Land and Environment Court New South Wales

• Medium Neutral Citation: South East Forest Rescue Incorporated v Bega Valley Shire Council and South East Fibre Exports Pty Ltd [2011] NSWLEC 250
• Hearing dates: 1 and 2 December 2011
• Decision date: 16 December 2011
• Jurisdiction: Class 4
• Before: Preston CJ

Decision

The Court:

1. Declares that development consent dated 14 June 2011 granted by Bega Valley Shire Council to development application No. 2011.0035 for the installation of a wood pellet manufacturing plant at Lot 16 DP 1066187, Edrom Road, Eden, is invalid and of no effect.

2. Reserves the question of the costs of the proceedings.

• Catchwords: JUDICIAL REVIEW - development consent for wood pellet plant - failure to consider relevant matters - consistency with zone objectives - public submissions - ecologically sustainable development - climate change
• Legislation Cited: Environmental Planning and Assessment Act 1979 s 79C; Land and Environment Court Act 1979; s 25B; Protection of the Environment Operations Act 1997
• Cases Cited: Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts [2011] FCAFC 59; (2011) 180 LGERA 99; Clifford v Wyong Shire Council (1996) 89 LGERA 240; Conservation of North Ocean Shores Inc v Byron Shire Council [2009] NSWLEC 69; (2009) 167 LGERA 52; Currey v Sutherland Shire Council (1998) 100 LGERA 365; Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349; Franklins Ltd v Penrith City Council [1999] NSWCA 134; Hill v Woollahra Municipal Council [2003] NSWCA 106; (2003) 127 LGERA 7; Manly Council v Hortis [2001] NSWCA 81; (2001) 113 LGERA 321; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; Minister for Local Government v South Sydney City Council [2002] NSWCA 288; (2002) 55 NSWLR 381; Minister for Planning v Walker [2008] NSWCA 224; (2008) 161 LGERA 423; Nambucca Valley Conservation Association v Nambucca Shire Council [2010] NSWLEC 38; Parramatta City Council v Hale (1982) 47 LGRA 319; Schroders Australia Property Management Ltd v Shoalhaven City Council [2001] NSWCA 74; Telstra Corporation Ltd v Hornsby Shire Council (2006) 67 NSWLR 256; 146 LGERA 10; Tickner v Chapman (1995) 57 FCR 451; Warren v Electricity Commission of NSW (1990) 130 LGERA 565
• Category: Principal judgment
• Parties: South East Forest Rescue Incorporated (Applicant); Bega Valley Shire Council (First Respondent); South East Fibre Exports Pty Ltd (Second Respondent)
• Representation: Ms S Duggan SC with Mr S Nash (Applicant); Submitting appearance (First Respondent); Mr J E Robson SC with Mr R White (Second Respondent); Environmental Defender's Office (NSW) Ltd (Applicant); M E McMahon & Associates (Submitting appearance) (First Respondent); Herbert Geer Lawyers (Second Respondent)
• File Number(s): 40701 of 2011

Judgment

Nature of case and outcome

1 On 14 June 2011, Bega Valley Shire Council ("the Council") granted development consent to a development application by South East Fibre Exports Pty Ltd ("SEFE") for the installation of a pilot wood manufacturing plant at the site of SEFE's existing woodchip mill at Jews Head, Eden. An objector to the proposed development, South East Forest Rescue Incorporated ("SEFR") has challenged, by judicial review proceedings, the development consent on four grounds:

(a) the Council failed to consider and form the required mental state of satisfaction under cl 8(3) of Bega Valley Local Environmental Plan 2002 ("the LEP") that the development is consistent with the objectives of the relevant zone, being Zone 1(a) (Rural General Zone) under the LEP;

(b) the Council failed to consider, under s 79C(1)(d) of the Environmental Planning and Assessment Act 1979 ("EPA Act"), all of the submissions made by members of the public objecting to the proposed development and, in particular, those submissions concerning the consistency of the proposed development with the zone objectives and the principles of ecologically sustainable development ("ESD");

(c) the Council failed to consider ESD either under cl 79 of the LEP or as an element of the public interest under s 79C(1)(e) of the EPA Act; and

(d) the Council failed to consider anthropogenic climate change as an element of the public interest under s 79C(1)(e) of the EPA Act.

2 The Council has made a submitting appearance. The proponent of the pellet plant, SEFE, defended the Council's grant of development consent.

3 I have determined that the applicant, SEFR, has made out the first, second and third grounds, but not the fourth ground, and that the development consent should be declared invalid.

The Council's consideration and determination of the development application

4 On 31 January 2011, SEFE submitted a development application (DA 2011.0035) to the Council to construct a pilot wood pellet manufacturing plant on Lot 16 DP 1066187 ("the development"). The development includes the erection of a 16 m wide x 24 m long x 6 m high steel-framed, colour bond shed. The shed accommodates the wood pellet plant machinery used to produce the wood pellets. The development application was accompanied by a statement of environmental effects.

5 Section 1.3 of the statement of environmental effects described the developments, including the shed and the machinery. It noted that:

"Raw material feed for the plant would be sourced from hardwood and softwood sawmills located within a 100 km radius of SEFE's mill, alternatively, fines from SEFE's own process would be suitable, but would require more drying energy to reach target moisture content" (p 5 in Tender Bundle, vol 1, p 231 (Exhibit A)).

6 It also noted the uses of wood pellets:

"Wood pellets can be marketed for use in domestic space heaters, commercial boilers for hospitals, schools, etc, used for animal bedding, mushroom compost, animal litter, spill kits and a wide range of other uses" (p 2 or Exhibit A, p 228).

7 Section 2 of the statement of environmental effects considered the "Planning Issues". Section 2.2 was entitled "Zoning" and noted that the SEFE's mill site is zoned 1(a) (Rural General Zone) under the LEP and quoted the objectives of that zone from cl 2(2) of the LEP. Section 2.3 was entitled "Compatibility with Planning Provisions" and provided, in its entirety, as follows:

"The Bega Valley LEP 2002, under the Environmental Planning and Assessment Act 1979, requires a range of developments to obtain development consent prior to commencing development in the Rural 'A' Zone, including sawmills and timber yards.

Given the existing nature of the woodchip production activity and the objectives of Rural 'A' Zone, the proposed development is compatible with the planning provisions applicable to the site" (p 7 or Exhibit A, p 233).

8 Section 3 of the statement of environmental effects dealt with the "Existing Environment, Potential Impacts and Mitigation Measures", section 4 with "Cultural and Heritage Issues", section 5 with "Visual", section 6 with "Solid Waste", section 7 with "Hazard Issues", section 8 with "Monitoring and Reporting" and section 9 with "Social and Economic". None of the discussion in sections 3-9 of the statement of environmental effects dealt with the topics of the consistency of the development with the zone objectives or with the principles of ESD.

9 Section 10 contained the "Conclusions" which were, in their entirety:

"The proposed pellet plant development at the SEFE Mill is compatible with existing planning and site use. The construction and operation of this development should not result in any significant adverse impacts on the environment. As a precaution, the proponent is committed to a range of mitigation measures" (p 16 or Exhibit A, p 242).

10 The whole statement of environmental effects was only 16 pages in total but barely 12 pages in text, the remainder being photographs or blank spaces on the page.

11 On 2 February 2011, SEFE submitted the floor plans and elevations for the shed.

12 At the meeting on 3 February 2011, the Council's Development Control Unit allocated SEFE's development application to one of the Council's Development Control Planners, Mr Mark Fowler, for assessment.

13 On 4 February 2011, SEFE advised, in response to the Council's request, that the annual production capacity of wood pellets would be 1,320 cubic metres.

14 Mr Fowler (of the Council) notified various government departments, including the Department of Environment, Climate Change and Water ("DECCW") on 8 February 2011, inviting their comments on the development application.

15 The Council notified adjoining residents about the development application, as well as advertised the development application, inviting submissions. The submissions period was from 10 to 24 February 2011. 210 written submissions were received with 107 submissions raised in objection to the development and 103 submissions supporting the development. One of the submissions was from the applicant, SEFR, dated 22 February 2011 but lodged on 24 February 2011.

16 SEFR's submission included the following points:

(a) the inadequacy of the statement of environmental effects : "the Statement of Environmental Effects is perfunctory to say the least" and "can only be viewed as a preliminary expression of interest, rather than any form of environmental impact statement" (Exhibit B, p 762);

(b) the statement of environmental effects' failure to consider ESD and greenhouse impacts :

• "The statement of environmental effects does not look at the full life cycle of the raw material and ignores the greenhouse impacts of native forest logging. CO 2 emissions caused by the logging of native forests to supply the Eden chipmill has been conservatively estimated at over 26 million tonnes per year" (Exhibit B, p 762);
• "The Statement of Environmental Effects makes no serious attempt to examine the local or global impacts of the development. No attempt is made to assess the sustainability of native forest logging" (Exhibit B, p 762);
• "The claim that the factory will only use waste is erroneous. The material to be used for the pellets is not 'waste' and could not exist if over one million tonnes of trees, equating to a figure of almost 19,000 hectares of forest, were not logged each year to supply the chipmill. There is also scant mention of the manufacturing process or industry standards." (Exhibit B, p 762);
• "As shown there are many matters not addressed or not met in the Statement of Environmental Effects ... Two such matters are the principles of intergenerational equity and ESD, which are seemingly being breached in the context of s 79C" (Exhibit B, p 774);
• "South East Forest Rescue would urge the decision-maker to reject the development application until such time as: ... 3. a comprehensive full life-cycle analysis of the GHG emissions associated with native forest operations, the transport of logs to the chipmill and of the pellet factory operations has been completed and made available for public comment" (Exhibit B, p 778);
• "The majority of residents on the South Coast are very concerned about climate change and deforestation. The Galaxy Research Poll's findings were 78% of people want an end to native forest logging. It has been shown that the native forest logging industry is not sustainable. Thus the better outcome for communities and the environment would be for Bega Valley Shire Council to reject the development application for the pellet factory" (Exhibit B, p 778).

(c) the development is not consistent with the objectives of the 1(a) (Rural General Zone) under the LEP , in particular the development is not consistent with the objectives of:

• encouraging tourism (Exhibit B, pp 763-764);
• encouraging development that does not create undesirable environmental and cultural impacts, including greenhouse gases by customers burning the wood pellets (Exhibit B, pp 764-767);
• maintaining the scenic amenity and landscape quality of the area (Exhibit B, p 767);
• promoting the protection, and the preservation and enhancement, of natural ecological systems and processes, including that "the burning of wood, whether domestically or overseas, is not a clean technology, it still releases CO 2 and particulate pollution, the removal of trees is the removal of a carbon sink, and further the logging of native forest provides an economic incentive to produce more wood waste, rather than encouraging energy efficiency" (Exhibit B, p 768 and generally pp 767-772);
• ensuring development and management of the land has minimal impact on water quality and environmental flows of receiving waters (Exhibit B, pp 772-773).

17 Another submission was from a group called Climate Action Canberra lodged on 24 February 2011. This submission included the following points:

• burning pellets is greenhouse intensive (Exhibit A, p 367);
• "The source of the material for pellets is vital as using product from native forest logging will add to greenhouse emissions" by "encouraging continuing high levels of native forest destruction" (Exhibit A, p 367);
• "wood pellet production is not truly renewable because the forests will not be fully regenerated to their full carbon sequestering potential" (Exhibit A, p 368);
• "To encourage any technology or industry which depends on the continuing operation of a greenhouse polluting industry like industrial logging does not make environmental sense. When a forest has been felled and the wood is burned, it takes many years before [sic] the emissions from the wood burning to be neutralised by the regrowth forest" (Exhibit A, p 368);
• "Thus protecting native forests can be a large part of a desperately needed global warming mitigation strategy ... We need our forests for carbon sequestration not a venture that pellets and then exports our forests for short term profit" (Exhibit A, p 369);
• "The positive impacts that some people and companies might experience from wood pellet production are small in light of the climate emergency and the scale of disaster possible that forest degradation, wood chipping and pellet production contribute to. For these reasons we beg you, please don't approve this pellet plant." (Exhibit A, p 371).

18 A submission from Ms Lorraine Bower, Forestmedia, dated 24 February 2011 included the topic of "GHG emissions":

"There is no assessment by the proponent of the GHG emissions that will be produced by the plant in the process of its operations.

While most of the greenhouse and noxious gases generated from the burning of these pellets will not be produced on site; rather, they will be generated at the location where the pellets are eventually burned, these still need to be assessed in considering the environmental impacts of the project, whether or not they are burnt in Bega Valley LGA.

A Canadian study commissioned [by] the government of British Columbia (Canada) in 2009 'Emissions from Wood-Fired Combustion Equipment'. The same findings would apply to pellets which are virtually identical in their chemical composition ...

Industrial scale burning of native forest wood or wood products is more greenhouse intensive than coal fired power. Whether or not it ends up competing with genuine renewable[s] or with fuels such as coal will depend ultimately on where the pellets are sold and under what circumstances. No attempt has been made in the application to explain how much GHGs will be produced by these pellets.

The 'waste' on the forest floor currently breaks down slowly, which as mulch, it decomposes slowly and transfers significant carbon to the soil. This generates substantially less greenhouse gas than the proposed pellets. It also provides bacteria and habitat for many insects which are also sources of food for the many animals which live in the forest." (Exhibit B, pp 862-863).

19 A submission by Ms Harriett Swift dated 20 February 2011 similarly raised concerns as to:

• the greenhouse gases generated from burning the pellets (Exhibit B, p 808);
• "The Statement of Environmental Effects does not look at the full life cycle of the raw material (ie it ignores the greenhouse impacts of native forest logging)" (Exhibit B, p 809);
• no attempt is made to assess the sustainability of native forest logging for the raw material for the pellet plant (Exhibit B, p 809);
• timber that is not suitable for saw logs or woodchips could be used for pellets, "making logging even more intensive than current 'Integrated Harvesting' for woodchips" (Exhibit B, p 809).

20 There were other submissions which similarly raised issues concerning the consistency of the development with the zone objectives, ESD and impacts on climate change.

21 On 28 February 2011, DECCW provided comments to the Council on the development. Amongst other comments, DECCW noted that cl 97 of the Protection of the Environment Operations (General) Regulation 2009 prohibits the use of native forest bio-material to generate electricity and recommended imposition of conditions of consent requiring that raw feed materials only be sourced from sawdust or saw milling waste and that the proponent record the source and volume of raw feed material (Exhibit A, pp 338-339). The same day, Mr Fowler of the Council forwarded DECCW's response to SEFE for its response.

22 On 10 March 2011, SEFE responded to the matters raised by DECCW.

23 On 14 March 2011, Mr Fowler of the Council forwarded SEFE's response to DECCW for further comment. On 16 March 2011, Mr Fowler forwarded to DECCW, 9 submissions objecting to the development, including the submissions of SEFR, Climate Action Canberra, Ms Lorraine Bower and Ms Harriett Swift.

24 On 17 March 2011, DECCW responded to Mr Fowler's 14 March 2011 email responding to SEFE's response.

25 On 18 March 2011, Mr Fowler received a copy of a consent granted by Richmond Valley Council for a pellet processing plant at Woodburn.

26 On 21 March 2011, Mr Fowler forwarded the same sample of 9 public submissions to SEFE and asked for its comments on the issues raised.

27 On 24 March 2011, SEFE responded to Mr Fowler. In relation to the public submissions, SEFE noted that there are many issues raised and asked Mr Fowler to indicate any specific matters on which he would like comments. In relation to the upstream issues, such as the impacts of logging on native forests, SEFE said "because we would be utilising existing sawmill residue streams we should not be required to address any matters arising upstream from the point where the residues are generated." (Exhibit A, p 460).

28 On 5 April 2011, the Office of Environment & Heritage (replacing DECCW) emailed Mr Fowler advising that it had reviewed the draft consent Mr Fowler had earlier forwarded and it had used track changes to recommend some modifications (Exhibit A, p 467).

29 On 5 May 2011, SEFE advised Mr Fowler that it had "now received our pilot pellet plant from China and unpacked it", noted that the operating capacity of the pellet plant exceeded prior specifications being production of 600 kg/hour instead of 250 kg/hour, noted that SEFE will be able to access increased timber residues to support this level of production and that this changes data in the development application and statement of environmental effects and would require changes in plant output, truck movements and employment (Exhibit A, pp 475-476).

30 On 6 May 2011, SEFE advised the Council that the plant output would be 2,000 tonnes per annum or 3,000 cubic metres per annum instead of the previous plant output limit of 1,320 cubic metres per annum which DECCW had considered appropriate (Exhibit A, pp 475-476).

31 On 11 May 2011, SEFE forwarded to Mr Fowler the Emissions Assessment Report for the pilot wood pellet plant, which assessed and concluded that gaseous emissions from the plant will comply with the Protection of the Environment Operations (Clean Air) Regulation 2010 (Exhibit A, pp 481-495).

32 Sometime prior to 24 May 2011, Mr Fowler prepared the first Section 79C Assessment Report in relation to the development (Exhibit A, pp 572-583). This comprises the Council's proforma "Section 79C Assessment" form on which Mr Fowler has handwritten ticks and comments. Of relevance to SEFR's challenge, Mr Fowler:

• ticked the box signifying the relevance of the LEP, noting the zoning as 1(a) and the development as being defined as "Industry-Installation of wood pellet manufacturing plant" (Exhibit A, p 574);
• did not tick the box or write a comment next to cl 8 of the LEP concerning zone objectives;
• ticked the box but did not write a comment next to cl 12 of the LEP concerning the 1(a) zone;
• ticked the box but did not write a comment next to cl 65 of the LEP concerning general principles for development and use of land and buildings;
• ticked the box but did not write a comment next to cl 79 of the LEP concerning ecologically sustainable development;
• did not refer to, in any other comment, the consistency of the development with the zone objectives or ecologically sustainable development or climate change;
• noted in the section on "Public submissions" that the proposal was notified or advertised and submissions were received, and stated in response to the pro forma statement "summary of issues/conditions recommended to address issues" that "see separate report commenting on issues raised in submissions and Council reports." (Exhibit A, p 583).
• in the section on "Public interest", ticked the yes boxes signifying that approval of the development would be in the public interest, the principles of ESD have been considered in the assessment of the development, and the precautionary approach has been considered in the assessment of the development, but did not write any comments; and
• noted that the development was permissible under cl 12 of the LEP (p 583).

33 Mr Fowler was not called to give evidence by any party. However, Mr Keith Tull, Manager of Planning Services at the Council, was called by SEFE and gave affidavit evidence and was cross-examined at the hearing. Mr Tull said he saw a handwritten Section 79C Assessment when he looked at Mr Fowler's draft report to the Council meeting on 24 May 2011. The proforma Section 79C Assessment with Mr Fowler's handwriting looked similar to the one Mr Tull said he saw. No other handwritten Section 79C Assessment has been produced by the Council and it is reasonable to infer that the document described is in fact the document Mr Fowler prepared before the Council meeting on 24 May 2011.

34 The separate report commenting on issues raised in submissions, referred to in Mr Fowler's first Section 79C Assessment, was not identified with certainty. It might be the report that was annexed later to Mr Fowler's second Section 79C Assessment prepared for the Council meeting on 14 June 2011. That document contained a summary of objections (totalling 107) and a summary of letters of support (totalling 103). The summary of objections grouped the objections under the topics of processing, noise, emissions, zoning/approval process, impacts on humans, export of material, suitability of development, sustainability, global warming, alternatives, traffic, soil erosion and sedimentation, impact on flora and fauna, sales and marketing, social and economic benefits, and visual impact. The document summarised the objections and then provided a comment by Mr Fowler. Of relevance to SEFR's challenge, the document summarises the following submissions and makes the following comments:

(a) Processing

Submissions:

• SEFE must prove that no native forest will be felled for the particular purpose of using it as a fuel (Exhibit A, p 554); and
• the continued availability of waste wood for making wood pellets depends upon the continued destruction and consequent degradation of vast areas of native forest for woodchipping and export (p 555).

• Comment: SEFE has provided suitable information with regard to the type and source of raw feed material. DECCW requested that conditions of consent specify that native forest bio-material must not be used as raw feed material for the pellet plant and that the proponent keep records of the source and volume of raw materials used. The proposed conditions would address the source of materials issues raised in the submissions (pp 554-556).

(b) Emissions

Submissions:

• the statement of environmental effects makes no effort to identify or quantify particulate emissions from the plant or their impacts on human health (p 557);
• the greenhouse and noxious gases generated from burning of the pellets (by customers) need to be assessed in considering the environmental impacts of the project (p 557);
• industrial scale burning of native forest wood and wood products is more greenhouse intensive than coal fired power (p 557); and
• the statement of environmental effects ignores the greenhouse impacts of native forest logging (p 557).

Comment:

• air emissions from the plant need to comply with the Protection of the Environment Operations Act 1997 for air and particulate emissions; and
• based on an article on the Scientific American website, fewer pollutants escape from burning wood pellets than from firewood (pp 558-559).

(c) Zoning/approval process

Submissions:

• the site is Zone 1(a) agricultural which is arguably not appropriate for this type of development;
• the development does not promote tourism which is not consistent with the objectives of the 1(a) zoning, namely cl 12(2)(b) of the LEP (p 559); and
• the factory is designated development (p 559).

Comment:

• the development is not considered designated development;
• conditions of consent will limit production to a maximum of 1,320 cubic metres, prohibit use of native forest bio-material, and require reporting of the source of material and production output (pp 559-560); and
• there was no comment in relation to the submission concerning inconsistency with the zone objectives.

(d) Impact of humans

Submission: the production and burning of wood pellets contributes to air pollution and greenhouse gas emissions and have impacts on human health (p 560).

Comment: Mr Fowler repeated comments made in relation to "Emissions" (p 561).

(e) Suitability of development

Submissions:

• SEFE's predicted likely greenhouse emissions are fanciful (p 562);
• there is uncertainty as to what is wood waste and what will be used for the pellet plant (p 562); and
• approval of the pilot plant is pointless unless a full-scale plant is justified and certain (p 562).

Comment:

• any change in the amount of materials to be produced or the construction of a larger plant would require separate development application, assessment and determination; and
• all materials produced by the pellet plant would be from waste timber materials and would not require removal of any further trees for the pellet plant. A condition detailing this is proposed (p 563).

(f) Sustainability

Submission: the statement of environmental effects makes no serious attempt to examine the local or global impacts of this development (p 563).

Comment: referring to the Scientific American website, Mr Fowler said a greener alternative to burning of firewood is to burn wood pellets, which are made from saw dust and other lumber by-products that would have otherwise been landfilled and gone to waste and also emit fewer pollutants when burnt (p 563-564).

Submissions:

• material to be used for the pellets is not waste and would not exist if one million tonnes of trees were not logged each year to supply the chipmill (p 564);
• the statement of environmental effects does not look at the full life cycle of the raw material (ie it ignores the greenhouse impacts of native forest logging) (p 564);
• Sustainability of native forest logging for raw materials has not been assessed (p 564); and
• trees that are not suitable for use for woodchips could be used for pellets, thus making logging even more intensive than the current integrated harvesting for woodchips (p 564).

Comment: Mr Fowler repeated the comments he made in relation to the "Suitability of development" (p 565).

(g) Global warming

Submissions:

• any use of native forest wood, whether defined as "waste" or otherwise, will add to greenhouse emissions by encouraging continuing high levels of native forest destruction (p 565);
• wood pellet production is not truly renewable because the forests will not be fully regenerated to their full carbon sequestering potential (p 565);
• to encourage any technology or industry which depends on the continuing operation of a greenhouse polluting industry like industrial logging does not make environmental sense (p 565); and
• bio-fuels from native forests contribute several times more greenhouse gases that fossil fuels (p 565).

Comment:

• the British Columbia study referred to by objectors is not considered useful in assessing the likely impacts of the burning of wood pellets on the environment or on human health (p 566);
• the study does, however, provide a statement that the use of pellets can be viewed as an emission reduction measure, compared to burning firewood (p 565); and
• the impact of reduced gas emission with the burning of wood pellets is supported by the Scientific American website (p 566).

(h) Alternatives

Submissions:

• continued logging threatens tourism (p 566);
• new clean industries (such as renewables energies) should be encouraged in favour of polluting and destructive industries such as the proposal (p 566); and
• the destructive presence of SEFE already harms the local tourist industry (p 567).

Comment:

• the plant's location would not reduce existing visual amenity enjoyed from public vantage points around Twofold Bay and would not impact on existing businesses in or around Eden or the greater Bega Valley Shire (p 567); and
• the source of raw materials has previously been outlined by Mr Fowler in the report (p 567).

(i) Impact on flora and fauna

Submission: the development encourages the destruction of the forests (p 568).

Comment: Mr Fowler repeated comments made in relation to the source of materials issues (p 568).

(j) Social and economic benefits

Submissions:

• any real or perceived positive social and economic impacts of the development must be weighed against the scale of the dire climate emergency (p 568);
• native forest logging costs the Shire (p 568).

Comment:

• SEFE has indicated that raw materials to be used would be sourced from hardwood and softwood sawmills and fines from the residues of the chipmill operation (p 568); and
• the ethics of forest logging is not a consideration in the assessment of this application (p 568).

35 There was a further document on the Council file prepared by Mr Fowler concerning "Ecologically Sustainable Development" ("the ESD document"). The precise date on which the ESD document was prepared is unclear. Mr Tull said that a document summarising ESD considerations was on the Council file by the time of the Council meeting on 24 May 2011 (para 33 of Mr Tull's affidavit of 17 November 2011).

36 The ESD document commences as follows:

"The project has been assessed in accordance with Council's own provisions for Ecologically Sustainable Development (ESD) in the LEP 2002 and wider principles of ESD. The principles of ESD include the precautionary principle, intergenerational equity, conservation of biological diversity and ecological integrity and improved valuation, pricing and incentive mechanisms.

These principles aim to prevent and reverse adverse impacts of economic and social activities on the ecosystem, while continuing to allow the sustainable, equitable development of societies. The application of these principles were utilised in the assessment of the pilot wood pellet plant which are discussed below." (Exhibit A, p 552).

37 The discussion that follows addresses the four ESD principles. The discussion of the precautionary principle includes:

"The assessment of the development application for the pilot wood pellet plant has demonstrated that the proposal does satisfy the precautionary principle as it relates to climate change. That is, whilst some uncertainty exists as to the magnitude of effects that climate change will have on the environment, it is not a justifiable reason to not do anything about addressing it. To this end, the pilot wood pellet plant can play a role in diversifying our energy sources and providing an emission reducing alternative to greenhouse gas emissions generated from existing wood combustion heaters or lost energy fuel from burning waste materials generated at the wood chip mill and/or other saw mills located within 100 kilometres of the site." (p 552).

38 The discussion of the pilot wood pellet plant itself concluded that its environmental consequences have been assessed and are readily manageable (p 552).

39 The discussion of intergenerational equity is as follows:

"The proposal is consistent with the principles of social equity and intergenerational equity through the harnessing of waste materials that are already generated at the site and other wood processing premises for an item that could be utilised for energy production. The generated heat of the final pellets could displace a certain amount of harmful greenhouse gas emissions, particulates and other pollutants that would otherwise have been created by conventional wood heaters, unflued gas heaters and other fossil fuel power generators. This contributes in a positive way to improving the health, diversity and productivity of the environment for the benefit of future generations." (p 552).

40 The discussion of conservation of biological diversity and ecological integrity concluded that the plant itself will have no impacts on native flora and fauna and then continues:

"The proposed limiting of materials through the plant would involve stringent environmental monitoring to enable any problems to be readily identified and addressed to ensure they do not become a greater problem that could affect ecological processes or biological diversity." (p 552).

41 The discussion of improved valuation, pricing and incentive mechanisms focussed on the fact that the plant would not cause alteration of the immediate or surrounding acoustic and visual environments (p 553).

42 Mr Fowler prepared and submitted to the councillors at the meeting of the Council's Planning and Environment Committee on 24 May 2011, a report on the development ("the May report") (Exhibit A, pp 512-532). The May report stated in the "Precis" that the application for the development "is being reported to Council due to 210 submissions being received, 107 raising objection and 103 supporting the proposed development" (p 512). The May report described briefly the development and the site. It then had a section "Planning Assessment" which provided, in its entirety, as follows:

"The proposal has been assessed in accordance with the Matters for Consideration under Section 79C of the Environmental Planning and Assessment Act 1979. Staff highlight the key issues of the proposal in this report for Council's consideration.

Zoning

The land is zoned Rural 1(a) General Rural Zone under Bega Valley Local Environmental Plan 2002 (BVLEP 2002). The proposed pilot wood pellet manufacturing plant falls within the definition of an Industry and is a permissible use in the zone subject to development consent." (p 513).

43 The May report then contained a longer section entitled "Consultation". This Consultation section advised that:

"The development application was notified to adjoining and adjacent owners in accordance with Development Control Plan No 3 - Notification Policy for a period of 14 days from the 10 February 2011 to 24 February 2011 with no submissions received from adjoining owners. Notwithstanding that the application was not required to be placed on public exhibition a total of 210 submissions were received with 103 submissions supporting the proposal and 107 submissions raising objection. The issues raised in the objections are outlined below followed by staff comment." (p 514).

44 There then followed a discussion of "Submissions" grouped under topic headings of "Source of materials", "Noise", "Fauna and flora", "Social & economic impact", "Traffic generation", "Alternatives to the proposal", "Global Warming Emissions", "Approval Process", "Impact on humans by Emissions", "Visual Impact" and "In support of the proposal the following has been submitted".

45 In relation to "Source of materials", the staff comment in the May report noted that:

"The applicant has indicated that wood waste would be sourced from hardwood and softwood sawmills located within 100 kilometre radius of SEFE's mill and fines from SEFE's own process may be used subject to further drying of the material.

It is proposed to include a condition in the attached draft consent prohibiting the use of any materials in the process that are classified as Native Forest Bio-Material as defined in Chapter 7, Part 3, Clause 96 of the Protection of the Environment Operations (General) Regulation 2000 [sic, 2009]. It is also proposed to include a condition in the draft consent requiring reporting be undertaken to identify where the raw materials were sourced from and production output.

It is considered that the proposed conditions would address the "source of materials" issues raised in the submissions. The proposed conditions have been supported by the Department of Environment, Climate Change and Water (DECCW) who currently license the premises under the Protection of the Environment Operations Act 1997." (pp 514-515).

46 In relation to "Fauna and flora", the May report noted the submission that the development would encourage the destruction of the forests. The staff comment in the May report repeated the effect of the comment made in relation to the source of materials issues. The comment also noted that the siting of the plant would not impact on any existing flora and fauna on the site (pp 515-516).

47 In relation to "Social & economic impact", the May report noted the submission that any positive social and economic impacts of the development must be weighed against the scale of the dire climate emergency and the costs of native forest logging. The comment in the May report again repeated that SEFE has indicated that the raw materials would be sourced from hardwood and softwood sawmills or fines from the residue of the chipmill operation. The comment was also made that "the ethics of forest logging is not a consideration in the assessment of this application." (p 516).

48 In relation to "Alternatives to the proposal", the May report noted the submission that continued logging threatens important industries such as tourism and that the existing use of the raw material feed as mulch generates substantially less greenhouse gas than the proposed pellets. The staff comment in the May report in relation to the impact on tourism was that the plant's location would not reduce existing visual amenity from public vantage points around Twofold Bay and the proposal would not impact on existing tourist business in and around Eden or the greater Bega Valley Shire. In relation to the raw material, the comment simply stated, "the source of the raw material has been previously outlined in this report." (p 517).

49 In relation to "Global Warming Emissions", the May report noted the submissions that referred to the British Columbia study on emissions from woodfired combustion equipment, that the greenhouse and noxious gases generated from burning the pellets needed to be assessed in considering the environmental impact of the project, and that industrial scale burning of native forest wood and wood products is more greenhouse intensive than coal fired power (pp 517-518). The staff comment in the May report found the British Columbia study not to be a useful document in assessing the likely impacts of the burning of wood on the environment and on human health and referred to the Scientific American website article to support a finding that there are reduced gas emissions by burning wood pellets rather than firewood (p 518).

50 In relation to the "Approval Process", the May report noted the submission that: "The chipmill site is currently zoned 1(a) agricultural, arguably not appropriate for this type of development. The development does not promote tourism which is not consistent with the objectives of 1(a) zoning, namely Clause 12(2)(b) of BVLEP 2002" (p 518). It also noted the submission that the development is designated development under the EPA Act and Regulations. The staff comment only addressed, and rejected, the submission that the development is designated development. It did not deal with the submission that the development is inconsistent with the zone objectives (pp 518-519).

51 In relation to the "Impact on humans by Emissions", the May report noted the submissions concerning the impact of emissions from the drying and production of the pellets and from burning pellets on human health. The staff comment noted that air emissions from the plant would need to comply with the Protection of the Environment Operations Act for air and particulate emissions. In relation to impacts on human health associated with burning wood pellets, the comment referred again to the Scientific American website (pp 520-521).

52 The submissions in support of the proposal were extracted in the May report, but with no comment (p 522).

53 The May report noted that DECCW had reviewed the proposal and provided comments in relation to noise, air emissions, hours of operations, and sourcing of wood materials and that it supported the proposal subject to several conditions being included with the consent.

54 The "Conclusion" of the May report was as follows:

"The proposed development is a permissible use with consent within the 1(a) zoning of the land and is consistent with the existing industrial nature of the site. The proposal is for a pilot plant only and any proposal to increase production or establish any new plant would require the lodgement of a separate development application for assessment and determination.

The issues raised in the submissions are addressed in the report and it is considered do not warrant any further medication to or refusal of the application.

The assessment of the development application and advice received from the Department of Environment, Climate Change and Water also confirmed that the issues raised in the submissions can be addressed through conditions of consent.

It is recommended that the development application be approved subject to the conditions outlined in the attached draft development consent." (p 523).

55 The "Recommendation" was that the development application be approved subject to the conditions outlined in the attached draft development consent.

56 There were three labelled annexures to the May report: Annexure 1 - Locality Plan; Annexure 2 - Site Layout Plan; Annexure 3 - DECCW comments (17 March 2011) as well as the annexed draft development consent.

57 At the Council meeting on 24 May 2011, three persons addressed the Council, Ms Harriett Swift and Ms Lisa Stone (on behalf of SEFR) objecting to the development and Mr Peter Mitchell (on behalf of SEFE) in favour of the development. A typed version of their addresses was subsequently made available to the councillors. A transcript was prepared for the court hearing (in Exhibit A, pp 648-656).

58 Ms Swift's oral submissions included:

• SEFE had already ordered the pellet plant and it had been delivered before consent had been obtained;
• when the development application was placed on public exhibition, no information whatsoever about direct or indirect emissions and their human health impacts was provided;
• native forests are important in combating climate change;
• the Council should not give the green light to "yet another pretext for destroying forests and turning them into carbon dioxide" (Exhibit A, pp 533-535 and 648-649).

59 Ms Swift was asked and answered two questions from councillors at the conclusion of her address.

60 Ms Stone's oral submissions included:

• a pellet plant proposal is transboundary because the forests being logged to feed the factory stretch over other shires and interstate and greenhouse gas emissions have no borders;
• native forests are being logged at an unsustainable rate;
• "Climate change and pollution mitigation measures are currently great matters of public interest. Given the evidence on climate change, the adverse impacts of native forest logging's greenhouse gas emissions, the effect on water supply, the loss of biological diversity, the loss of ecological integrity, it would therefore be difficult to argue that this project will have positive environmental outcomes, and certainly does not fit the definition of zero emission renewable technologies. The definition of renewable technologies are that they do not release greenhouse gases and use zero carbon resources. The industrial patch clear-felling of the south east is the antithesis of renewable." (p 536).
• "the proponent must provide a comprehensive full life-cycle analysis of feed stock and the GHG emissions associated with all native forest operations, the transport of logs to the chipmill and of the pellet factory's operations before it could be stated that this project has been given proper consideration." (p 537);
• SEFR "have tabled a detailed submission on the failure of the Development Application to address many legal requirements which we refer you to. Given the legal considerations is not addressed, the failure to fulfil the requirements of the various Acts and the failure to consider the broader environmental impacts this proposal should be rejected." (p 537);
• "The majority of residents on the South Coast are hugely concerned about climate change and deforestation. The latest Galaxy Poll's findings were that 78% of people want an end to native forest logging. Thus the better outcome for communities and the environment would be for Council to reject the development application for the pellet factory." (p 537 and see pp 650-651).

61 Mr Mitchell's oral submissions included:

• "Previous speakers (enviro-Nazis) totally committed to stopping all NF [native forest] harvesting and destroying the timber communities that depend on these working forests" (p 538);
• "Fortunately, as the draft DA states 'the ethics of forest logging is not a consideration in the assessment of this application'. SEFE operates under RFA, an EPA licence, its timber is sourced under AFS and complies with all regulatory statutes necessary." (p 538); and
• an explanation of the production process and uses of pellets (p 538 and pp 652-653).

62 At the completion of his address, Mr Mitchell answered questions from certain councillors concerning:

• the proportion of softwood and hardwood used;
• the amount of gas used to dry raw material;
• the cost of the plant; and
• the sawmills providing raw material (para 33 of Mr Mitchell's affidavit of 21 November 2011 and Exhibit A, pp 653-656).

63 Mr Tull gave evidence that each councillor had a copy of the May report. Mr Tull also said that the Council's file on the development application was in Mr Tull's possession at the Council meeting. The file contained:

• the development application including the statement of environmental effects;
• the written submissions received by the Council;
• referrals;
• correspondence between Council staff, government agencies and SEFE;
• the Section 79C Assessment with Mr Fowler's handwriting;
• the summary of written submissions and the ESD document; and
• research papers and articles, including some papers referred to in the public submissions (para 33 of Mr Tull's affidavit of 17 November 2011 as clarified by cross-examination on 1 December 2011).

64 Mr Tull's evidence is that no councillor asked to look at, or did look at, the Council file before, during or after the May meeting (cross-examination on 1 December 2011).

65 Ms Stone, who attended and addressed the May meeting, also stated that the table in the centre of the room, on which documents that may be referred to during the course of the meeting (which Ms Stone was told included the public submissions) were placed, was not visited by any councillor during the meeting (para 8 of Ms Stone's affidavit of 26 October 2011).

66 Ms Stone said that she walked up to each councillor at the meeting and placed a copy of SEFR's submission dated 22 February 2011 in front of each councillor. This accords with her statement in her oral address that SEFR had tabled a detailed submission (Exhibit A, p 537 and p 650). Ms Stone said, however, that she did not see any councillor read SEFR's submission (para 8 of Ms Stone's affidavit of 26 October 2011).

67 Mr Tull said that, as there were three addresses to the May meeting, the Council, in accordance with its Code of Meeting Practice, deferred further debate on the development application so that the issues raised by the three addresses could be assessed by Council staff (para 37 of Mr Tull's affidavit of 17 November 2011). Accordingly, further consideration of the development application was adjourned to the Council meeting on 14 June 2011.

68 Mr Fowler prepared a second Section 79C Assessment, this time by typing on the electronic proforma sheet and then printing out the completed assessment report. Of relevance to SEFR's challenge, Mr Fowler:

• ticked the box signifying the relevance of the LEP, noted the zoning as 1(a) and the development being defined as "Industry - Installation of pilot wood pellet manufacturing plant" (Exhibit A, p 541).
• did not tick or write a comment next to the box for cl 8 of the LEP concerning zone objectives;
• did tick the box for cl 12 of the LEP of the 1(a) zone and wrote the comment "the use is permissible in the zone subject to Council consent";
• did tick the box for cl 65 of the LEP concerning general principles for development and use of land and buildings and wrote the comment:

"The development is consistent with the existing industrial uses that operate from the site. The development would not detract from any viable agricultural land, or require the removal of any vegetation. There would be no impact on fauna and flora as no vegetation requires to be removed. The location of the shed would be screened from public vantage points by the existing plant and equipment already erected on-site.

The development would generate minimal additional traffic on roads that are maintained by the applicant and the RTA being Edrom Road and Princes Highway. Both roads are designed to cater for large semi trailer truck usage.

The applicant has detailed that the materials to be used would be waste materials generated at sawmills from within 100km from the site or waste materials generated from the chip mill. It is considered that the development would have a positive impact on the environment by providing a re-use to waste timber products generated by sawmills and the chipmill. Literature obtained from the web and detailed in submissions, details that pellets are better for the environment as they burn more efficiently and produce less emissions like ash. This is considered a benefit for the environment as the chipmill currently burns waste material on-site in their large burner.

The location of the pellet plant within the existing wood chip mill is considered better from the environment given the site's already disturbed nature, it is utilised for wood processing and the extent of infrastructure already on-site like the electricity substation, amenity buildings and roads."

• ticked the box for cl 79 of the LEP concerning ecologically sustainable development and wrote the comment:

"The location of the proposed pilot plant is within an existing disturbed site. Its placement near existing amenities and services ensures no vegetation clearing is required and minimises potential impacts on the surrounding environment. The pilot plant's placement at the chipmill site ensures access to electricity services with no need to extend associated infrastructure.

The reuse of wood fines generated at sawmills and the chipmill is considered a sustainable alternative to the use of these materials that would otherwise be burnt. The chipmill can currently burn waste wood fines on-site.

The final use of wood pellets is also considered more ecologically sustainable than the burning of normal untreated firewood. There is evidence that the burning of wood pellets is better for the environment due to lesser emissions when burnt. This also provides improved well being for persons who suffer from cardiovascular and pulmonary disease.

The applicant has detailed that no additional timber felling is required for the provision of materials for the pilot pellet plant. Proposed conditions of consent to verify material source and that the use of Native Forest Bio-material as defined in Chapter 7, Part 3, Clause 96 of the POEO Regulations 2009 is not permitted, would ensure that no additional native vegetation clearing would be undertaken because of this development.

Proposed conditions on air emission and further testing would also ensure that the pilot pellet plant would be ecologically sustainable development and operate in accordance with the State standards dictated under the POEO Act and be con [sic]." (p 544).

• ticked various boxes signifying that the proposal is satisfactory in regard to the impacts on the natural environment and wrote the comment:

"The development application details that it would use waste wood materials that are produced from existing sawmills located within a 100 kilometre radius of the chipmill, or waste materials that are produced at the wood chip mill site itself. As the proposed materials to be used for the pilot wood pellet plant would be sourced from existing sawmills and/or the chipmill site itself, no additional trees are proposed to be removed for the production of wood pellets. Therefore, the only additional impacts to fauna and flora are those that are located at the chipmill for the erection of the plant and ancillary infrastructure. The development application was reviewed by Southern Rivers Catchment Authority. The placement of the shed and ancillary infrastructure would be located on already disturbed areas and there would be no impact on existing vegetation on-site. The proposal would have no impact on fauna and flora." (p 547);

• ticked the box signifying that the proposal is satisfactory having regard to the social and economic effects on the locality, town or shire and wrote the comment:

"It is considered that the development would have a neutral to a positive social and economic benefit. The proposed pilot plant would use waste materials from existing sawmills and/or from the woodchip mill site itself." (p 550);

• noted in the section on public submissions that the proposal had been notified or advertised and that submissions were received and stated "see attached copy summary of issues detailed in objections and letters of support" (p 551). The attached summary was the document to which I have earlier referred and summarised when discussing Mr Fowler's first Section 79C Assessment;

• in the section on the public interest, ticked the yes boxes signifying that approval of the development would be in the public interest, that the principles of ESD had been considered in the assessment of the development, and that the precautionary approach had been considered in the assessment of the development, and added a comment next to the box concerning the principles of ESD "see assessment above" (p 551); and

• noted the development was considered to be satisfactory and permissible under cl 12 of the LEP (p 551).

69 Mr Fowler signed and dated the completed Section 79C Assessment on 14 June 2011.

70 Mr Fowler prepared and submitted to the councillors for the Council meeting on 14 June 2011 a second report ("the June report") (Exhibit A, pp 584-604).

71 The June report noted in the "Precis" that the development application had been reported to the Council meeting on 24 May 2011, the matter had been deferred as there were three addresses to the report, the issues raised in the addresses had been assessed by Council staff, and the development application was recommended for approval subject to conditions in the attached draft consent (p 584).

72 The description of the proposal in the June report was the same as the description of the proposal in the May report. The June report then turned to assess the three addresses made to the Council at the Council meeting on 24 May 2011. The June report opened the assessment of the addresses as follows:

"There were three addresses at the Council meeting held on 24 May 2011. Addresses by Ms Swift and Mrs Stone raised issues objecting to the proposal, and those issues not covered in the previous report to Council are outlined below followed by staff comment. The third address was by Mr Mitchell on behalf of the applicant." (p 585).

73 The June report grouped the addresses and the comments under two topics: "Social & economic impact" and "Approval Process".

74 Under the heading of "Social & economic impact," the June report extracted part of Ms Stone's address concerning the majority of people being concerned about climate change and native forest logging. The staff comment in the June report was:

"As previously outlined, the applicant has indicated that the raw material to be used would be sourced from hardwood and softwood saw mills from within 100 kilometres of the chipmill site or fines generated from the chipmill operation.

The ethics of forest logging is not a consideration in the assessment of this application. The existing chipmill operates within existing development approvals applying to the site and other relevant approvals from State and federal Government approvals and legislation.

The proposed draft consent attached to this report details several conditions that would limit the operation of the pilot plant and, in the opinion of staff, would appropriately mitigate concerns raised over additional logging of Native Forests. Any variation to the plant or requests to increase the size of the plant would require the lodgement of a separate development application for assessment and determination." (p 586).

75 Under the heading of "Approval Process", the June report summarised concerns raised by Ms Swift that:

"The potential impacts associated with noise and emissions should be investigated prior to the determination of the development application. This information should also be provided to the public for comment." (p 586)

76 The staff comment in the June report was that conditions of consent will require SEFE to undertake a noise and air emission assessment of the plant to ensure compliance with the NSW Industrial Noise Policy and the Protection of the Environment Operations Act (p 586).

77 The "Conclusion" of the June report was:

"The majority of the grounds for objection to the proposal raised in the addresses to Council by Ms Swift and Mrs Stone relate to the logging of Native Forests in the South East Region of Australia which is not a consideration in this report.

The applicant has detailed that the materials to be utilised for the pellet plant would be obtained from sawmills or from waste materials generated at the chip mill itself. The attached draft consent details conditions that would limit the materials to be used for the pellet plant and provide reporting mechanisms detailing the source of materials to be used in the plant.

It is recommended that the development application be approved subject to the conditions outlined in the attached draft development consent." (p 587).

78 The "Recommendation" was that the development application be approved subject to conditions outlined in the attached draft development consent.

79 The June report had three annexures: Annexure 1 - Locality Plan; Annexure 2 - Draft Consent and Annexure 3 - Addresses to Council (being the written versions of the addresses of Ms Swift, Ms Stone and Mr Mitchell).

80 The elevations and plans of the pellet plant were included in the papers for the Council's Planning and Environment Committee meeting on 14 June 2011.

81 Mr Tull said that a copy of the June report was provided to each councillor for the meeting on 14 June 2011 (para 38 of Mr Tull's affidavit of 17 November 2011).

82 Mr Tull said that there was a Question and Answer session on 14 June 2011 prior to the Council meeting (para 38). The purpose of a Question and Answer session was to allow councillors time to review the agenda items before the council meeting and for the councillors to question staff about the development application, Section 79C Assessment and request clarification of matters, view plans, submissions etc. The Council report was sometimes discussed at the Questions and Answer session (para 34 of Mr Tull's affidavit of 17 November 2011). However, Mr Tull said that at the Question and Answer session before the Council meeting on 14 June 2011, no councillor asked any question, and Mr Tull did not provide any answer to any question, about SEFE's development application for the wood pellet plant (cross-examination on 1 December 2011 and para 38 of Mr Tull's affidavit of 17 November 2011).

83 Mr Tull said he again had the Council file with him at the Council meeting on 14 June 2011. The file contained all of the documents previously stated to be on the Council file for the 24 May 2011 meeting as well as the second Section 79C Assessment. However, again, Mr Tull's evidence is that no councillor asked to look at, or did look at, the Council file before or during the Council meeting on 14 June 2011.

84 Ms Stone attended for the duration of the Council meeting on 14 June 2011. She observed again a number of documents on the table in the centre of the room but did not see any councillor go to the table. She also did not see any councillor read submissions (para 12 of Ms Stone's affidavit of 26 October 2011).

85 The Council resolved at the meeting on 14 June 2011 to determine the development application by granting development consent subject to the conditions outlined in the draft development consent. Notice of determination dated 14 June 2011 was given to SEFE (Exhibit A, pp 606-610).

86 Subsequently, construction certificates were issued. SEFE commenced construction of the appellant plant on 27 June 2011 and completed construction on 25 August 2011.

87 SEFR commenced these proceedings challenging the development consent on 12 August 2011.

Failure to consider and be satisfied of the development's consistency with zone objectives

88 Clause 8(3) of the LEP provides:

"Consent must not be granted to development proposed within a zone unless the consent authority has taken into consideration such of the objectives of the zone as are relevant to the proposal and is satisfied that the development is consistent with those objectives."

89 Clause 12(2) of the LEP sets out the objective of the relevant Zone 1(a):

"The objectives of Zone 1(a) are as follows:

(a) to encourage continued growth in the area's rural economic base,

(b) to encourage other forms of development, including tourism, that are compatible with agricultural activities and do not create undesirable environmental and cultural impacts,

(c) to protect and conserve the productive potential of prime crop and pasture land,

(d) to maintain the scenic amenity and landscape quality of the area,

(e) to promote the protection, and the preservation and enhancement, of natural ecological systems and processes,

(f) to provide proper and coordinated use and protection of rivers, riparian corridors and water catchment areas,

(g) to promote the economic provision of services compatible with the nature and intensity of development and the character of the area,

(h) to ensure that development and management of the land has minimal impact on water quality and environmental flows of receiving waters,

(i) to maintain significant features of natural and cultural heritage."

90 Clause 8(3) sets a precondition to the exercise of the power to determine a development application by the grant of consent. The Council, as the consent authority, must, first, take into consideration such of the objectives of the zone in which the development is proposed and, secondly, form the requisite mental state of satisfaction that the development is consistent with those objectives. If the precondition in cl 8(3) is not satisfied in the circumstances of the particular development, the power to grant consent to that development is not enlivened and any purported exercise of the power to grant consent will be invalid: Clifford v Wyong Shire Council (1996) 89 LGERA 240 at 249, 251-252; Currey v Sutherland Shire Council (1998) 100 LGERA 365 at 372, 374-375; Franklins Ltd v Penrith City Council [1999] NSWCA 134 at [18], [27], [28]; Manly Council v Hortis [2001] NSWCA 81; (2001) 113 LGERA 321 at [22], [31], [32], [53], [54]; and Schroders Australia Property Management Ltd v Shoalhaven City Council [2001] NSWCA 74 at [7].

91 SEFR submitted that the inference should be drawn, from all of the evidence, that the Council did not consider the relevant objectives of Zone 1(a) or form the required mental state of satisfaction that the development is consistent with those objectives. SEFE submitted to the contrary.

92 I find that the Council, as the collegiate body that exercised the power to grant consent, neither took into consideration such of the objectives of Zone 1(a) as were relevant to SEFE's development nor formed the required mental state of satisfaction that the development was consistent with those objectives.

93 The Council, comprising the councillors as a collegiate body, exercised the power to determine the development application by granting consent. The power was not exercised by a delegate, such as the council officer reporting to the council, Mr Fowler. Hence, the Council, as the collegiate body of councillors, had to consider what were the relevant zone objectives and be satisfied that the development was consistent with those relevant zone objectives.

94 The evidence is that the only documents the councillors had before them when they considered and determined SEFE's development application by granting consent were Mr Fowler's two reports to the Council, the first to the Council meeting on 24 May 2011 and the second to the Council meeting on 14 June 2011, together with the respective annexures to those reports, as well as the plans and elevations of the development which were part of the agenda papers for the meeting on 14 June 2011.

95 Other documents in the Council's file were not provided to the councillors and no councillor requested to look at, or did look at, the documents in the Council's file. The documents on the Council's file which were not considered by the councillors included: the development application, statement of environmental effects and other documents submitted by SEFE in support of the development application; the 210 public submissions either objecting to or supporting the development; Mr Fowler's first (handwritten) and second Section 79C Assessments; Mr Fowler's document summarising the submissions objecting to or in supporting the development; and Mr Fowler's ESD document. The only other document provided to the councillors was SEFR's submission dated 22 February 2011 which Ms Stone said she placed in front of each councillor at the meeting on 24 May 2011 although Ms Stone said she did not see any councillor read SEFR's submission.

96 Mr Fowler's reports to the Council meetings in May and June 2011 did not draw the councillor's attention at all to cl 8(3) of the LEP, either in terms or in effect. Only the May report contained a section "Planning Assessment" and even that consisted only of two paragraphs. The first paragraph merely reported the fact that the Council officer had assessed the proposal in accordance with s 79C of the EPA Act; that is unexceptional - all development applications are required to be assessed in accordance with s 79C of the EPA Act. No detail of the assessment was provided. The first paragraph then stated:

"Staff highlight the key issues of the proposal in this report for Council's consideration."

97 By this statement, the councillors' attention is only drawn to the "key issues" which are highlighted in the report and to nothing else. Clause 8(3) of the LEP is not one of the key issues highlighted anywhere in the report for the councillors' consideration.

98 The second paragraph in the planning assessment section of the May report only refers to the zoning and the permissibility of the development as an industry in that zone. This is a reference to the zoning and development controls in cl 12 of the LEP, distinct requirements from the precondition in cl 8(3) of the LEP.

99 The May report returns to the zoning and permissibility of the use in the conclusion where it states that "the proposed development is a permissible use with consent within the 1(a) zoning of the land and is consistent with the existing industrial nature of the site." This is a distinct requirement to the precondition in cl 8(3) of the LEP. The statement that the proposed development "is consistent with the existing industrial nature of the site" is not the relevant test required by cl 8(3) of consistency with such of the objectives of Zone 1(a) as are relevant to the proposed development.

100 The only other reference to the issue of the consistency of the development with the zone objectives is in the May report's consideration of the submissions under the topic of "Approval Process". The May report quotes the submission that the development does not promote tourism, which is not consistent with the objectives of the 1(a) zoning and the reference to cl 12(2)(b) of the LEP. However, in the comment in the May report dealing with this submission, the issue raised is totally ignored. The comment focuses instead on another submission that the development is designated development. Hence, one of the "key issues" raised in the May report for Council's consideration was the issue of whether the development was designated development - the report said it was not. The issue of consistency with the zone objectives was not raised as a key issue for the Council's consideration by the comments in the May report.

101 Hence, nothing in the May report drew the councillors' attention to cl 8(3) of the LEP or the need to take into consideration such of the objectives of Zone 1(a) as are relevant to the development and to form the requisite mental state of satisfaction that the development was consistent with those objectives, or even stated that the Council staff had considered and formed such a mental state of satisfaction. Indeed, having regard to the express statement that staff had highlighted the key issues of the proposal in the report for the Council's consideration and the fact that cl 8(3) was not an issue highlighted in any way in the report, the councillors would reasonably be expected to have not considered which of the zone objectives were relevant to the proposal or formed the requisite mental state of satisfaction under cl 8(3) that the development was consistent with the relevant zone objectives.

102 The June report did not deal at all with a planning assessment. The stated purpose of the June report was merely to assess the three addresses made to the Council meeting on 24 May 2011. The June report stated that "those issues not covered in the previous report to Council are outlined below followed by staff comment." Hence, again, the councillors were being informed of what issues raised by the addresses needed to be considered by the Council. Nowhere in the summary of issues raised in the three addresses or in the comments responding to the issues is there any reference to or consideration of cl 8(3) of the LEP or the development's consistency with the relevant zone objectives.

103 In addition to the information in the May report and the June report, the Council also received information at the meeting. At the meeting on 24 May 2011, the additional information was contained in the three addresses by Ms Swift, Ms Stone and Mr Mitchell and in the questions and answers to Ms Swift and Mr Mitchell at the conclusion of their addresses. However, this information did not include cl 8(3) of the LEP in terms or substance. Hence, these addresses and questions and answers did not inform the councillors of the need to consider, or provide an evidentiary basis for considering, cl 8(3) of the LEP and its application to the development.

104 The evidence of Mr Tull who attended both the May and June meetings of the Council, and the Question and Answer sessions beforehand, was that there were no questions asked by any councillor or information provided by Mr Tull concerning SEFE's development application hence the application of cl 8(3) to the development. The evidence of Ms Stone, who also attended for the duration of the May and June meetings of the Council, corroborates that the councillors did not discuss cl 8(3) or its application to the development.

105 The transcript of the debate at the meeting on 14 June 2011 also shows that there was no discussion of cl 8(3) or its application to the development.

106 Mr Tull's explanation of the Council's usual practice provides further evidence that the Council did not consider cl 8(3) and its application to the development in this case. Mr Tull said that the usual practice of Council officers in reporting to the Council is to only identify specific zone objectives if the case officer assessing the development application has reached the opinion that the development is not consistent with the zone's objectives (para 17 of Mr Tull's affidavit of 17 November 2011). Mr Tull gave examples in other cases where the relevant case officer expressly stated in the report to the Council that the development did not meet the zone objectives (para 18).

107 This "usual practice" of the Council officers has the consequence that, when the Council is a collegiate body of councillors acting as the consent authority, it only receives information about cl 8(3) and its application to a particular development if and when the Council officer reporting to the Council reaches the opinion that the development is inconsistent with the zone objectives. The Council in that situation is directed by the Council officer's report to give positive attention to the requirement to form a mental state of satisfaction or dissatisfaction as to the consistency of the development with the relevant zone objectives. However, if the Council officer does not reach the opinion that the development is inconsistent with the zone objectives, the officer's report to the Council is silent as to cl 8(3) and its application to the development and no evidentiary basis is provided to the Council to enable it to consider and to form the required mental state of satisfaction as to the consistency of the development with the relevant zone objectives. Mr Tull did not state in his evidence that the Council's usual practice in this situation is, nevertheless, to consider and to form the required mental state of satisfaction as to the development's consistency with the zone objectives.

108 From this evidence of usual practice, I infer that the Council only gives positive attention and positively forms the required mental state of satisfaction under cl 8(3) of the LEP in relation to a proposed development if the Council officer reporting to the Council reaches an opinion that the development is not consistent with the zone objectives.

109 According to this usual practice, the Council in this case would not have given positive attention to and would not have positively formed the required mental state of satisfaction that SEFE's development was consistent with the relevant objectives of Zone 1(a). Hence, the Council's usual practice corroborates the inference I draw from the other evidence of the Council's consideration and determination of SEFE's development application that the Council did not consider or apply cl 8(3) to the development.

110 SEFE sought to rely on Mr Fowler's two Section 79C Assessments as evidencing consideration by the Council of cl 8(3) of the LEP. These assessments do not assist for two reasons. First, the evidence is that the councillors had no knowledge of the contents of these assessments. Neither assessment was provided to any councillor and Mr Tull's evidence is that no councillor asked to look at, or did look at, any documents on the Council's file (which included Mr Fowler's two Section 79C Assessments). Mr Tull's evidence is that no councillor asked any questions, and that Mr Tull provided no information in the Question and Answer sessions before the Council's meeting, concerning SEFE's development application. Hence, there was no oral communication of the contents of the two Section 79C Assessments to the councillors.

111 Secondly, neither the first (handwritten) nor the second Section 79C Assessments ticked the box or wrote any comment next to cl 8 of the LEP in the proforma sheets. The assessments were silent as to the issue of the consistency of the development with the zone objectives. The ticking of the box next to cl 12 in both assessments and the addition of the comment in the second Section 79C Assessment that "the use is permissible in the zone subject to Council consent" does not assist in demonstrating consideration of cl 8(3) but rather shows consideration of the zoning and permissibility of the use with consent, distinct issues to those raised by cl 8(3) of the LEP. Even if a proposed development is for a permissible purpose, that does not necessarily lead to a conclusion that the development is consistent with the zone objectives. Separate consideration and formation of a positive opinion of consistency with the zone objectives is required: Conservation of North Ocean Shores Inc v Byron Shire Council [2009] NSWLEC 69; (2009) 167 LGERA 52 at 79 [84].

112 Hence, even if councillors had considered the two Section 79C Assessments, they would not have had their positive attention drawn to cl 8(3) or its application to SEFE's development.

113 SEFE referred to the ticking of the box for cl 65 in each of Mr Fowler's Section 79C Assessments and the addition of the comment in the second assessment considering the matters raised in cl 65 of the LEP. SEFE submitted that the matters in cl 65, and considered in the Section 79C Assessments, substantially overlap with the objectives of Zone 1(a). Hence, SEFE submitted that consideration of the matters in cl 65 in the second Section 79C Assessment effected consideration of the objects of Zone 1(a) for the purposes of cl 8(3) of the LEP. SEFE referred to the statement in Hill v Woollahra Municipal Council [2003] NSWCA 106; (2003) 127 LGERA 7 at [53] that:

"Another consideration relevant to this question is that, so long as the body in question does address the question it is required to address, it does not have to refer explicitly to the statute or instrument that poses the question: the body is required to address the substance of the question, not the fact that the question is posed by a particular statute or instrument. Explicit reference to the statute or instrument will help confirm that the body did address the right question, but absence of such reference does not of itself indicate that it did not."

114 In this case, I find that consideration of the matters in cl 65 in the two Section 79C Assessments does not establish consideration by the councillors of cl 8(3) of the LEP. First, as stated above, I find the councillors had no knowledge of the contents of Mr Fowler's Section 79C Assessments, and hence the discussion of the cl 65 matters therein.

115 Secondly, the questions that the Council were required to address under cl 65 and under cl 8(3) of the LEP are different. Clause 65 requires only that the consent authority consider such of the matters in cl 65 as are relevant to the proposed development while cl 8(3) requires not only the taking into consideration of such of the objectives of the zone as are relevant to the proposal but also the forming of the mental state of satisfaction that the development is consistent with those objectives. This additional requirement of satisfaction in cl 8(3) is absent from cl 65.

116 Thirdly, the matters in cl 65 are not in terms or effect the same as the objectives of Zone 1(a). It is not enough that there are some similarities in the topics covered by the matters in cl 65 and the objectives of Zone 1(a). The question required to be addressed by cl 8(3) is the consistency of the development with the objectives of the relevant zone (here, Zone 1(a)) in the terms in which they are expressed (here, in cl 12(2)). These terms are materially different to the terms in cl 65(1). To address the question required by cl 8(3) by reference to the terms used in cl 65(1) is to address the wrong question.

117 Likewise, SEFE submitted that the consideration in the two Section 79C Assessments of the issues under the headings of "Environmental Impacts", particularly in the second Section 79C Assessment with its comments, demonstrated consideration of the objectives of Zone 1(a). SEFE submitted that the issues identified under the "Environmental Impacts" headings overlap with, and mirror, the objectives required to be considered by cl 12(2) and cl 8(3) of the LEP. SEFE submitted that the Council officer, having concluded that the development is satisfactory having regard to the matters identified under the "Environmental Impacts" headings, should also be inferred to have been satisfied that the development is consistent with the zone objectives.

118 I do not agree for the same three reasons I rejected SEFE's submission that consideration of cl 65 constitutes consideration of cl 8(3) and cl 12(2) of the LEP: first, the councillors had no knowledge of Mr Fowler's Section 79C Assessments and hence the discussion of the environmental impacts therein; secondly, the questions the Council was required to address under cl 8(3) and cl 12(2), and in particular the requirement of satisfaction of the development's consistency with the relevant zone objectives, are different to the questions raised under the headings of "Environmental Impacts" in the Section 79C Assessments; and thirdly, the terms of cl 8(2) and cl 12(2) are materially different to the terms of the questions in the proforma sheets of the Section 79C Assessments under the headings of "Environmental Impacts".

119 SEFE also sought to rely on its statement of environmental effects submitted with its development application, which considered the objectives of Zone 1(a). Again, the statement of environmental effects does not assist SEFE for two reasons.

120 First, the evidence is that the councillors were never provided with, never asked to look at, and never did look at the statement of environmental effects, and otherwise, had no knowledge of the statement of environmental effects' discussion of the objectives of Zone 1(a). Hence, the councillors did not consider or adopt the statement of environmental effects' discussion of the zone objectives.

121 Secondly, the discussion of the zone objectives in the statement of environmental effects was not adequate in any event to consider or apply cl 8(3) of the LEP to the development. Section 2.2 of the statement of environmental effects, concerning zoning, merely noted that the site of the proposed development was on land zoned 1(a) and set out the objectives of the zone. However, there was neither any reference to cl 8(3) nor any examination in substance of which of the objectives were relevant to the proposed development or of whether the development was consistent with the objectives identified to be relevant (as required by cl 8(3) of the LEP).

122 Section 2.3 of the statement of environmental effects, concerning compatibility with planning provisions, is only two paragraphs. The first paragraph contains the unexceptional statement that the LEP requires a range of developments to obtain development consent in Zone 1(a). The second paragraph baldly states: "Given the existing nature of the woodchip production activity and the objectives of the Rural 'A' Zone, the proposed development is compatible with the planning provisions applicable to the site." There is no explanation of what are "the planning provisions applicable to the site." There is no reference to cl 8(3) either in terms or substance. The statement does not ask or answer the relevant questions of which of the core objectives are relevant to the development and whether the development is consistent with the objectives of the zone. There are no findings or inferences of fact demonstrating that the proposed development is consistent with the objectives of Zone 1(a).

123 Hence, even if the councillors had considered the statement of environmental effects, they would not have had their positive attention drawn to cl 8(3), either in terms or substance, or its application to the particular development in question.

124 Finally, SEFE submitted that the councillors should be assumed to have knowledge of the LEP, and in particular cl 8(3) of it. SEFE submitted that cl 8(3) is a precondition that must be satisfied for all development applications considered by the Council. It stands in contrast to the particular preconditions in the clauses considered in Currey v Sutherland Shire Council and Franklins v Penrith City Council .

125 I accept that the cl 8(3) of the LEP is a precondition that the Council must consider and apply before granting consent to all development regulated by the LEP. This may mean that the councillors do have some knowledge of the existence and content of cl 8(3). However, merely being aware of the existence or even of the contents of cl 8(3) of the LEP is insufficient. The Council must enliven that knowledge and apply cl 8(3) to each particular development application. Clause 8(3) demands that the Council not grant consent to the particular development proposed unless the Council has taken into consideration such of the objectives of the zone as are relevant to that particular development and formed the mental state of satisfaction that the particular development is consistent with those relevant objectives. The question is whether the Council did so in the case of SEFE's development application. On the whole of the evidence, I find that the Council, as the collegiate body, did not consider or apply cl 8(3) to SEFE's development application before determining to grant consent to the development proposed.

126 For these reasons, the Council did not satisfy the precondition in cl 8(3) of the LEP and therefore had no power to grant consent to the development. The Council's exercise of power to grant consent to the development is invalid.

Failure to consider public submissions

127 SEFR's second ground of challenge is that the Council failed to consider submissions made by members of the public in determining the development application and in particular submissions raising the two issues of the consistency of the development with the zone objectives and the principles of ESD.

128 SEFR submit that the Council was bound to consider all submissions made by the public under s 79C(1)(d) of the EPA Act, which provides that:

"In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application:

(d) any submissions made in accordance with this Act or the regulations".

129 The development of the pellet plant is for the purpose of industry. Such development is not designated development or advertised development under the EPA Act and the Environmental Planning and Assessment Regulation 2000. Accordingly, the development application did not need to be notified or advertised, or submissions invited, under the provisions for notification and advertisement of these types of development.

130 However, the Council has adopted Development Control Plan No. 3 -Notification Policy under the then s 72 of the EPA Act. The Notification Policy identifies specific development in the LEP that is to be publicly exhibited before an application for development consent is to determined pursuant to the EPA Act (cl 7.2). Notification is required in all instances except where the notification policy specifies that it is not (in cl 7.1). There are 2 types of notification, Type A and Type B.

131 Type A notification is stated to be "for minor proposals, and notification is aimed at those on 'adjoining land'." Type A notification consists of a letter being sent to adjoining landowners and occupiers advising them of the development application and inviting written submissions within a period of 14 days from the date of the notification letter (cl 7.3). Type B notification is stated to be "for more complex proposals, where more extensive notification is carried out and is aimed at 'neighbouring land'." Type B notification consists of a letter being sent not only to adjoining landholders and occupiers but also neighbouring landholders and occupiers, as well as placing an advertisement in a local newspaper, inviting written submissions within 14 days from the date of the advertisement (cl 7.3).

132 However, the Council retains an element of discretion as to the level of notification required for development that in the opinion of the Director of Environment, Planning and Development is of a nature that the opportunity should be available to submit written comments (cl 7.4). Hence, the Council can, in its discretion, require Type B notification for development for which Table 1 would specify Type A notification, if the particular development is of a nature that more extensive notification is warranted.

133 In this case, the Council did determine that more extensive notification was required for SEFE's development and it gave not only Type A notification to adjoining landowners and occupiers but also placed an advertisement in the local newspaper inviting submissions within the submission period of 10 February to 24 February 2011. 210 submissions were received by the Council in response to this advertisement.

134 In these circumstances, the submissions made to the Council in the submission period can be characterised as being "submissions made in accordance with the Act or Regulations" within s 79C(1)(d) of the EPA Act. The submissions were made in response to an advertisement placed by the Council in a local newspaper in accordance with the Notification Policy which in turn was made pursuant to the then s 72 of the EPA Act. SEFE did not contest that the submissions made to the Council were made in accordance with the Act or the Regulations.

135 SEFR submitted that certain of the submissions made concerned the issues of the development's consistency with the objectives of Zone 1(a) and the application of the principles of ESD to the development. SEFR submitted that both of these issues are relevant matters that the Council was bound to take into consideration in the determination of SEFE's development application. SEFR submitted that when the Council resolved to grant consent to the development, it was done in the absence of any knowledge of the public submissions that had been made on either consistency with the zone objectives or the principles of ESD. The evidence is that no councillor was provided with copies of all of the public submissions (with the exception of SEFR's submission of 22 February 2011 which Ms Stone placed before each councillor at the meeting on 24 May 2011), or asked to look at the Council's file containing the submissions made or was seen to read any submissions. SEFR submitted that the summary of the submissions made in the reports to the Council meetings did not address the issues raised in the public submissions of consistency with the zone objectives or the principles of ESD. Hence, SEFR submitted, the Council failed to take into consideration the public submissions and failed to comply with the requirements of s 79C(1)(d) of the EPA Act: Nambucca Valley Conservation Association v Nambucca Shire Council [2010] NSWLEC 38 at [186] and [191].

136 SEFE defended the Council's decision, submitting that the Council was entitled to rely on its officer, Mr Fowler, summarising all of the submissions which had been made and reporting to the Council on the submissions in his reports to the Council meetings on 24 May 2011 and 14 June 2011. By adopting the summary of the submissions in the reports, the Council took the submissions into account: Parramatta City Council v Hale (1982) 47 LGRA 319 at 346; Minister for Local Government v South Sydney City Council [2002] NSWCA 288; (2002) 55 NSWLR 381 at 426-427 [211].

137 In my view, SEFR has established that the Council failed to consider the submissions made which raised the issues of the consistency of the development with the zone objectives and the principles of ESD in determining the development application by granting consent.

138 The duty under s 79C(1)(d) of the EPA Act requires the body or person who is the consent authority to take into consideration the submissions made in accordance with the Act or Regulations in determining the development application. In this case, it is the Council as the collegiate body who had to take into consideration the submissions. The Council could not delegate that function and duty to someone else, such as a Council officer. The councillors, sitting as the collegiate body, had to apply their own minds to the submissions and the issues raised by the submissions. To do that, they must obtain an understanding of the facts and circumstances set out in the submissions, and of the contentions they urged based on those facts and circumstances.

139 This does not mean that the Council as the collegiate body was denied the assistance of others, such as a council officer, in the process of ascertaining the facts and contentions contained in the submissions. The Council could assign to an officer the task of recording, collating, organising and summarising the submissions. The officer could ascertain the facts and contentions raised in the submissions and bring them to the attention of the Council in a summary or report to the Council: see Tickner v Chapman (1995) 57 FCR 451 at 464, 476-477; Minister for Local Government v South Sydney City Council at [211].

140 However, the summary or report of the assisting officer must bring to the Council's attention all material facts and contentions raised in the submissions which the Council as the consent authority is bound to consider and which cannot be dismissed as insignificant or insubstantial: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 30-31; Tickner v Chapman at 477. If the officer leaves out from the summary or report to the Council, and hence does not bring to the Council's attention, the material facts or contentions raised in the submissions, the Council will not be able to perform its function and duty of taking into consideration those submissions by adopting the summary or report alone. The Council cannot perform its task of ascertaining and evaluating the facts and contentions raised in submissions, and hence considering the submissions, unless it knows what they actually are: Tickner v Chapman at 464-465, 476.

141 In this case, a number of the submissions made by persons objecting to the development raised the issues that the development was inconsistent or incompatible with the objectives of the relevant Zone 1(a): see, for example, SEFR's submission (Exhibit B, pp 763-773); Mr M Fisher's submission (Exhibit B, p 733); Mr D Reckord's submission (Exhibit B, p 740); Ms W Fuller's submission (Exhibit B, p 747); Ms K Urquhart's submission (Exhibit B, p 782); Ms C Dignan's submission (Exhibit B, p 789); Ms J Dodds' submission (Exhibit B, p 797); Ms H Swift's submission (Exhibit B, p 808); Ms L Katz's submission (Exhibit B, p 819); and Ms L Bower's submission (Exhibit B, p 862). Some submissions also raised the issue that SEFE has not established that the development is consistent with the principles of ESD: see, for example, SEFR's submission (Exhibit B, p 774) and Mr M Harewood's submission (Exhibit B, p 736).

142 The Council officer assessing the development application for the Council, Mr Fowler, undertook the task of summarising the submissions in his two reports to the Council for its meetings on 24 May 2011 and on 14 June 2011. However, neither of these reports raised the issues of consistency of the development with the zone objectives or the issue of application of the principles of ESD to the development for the consideration of the Council.

143 The May report stated that "the issues raised in the objections are outlined below followed by staff comment." I have summarised earlier in the judgment the May report's consideration of the issues Mr Fowler said were raised in the submissions. Neither the issue of consistency of the development with the zone objectives nor the issue of the application of the principles of ESD to the development was raised in the May report as one of the "issues raised in the objections" or discussed in the May report in the "staff comment". Hence, these issues raised in the submissions were not brought to the attention of the councillors. Councillors reading the May report, especially in the light of the statement that the issues raised in the objections had been outlined in the report, would not have been aware that these issues had been raised in the submissions. These issues were relevant issues for the Council to take into consideration (as I hold elsewhere in the judgment in relation to SEFR's first and third grounds of challenge). The Council could only perform its duty of taking the issues into consideration after it knew that those issues had been raised in the submissions.

144 The June report only addressed the issues raised in the three addresses to the Council at its meeting on 24 May 2011. The June report stated that "addresses by Ms Swift and Mrs Stone raised issues objecting to the proposal, and those issues not covered in the previous report to Council are outlined below followed by staff comment." The issues outlined in the June report concerned only two topics: social and economic impact and approval process. Neither the submissions summarised nor the following staff comment in the June report on either of these two topics raised the issues of the consistency of the development with the zone objectives or the principles of ESD. Again, councillors reading the June report would have been unaware that the submissions that had been made had raised the issues of consistency with zone objectives or the principles of ESD.

145 The other information provided to the councillors also did not raise the issues of the development's consistency with the zone objectives or the principles of ESD that had been raised in the submissions. The oral addresses to the Council on 24 May 2011, the questions and answers of the persons who addressed the Council on 24 May 2011, and the debate of the Council at its meeting on 14 June 2011 did not address these issues: see my findings earlier in the judgment on SEFR's first ground of challenge.

146 SEFE sought to rely on Mr Fowler's two Section 79C Assessments and the separate document Mr Fowler prepared summarising the submissions received by the Council both objecting to and supporting the development. These documents do not assist in establishing consideration by the councillors of the submissions raising the issues of consistency with the zone objectives and the principles of ESD for two reasons. First, I find on the evidence that the councillors were not provided with, did not ask to look at and did not actually look at any of these documents. The councillors were unaware of the contents of the documents and any discussion in them of the submissions. Hence, the councillors cannot be taken to have considered the submissions by reference to these documents.

147 Secondly, these documents do not consider the issues of consistency with the zone objectives or the principles of ESD raised in the submissions. The two Section 79C Assessments, in the section on "Public Submissions", noted that submissions had been received and referred to the "separate reporting commenting on issues raised in submissions and Council reports" (May report) or the "attached copy summary of issues detailed in objections and letters of support" (June report). Other, than these respective references, the two Section 79C Assessments do not expressly identify, summarise or comment on the issues raised in the submissions.

148 The separate document referred to in each of the Section 79C Assessments was Mr Fowler's summary of submissions objecting to and supporting the development. I have summarised this document earlier in the judgment. Under the topic of "Zoning/Approval process", the document notes the submissions that Zone 1(a) agricultural is not appropriate for the development and that, the development does not promote tourism and is not consistent with the objectives of Zone 1(a). However, in the comment in response, there is no addressing of this issue but instead the comment focuses on other issues raised under this topic. The document does not enable an understanding of the relevant facts and circumstances and the contention urged concerning the inconsistency of the development with the zone objectives based on those facts and contentions, set out in the submissions. The document does not expressly identify the issue of the application of the principles of ESD as having been raised in the submissions and does not address this issue.

149 Hence, even if the councillors had considered the two Section 79C Assessments and the document summarising the submissions, they would not have had their positive attention drawn to, and been provided with sufficient information on, the issues of the development's consistency with the zone objectives and the principles of ESD raised in the submissions so as to enable them to take into consideration those submissions.

150 In these circumstances, the Council has failed to comply with s 79C(1)(d) of the EPA Act to take into consideration those submissions made which raised the issues of the consistency of the development with the zone objectives and the principles of ESD.

Failure to consider ESD

151 SEFR's third ground of challenge is that the Council failed to consider the relevant matter of ESD. SEFR submit that ESD is a relevant matter to be considered in two ways: first, by cl 79 of the LEP and, secondly, as an element of the public interest required to be considered under s 79C(1)(e) of the EPA Act.

152 As the first way, cl 79 of the LEP provides:

"Before determining an application for consent to development, consideration shall be given by the consent authority to the following in so far as they are relevant to the proposed development and may promote the principles of ecologically sustainable development:

(a) building and allotment orientation,

(b) conservation, protection and enhancement of natural resources (including riparian areas and remnant native vegetation),

(c) optimisation of the use of natural features of the site,

(d) reduction of car dependence,

(e) use of landscaping to improve air, soil and water quality,

(f) optimisation of energy efficiency,

(g) waste minimisation."

153 The concept of "ecologically sustainable development" is defined in the Dictionary of the LEP to mean "development which uses, conserves and enhances the community's resources so that ecological processes on which life depends are maintained, and the total quality of life, now and in the future, can be increased."

154 Clause 79 requires the consent authority to, first, identify which of the matters enumerated in paragraphs (a) to (g) are relevant to the development proposed in the development application and, secondly, consider whether and to what extent the development promotes the principles of ecologically sustainable development (as defined) having regard to those matters identified to be relevant to the development.

155 As to the second way, s 79C(1)(e) of the EPA Act requires a consent authority to take into consideration the public interest in determining a development application. Consideration of the public interest embraces ESD where issues relevant to one or more of the principles of ESD are raised by the development the subject of the development application: Telstra Corporation Ltd v Hornsby Shire Council (2006) 67 NSWLR 256; 146 LGERA 10 at [121]-[124]; Minister for Planning v Walker [2008] NSWCA 224; (2008) 161 LGERA 423 at 451 [42]-[43].

156 The Council officer assessing SEFE's development application, Mr Fowler, identified the principles of ESD to be relevant to the development proposed, both in terms of cl 79 of the LEP and the wider principles of ESD. As I have summarised earlier in the judgment, in the first (handwritten) Section 79C Assessment, Mr Fowler ticked the box next to cl 79 of the LEP and the box signifying consideration of the principles of ESD and, in the second Section 79C Assessment, he ticked the box next to cl 79 of the LEP and added a written comment discussing the application of cl 79 to the development and ticked the box signifying consideration of the principles of ESD and said "see assessment above". Mr Fowler also prepared the separate ESD document which states that the development has been assessed in accordance with the both the Council's own provisions for ESD in the LEP (ie in cl 79) and wider principles of ESD. I have set out Mr Fowler's discussion in the ESD document earlier in the judgment.

157 ESD, in terms of cl 79 of the LEP and as an element of the public interest under s 79C(1)(e) of the EPA Act, were relevant matters to be taken into consideration by the Council in determining SEFE's development application. However, I find that the Council as the collegiate body with the duty to take ESD into consideration in determining to grant consent to SEFE's development, failed to do so.

158 None of the material considered by the Council at its meetings on 24 May 2011 or 14 June 2011 in determining the development application addressed ESD, either in terms of cl 79 of the LEP or as an element of the public interest under s 79C(1)(e) of the EPA Act. This is not a case where it is necessary to address the level of particularity of the principles of ESD that the consent authority is bound to consider, such as was the case in Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349. There was simply no consideration by the Council as the collegiate body of ESD at all.

159 Neither the May report nor the June report referred to ESD. The May report in its section on "planning assessment" does not deal at all with cl 79 of the LEP. It asserts that: "The proposal has been assessed in accordance with the matters for consideration under s 79C of the Environmental Planning and Assessment Act 1979." However, there is no explanation of what the matters for consideration are or of any assessment in accordance with the matters. The subsequent statement that "[s]taff highlight the key issues of the proposal in this report for Council's consideration" informs the Council that the key issues of planning assessment are highlighted elsewhere in the report. However, nowhere in the report is either cl 79 of the LEP or ESD as an element of the public interest under s 79C(1)(e) of the EPA Act highlighted.

160 The June report assessed the issues raised by the three addresses to the Council on 14 June 2011. These were dealt with under the topics of social and economic impact and approval process. Nowhere in the submissions or the following staff comment on these two topics is ESD dealt with in the June report.

161 The oral addresses to the Council on 24 May 2011, the questions and answers of the persons who addressed the Council on 24 May 2011 and the debates of the Council at its meeting on 14 June 2011 did not address ESD either in terms of cl 79 of the LEP or as an element of the public interest under s 79C(1)(e) of the EPA Act.

162 SEFE sought to rely on Mr Fowler's two Section 79C Assessments as well as Mr Fowler's separate ESD document, which do consider both cl 79 of the LEP and wider principles of ESD. However, I find on the evidence that the councillors were not provided with, did not ask to look at, and did not look at any of these documents and that the councillors were unaware of the contents of the documents and the discussion of ESD in them. Accordingly, the councillors, as the consent authority, cannot be taken to have considered ESD under cl 79 of the LEP or as an element of the public interest under s 79C(1)(e) of the EPA Act by considering and adopting the discussion of these relevant matters in these documents.

163 Accordingly, I find that the Council failed to take into consideration in determining the development application cl 79 of the LEP and ESD as an element of the public interest under s 79C(1)(e) of the EPA Act.

Failure to consider anthropogenic climate change

164 SEFR's final ground of challenge is that the Council failed to take into consideration the effect of the development on anthropogenic climate change. SEFR submitted that the Council was obliged to take into consideration the effect of the development on anthropogenic climate change as an element of the public interest under s 79C(1)(e) of the EPA Act.

165 SEFR submitted that the development would have both downstream and upstream impacts on climate change. The downstream impacts come from the burning of the pellets produced by the pellet plant, by emitting greenhouse gases. The upstream impacts come from the logging of native forests (which are a carbon sink) to supply the timber for the woodchip mill or for sawmills in the area, from which mills the wood waste, which is the raw material for making the pellets, will be sourced.

166 SEFE submitted that the Council considered the potential impacts of the development on climate change, including both the downstream and upstream impacts.

167 In my view, SEFR has not established this ground of review.

168 The relevant matter, which the Council as the consent authority was bound to take into consideration in determining the development application, was the public interest under s 79C(1)(e) of the EPA Act. The precise content of the public interest that a consent authority must take into consideration in determining any particular development application will depend on the relevant facts and circumstances, including of the development and the impact of the development on the environment. In certain circumstances, the impact of a development on climate change, or conversely the impact of climate change on a development, may be facts of such importance that, if they are not considered, it could be said that the relevant matter of the public interest has not been taken into consideration. As was said in Minister for Aboriginal Affairs v Peko-Wallsend at 61, the facts to be brought to mind, in having regard to a relevant matter, are "the salient facts which give shape and substance to the matter: the facts of such importance that, if they are not considered, it could not be said that the matter has been properly considered": see also Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts [2011] FCAFC 59; (2011) 180 LGERA 99 at [45].

169 In this case, SEFR submitted that the downstream and upstream impacts of the development, in the general way I have described, were impacts of such importance that, if they were not taken into consideration, the Council would have failed to take into consideration the public interest.

170 Even if this were to be assumed for the purposes of this case, I am of the view that SEFR has not established that the Council did not take those matters into consideration.

171 In relation to the downstream impacts, the May report brought to the attention of the councillors both the submissions made and the staff comments on the global warming emissions from burning the pellets as well as the impact on humans by emissions from burning the pellets: see the summary given earlier in the judgment of the May report's discussion of these matters.

172 The issue of emissions was again briefly raised by Ms Swift in her oral address to the Council at its meeting on 24 May 2011. Mr Mitchell from SEFE, in his oral address to the councillors at the May meeting, also referred to the emissions from burning the pellets, that the pellets were a greener alternative to fossil fuels, and that production of the pellets involves beneficial use of waste shavings from sawmills that would otherwise be disposed of by burning (Exhibit A, pp 652-653). In his answers to questions from councillors after his address, Mr Mitchell referred to the efficiency of, and emissions from, burning the pellets (Exhibit A, pp 654-655).

173 The June report to the Council meeting on 14 June 2011 referred the councillors to, but did not repeat, the discussion of the issues raised by objectors in the May report. The June report annexed the written versions of the three addresses made to the Council's May meeting.

174 In relation to the upstream impacts, the May report brought to the attention of the councillors both the submissions made and the staff comments on the source of materials issue. The staff comment, and the recommended conditions of consent, dealt with the upstream impacts in three ways. First, to prevent the plant from sourcing raw materials for production of the pellets directly from native forests, the draft consent recommended imposition of a condition prohibiting the use of any materials in the process classified as native forest bio-material defined in cl 96 of the Protection of the Environment Operations (General) Regulation 2009 (condition 3 of the draft consent). Secondly, the May report recorded SEFE's indication that the wood waste, which would provide the raw material for production of the pellets, would be sourced from hardwood and softwood mills located in a 100 km radius of SEFE's mill and fines from SEFE's own woodchip mill. Thirdly, verification of the source and volume of raw materials and production output would be ensured by imposition of a condition that SEFE record the source and volume of all raw feed materials and the production output, and provide copies of the records annually to the Council and to the Office of Environment & Heritage (condition 4 of the draft consent). The staff comment in the May report was that these conditions would address the source of materials issues raised in the submissions.

175 The May report also addressed the issue raised in the submissions that the development would encourage the destruction of forests and exacerbate the dire climate emergency. The staff comment on these issues repeated that imposition of the proposed conditions of consent would ensure that native forest bio-material is not used for the development and that instead the development would only use waste wood from existing sawmills and the chipmill. In this way, the plant would not encourage destruction of the forest or exacerbate the climate emergency. The May report also stated that, "the ethics of forest logging is not a consideration in the assessment of this application." Finally, the May report annexed a copy of DECCW's letter of 17 March 2011 which addressed the issue of the "Source of Wood Material for Pellet Manufacture". DECCW stated:

"DECCW is satisfied that the proponent has now provided suitable information with regard to the type and source of raw feed material. DECCW requests that the raw feed material be explicitly defined within any consent and that the proposed sources of this raw feed material should be controlled through the consent." (Exhibit A, p 532).

176 Ms Swift, in her oral address to the Council at its meeting on 24 May 2011, a copy of which was provided to the councillors in the June report, specifically addressed the proposed condition 3 which prohibited use of native forest bio-material. Ms Swift extracted for the benefit of the councillors the definition of native forest bio-material contained in cl 96 of the Protection of the Environment Operations (General) Regulation 2009. Ms Swift referred to the just released report of the Climate Commission and said that it calls for an end to the logging of native forest. Ms Swift said that:

"At a time when Australia is finally waking up to the importance of our native forests in combating climate change, it would be a very sad day for the Bega Valley to be leading the charge in the other direction, giving the green light to yet another pretext for destroying the forests and turning them into carbon dioxide." (Exhibit A, p 535).

177 Ms Stone, on behalf of SEFR, in her address to the Council, also submitted that native forests are being logged at an unsustainable rate and that one of the adverse impacts of native forest logging is on greenhouse gas emissions. Ms Stone also referred to the Climate Change Committee's recently released report which, she said, underscored the importance of eliminating harvesting of old growth forests in reducing emissions from land ecosystems. Ms Stone tabled with the councillors, and referred in her address to, SEFR's written submission of 22 February 2011. This contained extensive discussion of the adverse impacts of native forest logging. Ms Stone referred to opinion polls which showed that the majority of people are concerned about climate change and deforestation and want an end to native forest logging.

178 Mr Mitchell, in his oral address to the Council, referred to the staff comment in the May report that the ethics of forest logging is not a consideration in the assessment of the application. He stated that SEFE operates under the regional forest agreement and EPA licence and sources its timber for the chipmill under Australian Forestry Standards and complies with all regulatory statutes. After his address, councillors asked and Mr Mitchell answered questions including about the proportions of softwood and hardwood and the mills from which SEFE would source the material within 100 kms.

179 The June report referred to and annexed copies of the three addresses to the May Council meeting. The June report specifically addressed the issue raised by Ms Stone of the adverse impacts of native forest logging and the concern about climate change and deforestation. The comment in the June report reiterated that the raw material to be used for the plant would be sourced from hardwood and softwood sawmills within 100 kms of the chipmill site or fines generated from the chipmill operation. The June report repeated that the ethics of forest logging is not a consideration in the assessment of the application and stated that the existing chipmill operates within the existing development approvals and other approvals from State and Federal government and legislation. It referred to the proposed conditions that would limit the operation of the plant, and, "in the opinion of staff, would appropriately mitigate concerns raised over additional logging of Native Forests."

180 In the conclusion, the June report noted that:

"The majority of the grounds for objection to the proposal raised in the addresses to Council by Ms Swift and Mrs Stone relate to the logging of Native Forests in the South East Region of Australia which is not a consideration in this report.

The applicant has detailed that the materials to be utilised for the pellet plant would be obtained from sawmills or from waste materials generated at the chip mill itself. The attached draft consent details conditions that would limit the materials to be used for the pellet plant and provide reporting mechanisms detailing the source of materials to be used in the plant." (Exhibit A, p 587).

181 At the meeting on 14 June 2011 of the Council's Planning and Environment Committee, Councillor Hughes expressly referred to the staff comment in the May and June reports, and picked up by Mr Mitchell in his address to the May meeting, that "the ethical issues of native forest logging weren't to be considered." He said the Council should be thinking about "all the values that can be derived from native forests" (Exhibit A, p 657). Councillor Hughes went on to urge the Council to impose a monetary rate on the chipmill for the wood it used.

182 Councillor Seckold addressed the statement that "raw material will be sourced from wood and softwood mills within 100 kms of the chipmill." He said that this may be adequate for the pilot plant but not for a full-scale pellet production mill in the future. He expressed concern that "there is no assessment for procuring the raw materials needed for the mill." (Exhibit A, p 660).

183 After the debate, the councillors voted, by majority, in favour of the recommendation in the June report to grant development consent (Councillors Hughes and Seckold voted against the recommendation).

184 On this evidence, I find that SEFR has not established that the issues of the downstream and upstream impacts of the development on anthropogenic climate change were not taken into account by the Council, as the collegiate body, in determining the development application. Accordingly, even assuming that these issues were elements of the public interest, SEFR has not established that the Council failed to take them into account and hence failed to properly consider the public interest under s 79C(1)(e) of the EPA Act.

Conclusion and orders

185 SEFE has established the first, second and third grounds, but not the fourth ground, of challenge to the development consent. These successful grounds ordinarily would have the consequence of invalidating the development consent. SEFE submit, nevertheless, that the Court, either in its discretion or under s 25B of the Land and Environment Court Act 1979, should not declare the consent invalid for six reasons:

"(a) First, the proposal is located in an already environmentally damaged location.

(b) Secondly, the development is a relatively small one in the context of the scale of the Second Respondent's existing wood chip mill operation.

(c) Thirdly, the development has environmental benefits in that it has energy recovery potential, and may reduce emissions generated by the existing burning of wood waste.

(d) Fourthly, the development has already been ordered, tested and paid for, and the shed component fully constructed.

(e) Fifthly, the development consent was granted by the Council on 14 June 2011, and the construction certificate was issued on 24 June 2011. The Second Respondent commenced construction of the shed on 27 June 2011, and completed it by 25 August 2011. Notwithstanding that, the applicant delayed in bringing its claim until 12 August, when construction was nearly complete.

(f) Sixthly, given the scale and nature of the development, there is no real prospect of the development being refused by Council in the event that the DA is remitted back to Council" (para 61 of second respondent's outline of submissions).

186 I disagree. The EPA Act reposes in the consent authority the duty to determine the development application in accordance with law, including by taking into consideration and forming the requisite mental state of satisfaction about specified relevant matters. I have found that the Council has failed to comply with its duty. It is the Council, not the Court, that is, in law, required to determine the development application by considering and weighing the relevant matters. The failures I have found established are not technical breaches of no materiality. The duty to determine the development application, in accordance with law, has not been fulfilled. The Council, as the consent authority with that duty, should now discharge the duty. I do not find that there is no real prospect that the Council, properly exercising its duty, will not make a different decision. In any event, however, the decision is for the Council to make and I should not substitute, in the guise of exercising a discretion to refuse relief, my decision as to the merits of the application: see similar concerns expressed in Warren v Electricity Commission of NSW (1990) 130 LGERA 565 at 602-604. The proper course is for the Council to consider and determine again, in accordance with law, the development application.

187 I do not find that the fact that SEFE ordered, paid for and accepted delivery of the pellet plant prior to the grant of development consent, is a matter justifying declining declaratory relief. I do not find that the delay between the Council's determination of the development application on 14 June 2011 and the commencement of the proceedings challenging that consent on 12 August 2011 to be unreasonable or warrant declining granting declaratory relief. The speed at which the pellet plant was erected was in part a reflection of the fact that SEFE had already taken delivery of the pellet plant prior to obtaining development consent and the fact that it was relatively easily erected as a pilot plant. I do not consider that significant prejudice has been established by SEFE if the consent were to be declared invalid and the Council were to be required to consider and determine again the development application.

188 Accordingly, the development consent should be declared invalid.

189 The question of the costs of the proceedings was not argued. Ordinarily, these being Class 4 proceedings, the costs should follow the event. This would mean that there should be an order for costs of the proceedings in favour of the applicant. However, I will reserve the question of costs to afford the parties an opportunity to consider their position. If the parties reach agreement on the costs order to be made, consent orders can be filed and I will make orders in chambers in accordance with the consent orders. Otherwise, the parties should list the matter before me for hearing and determination of the appropriate costs order to be made.

190 The Court:

1. Declares that development consent dated 14 June 2011 granted by Bega Valley Shire Council to development application No. 2011.0035 for the installation of a wood pellet manufacturing plant at Lot 16 DP 1066187, Edrom Road, Eden, is invalid and of no effect.

2. Reserves the question of the costs of the proceedings.

Decision last updated: 19 December 2011