a fit and proper person would be inimical to the attainment of those objects [of the POEO Act]."

There was no utility in the Court granting the relief sought

The Court concluded that it would not be useful for the relief that was sought to be granted. This was because the EPA tendered evidence that it was of the view that Crush and Haul was not a "fit and proper person" and as such, would revoke the EPL under section 79 of the POEO Act if it was required to issue one.

Whilst the Court was not required to consider whether Crush and Haul was a "fit and proper person" to hold an EPL in the judicial review proceedings, the EPA referred the Court to Preston CJ's 2022 Decision to convict Crush and Haul for an offence against section 48 of the POEO Act. Section 48(2) of the POEO Act requires an occupier of premises at which a scheduled activity is carried on to hold an EPL authorising that activity to be carried on at the premises. Preston CJ found that Crush and Haul committed the offence "recklessly" (at [81] of the 2022 Decision).

Conclusion

This case confirms that the grant of an integrated development consent does not automatically mean that an EPL is to be issued. Those wanting to carry out scheduled activities under the POEO Act must make a separate application for an EPL and should not assume that one will be granted following general terms of approval being issued by the EPA under a development consent. 

Consent authorities do not need to consider the "fit and proper person" test when considering the merits of an integrated development application. However, the test applies under the POEO Act in considering whether to issue subsequent environmental protection licences for certain types of development that may have earlier been approved through a development consent. If an EPL is not granted, the proposed activity cannot be carried out above the threshold in schedule 1 of the POEO Act and so is akin to a refusal of a development consent.

Whilst this case dealt with the issue of an EPL under the POEO Act, there are other types of approvals required as part of the integrated development regime. For example, aquaculture permits, mining leases, an approval under section 138 of the Roads Act 1993 (NSW), and activity approvals (controlled activity and aquifer interference approvals) under the Water Management Act 2000 (NSW). 

This case may have implications for any authorities issuing general terms of approval and subsequently issuing separate approvals, as the Court has determined that there are separate exercises of power conferred on approval authorities. Those relying on integrated development consents need to be aware of the requirement to obtain further approvals which may be separate to the integrated development process. It should not be assumed that the further approvals will be granted. 

This case also highlights the ramifications a criminal conviction can have for the carrying out of certain types of development given the "fit and proper person" test applies to those types of activities which require an EPL.