Land and Environment Court New South Wales

• Medium Neutral Citation: Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38
• Decision date: 28 March 2013
• Jurisdiction: Class 4
• Before: Pepper J

Decision

Amended summons dismissed. Injunction granted by Sheahan J on 5 September 2012 discharged forthwith. Costs reserved.

• Catchwords: JUDICIAL REVIEW: whether departmental decision approving pilot gas exploration program should be set aside for breaching ss 111 or 112 of the Environmental Planning and Assessment Act 1979 - whether Department failed to take into account a relevant mandatory consideration - whether Department failed to give proper, genuine and realistic consideration to a relevant mandatory matter.; JURISDICTION: whether impugned decision made under Pt 5 of the Environmental Planning and Assessment Act 1979 or the Petroleum (Onshore) Act 1991 - whether the Court has jurisdiction to determine a challenge to an approval made under the Petroleum (Onshore) Act 1991.; STATUTORY CONSTRUCTION: whether s 112 of the Environmental Planning and Assessment Act 1979 gives rise to a jurisdictional fact - meaning of "examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment" in s 111 of the Environmental Planning and Assessment Act 1979 - meaning of "likely to significantly affect the environment" in s 112 of the Environmental Planning and Assessment Act 1979 - proper construction of cl 228 of the Environment Planning and Assessment Regulation 2000.; EVIDENCE: whether expert evidence admissible to prove a breach of s 111 of the Environmental Planning and Assessment Act 1979 - whether expert evidence admissible to prove a breach of s 112 of that Act - whether expert evidence should be excluded or limited on some other basis - use of secondary sources by experts.; PRECEDENT: meaning of "plainly wrong" - status of appellate dictum on court at first instance.
• Legislation Cited: Environmental Planning and Assessment Act 1979, ss 5, 5A, 76(1), 77(3)(d1), 77A, 78A(8)(b), 79C, 90(1)(c3),110, 111, 112, 115, 123; Environmental Planning and Assessment Regulation 2000, cls 3, 4, 228, 27(g) of Sch 3; Environmental Planning and Assessment Regulation 1994, cl 82; Environment Protection and Biodiversity Conservation Act 1999 (Cth); Evidence Act 1995, ss 60, 79, 135, 136; Interpretation Act 1987, ss 11, 35, 38; Land and Environment Court Act 1979, ss 20, 21C, 31; Petroleum (Onshore) Act 1991, ss 3, 9, 23, 115; State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007, cls 3, 6; Uniform Civil Procedure Rules 2005, r 31.19
• Cases Cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27; Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244; Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559; (2008) 76 IPR 618; Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223; Attorney-General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1; Attorney-General (NT) v Hand [1988] FCA 272; (1988) 16 ALD 318; Attorney-General (NT) v Minister for Aboriginal Affairs [1989] FCA 159; (1989) 23 FCR 536; Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485; Bailey v Forestry Commission of New South Wales [1989] NSWLEC 24; (1989) 67 LGRA 200; Barrick Australia v Williams [2009] NSWCA 275; (2009) 74 NSWLR 733; Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197; BHP Billiton Iron Ore Pty Ltd v National Competition Council [2007] FCAFC 157; (2007) 162 FCR 234; Blue Mountains City Council v Prospect County Council (1992) 74 LGRA 129; Bodney v Bennell [2008] FCAFC 63; (2008)167 FCR 84; Bruce v Cole [1998] NSWSC 260; (1998) 45 NSWLR 163; Calardu Penrith Pty Ltd v Penrith City Council [2010] NSWLEC 50; Caldera Environment Centre Inc v Tweed Shire Council [1993] NSWLEC 102; Centro Properties Ltd v Hurstville City Council [2004] NSWLEC 401; (2004) 135 LGERA 257; Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; (2010) 78 NSWLR 393; Chen v Virgona [2008] NSWLEC 281; CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384; City of Botany Bay v New South Wales Land and Housing Corporation [2010] NSWLEC 160; City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135; City of Sydney Council v Royal Botanic Gardens and Domain Trust [2004] NSWLEC 285; Commissioner of Patents v Sherman [2008] FCAFC 182; (2008) 172 FCR 394; Corowa v Geographe Point Pty Ltd [2007] NSWLEC 121; (2007) 154 LGERA 117; Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588; DEXUS Funds Management Ltd v Blacktown City Council [2011] NSWLEC 156; DMW v CGW [1982] HCA 73; (1982) 151 CLR 491; Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349; Drummoyne Municipal Council v Maritime Services Board (1991) 72 LGERA 186; Drummoyne Municipal Council v Roads and Traffic Authority of New South Wales [1989] NSWLEC 19; (1989) 67 LGRA 155; F Hannan Pty Ltd v Electricity Commission of New South Wales (1983) 51 LGRA 353; Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89; Fay v Roads and Traffic Authority of New South Wales (No 2) (1991) 25 ALD 201; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 87 ALJR 98; Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 291 ALR 399; Foster v Minister for Customs and Justice [2000] HCA 38; (2000) 200 CLR 442; Friends of King Edward Park Inc v Newcastle City Council [2012] NSWLEC 113; Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd [2012] NSWLEC 207; Gedeon v Commissioner of the New South Wales Crime Commission [2008] HCA 43; (2008) 236 CLR 120; Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504; Goldberg v Waverley Council [2008] NSWLEC 49; Guthega Development Pty Ltd v Minister Administering the National Parks and Wildlife Act 1974 (NSW) (1986) 7 NSWLR 353; HG v R [1999] HCA 2; (1999) 197 CLR 414; Huntlee Pty Ltd v Sweetwater Action Group Inc; Minister for Planning and Infrastructure v Sweetwater Action Group Inc [2011] NSWCA 378; (2011) 185 LGERA 429; Informax International Pty Ltd v Clarius Group Ltd [2011] FCA 183; (2011) 192 FCR 210; Jarasius v Forestry Commission of New South Wales [No 1] [1988] NSWLEC 11; (1988) 71 LGRA 79; Jugiong Quarries Pty Ltd v Water Administration Ministerial Corporation [1995] NSWLEC 74; Khan v Minister for Immigration and Ethnic Affairs [1987] FCA 457; (1987) 14 ALD 291; Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277; King v Great Lakes Shire Council (1986) 58 LGRA 366; Kivi v Forestry Commission of New South Wales (1982) 47 LGRA 38; Leichhardt Municipal Council v Maritime Services Board of New South Wales (1985) 57 LGRA 169; Liverpool City Council v Roads and Traffic Authority and Interlink Roads Pty Ltd (1991) 74 LGRA 265; Makita (Aust) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705; McCormack v Deputy Commissioner of Taxation Large Business and International [2001] FCA 1700; (2001) 114 FCR 574; Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24; Minister for Immigration and Citizenship v Le [2007] FCA 1318; (2007) 164 FCR 151; Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; (2010) 243 CLR 164; Minister for Planning v Walker [2008] NSWCA 224; (2008) 161 LGERA 423; Newcastle & Hunter Valley Speleological Society Inc v Upper Hunter Shire Council and Stoneco Pty Ltd [2010] NSWLEC 48; Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230; Oshlack v Rous Water [2011] NSWLEC 73; (2011) 184 LGERA 365; Oshlack v Rous Water (No 2) [2012] NSWLEC 111; (2012) 189 LGERA 243; Parks and Playgrounds Movement Inc v Newcastle City Council [2010] NSWLEC 231; (2010) 179 LGERA 346; Pittwater Council v Minister for Planning [2011] NSWLEC 162; (2011) 184 LGERA 419; Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144; Prasad v Minister for Immigration and Ethnic Affairs [1985] FCA 47; (1985) 6 FCR 155; Prineas v Forestry Commission of New South Wales (1983) 49 LGRA 402; Prineas v Forestry Commission of New South Wales (1984) 53 LGRA 160; R v Blakeley; Ex parte Association of Architects, Engineers, Surveyors & Draughtsmen of Australia [1950] HCA 40; (1950) 82 CLR 54; R v Ludeke; Ex parte Queensland Electricity Commission [1985] HCA 55; (1985) 159 CLR 178; Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347; Rundle v Tweed Shire Council (1989) 68 LGRA 308; Schroders Australia Property Management Ltd v Shoalhaven City Council [1999] NSWLEC 251; (1999) 110 LGERA 130; Sustainable Fishing and Tourism Inc v Minister for Fisheries [2000] LEC 2; (2000) 106 LGERA 322; Swift v SAS Trustee Corporation [2010] NSWCA 182; Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55; Timbarra Protection Coalition Inc v Ross Mining NL [1998] NSWLEC 19; (1998) 99 LGERA 345; Transport Action Group Against Motorways Inc v Roads and Traffic Authority [1999] NSWCA 196; (1999) 46 NSWLR 598; ULV Pty Ltd v Scott (1990) 19 NSWLR 190; (1990) 69 LGRA 212; Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118; Warren v Electricity Commission of New South Wales [1990] NSWLEC 131; (1990) 130 LGERA 565; Willoughby City Council v Minister Administering the National Parks and Wildlife Act (1992) 78 LGERA 19; Waterford v Commonwealth [1987] HCA 25; (1987) 163 CLR 54; Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422; (2004) 61 NSWLR 707; Ying v Song [2009] NSWSC 1344; Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 51 NSWLR 589
• Texts Cited: J D Heydon, "How Far Can Trial Courts and Intermediate Appellate Courts Develop the Law" (2009) 9(1) Oxford University Commonwealth Law Journal 1, 25; M Aronson, B Dyer, M Groves, Judicial Review of Administrative Action, 4th ed (2009) Law Book Co; M Leeming, Authority to Decide - The Law of Jurisdiction in Australia, (2012) The Federation Press; Oxford English Dictionary, online edition; The Macquarie Dictionary, online edition
• Category: Principal judgment
• Parties: Fullerton Cove Residents Action Group Incorporated (Applicant); Dart Energy Ltd (First Respondent); New South Wales Department of Trade and Investment, Regional Infrastructure and Services (Second Respondent)
• Representation: Mr I Hemmings and Ms V McWilliams (Applicant); Mr R Lancaster SC and Ms A Hemmings (First Respondent); Mr A Shearer (Second Respondent); Environmental Defender's Office (Applicant); Dart Energy Ltd (First Respondent); New South Wales Department of Trade and Investment, Regional Infrastructure and Services (Second Respondent)
• File Number(s): 40866 of 2012

INDEX

Topic	Paragraph Number
The Fullerton Cove Residents Action Group Opposes the Granting of PEL 458 Issued to Dart Energy by the Minister for Mineral Resources	1
Fullerton's Claims as Pleaded	32
Use of Expert Evidence in Judicial Review Proceedings	42
Issues for Determination	59
Jurisdiction	60
Statutory Framework	77
There Has Been No Breach of s 111 of the EPAA	84
Failure to Consider the ESG2 Guidelines	87
Failure to Obtain a Groundwater Assessment	113
Admissibility of Expert Evidence in Determining a Breach of s 111 of the EPAA	115
Alleged Failure to Consider the Impact of the Pilot Program on Shore, Migratory and Non-Migratory Birds, Amphibian Species and Species of Flora	175
Flora	200
Fauna	210
Cumulative Impact	222
There Has Been No Breach of s 112 of the EPAA	226
Section 112(1) of the EPAA Gives Rise to a Jurisdictional Fact	230
Plainly Wrong	278
Alleged Breaches of s 112	301
The ESG2 Guidelines	302
Designated Development	309
Factual Concessions Made by Fullerton	318
Groundwater	319
The Pacific Golden Plover and the Eastern Grass Owl	320
Cumulative Impact	326
Discretion to Refuse to Grant Relief	331
Costs	333
Orders	335

Judgment

The Fullerton Cove Residents Action Group Opposes the Granting of PEL 458 Issued to Dart Energy by the Minister for Mineral Resources

1 In Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197 I made the following observation (at [1]):

It is a matter of common knowledge that the exploration for, and use of, coal seam gas is contentious. This judgment will, however, do little to quell the current anxiety surrounding the coal seam gas mining debate. In this regard it must be understood that the merits, or otherwise, of the use of this resource are irrelevant to the issues raised for determination by these judicial review proceedings, concerning, as they do, only the lawfulness of the approval under challenge.

2 These remarks apply with equal force to the petroleum exploration licence, number 458 ("PEL 458"), presently under challenge. This is particularly so in circumstances where I have determined that the amended summons filed in Court on 12 October 2012 should be dismissed.

3 In large part, the background facts giving rise to these proceedings were uncontroversial and were contained in a joint statement of agreed facts, filed, upon the request of the Court, after the hearing had concluded.

4 On 6 June 2008, the Minister for Mineral Resources ("the Minister") granted PEL 458 to Macquarie Energy Pty Ltd ("Macquarie") under the Petroleum (Onshore) Act 1991 ("the PO Act") for a period of three years, for the purpose of exploration of petroleum. PEL 458 was granted subject to conditions.

5 Macquarie is a wholly owned subsidiary of Apollo Gas Ltd ("Apollo"). Apollo is a wholly owned subsidiary of the first respondent, Dart Energy Ltd ("Dart").

6 The First Schedule to PEL 458 sets out the exploration area which is the subject of PEL 458. Generally, PEL 458 covers 36 graticular blocks, or an area of approximately 2,000km², and extends down the New South Wales coast from Myall Lakes in the north, to Belmont in the south.

7 Condition 1 of the Second Schedule to PEL 458 required the written approval of the second respondent, the New South Wales Department of Trade and Investment, Regional Infrastructure and Services ("the Department"), subject to any stipulated conditions, before any "Category 3" development, including petroleum exploration borehole activities, could be commenced.

8 On or about 26 September 2011, Dart submitted a document titled "Pilot Appraisal Exploration Program: Review of Environmental Factors - PEL 458" ("the REF") to the Department in respect of the proposed drilling of two sets of pilot appraisal wells and production flow testing, otherwise known as the Pilot Appraisal Exploration Program ("the pilot program").

9 The pilot program is classified as "Category 3" development for the purposes of Condition 1 of the Second Schedule of PEL 458.

10 The pilot program site includes the following allotments:

(a) Lot 1582 in DP 1012434 and described as 397 Fullerton Cove Road, Fullerton Cove ("the south allotment");

(b) Lot 1322 in DP 589751 and described as 285 Cabbage Tree Road, Fullerton Cove ("the north allotment"); and

(c) Lot 1332 in DP 609173 and described as 183 Cabbage Tree Road, Fullerton Cove ("the north west allotment").

11 The pilot program site is located within PEL 458, at Fullerton Cove, north of Newcastle.

12 The carrying out of the pilot program as initially proposed included the drilling of the following four wells:

(a) two lateral pilot wells located on the north allotment ("the lateral wells"), which will be accessed through the north west allotment; and

(b) two vertical pilot wells located on the south allotment ("the vertical wells").

13 To enable the drilling of the two sets of pilot appraisal wells (each set comprising a lateral well and a vertical well), drilling and testing compounds need to be constructed for the wells. The sizes of these compounds are proposed to be as follows ("compound sites"):

(a) the platforms for the lateral wells are each 80m x 80m; and

(b) the combined platform of the vertical wells is 130m x 80m ("the southern compound site").

14 The Fullerton Cove locality is bounded by a number of national parks and state conservation areas, including the Hunter Estuary National Park, Tilligerry State Conservation Area, Worimi State Conservation Area and Worimi National Park.

15 The pilot program site:

(a) contains endangered ecological communities ("EECs"), including Relic Saltmarsh Flat;

(b) is adjacent to the Hunter Estuary National Park and the Hunter Estuary Wetlands ("the wetlands"), listed under the Ramsar List of Wetlands of International Importance; and

(c) is generally located above the Stockton and Tomago aquifers.

16 The compound sites:

(a) do not contain any EECs; and

(b) are not adjacent to the Hunter Estuary National Park and the wetlands.

17 The closest wells would be located more than 500m from the wetlands.

18 The carrying out of the pilot program is unquestionably an "activity" to which Pt 5 of the Environmental Planning and Assessment Act 1979 (NSW) ("the EPAA") applied.

19 The Department was the determining authority for the pilot program.

20 On 22 December 2011, Dart wrote to the Department providing additional information in respect of the pilot program. This additional information is elaborated upon below.

21 On 17 May 2012, Dart wrote to the Department providing the referral decision of the Commonwealth Department of Sustainability, Environment, Water, Population and Communities that the pilot program is not a controlled action under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) ("the EPBC Act").

22 On 25 May 2012, the Department prepared a minute entitled "PEL458 Dart Energy Fullerton Cove Pilot Appraisal: Part 5 Determination and Activity Approval" recommending that the Manager Environmental Operations: (a) determine that the pilot program was (i) not likely to significantly affect the environment; and (ii) not likely to significantly affect any threatened species, populations, ecological communities, or critical habitats; and (b) approve the pilot program ("the 25 May 2012 minute").

23 On 1 June 2012, the Department:

(a) made a determination under Pt 5 of the EPAA that the pilot program was not likely to significantly affect the environment and that therefore no environmental impact statement ("EIS") was required ("the Pt 5 determination"); and

(b) wrote to Dart, in accordance with Condition 1 of PEL 458, granting approval to conduct drilling of two sets of pilot appraisal wells for no more than 12 months of production flow testing and subject to other conditions ("the approval").

24 On 18 June 2012, Dart wrote to the Department seeking to vary the approval ("the variation"). The variation sought to:

(a) restrict the pilot program to a single inclined production well (with two boreholes on a single site) rather than the drilling of two sets of exploration wells (each set comprising a lateral well and a vertical well);

(b) reduce the area of the pilot program site such that it would include the south allotment only;

(c) amend the pilot program to require the construction of a single compound on the southern compound site only;

(d) reduce the numbers of drill pads from three to one;

(e) remove from the pilot program proposed wells on the north allotment; and

(f) reduce the total drilling period from an estimated three months to 50 days (seven weeks).

25 A departmental minute dated 13 July 2012 recommended approval be granted to the variation. The comments were as follows:

Drill pads and compounds will be reduced from three to one resulting in significant decreases in surface impact, waste generation and resource use.

In light of the fact that the revised proposal will reduce surface impact, the duration of the activity and will result in no additional water or gas production the variation can be approved without further assessment in accordance with the section 110E(a) of the EP&A Act 1979 "a modification of an activity, whose environmental impact has already been considered, that will reduce its overall environmental impact".

26 In making the recommendation it was determined that the proposed variation would not be likely to significantly affect the environment and not be likely to significantly affect any threatened species, populations, or ecological communities, or critical habitats.

27 On 17 July 2012, the Department wrote to Dart granting approval to the variation, subject to conditions.

28 At no point has an EIS in respect of the pilot program been prepared by Dart or considered by the Department.

29 The applicant, Fullerton Cove Residents Action Group Incorporated ("Fullerton"), filed a summons with the Court on 24 August 2012 and a notice of motion for interlocutory injunctive relief on 29 August 2012.

30 On 5 September 2012, Sheahan J in Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd [2012] NSWLEC 207 made an order setting the matter down for an early hearing and granting interlocutory relief to Fullerton restraining Dart from carrying out any development for the pilot program "beyond completion of the on-ground or above ground component in Phase (1), involving site preparation and drilling compound construction".

31 As will become apparent, the complexity of this matter, presumably not appreciated by the parties at the time it was before his Honour, was not apparent when the proceedings came before Sheahan J. As the proceedings unfolded, new factual and legal issues came to light, issues that were not readily apparent from a preliminary reading of the pleadings. By the time the hearing had concluded (in five days, not three, as had been estimated by the parties and as had been allocated by the Court), Fullerton had served five sets of written submissions; Dart four and the Department three.

Fullerton's Claims as Pleaded

32 Fullerton filed points of claim on 19 September 2012. Points of defence were filed by both Dart and the Department on 5 October 2012. Unlike the summons, the points of claim were never the subject of amendment. The significance of this is revealed below.

33 In its points of claim, Fullerton alleges breaches of ss 111 and 112 of the EPAA. During the hearing a claim that the pilot program was "designated development" pursuant to the EPAA and thus a type of development likely to have an impact on the environment thereby necessitating the preparation of an EIS, was abandoned by Fullerton.

34 Also, during the course of the hearing a dispute emerged between the parties as to the scope of the allegations pleaded in the points of claim. As a consequence it is necessary to set out the pleadings in some detail.

35 In respect of the breach of s 111 of the EPAA, Fullerton alleged (at paragraphs 21-28 of the points of claim):

21 Section 111 of the EPA Act required the determining authority, the Second Respondent, in its consideration of the Activity, to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of the Activity.

22 Clause 228(1)(a) of the Environmental Planning and Assessment Regulations 2000 (EPA Regulation) identified specific guidelines to be taken into account in considering the likely impact of the Activity.

23 The ESG2: Environmental Assessment Guidelines for exploration, mining and petroleum production activities subject to Part 5 of the Environmental Planning and Assessment Act 1979 were specific guidelines for the Activity, which came into force in March 2012 (the 'Guidelines').

24 By reason of paragraphs 22 and 23 above, the Guidelines were required to be considered in the assessment of the likely impacts that may arise from the Activity.

25 In breach of s 111, the Second Respondent erred in law in manifestly failing to consider the Guidelines.

26 In further breach of s 111, the Second Respondent erred in law in failing to take into account to the fullest extent possible all matters affecting or likely to affect the environment in that it failed to obtain, examine and take into account a groundwater assessment.

Particulars

i. No groundwater assessment was provided to the Second Respondent for the PAEP.

ii. Accordingly, as at 1 June 2012, there was insufficient information before the Second Respondent to enable it to comply with s 111 of the EPA Act.

27 In further breach of s 111, the Second Respondent erred in law in failing to take into account to the fullest extent possible all matters affecting or likely to affect the environment in that it failed to consider the impact of the Activity on:

a. Shorebirds, migratory and non-migratory species;

b. Amphibian Species; and

c. Other threatened or vulnerable species that may be affected by the carrying out of the Activity.

Particulars

i. The REF was supported by an ecological assessment 'draft version 5' dated 23 September 2011.

ii. The ecological assessment was inadequate in the information it provided and could not serve its required purpose for a Part 5 assessment.

28 By reason of the failure to comply with s 111 of the EPA Act before purportedly granting the Part 5 Approval, the Part 5 Approval is invalid.

36 In relation to non-compliance with s 112 of the EPAA, it was asserted by Fullerton that (at paragraphs 29-34 and 36-40 of the points of claim):

29 The Second Respondent purported to approve the Activity pursuant to Part 5 of the EPA Act.

30 As part of the assessment of the Activity, the Second Respondent carried out an Evaluation of Likely Significance of Potential Impacts on the Environment (the 'Evaluation').

31 The Evaluation concluded that the potential significance of impact by the Activity was "medium".

32 As at the date of the Evaluation, the Guidelines were in force.

33 Pursuant to the Guidelines, a "medium" level impact is considered significant.

Particulars

Guidelines, p.37.

34 In the premises, the Activity was likely to significantly affect the environment.

...

36 On 25 May 2011, the Second Respondent erred in law in concluding that the Activity was not likely to significantly affect the environment.

Particulars

a. Minute dated 25 May 2012.

b. Signed Part 5 assessment dated 25 May 2012

37 By reason of the above, the Second Respondent could not approve the Activity without first obtaining, or being furnished with, and EIS.

38 No EIS was prepared for the Activity.

39 In breach of s 112, the Second Respondent erred in law in purporting to approve the Activity without first obtaining, or being furnished with, an EIS.

40 By reason of the Second Respondent's failure to comply with section 112 of the EPA Act in purporting to grant the Part 5 Approval, the said Part 5 Approval is invalid.

37 From the outset, Dart and the Department took issue with the assertion made by Fullerton in opening, that the Department had breached s 111 of the EPAA by failing to take into account certain mandatory factors contained in ESG2: Environmental Impact Assessment Guidelines for exploration, mining and petroleum production activities subject to Part 5 of the Environmental Planning and Assessment Act 1979 released in March 2012 ("the ESG2 Guidelines"), as opposed to the Guidelines themselves, and by failing to take into account the likely effect of the pilot program on four flora and four fauna species, either individually or cumulatively. Neither allegation, Dart and the Department argued, had been properly, or at all, pleaded in the points of the claim. The respondents further contended that neither claim could properly be seen to fall within the omnibus description of an "error of law" contained in paragraphs 25, 26 and 27 of the points of claim.

38 In addition, Dart and the Department submitted that Fullerton had failed to plead, in determining whether the pilot program was an activity that was likely to significantly affect the environment for the purposes of s 112 of the EPAA, that this gave rise to a jurisdictional fact.

39 Similarly, the respondents stated that to characterise the failures of the Department pursuant to s 112 of the EPAA as an "error of law" was not only to misstate, but was to misconceive the duty, and any correlative non-compliance, imposed on the Department as the "determining authority" in that provision.

40 The complaint by the respondents that, as framed, the pleaded breaches of ss 111 and 112 of the EPAA amount to, in each instance, no more than "errors of law" is not frivolous. This is because, as Dart and the Department submitted with considerable force, if the debate is framed strictly in terms of "error of law" and a failure to have regard to certain mandatory considerations, the Court can only have regard to the material that was before the Department at the time the approval (and the variation) was granted. Reliance cannot be placed on new or extraneous material, and in particular, any scientific expert evidence, in any examination of the alleged breaches. Put another way, this material is irrelevant to the determination of the issues raised in the points of claim, and therefore, ought not be put before the Court.

41 Predictably, this gave rise to difficult questions concerning the admissibility of the scientific reports sought to be tendered by Fullerton, the corollary of which involved, as a threshold issue, the determination of the proper construction of both ss 111 and 112.

Use of Expert Evidence in Judicial Review Proceedings

42 Generally, extraneous evidence is not admissible in respect of a ground of review premised on a bare allegation of an error of law (Attorney-General (NT) v Hand [1988] FCA 272; (1988) 16 ALD 318 at [23] per Wilcox J and Waterford v Commonwealth [1987] HCA 25; (1987) 163 CLR 54 at 77-78 per Brennan J).

43 Moreover, and again stated no higher than at a high level of generality for present purposes, the circumstances in which extraneous evidence is admissible in judicial review proceedings is confined (Attorney-General (NT) v Minister for Aboriginal Affairs [1989] FCA 159; (1989) 23 FCR 536 at 539-540; McCormack v Deputy Commissioner of Taxation Large Business & International [2001] FCA 1700; (2001) 114 FCR 574 at [37]-[41]; DEXUS Funds Management Ltd v Blacktown City Council [2011] NSWLEC 156 at [9] and Friends of King Edward Park Inc v Newcastle City Council [2012] NSWLEC 113 at [74]). The issue must be tested by reference to the grounds of review in issue (Attorney-General (NT) v Minister for Aboriginal Affairs at 539 per Lockhart J). These grounds of review may give rise to a number of limited exceptions to the general rule stated above (Friends of King Edward Park at [74] and the authorities usefully collected thereat per Biscoe J).

44 Thus material that was not before the decision-maker may be admissible if, for example, the ground of review pleaded is that of manifest unreasonableness; a failure to make inquiries where the decision-maker was under a duty to do so, revealing information readily available and relevant to the determination to be made (Prasad v Minister for Immigration and Ethnic Affairs [1985] FCA 47; (1985) 6 FCR 155 and Minister for Immigration and Citizenship v Le [2007] FCA 1318; (2007) 164 FCR 151 at [65]-[67]); or possibly breach of procedural fairness based on a legitimate expectation that a decision-maker would follow particular procedures that were not followed (see Friends of King Edward Park at [75]-[82] and DEXUS at [9]).

45 But whether or not a decision-maker has failed to consider a mandatory relevant consideration is to be determined by reference to the record before the decision-maker, assuming of course that the consideration was required to be taken into account as a matter of statutory construction, and not by reference to additional material such as expert scientific evidence (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39-40; Foster v Minister for Customs and Justice [2000] HCA 38; (2000) 200 CLR 442 at [22]-[23] and Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349 at [126] and [132(1)-(5)]).

46 In the present case, the pleadings were certainly not drafted with the necessary felicity and precision that the respondents were entitled to. As the High Court stated in Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 291 ALR 399 (at [25]): "It is for the party making ... allegations ... to identify the case which it seeks to make and to do that clearly and distinctly". On any view, the points of claim were deficient in this respect.

47 However, when paragraphs 21-28 of the points of claim are read as a whole, and likewise paragraphs 29-40 (excluding paragraph 35 dealing with designated development that was not pressed by Fullerton Cove at the hearing), and when regard is had to the points of defence, it is clear that what is alleged is a breach by the Department of ss 111 and 112 of the EPAA, unconfined in scope, and that was understood as such by both Dart and the Department.

48 The respondents, and in particular Dart, strenuously contended that if Fullerton was to depart from the "long line of authority in this Court that the determination of whether an activity 'is likely to significantly affect the environment' for the purpose of s 112 so as to require an EIS is a matter for the determining authority and not for the court", it was required to do so expressly in its pleading by alleging that s 112 involves the determination of a jurisdictional fact. Dart relied in support on an affidavit of Ms Louise Camenzuli, a solicitor engaged by Dart, affirmed 5 October 2012, which demonstrated that Dart had sought particulars of the error of law alleged in paragraphs 36-40 of the points of claim. But in my opinion, neither the request nor the answer by the solicitor for Fullerton advanced the matter very far.

49 It is plain that the pleadings in respect of s 112 do not explicitly raise an assertion as to the existence of a jurisdictional fact. To this observation there are two responses. First, since 2010, there has been authority in this Court that has held that s 112 does give rise to a jurisdictional fact (Parks and Playgrounds Movement Inc v Newcastle City Council [2010] NSWLEC 231; (2010) 179 LGERA 346 at [132] per Biscoe J and Oshlack v Rous Water [2011] NSWLEC 73; (2011) 184 LGERA 365 at [5]-[6] per Biscoe J, although cf Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55 at [84] per Spigelman CJ which suggests it does not). Therefore, unless these decisions are plainly wrong (see a discussion of this test below in the context of determining whether there has been a breach of s 112), the position in this Court has been that, however pleaded, in order for the Court to determine whether or not s 112 of the EPAA has been breached, the Court must determine the existence of a jurisdictional fact. That is to say, in order to ascertain whether or not the Department unlawfully granted approval to the pilot program in the absence of having obtained an EIS, the Court must, on present authority, determine for itself if the activity the subject of the approval is "likely to significantly affect the environment".

50 Second, while not all errors of law are jurisdictional errors, the determination of a jurisdictional fact is the determination of a "form of jurisdictional error" (Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; (2010) 78 NSWLR 393 at [34] and Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144 at [59]) and thus the determination of an error of law.

51 The respondents sought to challenge the correctness of Parks and Playgrounds and asserted that there was no jurisdictional fact embedded within s 112 that would permit expert evidence not before the decision-maker to be admitted into evidence.

52 It is somewhat trite to note that this issue is a complex one and that in the absence of a detailed analysis of the jurisprudence on jurisdictional fact and an examination of the authorities concerning s 112 of the EPAA, it could not, at least for the purposes of an evidential ruling, be easily and quickly resolved.

53 In relation to the claimed breach of s 111 of the EPAA, the parties similarly joined issue as to whether or not expert evidence was admissible to decide whether or not the Department failed to take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of the pilot program.

54 Again, as the survey of the relevant s 111 authorities reveals (discussed in detail below), the position is, to date, somewhat equivocal and requires careful consideration of the case law to resolve the issue.

55 Accordingly, and despite admonishment by the High Court in Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588 against this course (at [83]), scientific evidence sought to be relied upon by Fullerton to prove the breaches alleged was, as a matter of prudence, provisionally admitted subject to relevance. This approach was adopted in order to ensure that the hearing of the proceedings concluded within a reasonable time given that the matter had been set down for three hearing days, with no possibility of extending the hearing time beyond five days, and because properly construing ss 111 and 112 of the EPAA was necessary in order to decide both issues of contravention and the receipt of the scientific evidence.

56 Dart submitted that taking a generous view of the scope of the claims made against it and provisionally admitting the scientific expert evidence, would result in prejudice to it in respect of the s 111 claim because no expert evidence had been prepared to meet this ground of review.

57 But this was, as Dart conceded, a calculated gamble by it given that Fullerton had filed and served expert evidence specifically addressing the question of whether, for example, there was "sufficient information contained in the Project Documentation to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment" by reason of the pilot program (one of the issues Dr Gavin Mudd, an environmental engineer, was asked to comment upon by Fullerton). Thus any unfairness flowing to Dart by electing not to adduce any evidence directly in response to that filed by Fullerton was, to a large extent, of its own making. Dart could have easily sought a ruling in advance of the hearing on the admissibility of the evidence. It did not do so.

58 As it transpired no prejudice resulted to Dart in light of the evidence elicited from both Dart's experts and those of Fullerton. This was so notwithstanding, and contrary to the arguments put by Fullerton, that the function and inquiry set out in ss 111 and 112 of the EPAA are not the same. On any reading of those provisions the obligation set out in s 111 is very different to that contained in s 112.

Issues for Determination

59 At the conclusion of the hearing the following issues had emerged for determination by the Court (although neither Dart nor the Department accepted that all of the issues identified below arose for determination on the pleadings):

(a) whether the Court had jurisdiction to hear and determine all the claims for relief in the amended summons;

(b) whether expert evidence was admissible in judicial review proceedings in support of the claim that the Department had breached s 111 of the EPAA;

(c) whether in breach of s 111 of the EPAA, the Department had failed to consider the ESG2 Guidelines;

(d) whether the Department had failed to obtain, examine and take into account a groundwater assessment in breach of s 111 of the EPAA;

(e) whether, in breach of s 111 of the EPAA, the Department had failed to consider the impact of the activity on shorebirds, amphibian species and other threatened or vulnerable species that may be affected by carrying out the pilot program;

(f) whether the Department was required by s 111 to take into account the likely effect of the pilot program on:

(i) Maundia triglochinoides;

(ii) Persicaria elatior;

(iii) Asperula asthenes;

(iv) Zannichellia palustris;

(v) the Eastern Grass Owl;

(vi) the White-fronted Chat;

(vii) the Green and Golden Bell Frog;

(viii) the Pacific Golden Plover; and

(ix) the cumulative effect of the activity as a whole;

(g) whether the fact referred to in s 112(1) of the EPAA, namely, that the pilot program is "an activity that is likely to significantly affect the environment" is a jurisdictional fact and therefore expert evidence was admissible to support the alleged breach by the Department of that provision;

(h) if it is a jurisdictional fact, whether the pilot program was "an activity that is likely to significantly affect the environment" thereby requiring an EIS to be obtained and considered by the Department prior to granting the approval to conduct the program;

(i) whether the impact of the pilot program on groundwater, the four flora and four fauna species identified above and the cumulative impact of the pilot scheme meant that it was an activity that was likely to significantly affect the environment and require an EIS; and

(j) whether the Court should, in the exercise of its discretion, grant any or all of the relief sought in the amended summons, including the injunctive relief.

Jurisdiction

60 A challenge to the jurisdiction of the Court was made by Dart. In short, Dart contended that the Court could not entertain a claim for, or grant relief in respect of, an approval granted not under the EPAA, but given pursuant to a condition of a petroleum licence issued under another Act. Put simply, Dart argued that because Fullerton challenged the validity of an approval to carry out a pilot program given under the PO Act, and not Pt 5 of the EPAA, the Court lacked jurisdiction to hear and determine the matter.

61 Condition 1 of PEL 458 relevantly provided as follows:

Environmental Assessment

1. This Licence is granted (or renewed, if applicable) under Part 3 of the Petroleum (Onshore) Act 1991. After consideration of the environmental impact as required by Section 111 of the Environmental Planning and Assessment Act 1979, it has been determined that the type of exploration activities listed in Category 1 and in certain circumstances Category 2 may be conducted on the licence area provided that

...

The type of activity listed in Category 3 requires notification to an Environmental Officer of the Department and will normally require an additional specific determination under Part 5 of the Environmental Planning and Assessment Act 1979. At least 4 weeks prior to the proposed commencement of any activity listed in Category 3, a Review of Environmental Factors in accord with Clause 228 of the Environmental Planning and Assessment Regulation 2000 must be submitted to the Department to enable a determination under Part 5 of the Environmental Planning and Assessment Act 1979 to be made. In these cases the Department will assess any potential impact under Parts 6 or 8A of the National Parks and Wildlife Act 1974. Exploration activities must not commence until the written approval of the Assistant Director, Environment of the Department, is obtained and subject to any conditions he may stipulate.

...

Category 3

- Petroleum exploration boreholes.

- Seismic surveys.

62 The pilot program is a "Category 3" activity under condition 1 of PEL 458 that requires both a Pt 5 determination under the EPAA and a separate approval under the PO Act.

63 The 1 June 2012 approval from the Department stated as follows:

PEL458: Approval to undertake Fullerton Cove Pilot Appraisal

In accordance with Condition 1 of PEL458 granted under the provisions of the Petroleum (Onshore) Act 1991, the titleholder is hereby granted approval to conduct drilling of two sets of pilot appraisal wells and production flow testing, subject to the conditions set out below. These conditions relate specifically to this approval. The conditions are in addition to those previously attached to PEL458 and prevail to the extent of any inconsistency. A breach of these conditions is an offence under the Petroleum (Onshore) Act 1991.

CONDITIONS

General Conditions

1. The activities must be carried out generally in accordance with the methods contained in:

a) "Pilot Appraisal Exploration Program, Review of Environmental Factors for Fullerton Cove - PEL458" Rev 3, dated 22/9/2011 submitted by Dart Energy.

b) Letter dated 22nd December 2011 from Dart Energy, addressing email from DRE, and accompanying reports: GCA Engineering Solutions - Erosion and Sediment Control and Stormwater Management for Pilot Well Drilling; Douglas Partners - Acid Sulphate Soil Management Plan; PEA Consulting - Supplementary Ecological Report.

Except as amended by the following conditions.

64 Thus Dart submitted that because s 20 of the Land and Environment Court Act 1979 ("the LEC Act") does not vest jurisdiction in the Court to hear and determine claims arising under the PO Act (and s 20(2) cannot assist Fullerton because the PO Act is not a "planning or environmental law" as that term is defined in s 20(3)), the matter cannot proceed in this Court.

65 Section 20 of the LEC Act relevantly provides as follows:

20 Class 4-environmental planning and protection and

development contract civil enforcement

(1) The Court has jurisdiction (referred to in this Act as "Class 4" of its jurisdiction) to hear and dispose of the following:

...

(c) proceedings under section 123 of the Environmental Planning and Assessment Act 1979,

(2) The Court has the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of the following proceedings:

(a) to enforce any right, obligation or duty conferred or imposed by a planning or environmental law or a development contract,

(b) to review, or command, the exercise of a function conferred or imposed by a planning or environmental law or a development contract,

(c) to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function,

(d) whether or not as provided by section 68 of the Supreme Court Act 1970-to award damages for a breach of a development contract.

...

(3) For the purposes of subsection (2), a planning or environmental law is:

(a) any of the following Acts or provisions:

Aboriginal Land Rights Act 1983 (other than Division 5 of Part 7),

Biological Control Act 1985,

Coastal Protection Act 1979,

Contaminated Land Management Act 1997,

Environmental Planning and Assessment Act 1979,

Environmentally Hazardous Chemicals Act 1985,

Part 5A or 5B of the Forestry Act 2012,

Heritage Act 1977,

Part 2 of Chapter 6, Chapter 7 or Chapter 15 of the Local Government Act 1993,

Schedule 3 to the Miscellaneous Acts (Planning) Repeal and Amendment Act 1979,

National Parks and Wildlife Act 1974,

Native Vegetation Act 2003,

Part 5 of the Olympic Co-ordination Authority Act 1995,

Ozone Protection Act 1989,

Pesticides Act 1999,

Plantations and Reafforestation Act 1999

Plumbing and Drainage Act 2011,

Protection of the Environment Administration Act 1991,

Protection of the Environment Operations Act 1997

Rural Fires Act 1997,

Threatened Species Conservation Act 1995,

Trees (Disputes Between Neighbours) Act 2006,

Uranium Mining and Nuclear Facilities (Prohibitions) Act 1986,

Waste Avoidance and Resource Recovery Act 2001,

Waste Recycling and Processing Corporation Act 2001, or

(b) any statutory instrument made or having effect thereunder or made for the purposes thereof, including any deemed environmental planning instrument within the meaning of the Environmental Planning and Assessment Act 1979,

as respectively in force at any time, whether before, on or after 1 September 1980.

66 In my opinion there are two principal reasons why the jurisdictional challenge must fail. First, the approval granted on 1 June 2012 gives rise to a determination under Pt 5 of the EPAA that is properly amenable to challenge in this Court pursuant to s 20 of the LEC Act. This conclusion requires further explanation.

67 Dart submitted that although the PO Act did not expressly confer upon the Minister or the Department the power to grant the 1 June 2012 approval to commence exploration activities, the approval was nevertheless an approval given under the PO Act insofar as it was an approval required by reason of condition 1 of PEL 458 issued by the Minister (in this respect the submission is correct, Pt 5 of the EPAA does not contain an approval function or power). Accordingly, it did not matter that a separate determination was made under Pt 5 of the EPAA (the 1 June 2012 determination) because the determination was part of, and not distinct from, the approval under the PO Act. But this is not a complete answer.

68 Part 3 of the PO Act deals with "Petroleum titles". Such titles are granted by the Minister under s 9 of that Act. A petroleum title may be subject to conditions imposed by the Minister and specified in the title (s 23 of the PO Act). Condition 1 to PEL 458 requiring the additional determination under Pt 5 of the EPAA is such an example. It is true that Dart has the benefit under the PO Act of a "petroleum title" as defined and issued under that Act. But, as stated in condition 1 of PEL 458, because the pilot program is a Category 3 activity, it requires "an additional specific determination under Pt 5 of the" EPAA and "exploration activities must not commence until the written approval of the Assistant Director, Environment of the Department is obtained and subject to any conditions he may stipulate".

69 The approval given by the Assistant Director (through the Manager, Environmental Operations) on 1 June 2012 was therefore nevertheless granted consequent upon the determination under Pt 5 of the EPAA of the same date. Not only is the pilot program an "activity" for the purposes of Pt 5 (see the definition of that term in s 110(1) of the EPAA), the approval given on 1 June 2012 is a "form of authorisation" for the purpose of the definition of "approval" contained in s 110(1) of that Part. The "determining authority" - the Department, through the Assistant Director's delegate - could not grant approval to commence the pilot program without first satisfying ss 112 and 111 of the EPAA. The two discrete discretionary exercises are therefore wholly separate.

70 As there is no doubt that the Court has jurisdiction to decide whether a determining authority (in this case the Department) has breached its duty to not "grant an approval in relation to an activity" that is likely to significantly affect the environment absent obtaining an EIS (s 112 of the EPAA), or to "examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of" the pilot program (s 111), it follows that the Court can entertain the claims made by Fullerton in its points of claim that there has been a breach of these provisions by the Department in granting the approval under the PO Act, either by reason of s 20(2) of the LEC Act or s 20(1)(c) of that Act.

71 Second, even if the above analysis is incorrect and the approval is not subject to a reviewable Pt 5 determination, s 21C(1) of the LEC Act expressly confers jurisdiction on the Court to hear and dispose of proceedings arising under the PO Act:

21C Class 8-mining matters

(1) The Court has jurisdiction (referred to in this Act as "Class 8" of its jurisdiction) to hear and dispose of proceedings arising under the Mining Act 1992 or the Petroleum (Onshore) Act 1991.

72 Although s 21C gives the Court jurisdiction in respect of Class 8 matters and these proceedings were commenced in Class 4 of the Court's jurisdiction, by operation of s 31 of the LEC Act the Court has the power to entertain the matter (Chen v Virgona [2008] NSWLEC 281 at [17]).

73 In reply, Dart argued that because the claim by Fullerton for relief involves no assertion of any right, cause of action or interest derived from the PO Act, s 21C of the LEC Act is not enlivened because "the proceedings" are not proceedings "arising under" the PO Act. Alternatively, Dart submitted that s 115 of the PO Act explicitly sets out the jurisdiction of this Court to hear and dispose of matters arising under that Act and this jurisdiction did not encompass judicial review proceedings of the type contemplated by the present case. Section 115 of the PO Act relevantly states:

115 Jurisdiction of Land and Environment Court

(1) The Land and Environment Court has jurisdiction to hear and determine proceedings relating to any of the following matters:

...

(m) any question or dispute as to:

(i) the validity of a petroleum title, or

(ii) the decision of the Minister in relation to an application for the granting, renewal or transfer of a petroleum title, or

(iii) the decision of the Minister to cancel a petroleum title,

...

(q) any other matter in respect of which jurisdiction is conferred on the Court by this Act.

(2) Nothing in this section limits or restricts the jurisdiction conferred on any other court by any other Act or law.

74 If, as I have accepted, the relevant approval is an approval given under the PO Act, then, in my view, the proceedings arguably "arise under" that Act and s 21C of the LEC Act is enlivened. Further, I do not accept, as Dart suggested, that s 21C of the LEC Act is subordinate to s 115 of the PO Act. The words in s 21C are plenary in scope and there is no express limitation on the jurisdiction of this Court in either that provision or s 115 of the PO Act that limits the Court's jurisdiction to hear and dispose of these proceedings.

75 Having said this, there was, however, considerable force in Dart's contention that, as pleaded, the allegations in the points of claim did not fall within the scope of s 115 of the PO Act, and in particular, s 115(1)(m) of that Act. The term "petroleum title" contained in s 115(1)(m) is defined in s 3 to mean "an exploration licence, assessment lease, production lease or special prospecting authority in force under this Act". There is no challenge whatsoever made to the decision to issue PEL 458 or its validity in the points of claim. Challenge is made only to the approval, albeit granted under the rubric of the PO Act, permitting the pilot program to commence.

76 Nonetheless, for the reasons given earlier, I am of the opinion that the Court has jurisdiction to hear and determine Fullerton's claims.

Statutory Framework

77 Section 5 of the EPAA sets out the Act's objects:

5 Objects

The objects of this Act are:

(a) to encourage:

(i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment,

(ii) the promotion and co-ordination of the orderly and economic use and development of land,

(iii) the protection, provision and co-ordination of communication and utility services,

(iv) the provision of land for public purposes,

(v) the provision and co-ordination of community services and facilities, and

(vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species, populations and ecological communities, and their habitats, and

(vii) ecologically sustainable development, and

(viii) the provision and maintenance of affordable housing, and

(b) to promote the sharing of the responsibility for environmental planning between the different levels of government in the State, and

(c) to provide increased opportunity for public involvement and participation in environmental planning and assessment.

78 Part 5 of the EPAA deals with "Environmental assessment" in relation to approvals given to carry out, for present purposes, activities such as the pilot program.

79 Section 111 contained in Pt 5 relevantly provides as follows:

111 Duty to consider environmental impact

(1) For the purpose of attaining the objects of this Act relating to the protection and enhancement of the environment, a determining authority in its consideration of an activity shall, notwithstanding any other provisions of this Act or the provisions of any other Act or of any instrument made under this or any other Act, examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity.

...

(4) Without limiting subsection (1), a determining authority must consider the effect of an activity on:

(a) critical habitat, and

(b) in the case of threatened species, populations and ecological communities, and their habitats, whether there is likely to be a significant effect on those species, populations or ecological communities, or those habitats, and

(c) any other protected fauna or protected native plants within the meaning of the National Parks and Wildlife Act 1974.

80 Section 115 of the EPAA provides that the Environmental Planning and Assessment Regulation 2000 ("the Regulations") "may make provision for or with respect to: (a) the factors to be taken into account when consideration is being given to the likely impact of an activity on the environment".

81 Clause 228 of the Regulations therefore relevantly provides (emphasis added):

228 What factors must be taken into account concerning the impact of an activity on the environment?

(1) For the purposes of Part 5 of the Act, the factors to be taken into account when consideration is being given to the likely impact of an activity on the environment include:

(a) for activities of a kind for which specific guidelines are in force under this clause, the factors referred to in those guidelines, or

(b) for any other kind of activity:

(i) the factors referred to in the general guidelines in force under this clause, or

(ii) if no such guidelines are in force, the factors referred to subclause (2).

...

(3) For the purposes of this clause, the Director-General may establish guidelines for the factors to be taken into account when consideration is being given to the likely impact of an activity on the environment, in relation to activities generally or in relation to any particular kind of activity.

(4) The Director-General may vary or revoke any guidelines in force under this clause.

82 Section 112 of the EPAA relevantly states:

112 Decision of determining authority in relation to certain activities

(1) A determining authority shall not carry out an activity, or grant an approval in relation to an activity, being an activity that is a prescribed activity, an activity of a prescribed kind or an activity that is likely to significantly affect the environment (including critical habitat) or threatened species, populations or ecological communities, or their habitats, unless:

(a) the determining authority has obtained or been furnished with and has examined and considered an environmental impact statement in respect of the activity:

(i) prepared in the prescribed form and manner by or on behalf of the proponent, and

(ii) except where the proponent is the determining authority, submitted to the determining authority in the prescribed manner,

...

(1B) Without limiting subsection (1), a determining authority must not carry out an activity, or grant an approval in relation to an activity, being an activity that is in respect of land that is, or is a part of, critical habitat or is likely to significantly affect threatened species, populations or ecological communities, or their habitats, unless a species impact statement, or an environmental impact statement that includes a species impact statement, has been prepared (in each case) in accordance with Division 2 of Part 6 of the Threatened Species Conservation Act 1995.

83 And for the purposes of ss 111 and 112, s 5A of the EPAA provides that:

5A Significant effect on threatened species, populations or ecological communities, or their habitats

(1) For the purposes of this Act and, in particular, in the administration of sections 78A, 79B, 79C, 111 and 112, the following must be taken into account in deciding whether there is likely to be a significant effect on threatened species, populations or ecological communities, or their habitats:

(a) each of the factors listed in subsection (2),

(b) any assessment guidelines.

(2) The following factors must be taken into account in making a determination under this section:

(a) in the case of a threatened species, whether the action proposed is likely to have an adverse effect on the life cycle of the species such that a viable local population of the species is likely to be placed at risk of extinction,

(b) in the case of an endangered population, whether the action proposed is likely to have an adverse effect on the life cycle of the species that constitutes the endangered population such that a viable local population of the species is likely to be placed at risk of extinction,

(c) in the case of an endangered ecological community or critically endangered ecological community, whether the action proposed:

(i) is likely to have an adverse effect on the extent of the ecological community such that its local occurrence is likely to be placed at risk of extinction, or

(ii) is likely to substantially and adversely modify the composition of the ecological community such that its local occurrence is likely to be placed at risk of extinction,

(d) in relation to the habitat of a threatened species, population or ecological community:

(i) the extent to which habitat is likely to be removed or modified as a result of the action proposed, and

(ii) whether an area of habitat is likely to become fragmented or isolated from other areas of habitat as a result of the proposed action, and

(iii) the importance of the habitat to be removed, modified, fragmented or isolated to the long-term survival of the species, population or ecological community in the locality,

(e) whether the action proposed is likely to have an adverse effect on critical habitat (either directly or indirectly),

(f) whether the action proposed is consistent with the objectives or actions of a recovery plan or threat abatement plan,

(g) whether the action proposed constitutes or is part of a key threatening process or is likely to result in the operation of, or increase the impact of, a key threatening process.

(3) In this section:

assessment guidelines means assessment guidelines issued and in force under section 94A of the Threatened Species Conservation Act 1995 or, subject to section 5C, section 220ZZA of the Fisheries Management Act 1994.

key threatening process has the same meaning as in the Threatened Species Conservation Act 1995 or, subject to section 5C, Part 7A of the Fisheries Management Act 1994.

There Has Been No Breach of s 111 of the EPAA

84 There are three limbs to the alleged breach of s 111 of the EPAA:

(a) first, that the Department manifestly failed to consider the ESG2 Guidelines;

(b) second, that the Department failed to take into account to the fullest extent possible all matters affecting or likely to affect the environment because it failed to obtain and take into account a groundwater assessment; and

(c) third, that the Department failed to take into account to the fullest extent possible all matters affecting or likely to affect the environment because the Ecological Assessment in the REF was inadequate because it failed to consider the impact of the pilot program on migratory and non-migratory shore birds, certain amphibian species and other species identified in expert ecological evidence.

85 Before turning to the application of s 111 to the facts of this case, it is necessary to consider the content of the duty imposed by the provision. The duty upon the determining authority, in this case the Department, to "examine and take into account to the fullest extent possible" the matters obliged to be considered by s 111 is, as the authorities have clarified, an obligation to examine and take into account the matters referred to in that section to the fullest extent reasonably possible (Guthega Development Pty Ltd v Minister Administering the National Parks and Wildlife Act 1974 (NSW) (1986) 7 NSWLR 353 at 366; Transport Action Group Against Motorways Inc v Roads and Traffic Authority [1999] NSWCA 196; (1999) 46 NSWLR 598 at [68]; Parks and Playgrounds at [158] and Oshlack v Rous Water (No 2) [2012] NSWLEC 111; (2012) 189 LGERA 243 at [65]-[68]). The duty is to conduct a proper examination of the relevant matters required to be considered, more than mere advertence is necessary. Fullerton bears a heavy burden in demonstrating that the Department failed to properly take into account a matter required for consideration under s 111 (Jugiong Quarries Pty Ltd v Water Administration Ministerial Corporation [1995] NSWLEC 74 at 14).

86 The conduct of the duty is informed by the factual circumstances surrounding its execution. That is to say, in the present case the fact that the proposed activity does not involve coal seam gas production other than for the purposes of a pilot program and requires the establishment of two pilot wells on a single drill site operational for a limited period of time (50 days) and subject to the conditions of PEL 458 and the 1 June 2012 approval (including the variation).

Failure to Consider the ESG2 Guidelines

87 By reference to cl 228(1)(a) of the Regulations, Fullerton contended that as a matter of inference, the Department had breached the duty imposed on it by s 111 by failing to consider the ESG2 Guidelines in assessing the likely impact of the activity. The Guidelines came into force in March 2012.

88 As stated in the Introduction to the ESG2 Guidelines, the Guidelines were developed to provide a framework for "industry" to use in assessing the potential environmental impact of activities requiring the preparation of an REF or EIS (footnotes omitted):

Introduction

The Mineral Resources Branch of NSW Trade & Investment is responsible for the administration of authorisations under the Mining Act 1992 and petroleum titles under the Petroleum (Onshore) act 1991. Authorisations are defined as exploration licences, assessment leases, mining leases, mineral claims and opal prospecting licences. Petroleum titles include exploration licences, assessment leases and production leases.

As part of this role, Mineral Resources has a statutory obligation under s.111 of the Environmental Planning and Assessment Act 1979 (EP&A Act) to "examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment" when determining certain applications in relation to authorisations and titles. This obligation applies where activities have not previously been approved under the former Part 3A or Part 4 of the EP&A Act, or assessed by another Government agency in accordance with Part 5.

In order to assess these impacts, Mineral Resources may require the authorisation/title holder to prepare a Review of Environmental Factors (REF) or Environmental Impact Statement (EIS).

These Guidelines have been developed to provide a framework for industry to use in assessing the potential environmental impact of activities requiring the preparation of a REF, EIS or other supporting documentation.

89 Relevantly, the ESG2 Guidelines stated that the REF must summarise the individual impacts of the activity and consider the total impact of the activity:

5 Summary of impacts

The REF must summarise the impacts of the activity (preferably in tabular form) and consider the total impact of the activity based on the classification of individual impacts as low, medium or high adverse, negligible or positive.

Note. When considering the likely environmental significance of the impacts associated with the proposed activity, applicants should consider:

• how extensive are the impacts?
• how adverse are the impacts on environmentally sensitive areas?
• how acceptable are the impacts considering the nature of the impacts?

In addition to medium and high impacts, consideration should also be given to the overall effects of the low impacts. Although impacts may be of only low to medium concern when considered individually, the total effect of the impacts could be substantial.

Further guidance is given below:

Extensive impacts are likely to be significant In deciding if the impacts of an activity are likely to significantly affect the environment, the type, degree and range of each impact must be considered on its merits. If an impact is extensive in terms of spatial or time dimensions and intensity or severity there is potentially a high risk to the environment. Impacts which adversely impact on environmentally sensitive areas are likely to be significant The impacts of activities undertaken in environmentally sensitive areas are more likely to be significant than similar activities proposed in less sensitive locations. Relatively small activities carried out in sensitive locations can result in substantial impacts on the environment. A precautionary approach should be adopted for activities proposed in locations known to be environmentally sensitive, including careful investigation of alternatives and mitigation strategies. Activities that are likely to indirectly affect sensitive locations may also be considered to significantly affect the environment. Impacts with a low level of acceptability because of the nature of the impacts are likely to be significant When considering the impacts of an activity, the extent of the potential impacts is only one factor to be considered. Impacts that are not very extensive may still significantly affect the environment.

Any impact that results in a threat to the health or safety of individuals or the community has a low acceptability level. In considering the risks to the community, particular attention should be given to the welfare of children, the aged or any disadvantaged group.

90 The ESG2 Guidelines stipulate that the REF must describe certain stipulated matters:

6 Conclusions

The REF must describe whether:

• there is likely to be a significant effect on the environment (if so, an EIS is required)
• there is likely to be a significant effect on threatened species, populations, ecological communities or their habitats (if so, a SIS is required)
• the activity is in respect of land that is, or is part of, critical habitat (if so, a SIS is required)

In considering whether there is likely to be a significant effect on the environment, the applicant must describe whether the activity as a whole will have a significant effect on the environment and explain the reasons for this conclusion.

Note. The ranking of the potential significance of the individual impacts of an activity must be considered as well as the aggregation of all the impacts of the activity. The cumulative effect could result in the activity as a whole having a significant effect.

A medium or high level of impact is considered to be significant. Examples of activities that have the potential to have significant effect on the environment include, but are not limited to, circumstances where:

• the impacts from the proposed activity would result in a permanent and adverse change to the environment
• there is a low level of confidence in forecasting outcomes. In this case the risks may be high. If the risks to the environment are high, then impacts can be judged to have the potential to significantly affect the environment
• the risks of irreversible change may be high due to the environment's natural sensitivity and/or induced sensitivity because of cumulative impacts
• it is known that the environment is already stressed and therefore the acceptability of activity that will further degrade the environment may be significantly reduced.

91 The ESG2 Guidelines were also required to be taken into account, Fullerton submitted, in order to promote consistency in decision-making and because they represented best practice from an environmental perspective in the specific industries of petroleum exploration, mining and production.

92 Fullerton relied on the absence of any express reference to the ESG2 Guidelines in: the 25 May 2012 minute recommending that the Department determine that the pilot program was not likely to significantly affect the environment; the REF, which specifically referred to cl 228 of the Regulations; and the 1 June 2012 Pt 5 determination evaluation assessing the likely significance of the impact of the pilot program to invite the Court to draw the inference that the Guidelines had not been considered.

93 Fullerton specifically relied upon the Note contained in section 6 "Conclusions" of the ESG2 Guidelines. It argued that because the Note stated that "a medium or high level of impact is considered to be significant", in circumstances where the 1 June 2012 Pt 5 determination had assessed the environmental significance of the "activity as a whole" to be "medium", but had nevertheless concluded that no EIS was required, this demonstrated that the ESG2 Guidelines had not been considered adequately or at all by the Department.

94 Fullerton drew support from s 35(4) of the Interpretation Act 1987, which states that marginal notes, endnotes and footnotes are to be taken as part of an Act or instrument. However, given that the Guidelines are neither an "enactment" nor an "instrument" for the purpose of the Interpretation Act, I do not understand how s 35 assists Fullerton and in any event s 35(2)(c) of that Act suggests a contrary position.

95 Fullerton will succeed if it can demonstrate, first, that as a matter of statutory construction the Department was bound to take the ESG2 Guidelines into account in granting the approval (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39), and second, as a matter of inference, that no consideration was in fact given to the Guidelines by it.

96 In drawing such an inference the Court should bear in mind the articulation of the relevant principles made by McClellan J in Centro Properties Ltd v Hurstville City Council [2004] NSWLEC 401; (2004) 135 LGERA 257 at [36]-[37]):

36 In Weal v Bathurst City Council [2000] NSWCA 88; (2000) 111 LGERA 181, the Court of Appeal divided over a challenge to a development consent granted with respect to a proposed rail freight terminal. At issue was whether the council had considered the impacts of noise from the proposal.

37 Giles and Priestley JJA came to the view that the council's discretion had miscarried. Mason P came to the contrary view. However, as Priestley JA makes plain, the principles which govern the approach that a court should take in the event of a challenge were the subject of substantial agreement. A summary of those principles is useful and would include the following:

· the onus falls upon the challenger to satisfy a court that the relevant discretion has miscarried;

· when exercising its decision-making power, an administrative body must give "proper, genuine and realistic consideration" to the merit of the matter: see Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 at 292; Paramanantham v Minister for Immigration and Multicultural Affairs (1998) 94 FCR 28 at 64. Mere advertence to a matter may not be sufficient: Zhang at NSWLR 601;

· a failure to take matters into consideration may be demonstrated where it can be shown that the decision-maker had inadequate personal acquaintance with the facts and issues: Hale at LGRA 319;

· legally sufficient consideration of a relevant issue may require consideration of conditions which could ameliorate any prospective harm to the environment from the development;

· generally speaking, understanding the scope of a problem is a prerequisite to a lawful decision with respect to it;

· when a challenge is based upon Wednesbury unreasonableness a stringent test is applied. Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611. The decision must be devoid of plausible justification: Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 290; Minister for Urban Affairs and Planning v Rosemount Estates Pty Ltd (1996) 91 LGERA 31;

· when it comes to a consideration of whether the decision-maker has properly weighed up relevant considerations which it has itself identified, a court must proceed with caution "lest it exceed its supervisory role by reviewing the decision on its merits": Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 42;

· where there is no direct evidence of a consent authority's consideration of a matter, it may be difficult for a challenger to establish a failure to consider a relevant matter or consideration of an irrelevant matter. Confined to drawing an inference, that inference should only be drawn after anxious consideration: Hale; Currey v Sutherland Shire Council (1998) 100 LGERA 365 at 373 ...

97 Regard must also be had to the level of particularity at which the subject matter that is said to be relevant and mandatory is to be considered. Section 111 of the EPAA must expressly or impliedly oblige the Department to inquire and consider the ESG2 Guidelines, assuming their consideration is mandatory, at the level of particularity demanded by Fullerton's submission (Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118 at [60]; Foster v Minister for Customs and Justice at [23] and Barrington-Gloucester-Stroud Preservation Alliance at [173]).

98 Unquestionably, pursuant to s 115 of the EPAA and cl 228(1)(a) of the Regulations, there is a statutory requirement contained in s 111 to consider various prescribed "factors" (to borrow the statutory language) when assessing the likely impact of an activity on the environment. Clauses 228(1) and (3) provide that the Director-General may establish guidelines identifying the factors that must be taken into account when assessing this impact in accordance with the hierarchy specified in cl 228(1).

99 However, when consideration is given to the language of cl 228(1)(a) of the Regulations it becomes apparent that this limb of the ground of review cannot succeed because cl 228(1) is not engaged by the ESG2 Guidelines.

100 First, I accept the submissions of Dart and the Department that the ESG2 Guidelines are not relevant "guidelines" for the purposes of cl 228 because they were not guidelines made by the Director-General of the Department of Planning. Having concluded this (for reasons that are elaborated upon below), I nonetheless reject Dart's argument that the Guidelines cannot properly be characterised as "specific guidelines" for the purpose of cl 228(1)(a) because they were prepared to guide the preparation of documents by "industry". The title of the ESG2 Guidelines makes it abundantly clear that the Guidelines are directed to "exploration, mining and petroleum production activities" which plainly encompasses the pilot program. As the "Introduction" states, the ESG2 Guidelines are auspiced under the Mineral Resources Branch of NSW Trade & Investment which is responsible for the administration of authorisations under the Mining Act 1992 and petroleum titles under the PO Act. Clearly the "industry" referred to in the Guidelines is the mining and petroleum industry. It is the very "industry" seeking to explore for gas under the pilot program.

101 But irrespective of their characterisation, the ESG2 Guidelines were not, as is necessary upon the proper construction of cl 228, guidelines made by the Director-General of the Department of Planning. Rather, they were made by, the Director-General of the NSW Department of Trade and Investment, Regional Infrastructure and Services, that is to say, the second respondent. Although cl 228(1) appears to be silent as to who must be the maker of the guidelines referred to therein, when that clause is read both as a whole having regard to its scope and purpose and in the wider context of both the Regulations and the EPAA, it becomes clear that the guidelines, whether general or specific, must be those promulgated by the Director-General referred to in subclauses (3) and (4). It would, for example, be anomalous if the Director-General of the Department of Planning could repeal guidelines made by the Director-General of another Department. The "Director-General" referred to in cl 228(3) is, by reason of the combined operation of cl 3 of the Regulations and the definition of "Director-General" and "Department" in s 4 of the EPAA, the Director-General of the Department of Planning (the definitions in the EPAA apply to the Regulations: see s 11 of the Interpretation Act).

102 In this regard, the ESG2 Guidelines may be contrasted with the document entitled Is an EIS Required? Best Practice Guidelines for Part 5 of the Environmental Planning and Assessment Act 1979 ("the EIS Guidelines") issued by the "Department of Urban Affairs and Planning". That it is a general guideline for the purpose of cl 228(1)(b)(i) is readily inferred at page 2 of the EIS Guidelines (cl 82 is the former equivalent to cl 228(1)(a) under the Environmental Planning and Assessment Regulation 1994):

The guidelines apply to all activities unless specific guidelines are issued for a particular type of activity

The guidelines should form the framework for evaluating the need for an EIS. They are generic in nature and apply where no specific guidelines for specific types of activities have been prepared.

In March 1995, the Director General of Planning issued this guideline to apply to all determining authorities (except local councils and county councils) under the provisions of clause 82 of the EP&A Regulation 1994. For councils, the guideline is advisory and is considered to be best practice.

103 Similarly, the Commuter Car Park Program Guideline dated May 2009 issued by the Department of Planning (annexed to the affidavit of Ms Louise Camenzuli affirmed 12 October 2012) is a guideline that "has been established in accordance with clause 228(3) of the" Regulations.

104 Second, although Fullerton specifically alleges that the ESG2 Guidelines have not been taken into account, it does not allege, as it must, that there has been a failure to consider any or all of the "factors" contained within those Guidelines.

105 Clause 228(1) expressly refers to the "factors referred to in those guidelines" and "the factors referred to in subclause (2)", and not simply the "guidelines". That is to say, it is the factors within the ESG2 Guidelines that must be taken into account. This interpretation is consistent with the scope, purpose and context of cl 228 of the Regulations and ss 5 and 111 of the EPAA insofar as it is the content or substance of the guidelines, rather than the fact or form of the guidelines themselves, that is important for the purposes of the duty contained in s 111 of the EPAA. This analysis is not, as Fullerton submitted, a mere matter of semantics because, as the evidence reveals, although there is no reference to the ESG2 Guidelines in the supporting documentation, the factors contained in the Guidelines were nonetheless taken into account in the Pt 5 determination.

106 The function of the ESG2 Guidelines is, as it states (see the extract above), to provide the content for an assessment of the potential environmental impacts of activities requiring the preparation of an REF, EIS or other supporting documentation for the purpose of the statutory obligation stipulated in s 111 of the EPAA. A review of the Dart REF reveals that it discussed in detail all of the content requirements stipulated in the ESG2 Guidelines. Thus the "Content requirements for a REF" detailing (as described in the Guidelines) "The proposed activity", "The site", "The existing environment", "Impact assessment", "Summary of impacts" and "Conclusions" are all addressed in the REF. See, for example:

(a) sections 1.1 and 1.3 (overview and site history);

(b) section 3 (project description, including description of the activity);

(c) section 4 (legislative requirements and approvals at both a State and Commonwealth level);

(d) the extensive environmental impact assessment in section 6 dealing with, amongst other things: regional topography and geology; soils; hydrology; flora and fauna; matters of national environmental significance; noise and vibrations; air quality; heritage, including Indigenous cultural heritage; bushfire; hazardous materials and land contamination; visual amenity; waste; natural resource use; traffic impacts; community and social impacts; and importantly, the cumulative environmental impacts of the proposed pilot program;

(e) sections 7 and 8 (rehabilitation and mitigation measures);

(f) appendix 3 (groundwater assessment methodology);

(g) appendix 5 (EPBC Act protected matters search);

(h) appendix 6 (noise and vibration assessment);

(i) appendix 8 (Aboriginal cultural heritage assessment due diligence report); and

(j) appendix 9 (ecological assessment).

107 The Ecological Assessment dated 23 September 2011 contained in Appendix 9 of the REF is comprehensive, containing both a flora and fauna survey (the latter surveying amphibians, reptiles and avifauna). The Assessment examines specific impacts of the pilot program on identified mammals, birds, amphibians and vegetation communities, in addition to assessing the cumulative and wider scale impacts of the proposed pilot program on the environment.

108 The content of the ESG2 Guidelines (that is to say, the factors contained within it) was, therefore, considered by the Department when it considered the REF and other supporting documentation, such as the 15 May 2012 Commonwealth decision that the pilot program was not a controlled action for the purposes of the EPBC Act, the 25 May 2012 minute and the 1 June 2012 Pt 5 determination.

109 In order to demonstrate this point Dart put before the Court a table setting out all of the references in the materials before the Department to the factors referred to in the ESG2 Guidelines. That is to say, all of the references in the materials before the Department where there was consideration of: the assessment of physical and chemical impacts (factor 4.1 of the Guidelines, including references to air, water, soil and stability, noise and vibration and other physical impacts and the questions the REF should address pursuant to this factor); an assessment of biological impacts (factor 4.2, including references to fauna, flora, ecological impacts and the questions the REF should address pursuant to this factor); an assessment of community impacts (factor 4.3, including references to social and economic factors, heritage, aesthetic and cultural impacts, transportation impacts and the questions the REF should address pursuant to this factor); an assessment of natural resource impacts (factor 4.4); an assessment of Aboriginal cultural heritage impacts (factor 4.5); an assessment of historic cultural or natural heritage impacts (factor 4.6); whether the proposed activity was likely to impact on matters of national environmental significance under the EPBC Act (factor 4.7); and the assessment of cumulative impacts (factor 4.8). It is not necessary to set out this list in full. Suffice it to say that it was extensive, with no factor contained in the ESG2 Guidelines not the subject of material before the Department.

110 On any view, therefore, the various factors referred to in the ESG2 Guidelines were taken into account by the Department.

111 Third, the ESG2 Guidelines were released by the Department in March 2012, whereupon they came into force. By contrast, the application for approval of the pilot program and REF was submitted by Dart to the Department in September 2011. That is to say, nearly six months prior to the release of the Guidelines. Given that their stated purpose is to provide a framework for the petroleum and mining industry for use in preparing an EIS, REF or other supporting documentation for the purposes of s 111, I do not accept, as Fullerton submitted, that the ESG2 Guidelines could be taken as having, in effect, retrospective application to Dart or the Department. Having regard to scope, content and purpose of both cl 228(1) of the Regulations and s 111 of the EPAA, there is no available statutory construction of either provision that would permit this result.

112 For these reasons, I do not accept that the Department breached s 111 of the EPAA for failing to consider the ESG2 Guidelines as alleged by Fullerton.

Failure to Obtain a Groundwater Assessment

113 The second breach of s 111 contended for by Fullerton is that the Department did not take into account to the fullest extent possible all matters affecting or likely to affect the environment because it failed to obtain a groundwater assessment. It was uncontroversial that no separate groundwater assessment was provided by Dart to the Department.

114 Fullerton sought to rely on the affidavit of Dr Gavin Mudd, an environmental engineer, affirmed 19 September 2012, as to the sufficiency of the surface and groundwater information before the Department when it made its decision to approve the pilot program.

Admissibility of Expert Evidence in Determining a Breach of s 111 of the EPAA

115 This gives rise to a question as to the admissibility of Dr Mudd's report.

116 Fullerton submitted that expert evidence was admissible in any determination by the Court as to whether there had been a breach of s 111 of the EPAA by the Department notwithstanding that the proceedings were Class 4 judicial review proceedings. It relied upon the decision of Talbot J in Jugiong where his Honour said (at 14, emphasis added):

Insufficiency or incompleteness of an assessment required by s 111 is a matter of judgement for the Court on judicial review. It is necessary to assess the extent of materials and the consideration of them. The Court must also exercise its own judgement into whether the materials considered were inappropriate or incorrect.

It can be assisted in these tasks by evidence from relevant experts.

117 Fullerton also relied on authorities which it submitted were to similar effect, namely, Caldera Environment Centre Inc v Tweed Shire Council [1993] NSWLEC 102; King v Great Lakes Shire Council (1986) 58 LGRA 366 and Friends of King Edward Park.

118 Fullerton accepted, however, that receipt of this evidence meant that "the Court is not entitled to substitute its own opinion on the merits of the decision" by the Department (Jugiong at 14).

119 Both Dart and the Department submitted that s 111 contains an objective test that does not permit the admission of extraneous evidence not before the decision-maker, particularly when the ground of review in question is framed as, in this instance, involving an "error of law".

120 A survey of the potentially applicable case law reveals the following propositions. First, to date, it appears that no decision has directly and unequivocally decided the issue of whether expert evidence is admissible to determine whether or not a decision-maker has examined and taken into account to the fullest extent reasonably possible all matters affecting or likely to affect the environment as required by s 111 of the EPAA. While the authorities are replete with illustrations where such evidence has been admitted (for example, Jugiong), no party was able to furnish the Court with decisive and binding authority in this respect.

121 Of the four decisions relied upon by Fullerton, only Jugiong concerned the application of s 111. In Jugiong the admissibility of extraneous expert evidence appeared to be uncontroversial with Talbot J emphasising in that case that "the Court is not entitled to substitute its own opinion on the merits of the decision by the [decision-maker]" (at 14).

122 In King v Great Lakes Shire Council one of the grounds of challenge to the validity of a development consent for a caravan park was that, pursuant to the then s 90 of the EPAA, the council was obliged to consult with the National Parks and Wildlife Service and that had it done so, it would have received information that the development was not compatible with a national park that the Service was proposing to extend to include land upon which the development was, in part, to occur. The Court held that evidence was admissible to decide "as to what a council acting reasonably ought to have done" where what was alleged was a failure by the council to make inquiries with the Service in the course of assessing the impact of the proposed development pursuant to s 90 (at 371 per Cripps J). The obligation contained in s 111 is, in my view, in very different terms to the duty contained in the now repealed s 90.

123 In Caldera the admissibility of an ecologist's report opining as to the adequacy of the assessment of a proposed development on fauna was at issue. The case concerned the council's alleged failure to take into consideration (or to give any real consideration to), pursuant to the former s 90 of the EPAA (the same provision as in King v Great Lakes Shire Council), matters relating to the impact of the development on flora and fauna. In rejecting the expert's report Talbot J stated the following principles (at 9-10):

In exercising its function of judicial review this Court is not entitled to go beyond the material before the consent authority except to the limited extent already discussed (see King v Great Lakes, Hastings and ULV v Scott). Trespass into the field of merits is forbidden as one can see from the decision in Minister for Aboriginal Affairs v Peko Wallsend Ltd and Others 162CLR 24 at 40-42 and Chan Yee Kin v The Minister for Immigration and Ethnic Affairs 169CLR 379 at 391 and 392. The limited extent to which the Court can go beyond the material actually before the council might be summarised as follows:-

1. Where there is a failure to make inquiries, receive reports or consult with authorities, evidence is admissible as to what inquiries, reports or consultations would have revealed.

2. To show what a council acting reasonably ought to have done.

3. To achieve an understanding of the environmental consequences of the action or inaction of the council.

4. To explain factors, principles or materials relevant to the determination.

5. In a challenge to the reasonableness of the decision where all of the relevant material before the council is in the possession of the witness to explain what was before the council.

6. As to the existence and nature of information said to be relevant to the decision where council proceeds to a decision without making any attempt to obtain that information. (Prasad v The Minister for Immigration 65ALR 549 at 563 Jacfin Pty Ltd v The Taft Entertainment Company Pty Ltd & Ors No. 40033 of 1985 Stein J 3 October 1985 unreported and Hale).

The evidence of Mr Milledge variously expresses disagreement with the Warren Report in respect of the methods employed and its conclusions. Much of his evidence is conjecture (see paragraphs 9, 11, 13, 14 and 16 for example). More specifically Mr Webster says that the matters in paragraphs 8 and 9 do not relate to anything pleaded in the points of claim. Mr Robertson argues that the evidence of Mr Milledge is a serious attempt to assess impact where no such assessment has been made. He attempted to explain the evidence by reference to the documents in the council's file but in the main these were the Statement of Environmental Effects and the Warren Report. It is apparent that Mr Milledge concentrates on the Warren Report and seeks to discredit it. His criticisms extend to asserting that the report is wrong, contradictory or that there are omissions. No attention is paid to the other material available to council, that is, the whole of the material that the council had before it in relation to flora or fauna actually or constructively during the time that the application was considered. It was not necessary to have the whole of the material before the council, but it was necessary to have all of the relevant material (see ULV v Scott and Hastings). Being solely a critique of the Warren Report, the evidence of Mr Milledge does not fit into any of the identified categories of admissible evidence in this class of proceedings. It is not a case where the council gave no consideration at all nor is it a case where no attention is paid to the head of consideration. Information was obtained and inquiries were made. The conditions of consent addressed the potential for impact. There was consultation with and advice from the National Parks and Wildlife Service with whom an agreement must be reached before the development proceeds. Subject to those parts of the affidavit already referred to, the evidence is rejected.

124 As is apparent from the above quote, little comfort can be derived by Fullerton from this authority.

125 Friends of King Edward Park concerned an application pursuant to r 31.19 of the Uniform Civil Procedure Rules 2005 ("the UCPR") to admit an expert geotechnical report in support of a claim that the council had failed to take into account matters required to be considered under s 79C of the EPAA. It was in this context that Biscoe J stated that "authorities in this Court also support the admissibility of evidence where a duty of consultation or inquiry in the decision-making process is alleged, as it is in the present case" (at [82], citing King v Great Lakes Shire Council).

126 Read in its full context, I do not understand that by this remark his Honour was laying down a rule to the effect that wherever a statute confers a duty upon a decision-maker to consider certain matters this permits the Court to have recourse to material not before the decision-maker in order to determine if the duty has been fulfilled. Rather, it appears that his Honour was referring to circumstances where the decision-maker is under a duty similar to the duty at issue in Prasad, namely, a duty to make inquiries. Where such a duty exists evidence may be necessary to establish what, had they been made, those inquiries would have revealed. So much so is apparent from his Honour's reliance on the quote from Caldera (at [83]). Unlike the present case, such a duty was expressly pleaded in Friends of King Edward Park.

127 At this juncture it should be noted that Fullerton expressly disavowed any reliance on a Prasad like duty or manifest unreasonableness. Neither formed part of its claim.

128 Second, the most recent decisions concerning s 111 of the Court have only had regard to expert evidence that was before the decision-maker at the time the decision was made (Oshlack (No 2) at [76]-[77] per Pepper J; Parks and Playgrounds at [159] per Biscoe J and City of Botany Bay v New South Wales Land and Housing Corporation [2010] NSWLEC 160 at [84]-[90] per Sheahan J).

129 These later decisions are consistent with earlier authority (see, for example, Blue Mountains City Council v Prospect County Council (1992) 74 LGRA 129; Transport Action Group Against Motorways Inc; Willoughby City Council v Minister Administering the National Parks and Wildlife Act (1992) 78 LGERA 19; Drummoyne Municipal Council v Roads and Traffic Authority of New South Wales [1989] NSWLEC 19; (1989) LGRA 155 and Guthega), although in some instances, evidence from the decision-maker was admitted to illuminate what matters had been considered by the decision-maker (see, for example, Transport Action Group, Drummoyne and Sustainable Fishing and Tourism Inc v Minister for Fisheries [2000] LEC 2; (2000) 106 LGERA 322 at [75]).

130 Third, having said this, there are nevertheless illustrations of expert evidence having been received by the Court for the purposes of assisting it in determining if the duty imposed by s 111 has been fulfilled by the decision-maker. As a brief review of these cases demonstrates, however, scant explanation as to the juridical basis for the admission of this extraneous material is given by the Court in each instance and typically any challenge under s 111 of the EPAA is accompanied by an allegation that there has been a failure to fulfil the requirements of s 112, or that the decision is manifestly unreasonable in the Wednesbury sense.

131 It is therefore not possible to determine on what basis the evidence has been admitted in those cases.

132 Thus in Prineas v Forestry Commission of New South Wales (1983) 49 LGRA 402 the issue was whether an EIS prepared by the Forestry Commission of New South Wales was adequate for the purpose of determining whether proposed rainforest logging operations should be approved. The Court had regard to the evidence of several experts criticising the EIS on the basis of matters omitted from it in dismissing the application. The application was initially brought on the basis of a breach of ss 111 and 112 of the EPAA (although breach of the latter provision was later conceded). There was no discussion of the basis upon which the evidence was admitted into evidence.

133 The decision in Jarasius v Forestry Commission of New South Wales [1988] NSWLEC 11; (1988) 71 LGRA 79 concerned a challenge pursuant to ss 111 and 112 of the EPAA to the validity of timber licences and approvals granted by the Forestry Commission of New South Wales. In addition to a three day view, "an enormous amount of detailed written and oral, technical and scientific evidence as to impact and the adequacy of data and available research" was "tendered and explained by a large number of highly trained and experienced experts" (at 88). Some of this material was used by the Court to conclude that the available information on the distribution of flora and fauna in the region was inadequate and that it was not reasonably open to the Commission to arrive at the conclusion that the activities were not likely to significantly affect the environment (s 112) or that it had examined and taken into account to the fullest extent reasonably possible all matters affecting or likely to affect the environment (s 111). It appears that the expert evidence was admitted by the Court in circumstances that were not controversial and for the purposes of deciding breach of both ss 111 and 112.

134 Likewise, in Bailey v Forestry Commission of New South Wales [1989] NSWLEC 24; (1988) 67 LGRA 200 the Court relied on evidence from a range of expert (ecologists, foresters, agronomists and geologists) and lay witnesses to decide that in granting timber licences for selective logging of a State forest, the Forestry Commission had failed to comply with both ss 111 and 112 of the EPAA.

135 In Rundle v Tweed Shire Council (1989) 68 LGRA 308 the Court admitted a "vast body of scientific and medical evidence" concerning the impacts of the spraying of groundsel bush, a noxious weed, with herbicide. Curiously, the Court stated that this evidence was "only relevant" to alleged non-compliance with s 112 (at 321), but then nevertheless went on hold that, "having regard to the totality of that scientific and medical evidence" s 111 had not been breached (at 327).

136 A similar result followed in Warren v Electricity Commission of New South Wales [1990] NSWLEC 131; (1990) 130 LGERA 565, where the question was whether, in deciding to approve the construction of a high voltage electricity transmission line, s 111, in particular, had been complied with in circumstances where there was no consideration of, amongst other things, the effects of electromagnetic radiation on human health. Expert evidence was admitted to assist the Court in dismissing the application, although the decision was also challenged on the grounds of Wednesbury unreasonableness and a breach of s 112 of the EPAA.

137 In Fay v Roads and Traffic Authority of New South Wales (No 2) (1991) 25 ALD 201 expert evidence was employed by the applicant in an attempt to repudiate the estimated extent of usage of the Spit Road (at 204). More recently, in Goldberg v Waverley Council [2008] NSWLEC 49 visual impact expert evidence was relied upon by Lloyd J to find a breach of both ss 112 and 111 (at [63]-[64]).

138 Albeit spare on principle, historically, at least, it appears that the Court has readily admitted extraneous expert evidence to assist it in determining if the requirements of s 111 of the EPA have been met.

139 Unlike the arguments put with respect to s 112 of the EPAA, neither Dart nor the Department submitted that any of the cases reviewed above were plainly wrong. These earlier decisions must, in my view, be treated with caution given that they pre-date seminal authorities such as Attorney-General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1, admonishing any trespass by courts engaged in judicial review into the merits of the discretionary exercise of administrative power under challenge (at 38 per Brennan J). And, as noted above, none of these decisions analysed the basis of the admission of the expert evidence relied upon in each case.

140 Ultimately, in my opinion, the answer to the question of whether evidence not before the decision-maker, and in particular expert evidence, is admissible to demonstrate compliance or non-compliance with s 111 of the EPAA, is to be derived from the proper construction of that section, starting with the text of the provision itself and then having regard to the scope, context and purpose of the provision within the EPAA (Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 87 ALJR 98 at [39]; CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at 408 and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27 at [47]).

141 Section 111 is an unwieldy provision. So much is obvious from the judicial gloss that has been, as a matter of necessity, applied to it by the insertion of the qualifier "reasonable" in the phrase "to the fullest extent possible". Notwithstanding this drafting deficiency, the section nevertheless remains central to the functioning of Pt 5 of the EPAA. As Cripps J stated in F Hannan Pty Ltd v Electricity Commission of New South Wales (1983) 51 LGRA 353 (at 365-366, quoted approvingly in Drummoyne Municipal Council v Roads and Traffic Authority per Stein J at 157):

It is difficult to over-estimate the importance of s 111. The real intention of the legislature is made evident from the terms of s 111 itself. Compliance with its requirements is, in my opinion, pivotal to a proper working of Pt V of the Act.

142 The language of s 111 makes it plain, in my view, that the duty to consider to the fullest extent reasonably possible all matters affecting or likely to affect the environment by the activity in or to discuss the function of question extends to both a decision-maker's duty to examine these matters and the duty to take them into account. That is to say, the duty must be exercised both at the examination stage and at the consideration stage in order to discharge the function of assessing the effect or likely effect on the environment of the activity in question. It is, in effect, two duties masquerading as one.

143 The duty to take into account to the fullest extent reasonably possible all matters affecting or likely to affect the environment is, on any view, to be assessed objectively by the Court on the material before the decision-maker. By analogy with the traditional ground of judicial review of failing to take into account a mandatory relevant consideration, extraneous evidence, including expert evidence, is not relevant to the judicial task of determining whether or not there has been compliance with this limb of the statutory duty contained in s 111.

144 More difficult, however, is the first limb of the duty contained in s 111, namely, the duty to examine to the fullest extent reasonably possible all matters affecting or likely to affect the environment. The verb "examine" is defined to mean, amongst other things, "to inspect or scrutinise carefully; inquire into or investigate" (The Macquarie Dictionary, online edition) or "to inquire or search into, investigate (a question or subject); to consider or discuss critically; to try the truth or falsehood of (a proposition, statement etc)" (Oxford English Dictionary, online edition). This strongly suggests, therefore, especially when the central importance of the section is recalled, and having regard to the context, scope and purpose of Pt 5, the factors listed in s 5A, and the objects contained in s 5 of the EPAA, that something analogous to a Prasad like duty to inquire is embedded within s 111. If this is so, expert or other extraneous evidence may be admissible to show what inquiries ought to have been made as a precursor to the examination exercise, and if they had been made, what those inquires would have revealed.

145 In formulating the duty contained in s 111 in this way it must be emphasised that this does not provide unfettered licence to litigants to adduce expert evidence in a bid to persuade the Court that the decision arrived at by a determining authority was wrong or, alternatively, to invite the Court to substitute its own decision for that of the decision-maker. An inquiry by the Court into whether a determining authority has complied with s 111 must not be permitted to turn into an examination of the merits of the decision.

146 In addition, it may be expected that any party seeking to rely on this aspect of the duty contained in s 111 of the EPAA would make this abundantly clear in the pleadings. Points of claim alleging a bare breach of s 111 by reason of the failure to have regard to certain matters will not suffice. This will engage only the second limb of the duty, viz, the duty to take into account to the fullest extent reasonably possible all matters affecting or likely to affect the environment.

147 The pleadings in the present case do not disclose a reliance on any duty to inquire or, to put it another way, any duty to examine. Indeed, as stated above, Fullerton repeatedly expressly disavowed any reliance on such a duty. To allege that the Department "failed to obtain" a groundwater assessment is, in my opinion, without more, insufficient and is tantamount to pleading that the Department failed to take into account a groundwater assessment. As a consequence, as pleaded, no expert evidence is relevant or required to assist the Court in determining this issue. The question must be therefore decided on the materials before the Department and only those materials.

148 As the documentary evidence before the Court discloses, the effect of the pilot program on groundwater was considered by the Department and, in my view, considered sufficiently to comply with s 111 of the EPAA as pleaded. I arrive at this conclusion irrespective of the fact that no separate groundwater assessment was obtained by the Department. Fullerton has not established that s 111 of the EPAA requires that the Department obtain and consider "a groundwater assessment". Put another way, Fullerton has not demonstrated that as a matter of construction, s 111 necessitated that the Department consider the issue of groundwater at the level of particularity Fullerton demands.

149 In this context two principles should be noted. First, that the obligation contained in s 111 does not impose on a determining authority a standard of absolute perfection or a standard of compliance measured by no other consideration than whether it is possible in fact to carry out a particular investigation (Prineas at 417 per Cripps J). To reiterate, the duty is to consider to the fullest extent reasonably possible all matters affecting or likely to affect the environment. No more and no less. Second, the decision-maker does not make the determination "in a vacuum" (Schroders Australia Property Management Ltd v Shoalhaven City Council [1999] NSWLEC 251; (1999) 110 LGERA 130 at [34] per Pearlman J). The determination of the Department must be scrutinised against the history of the pilot program, the Department's prior knowledge and experience gained by its dealings with Dart in relation to the drilling of gas wells, and from other investigations undertaken in the geographical area covered by PEL 458.

150 Guidance as to the level of particularity at which an inquiry must be made, or a factor considered, is also provided by cl 228 of the Regulations. That clause makes it clear, in my opinion, that had the Department wholly failed to consider the impact of the pilot program on groundwater, then breach of s 111 of the EPAA would have been likely (see, for example, cls 228(2)(h), (i) and (n)). But this is not what in fact occurred.

151 The Department had before it sufficient information to discharge its duty under s 111 concerning the likely environmental impacts relating to ground and surface water consequent upon the pilot program becoming operational. This information was contained in, for example:

(a) a Review of Environmental Factors prepared by CH2M HILL Australia Pty Ltd on behalf of Macquarie Energy Pty Ltd, the then holder of PEL 458, in September 2009;

(b) well completion reports detailing the regional geology and stratigraphy for the Fullerton Cove area for four exploration boreholes drilled in the Fullerton Cove area by Dart in 2011;

(c) Dart's PEL 458 annual report for the period ending 6 June 2010, discussing the exploration progress, the actual work completed, the future exploration program and the proposed work program;

(d) Dart's PEL 458 annual report for the period ending 6 July 2011;

(e) Dart 's PEL 458 - Newcastle End of Work Programme 2008 - 2011 Report for the period 6 June 2008 to 6 June 2011, discussing previous exploration work in the Medowie-Fullerton Cove area including various test programs, regional geology, the PEL 458 exploration program (including the four test boreholes referred to above), coal seam development across the Fullerton area (which was considered to be consistent with the Upper Tomago Coal Measures coal properties), gas content and saturation, gas composition, coal rank, permeability and field compartmentalisation;

(f) the 2011 REF, that relevantly discussed and considered;

(i) the Fullerton Cove coal seam gas exploration history;

(ii) environmentally sensitive locations in the context of the project location;

(iii) the description of the pilot program;

(iv) the legislative requirements, approvals and relevant planning instruments;

(v) an environmental impact assessment including: regional topography and geology; soils; hydrology, including surface water and groundwater, in addition to the potential hydrological impacts and mitigation management measures, and, in consultation with the NSW Office of Water ("NOW"), a proposed groundwater monitoring regime; flora and fauna, matters of national environmental significance; hazardous materials and land contamination; waste; natural resource use; community and social impacts; and the cumulative environmental impacts of the proposed pilot scheme;

(vi) rehabilitation works;

(vii) mitigation measures;

(viii) a summary of the potential impacts of the pilot program, both adverse and beneficial;

(ix) pursuant to a request from NOW, an appended groundwater assessment to monitor the potential impact of the proposed pilot program on the surrounding groundwater resources by Douglas Partners dated September 2011; and

(xii) a detailed ecological assessment which extensively discusses hydrological issues;

(g) the referral by Dart under the EPBC Act to the Department of Sustainability, Environment, Water, Population and Communities ("SEWPC") for a determination on whether the pilot program was a controlled activity for the purposes of that Act, attaching the 2011 Pilot Appraisal Exploration Program EPBC Self-Assessment Report discussing, amongst other things, the impact of the activity on underlying aquifers and groundwater;

(h) a letter from NOW dated 23 November 2011, confirming that it "considers this exploration activity is likely to provide minimal risk to water resources, provided the construction, coring activity and abandonment is carried out to required standards", together with attached comments and conditions, including a reference to the existing monitoring bore holes at the subject site and all relevant licences;

(i) further information provided by Dart on 22 December 2011, pursuant to a request by the NSW Division of Resources and Energy ("DRE") of the NSW Department of Trade and Investment on 14 December 2011. The information concerned the following: the provision of an acid sulphate soil management plan referred to in the REF; the management of soil disturbance activities; the management of driller's mud on site; erosion and sediment issues, including management of runoff within the drill pad area; additional evidence that the proposed activity would not impact on areas of significant vegetation (including a suitable vegetation plan delineating EEC's in the study area); the potential indirect offsite impacts on surrounding wetlands, including the Ramsar listed wetlands; and the potential impact on groundwater dependent ecosystems from any potential drawdown of fresh water. In addition, Dart informed the Department that it had applied for a water licence from NOW;

(j) information provided to SEWPC by Dart on 13 March 2012, concerning the management of erosion and sediment control, and flood plain management considerations and an Interim Background Groundwater Assessment for Fullerton Cove prepared by Douglas Partners dated March 2012;

(k) advice from the Interim Independent Expert Scientific Committee on Coal Seam Gas and Coal Mining ("IIESC") dated 19 April 2012 noting that:

a. given the extent and duration of the proposed action and the implementation of the proposed suite of mitigation measures, there are unlikely to be substantial or measurable changes in the hydrological regime or physio-chemical characteristics of the Ramsar site...

(l) a determination by SEWPC that the pilot program was not a controlled activity under the EPBC Act dated 15 May 2012;

(m) a letter from Hunter Water to Dart dated 17 May 2012 stating that:

Hunter Water has reviewed the proposed development and considers that this specific development poses no risk to the quality of water taken by Hunter Water from the Tomago Sandbeds. The reason for this is that the location of the proposed works is sufficiently downstream of Tomago bores, for both groundwater and surface water, that it is not possible for Hunter Water groundwater bores to be draw water that has originated from the site in question.

Hunter Water has also considered the potential for depressurisation of the aquifer and associated loss of water storage and has concluded that this is not a risk as the groundwater pressure in the area, which is close to Fullerton Cove, is effectively controlled by sea level. Advice from Dart Energy indicates significant leakage from the aquifer would not be possible due to the thickness and stratigraphy of the rock and sediments above the coal seam at the site. Even so, any such leakage would have no impact on the volume of water available for urban water supply.

(n) the 25 May 2012 minute, which considered the "comprehensive groundwater monitoring program [to be] undertaken in consultation with the Office of Water"; the groundwater licence application with NOW; the requirement that all water required for drilling will be sourced from an appropriately licensed water supply; a "detailed response" to a DRE request for additional information relating to "offsite impact potential on the Hunter Estuary Wetlands and potential freshwater drawdown impacts on Hunter Water's sand bed aquifer water supply and groundwater dependent ecosystems"; and the suggested approval conditions by NOW;

(o) the 1 June 2012 Pt 5 determination considering "(b) Water impacts" including, but not limited to, impacts from the use of surface or groundwater and impacts from changes in water quality; and

(p) the 1 June 2012 approval, conditions 6 to 10 and Notes 1 and 2 of which specified:

Water Management

6. All produced formation water is to be disposed at a waste facility licensed to receive such wastes. Produced water may only be offered for beneficial re-use in accordance with relevant NSW legislation and licensing requirements and approved from DRE.

7. Produced water is not to be boiled-off otherwise disposed using any evaporative method.

8. Documentation covering the transfer of produced water and any off-site disposal of wastes must be maintained and made available for inspection by DRE on request.

9. On-site storage tanks are to be fitted with an automated notification and pump shut off function to ensure wells are shut off and do not produce additional water when total freeboard falls below 20%.

10. The NSW Office of Water is to be notified 28 days prior to the commencement of drilling.

Note 1: The NSW Office of Water requires that a license is obtained for the activity under the Water Act 1912 and that construction and abandonment of bores should be undertaken by a driller holding a NSW water driller's license.

Note 2: The applicant should develop a groundwater monitoring program in consultation with the NSW Office of Water. The monitoring program should lead to the development of a conceptual model of local groundwater behaviour, both in the target seams and other key aquifers. Prior to moving to production stage, it is expected a numerical hydrogeological model utilising the information gained from this monitoring program, and other available sources will be prepared. This model should quantify predicted impacts on the target aquifers, any other affected aquifers or surface water sources, and any users, including the environment.

152 Fullerton argued that there was a difference between a groundwater assessment and groundwater monitoring, and that whereas Dart had provided the latter, it had not provided the former and that absent such an assessment, the duty imposed on the Department in s 111 could not be fulfilled.

153 There are several answers to this submission. First, to repeat, a careful study of the legislation does not give rise to an obligation, either express or implied, to examine and investigate this contention to the level of particularity contended for by Fullerton. In other words, there is no construction of s 111 of the EPAA that requires the Department to have regard to a particular document, namely, a groundwater assessment, rather than to consider groundwater issues generally within the specific context of the pilot program as approved and as varied. Second, when regard is had to the material before the Department, on any view, there was, collectively at the very least, an assessment of the groundwater likely to be impacted by the pilot program. Third, in truth, Fullerton rails against the Department's implicit finding that the impact of the exploration program on groundwater is acceptable. The correctness of the Department's reasoning or conclusions in this regard is immune from challenge in these proceedings (Walsh at [62] and Minister for Planning v Walker [2008] NSWCA 224; (2008) 161 LGERA 423 at [35]).

154 To the extent that Fullerton suggested that the Department failed to give "proper, genuine and realistic consideration" (a formula, the genesis of which is Khan v Minister for Immigration and Ethnic Affairs [1987] FCA 457; (1987) 14 ALD 291 at 292 per Gummow J) to the assessment of groundwater in its purported fulfilment of the statutory obligation contained in s 111 of the EPAA, care must be taken not to slide into impermissible merits review, as the notes of caution have sounded (Bruce v Cole [1998] NSWSC 260; (1998) 45 NSWLR 163 at 186; Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 51 NSWLR 589 at [62]; Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 at [73], [75] and [79]; Walsh at [57]; Drake-Brockman at [123]; Swift v SAS Trustee Corporation [2010] NSWCA 182 at [45]; Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; (2010) 243 CLR 164 at [26]ff; Minister for Planning v Walker at [35] referring to Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 at [117] and Pittwater Council v Minister for Planning [2011] NSWLEC 162; (2011) 184 LGERA 419 at [137]).

155 Although the High Court in Minister for Immigration and Citizenship v SZJSS did not expressly disavow the use of the expression "proper, genuine and realistic consideration", the Court nevertheless reaffirmed the principle that a court should not scrutinise the merits of administrative decisions on the ground that there was a failure to give proper, genuine and realistic consideration of the evidence before it, such a task being quintessentially a matter for the decision-maker (at [30]).

156 As was recently noted in Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244 (at [24] per Basten JA):

24. The submissions further asserted that the claims assessor failed to have "proper, realistic and genuine consideration" to the expert report. These words do not advance the matter any further. As the High Court noted in SZJSS at [30], referring expressly to the phrase "proper, genuine and realistic consideration":

"That which had to be properly considered was 'the merits of the case'. Taken out of context and without understanding their original provenance, these epithets are apt to encourage a slide into impermissible merit review".

157 In any event, even if I were to accept that this epithet was apposite in the present case, an examination of the material referred to above more than amply demonstrates that fulsome consideration was given to this matter by the Department.

158 In case I am wrong and expert evidence is admissible to determine whether or not there had been a breach of s 111 of the EPAA, it is appropriate, given the provisional admission of such evidence at the hearing and in light of the ensuing factual contest, that I additionally determine the issue of breach having regard to this material. It will be both convenient and expedient, at this juncture, to deal with the evidence in greater detail than is necessary for the determination of the s 111 allegation, given that most of the expert evidence is also relevant to the issue of breach of s 112.

159 Fullerton relied on a report by Dr Gavin Mudd, an environmental engineer currently employed at Monash University. It was Dr Mudd's opinion that the information provided in the REF in respect of the assessment of the environmental impacts arising from the pilot program was "materially deficient with respect to surface water and groundwater risks". In particular, Dr Mudd was critical of the "complete absence of a thorough baseline groundwater study" in the REF and noted that the groundwater monitoring and assessment program would not effectively commence until after the pilot scheme became operational. In his opinion, the following specific areas needed to be addressed in order to fill the "information gap" in the REF: basic climactic data; a topographical map; flood risk information; sampling of the existing water quality of the Hunter Estuary wetlands; runoff from drains; a groundwater baseline study; and further information on the groundwater-surface water interaction.

160 In addition to objecting to Dr Mudd's evidence on the grounds of relevance in light of the pleaded grounds of review, the respondents also objected to the evidence on the basis that it failed to meet the requirements of s 79 of the Evidence Act 1995 (as explained in HG v R [1999] HCA 2; (1999) 197 CLR 414 at [39]-[41] per Gleeson CJ; Makita (Aust) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 at [85] per Heyon JA and Dasreef at [31], [32], [37] and [42] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ and [95]-[128] per Heydon J). This was because Dr Mudd:

(a) first, neither had specialist expertise in the Fullerton Cove area nor in relation to the drilling of pilot appraisal wells and production flow testing, and he had not undertaken any site inspection;

(b) second, had failed to disclose his reasoning process in concluding that the REF was deficient, and had merely opined generalised assertions and bare conclusions; and

(c) third, had relied on secondary sources in the formation of his opinions.

161 Dealing with each objection in turn:

(a) first, notwithstanding the need, as reiterated in Dasreef, for experts to have expertise in the matters about which they proffer opinion, the level of specificity of specialisation demanded by the respondents of Dr Mudd is beyond that which is required, namely, expertise in relation to "the drilling of pilot appraisal wells and production flow testing". Dr Mudd has extensive expertise and knowledge in groundwater management and environmental impact assessment, particularly with respect to the impact of mining activities. I consider him to be sufficiently qualified to give the evidence contained in his report;

(b) second, although somewhat parsimonious in detail, in my opinion, Dr Mudd's reasoning was nevertheless sufficiently transparent to understand his central thesis that the REF was deficient with respect to groundwater and surface water risks. Dr Mudd identified these deficiencies by reference to particular studies and data and, in each case, explained why the additional information was, in his opinion, necessary; and

(c) third, experts commonly make reference to secondary sources in the course of giving their opinions. In doing so the hearsay rule is generally excluded by reason of the operation of s 60 of the Evidence Act. The current position was summarised in Bodney v Bennell [2008] FCAFC 63; (2008) 167 FCR 84 (at [91]-[92]. See also Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559; (2008) 76 IPR 618 at [761]-[772], endorsed in Commissioner of Patents v Sherman [2008] FCAFC 182; (2008) 172 FCR 394 at [39]-[40]):

91 At [37] to [38] of Neowarra (No 1) it was said:

"Because any common law basis rule has not been imported into s 79, so that at the stage of admissibility there is no requirement that the facts upon which the expert's opinion has been formed be supported by admissible evidence, the fact that an expert's opinion is based in whole or in part on a 'fact' supported by hearsay, is not a ground upon which the opinion must be rejected. In any event, an expert's opinion that is based on 'facts' supported by hearsay is prima facie admissible under s 60. Subject to the application of ss 135 and 136, hearsay material on which an expert's opinion is based will qualify for admission as relevant to the basis upon which the expert holds the opinion ('a purpose other than proof of the fact intended to be asserted by the representation'). If it qualifies, it can then be used as proof of the fact intended to be asserted. That is the view that has been taken in relation to expert evidence in Daniel, Quick v Stoland, Lardil and Harrington-Smith v Western Australia [2003] FCA 893; (2003) 130 FCR 424. See also Welsh v The Queen at 368 and Lee v The Queen at 604. The weight to be accorded to that evidence is a matter for the Court".

(The full citations of the decisions in the above passage (other than Harrington-Smith) are Daniel v Western Australia [2000] FCA 858; (2000) 178 ALR 542, Quick v Stoland Pty Ltd (1998) 87 FCR 371, Lardil, Kaiadilt, Yangkaal, Gangalidda Peoples v Queensland [2000] FCA 1548, R v Welsh (1996) 90 A Crim R 364 and Lee v The Queen [1998] HCA 60; (1998) 195 CLR 594). Section 60 of the Evidence Act (referred to in the first paragraph of the quoted passage) provides that the hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of the fact intended to be asserted by the representation. Section 135 confers power to exclude evidence, and s 136 enables a court to limit the use to be made of evidence.

92 Before the Evidence Act it was well established that experts are entitled to rely upon reputable articles, publications and material produced by others in the area in which they have expertise, as a basis for their opinions. In Borowski v Quayle [1966] VR 382 at 386 (Borowski) Gowans J, quoting Wigmore on Evidence 3rd ed, vol 2 at 784-785, said that to reject expert opinion because some facts to which the witness testifies are known only upon the authority of others, "would be to ignore the accepted methods of professional work and to insist on finical and impossible standards". Experts may not only base their opinions on such sources, but may give evidence of fact which is based on them. They may do this although the data on which they base their opinion or evidence of fact will usually be hearsay information, in the sense they rely for such data not on their own knowledge but on the knowledge of someone else. The weight to be accorded to such evidence is a matter for the court. See generally Borowski at 385-387, PQ v Australian Red Cross Society [1992] 1 VR 19 at 34-35, H v Schering Chemicals [1983] 1 WLR 143 at 148-149, Millirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 at 161-163 and Jango (No 4) at [8].

162 If by reason of some particular feature of the reliance on these sources unfair prejudice results to the other parties, or the evidence is misleading or confusing, the Court has the power to exclude (s 135 of the Evidence Act) or limit the use to be made of the expert evidence (s 136). In the present case there was no basis for exercising the discretionary power contained in either of those provisions due to Dr Mudd's use of secondary sources.

163 Alternatively, the respondents submitted that the Court should exercise its discretion to exclude Dr Mudd's report pursuant to s 135 of the Evidence Act generally on the basis that its probative value was substantially outweighed by the misleading or confusing nature of his evidence.

164 Although, as I have noted above, there is some force to the criticisms with respect to the paucity of some of the reasoning underlying the opinions expressed by Dr Mudd, I do not consider that his report is so misleading or confusing that exclusion pursuant to s 135 is warranted.

165 Dart and the Department relied on the opinions of Mr Ross Naumann and Mr Michael Blackam, contained in affidavits affirmed on 12 October and 5 October 2012 respectively. Although in each instance the evidence was purportedly prepared for the exclusive purpose of the debate in respect of s 112 of the EPAA, it was nonetheless additionally relied upon for the purpose of s 111.

166 Mr Blackam is a hydrogeologist and hydrologist employed by Coffey Environments. He has over 13 years consulting experience in his field of expertise. His knowledge and experience extends to mine and catchment water balance, groundwater flow modelling and, amongst other things, environmental auditing and environmental impact assessment. He has undertaken a number of groundwater and surface water studies associated with mining and resource projects, including coal seam gas extraction.

167 Mr Blackam reviewed the REF having regard to those matters associated with the site hydrology and the potential for adverse environmental impacts to be caused by the pilot program. Specifically he examined drilling; drill casings and the isolation of aquifers; drilling fluids; storage of drilling muds and fluids; and the testing of the completed pilot well. He identified three possible environmental impacts resulting from the pilot program which were as follows:

(a) first, the reduction of water flow from aquifers supporting the wetlands thereby reducing the water levels in affected wetlands;

(b) second, accidental releases of poor quality water at the surface sufficient to have offsite impact of significance; and

(c) third, direct impact to stygofauna inhabiting subsurface macropores in certain aquifers.

168 In relation to the first potential impact, Mr Blackam opined that the target coal seams were at depths unlikely to have any connection with nearby wetlands or with the shallow aquifers connected to the wetlands. In relation to the second possible impact, it was his opinion that the volumes of water onsite at any time would be sufficiently low that the quantity of poor quality water that could be accidentally released was limited and that even if it moved offsite, it would be unlikely that the degraded water would cause a significant impact on the environment. If the offsite release was due to flooding, the flooding would, moreover, dilute the released water thereby further lessening any impact potential on downstream habitats. Finally, regarding the third potential impact, because carbonate rocks were not present in the area (the typical groundwater host system for stygofauna), it was unlikely that stygofauna were present at the subject site.

169 Thus it was Mr Blackam's expert opinion that the pilot program "has a low likelihood of causing a significant impact to the environment, and that the groundwater baseline monitoring, together with the planned impact mitigation measures, are appropriate and should minimise any risk of impact to the groundwater and surface water systems, including the nearby wetlands."

170 Mr Blackam criticised Dr Mudd's analysis of the deficiencies of the REF stating that, in his view, the flood mitigation measures detailed in the REF were sufficient; the sub-surface stratigraphy was described to a suitable level and that the absence of a hydrogeological cross-section would not add anything to the mitigation measures proposed; and that this was similarly the case in respect of the absence of hydrostatic pressures provided in the project documentation.

171 Mr Naumann is an engineer employed by Dart to oversee and manage the drilling process for the pilot program. He has over 28 years experience in well design and construction for conventional oil and gas and for coal seam gas wells. He is responsible for the well design and construction process for the installation of the wells for the pilot scheme. In brief, Mr Naumann gave evidence of the well design and construction, including conducting an offset well data review to identify pressure regimes, aquifers, groundwater sources and potential drilling hazards; well design, including calculations for the conditions of burst, collapse and tensile loading; well casings; well control; drilling fluid; and the documentation of company procedures.

172 All three engineers gave concurrent evidence. Based on the written and oral material of each of the three witnesses, I cannot accept the criticisms made by Dr Mudd in respect of the adequacy of the material contained in the REF. In my view, his evidence does not assist Fullerton in demonstrating breach of s 111 of the EPAA. I have arrived at this conclusion on the basis of:

(a) Dr Mudd's concession that the Interim Background Water Assessment report by Douglas Partners dated March 2012 - with which he had not been furnished at the time he wrote his report - "adequately addressed" the shallow groundwater resources;

(b) the fact that although the Douglas Partners report failed to contain data on groundwater pressure at the lower depths, I accept Mr Blackam's evidence that it was not necessary to obtain such data because of the isolation between the target coal formation and any proximate aquifer, bearing in mind that this was a short term pilot appraisal and exploration program, and therefore, the risk of vertical permeability between the deep and shallow groundwater systems was low. Dr Mudd conceded under cross-examination that Mr Blackam's view "was a reasonable expectation based on theory and based on normal groundwater behaviour" and that the risk of vertical permeability between the two systems was indeed "low";

(c) Mr Blackam questioned the efficacy of drilling a groundwater monitoring bore, as was suggested by Dr Mudd, as a method by which the necessary deep groundwater data could be obtained in light of the fact that the test bores contemplated by the pilot program would provide this data in any event; would provide for ongoing groundwater monitoring; and would present "the same risk in some ways as drilling just a CSG [bore] in terms of the activity of drilling";

(d) an absence of any groundwater issues presented by other bore holes drilled by Dart in the Fullerton Cove area either at a deep or shallow level as a consequence of the drilling; and

(e) Dr Mudd's concession that the "only concern" he had in relation to deep groundwater was the possibility of "some sort of catastrophic or significant failure of the drill equipment" or "well" and that this likelihood was "low", although this needed to be considered in the context of the environmentally sensitive wetlands nearby. Furthermore, Dr Mudd agreed that there was nothing about the stratigraphy or geology under the surface of Fullerton Cove that created any "out of the ordinary risk" in terms of such a failure.

173 Dr Mudd's opinion can be summarised as an expectation "that there would be a very low likelihood of any adverse impact" but for his "own part, [he] would like to know more information to be sure." However, this is not, as the discussion on the scope of s 111 of the EPAA above makes clear, what is required to satisfy the section. Were such an approach to be adopted in the present case, it would not, in my view, be a reasonably possible one as required by s 111.

174 For the reasons above, I therefore do not accept that the Department breached the obligation contained in s 111 of the EPAA by reason of any failure by it to obtain and consider a groundwater assessment.

Alleged Failure to Consider the Impact of the Pilot Program on Shore, Migratory and Non-Migratory Birds, Amphibian Species and Species of Flora

175 Fullerton alleges that the Department failed to take into account to the fullest extent reasonably possible all matters affecting or likely to affect the environment because it failed to consider the impact of the pilot program on shore birds, migratory and non-migratory birds, amphibian species and other threatened or vulnerable species identified by experts. This failure, it was particularised, arose because of the inadequacy of the information provided in the Ecological Assessment supporting the REF.

176 Not specified anywhere in the points of claim, the threatened and vulnerable species were identified through the expert evidence relied upon by Fullerton. It is convenient to initially deal with this allegation at the more generalised level as pleaded before examining it at the detailed level that emerged at the hearing.

177 Without repeating in full the reasons above, on any level this third challenge under the rubric of s 111 fails as a matter of law because:

(a) first, there was no obligation for the Department, in discharging its duty under s 111 of the EPAA to consider these matters at the high level of particularity asserted by Fullerton; and

(b) second, in complaining about the adequacy of the Ecological Assessment attached to the REF before the Department, Fullerton invites the Court to embark upon an examination of the merits of the Department's determination, which it cannot do in these proceedings.

178 As a matter of fact the contention must be rejected because there was, in any event, sufficient information before the Department to enable it to consider to the fullest extent reasonably possible any likely or actual environmental impacts arising from the pilot program on flora and fauna, both at a general and at a specific level.

179 Insofar as the REF was concerned:

(a) section 6.4 dealt with flora and fauna, including amphibians and shore birds, with specific reference to threatened, vulnerable and endangered species. It was noted that the proposed drilling location did not represent suitable habitat for any of the threatened species that could potentially occur in the area and that the drilling activities would not have a negative impact on these species or EECs due primarily to previous agricultural uses and clearing of the land;

(b) section 6.5 dealt with matters of national environmental significance under the EPBC Act, including wetlands of international significance, threatened ecological communities, threatened species and migratory species;

(c) appendix 4 dealt with the National Parks and Wildlife Service Atlas of NSW Wildlife Threatened Species Fauna search report;

(d) appendix 5 dealt with the EPBC Act Protected Matters Search Report;

(e) appendix 6 attached a noise impact assessment; and

(f) appendix 9 attached the Ecological Assessment (by PEA Consulting). The Ecological Assessment was based on an on-site assessment, a literature review, a database search of the local area, ecological field surveys and a consideration of the precautionary principle. Section 3.4 of the Assessment discussed the fauna surveys conducted on the subject site. Specifically, an amphibian and avifauna survey was undertaken. Section 4.3 listed the significant fauna and flora recorded within the wider local area. Section 5.5 recorded the fauna field survey results. Section 5.7 discussed areas of environmental sensitivity within the area of the proposed drilling. Section 6.1 dealt with the ecological footprint of the proposal and section 6.2 discussed the tangible impacts of the pilot drilling program, including the potential impacts on birds, amphibians and other mammals. Section 6.3 was concerned with the cumulative impacts of the proposed drilling. Section 6.8 discussed the potential impacts on significant species. Legislative assessments under the EPBC Act and relevant State Environmental Planning Policies were undertaken in section 8, and section 9.2 dealt with the management action for terrestrial ecology. Finally, appendices A to D listed flora survey data, flora species, fauna species and the EPBC assessment. It concluded by stating that the proposed drilling "would not have a significant effect on any significant species which occur on the subject site or have the potential to occur on the subject site".

180 Before the Department was also a letter from Dart dated 28 November 2011, responding to the 17 November 2011 SEWPC request for additional information in order to assess the referral for the pilot program under the EPBC Act. Specifically, SEWPC sought an assessment of the likely impacts of the pilot program on EPBC listed threatened and migratory species found in the Hunter Estuary Ramsar wetland. In this context it should be recalled that on 15 May 2012, SEWPC assessed the pilot program as not amounting to a controlled action for the purpose of the EPBC Act provided it was undertaken in the manner prescribed in the assessment, which included measures to be taken to avoid significant impacts on wetlands of international importance, listed threatened species and communities, and listed migratory species.

181 Further, on 8 December 2011, the EPA wrote to the Department raising deficiencies in the Ecological Assessment contained in the REF with respect to the absence of a suitable vegetation map delineating EEC vegetation on the subject site and asking when the flora surveys referred to in the Assessment had been undertaken. The information was provided to the Department on 22 December 2011. The information included specific comment on issues relating to various threatened species and potential noise impacts. Attached was a supplementary ecological assessment from PEA Consulting providing a vegetation map and an assessment of whether additional vegetation surveying was required.

182 In addition, the Department had regard to the IIESC's report dated 19 April 2012, that stated that in relation to the pilot program:

... nor is it expected or likely that the habitat or life cycle of a species dependent upon the Ramsar site will be substantially impacted.

183 Finally, the 25 May 2012 minute had regard to flora, fauna, ecological impacts (including the fact that the pilot program was located near to sensitive wetlands and migratory bird habitat) and the sensitive location of the proposed activity due to biological factors (again by reference to the close proximity to wetlands). And the 1 June 2012 Pt 5 determination assessed in detail the potential impacts of the pilot program on species of fauna, including habitat, with specific reference to wetland communities.

184 Fullerton took particular issue with the absence of a vegetation map in the Ecology Assessment. It noted that the Environmental Protection Authority ("the EPA") was concerned that it was unable to determine the likely impact of the pilot program without such a map and that it had requested its provision. A similar request was made by the Department to Dart on 14 December 2011.

185 While no vegetation map was directly given to the EPA by Dart, a map was subsequently provided to the Department by PEA Consulting on behalf of Dart on 22 December 2011, which was then forwarded on to the EPA. According to the evidence of Mr Steve McCall, an environmental consultant engaged by Dart to prepare the REF, the omission of a vegetation map from appendix 9 of that document was "accidental".

186 Notwithstanding evidence from the expert ecologists (Mr David Paull and Ms Elizabeth Ashby, discussed in detail below) to the effect that the map could be used to locate the drill pad and some vegetation communities, on any view, the map was deficient insofar as the colours on the map did not match the colours on the legend. It was incapable of being fully understood and did not provide a wholly accurate depiction of the location of the various vegetation communities it purported to represent.

187 But this did not, for present purposes, matter. This is because, first, even if it could be demonstrated that the Department approved the pilot program on the basis of the erroneous vegetation map (which, in my view, it could not), this amounted to no more than an error of fact. Such errors are unreviewable in judicial review proceedings. Second, the evidence demonstrated that no misleading consequence or assumption was drawn by the Department from the map. That is to say, there was no latent or patent error in the map that demonstrably played any material role in the decision-making process of the Department in granting the approval. Third, there is no suggestion by Fullerton that the Department was put on inquiry as to the inaccuracies contained in the map. And fourth, assuming expert evidence was admissible in support of this ground, this evidence disclosed not only that, in the opinion of the experts relied upon by Dart, the REF was adequate, but that in any event, there was no intersection between the drill pad site and any relevant vegetation community. The ecological evidence is analysed in greater detail below.

188 In my opinion, therefore, the material before the Department demonstrates that the Department fulfilled its duty pursuant to s 111 of the EPAA in its consideration of the impact of the proposed activity on shore birds, migratory and non-migratory birds, amphibian species and other threatened and vulnerable species, including flora, at the level of generality demanded by that provision.

189 But Fullerton further asserted that the Department had failed to discharge its statutory duty under s 111 because it had not considered to the fullest extent reasonably possible the effect or likely effect of the pilot program on the following identified species as demanded by that provision:

(a) four flora species referred to by Ms Elizabeth Ashby in her expert report (Maundia triglochinoides, Persicaria elatior, Asperula asthenes and Zannichellia palustris);

(b) any EECs on, or surrounding, the subject site;

(c) the Eastern Grass Owl;

(d) the White-fronted Chat;

(e) the Green and Golden Bell Frog;

(f) the Pacific Golden Plover; and

(g) the cumulative effects or impacts of the pilot program as a whole.

190 Again, with the exception of an examination of the cumulative effects of the pilot program as a whole, in my opinion, the obligation contained in s 111 of the EPAA does not warrant descent into this level of particularity as a matter of construction. Moreover, even if this level of particularity is required, the obligation is only to examine to the fullest extent reasonably possible the effect of the pilot drilling on the identified species in the context of a pilot scheme of limited duration and extent. In this regard it should be recalled that the original drilling proposal was for four drill holes for a period of three months. This was later varied to two drill holes on a single drill pad for a total drilling period of 50 days.

191 However, if I am incorrect and assuming, for present purposes, that expert ecological evidence is admissible to prove that the Department ought to have, but did not, adequately, or at all, consider these particular species in its assessment of the pilot program, it is appropriate that I proceed to determine the allegation as argued by Fullerton.

192 Fullerton relied upon the report of Mr David Paull an ecologist whose "primary area of expertise is in the field of mammalogy, herpetology and threatened species management". Mr Paull did not inspect the proposed subject site. A summary of his report is as follows:

Summary

Despite a lack of baseline data, sufficient wildlife data exists to indicate the importance of Fullerton Cove, particularly for migratory and local shorebirds and a variety of other wetland vertebrate species. Surveys undertaken for the Review of Environmental Factors (REF) have not adequately dealt with matters listed under the Threatened Species Conservation Act 1995 by not adhering to suggested survey guidelines, particularly in terms of seasonality and effort, and by not conducting impact assessments as required under the current REF Guidelines. The assessments which have been conducted have only dealt with the direct impacts of the drilling sites themselves (by means of vegetation clearance over a 2 ha area) and have not adequately dealt with offsite and indirect impacts, particularly those of surface water contamination and noise impacts, upon the shorebirds, frogs, foreshore environment and adjacent RAMSAR estuary. As a result, all migratory and threatened species which are known or may occur in the subject site have not been discussed. The lack of detail regarding mitigating measures outlined in the REF give no indication as to their effectiveness to prevent harm or disturbance to essential behaviour patterns for potentially affected migratory and threatened species or other protected fauna.

193 In response to Mr Paull's report, Dart relied upon a report of Dr Stephen Ambrose, an ecologist, who has specialist skills in avian ecology and who has conducted projects in terrestrial, waterbird and shorebird ecology. He has also conducted a wide range of investigations into potential impacts of development on aquatic invertebrates, frogs, reptiles, nationally and State listed threatened species and populations, and nationally listed migratory bird species.

194 Dr Ambrose examined the value of the subject site for the presence of native fauna, identified potential fauna and determined the habitat impacts of the pilot program through a review of the REF, a literature search of the fauna databases and technical reports relevant to the subject site and the adjacent land, and a personal inspection of the site where surveys, both diurnal and nocturnal, were conducted by him. He relevantly targeted the Eastern Grass Owl, amphibians, including the Green and Golden Bell Frog, and various migratory shorebirds, including woodland, saltmarsh and grassland bird species. Water samples were also taken by him at the site.

195 Dr Ambrose expressed the opinion that the project documentation, including the REF and other supporting documentation, both "accurately reflect the types, general distributions, the structures and quality of vegetation communities and fauna habitats on the Subject Site" when it came to fauna habitats.

196 Dr Ambrose assessed the pilot scheme against the seven-part test of significance established under s 5A of the EPAA for the threatened species identified by him in his report as potentially impacted by the test drilling. He concluded that "I have reached the same conclusion that was reached in the REF, that the Approved Development ... would not have a significant ecological impact on protected fauna, included threatened and regionally significant species and populations, and their habitats." And that "the overall conclusions within the fauna assessment report attached to the REF about the significance of impacts do not differ from mine". Moreover, the amended approved development "would have a lesser ecological impact than the Approved Development ... because the: duration of drilling operational impacts" was now reduced to 50 days and the "development footprint at ground level would be reduced" due to the reduction to one drilling site.

197 Ms Ashby, an ecologist specialising in vegetation, relied upon by Dart, arrived at a similar conclusion as to the accuracy of the "extent and nature" of the "vegetation and the habitats observed at the time of inspection ... described in the Ecology Report at Appendix 9 of the REF". Although her evidence was relevant to the criticisms made by Fullerton in respect of the consideration of the impact of the pilot program on the surrounding flora, the opinions she expressed in respect of habitat also had a bearing on the conclusions to be drawn on the impact of the pilot program on fauna.

198 The list of matters Ms Ashby considered in order to assess the potential impact was restricted to those significant species with potential habitat on or near the subject site and those significant vegetation communities that were observed to occur in the area.

199 As noted above, examination of the following four species was singled out by Fullerton as being deficient and in breach of s 111 because no seven-part test of significance pursuant to s 5A of the EPAA was taken into account by the Department in respect of:

(a) Maundia triglochinoides;

(b) Persicaria elatior (Knotweed);

(c) Asperula asthenes; and

(d) Zannichellia palustris.

Flora

200 The allegation of breach in respect of each of the identified species of flora must be rejected. First, it should be noted from the outset that the Ecological Assessment under the REF (Knotweed was explicitly referred to in section 6.4 Flora and Fauna in the REF) specifically recorded the presence or potential presence and habitat of each species (see Table 8). Moreover the Assessment had general regard to the assessments of significance under the EPBC and the seven-part test of significance under the EPAA. In each case, the assessments showed that no identified species and no identified significant species habitat, especially given the small scale and the short time frame of the proposed activity, would be affected, particularly having regard to the management recommendations to ameliorate any impacts on these species and habitats.

201 Second, two of the species referred to above (Knotweed and Zannichellia palustris) were separately considered and analysed in the Ecological Assessment and it was concluded that there was no likelihood of these species being present on the subject site, and therefore, because no potential impact could occur, no seven-part test of significance was required. Information concerning the Knotweed, Asperula asthenes and Maundia triglochinoides was also before the Department by reason of the additional material provided by Dart to it on 22 December 2011 (the PEA Consulting report dated 21 December 2011, providing further information concerning the impact of the proposal on vegetation).

202 Third, the Pt 5 determination dated 1 June 2012 summarised the extent and nature of the effect of the pilot program on flora, during its construction and operation, based on all of the information before the Department and concluded that, against each of the identified characteristics of the potential impacts (both adverse and beneficial) and the evaluation criteria, the effect would be "low". Likewise, the determination concluded that there would be no significant effect on threatened species, populations or ecological communities or their habitats when, in the administration of ss 111 and 112 of the EPAA, regard was had to s 5A of the EPAA.

203 Fourth, Ms Ashby examined each of the four species and concluded that because potential habitat for these species was present in the proposed and surrounding activity area, further consideration was required. Accordingly, she applied the seven-part test in respect of the species and concluded that, in relation to each one, "the proposal is unlikely to result in an significant adverse impact on this threatened species".

204 Although Ms Ashby conceded under cross-examination that she did not physically traverse the entire site, I nevertheless prefer her evidence to that of Mr Paull, if for no other reason than she has, according to her curriculum vitae, specialised flora expertise that Mr Paull lacks and, unlike Mr Paull, she inspected the site for the purpose of preparing her report.

205 Fullerton also criticised the assessment of the flora by the Department on the basis that only limited surveys were carried out for the purpose of identifying EECs on the subject site. This was so notwithstanding that express consideration of potential impacts of the pilot program on EECs is contained in the REF (section 6.4.1 and Appendix 5. More extensive consideration is found in the Ecological Assessment). Fullerton relied, for support, upon Mr Paull's evidence. Mr Paull stated that the timing of such surveys was critical and that in effect, they had been carried out at an inappropriate time.

206 Properly analysed, however, Fullerton's complaint is really one as to the merits of the consideration given to the EECs by the Department. Again, the material before the Department demonstrates that, in my opinion, sufficient consideration was given to the EECs present or potentially present on the subject site. This was confirmed by Ms Ashby's evidence, which included an assessment of three relevant EECs, namely, Coastal Saltmarsh, Swamp Oak Floodplain Forest and Freshwater Wetlands on Coastal Floodplains, on the following bases:

1. Spread of weed species into EEC or threatened species habitat.

2. Removal of EEC or threatened species habitat by construction works.

3. Exposure of acid sulphate soils and subsequent acidification of downslope environments.

4. Mobilisation of soil and subsequent sedimentation / smothering of vegetation.

5. Contamination of groundwater during the drilling process by driller's fluids.

6. Contamination of groundwater by gassy water extracted from the coal seam.

7. Contamination of the estuary or groundwater by pollutants from the project carried by floodwater.

8. Drawdown of the beneficial aquifer.

9. Subsidence due to the collapse of the depressurised coal seam.

All if these matters had been considered in the design of the PAEP and are each discussed below.

207 Her conclusion was that it was "only major subsidence that would lead to irreversible, permanent and major impacts on the Freshwater Wetland" and the scale of possible (but unlikely) subsidence was not likely to lead to any alteration in the extent or conditions of the EECs on or near the subject site. Ms Ashby was nevertheless able to confidently draw this conclusion in relation to the Freshwater Wetland notwithstanding that it was not examined by her due to a lack of time "given that the descriptions in the REF of the other vegetation communities were confirmed as accurate".

208 Ms Ashby also conducted a seven-part test of significance on the three EECs. In relation to all three, she concluded that "the proposal is unlikely to result in a significant adverse impact on" each of the EECs.

209 I therefore find that there was no breach of s 111 in relation to the consideration given by the Department of the environmental impact of the proposed activity on the flora on, or surrounding, the subject site.

Fauna

210 An analysis of the evidence before the Department and the expert ecological evidence compels a similar result in relation to the allegations concerning the four fauna species identified by Fullerton. That is to say, even if specific consideration of the four fauna species either expressly, or by a process of necessary statutory implication, was required pursuant to s 111 of the EPAA, consideration sufficient to discharge its statutory duty was, in the absence of the Department being put on notice of any need to inquire further, given by the Department.

211 It is convenient at this juncture to make the general observation that recourse to the material (which has been, in part, discussed above in respect of flora) before the Department (for example, sections 6.4 and 6.5 and Appendix 5 of the REF, the Ecological Assessment attached to the REF, the 25 May 2012 minute and the 1 June 2012 Pt 5 determination) demonstrates that broad consideration by the Department was given to avifauna and amphibians, including to their habitat, the limitations in the methodology utilised to assess this fauna, and ultimately, the impacts of the proposed pilot scheme on fauna. The conclusions stated in the Ecological Assessment were that (at sections 6.2.2 and 6.2.3):

6.2.2 Potential Impacts on Birds

The proposed activity may result in the temporary loss of a small amount of potential foraging habitat for birds that utilise modified landscapes, particularly ground-dwelling birds. The construction of platforms will remove some potential habitat. This temporary loss will not affect the lifecycle of any species relying upon the local area for its survival. Habitat to be affected is improved pasture which would only provide low quality foraging habitat and no core habitat features such as breeding areas. The two (2) migratory egrets recorded during the field investigation are known for their ability to utilised [sic] disturbed agricultural sites.

6.2.3 Potential Impacts on Amphibians

The construction of temporary platforms above ground could impede water flow during flood or rain events which may temporarily affect habitat for amphibians. The only species identified during the field inspection, Common Eastern Froglet (Crinia signifera) is known for its tolerance to disturbed sites and conditions. No long-term impacts are likely to occur as a result of the proposed activity.

212 Descending to the detail, express consideration was given to the Eastern Grass Owl, the White-fronted Chat, the Pacific Golden Plover, the Green and Golden Bell Frog, and their habitat in the Ecological Assessment attached to the REF. For example, the Green and Golden Bell Frog and its habitat was identified in Appendix 5 in the EPBC Act Protected Matters Search, and in the Ecological Assessment, under results for amphibian field surveys, it was noted that while "suitable marginal habitat" for the Frog was recorded on the subject site, "however it is lacking a semi-permanent water body to support a population."

213 In addition, the Pt 5 determination dated 1 June 2012 analysed the extent and nature of the impacts during construction and operation of the pilot program in respect of impacts from changes to natural water bodies and wetlands; any endangering or displacement of species of fauna; any reduction of critical habitat of any unique, threatened or endangered fauna; and impacts which created significant barriers to fauna movement. This more generalised consideration of the ecological impacts of the proposed activity is directly applicable to the four species of fauna at issue.

214 Again, assuming for present purposes that expert ecological evidence is admissible for the purpose of determining if the Department breached s 111 in this context, Dr Ambrose's evidence was that the proposed project, particularly as varied (with its reduced duration, bore holes and number of drilling platforms), would "not have a significant ecological impact on protected fauna, including threatened and regionally significant species and populations, and their habitats". His overall conclusion about the significance of the ecological impacts did not differ from those stated in the REF and, in his opinion, the pilot program was not likely to significantly affect the environment, including threatened species and populations or their habitat, including critical habitat or EECs.

215 In arriving at his conclusion, Dr Ambrose used the fauna species and habitat survey data contained in the REF and the data that he collected during both diurnal and nocturnal surveys, albeit conducted during a low rainfall period, on the subject site. Recordings of Green and Golden Bell Frog calls were specifically broadcast. Dr Ambrose particularly, but not exclusively, focused his attention on amphibians, migratory shorebirds and the Eastern Grass Owl. He noted that the subject site had been and was continuing to be used for grazing livestock and that, consequently, groundcover and aquatic vegetation was grazed and trampled. The water samples he had collected demonstrated that, at the time of his surveys, the water bodies on the subject site were "likely to be unsuitable or, at most, marginal habitat for Green and Golden Bell Frogs."

216 None of the four species identified by Fullerton were recorded as present on the surveyed site. But based on his investigations, Dr Ambrose concluded that potential marginal habitat occurred at the site for the Green and Golden Bell Frog and the White-fronted Chat. In relation the Eastern Grass Owl, it was his opinion, in direct contrast to that of Mr Paull, that this species did not inhabit the site and its status would not be impacted upon by the drilling. This view was formed on the basis of an absence of suitable habitat and an absence of any recordings of the Eastern Grass Owl on the site during his surveys.

217 As to the likely presence of migratory shorebird species, of which the Pacific Golden Plover is one, Dr Ambrose noted that the site provided unsuitable habitat for these species. Although he conceded that most migratory shorebirds species that had been recorded at Fullerton Cove arrived in Australia in "late August/early December" and departed in April the following year to their northern hemisphere breeding grounds, and that this was consistent with no migratory shore birds being recorded on the subject site during the survey.

218 Dr Ambrose also assessed the potential impacts of the development on the status of fauna species and their habitats based on the clearance and modification of habitat necessary for the construction and operation of the test drilling, and the potential noise, vibration and visual disturbances to fauna consequent upon the development. He applied the seven-part test of significance under s 5A of the EPAA for the threatened species he identified as having potential marginal habitat occurring on the site (which relevantly included the Green and Golden Bell Frog and the White-fronted Chat).

219 In relation to the impacts of noise and vibration caused by the drilling on the roosting and foraging behaviour of migratory shorebirds, a matter of particular concern to Mr Paull, Dr Ambrose acknowledged that there would be a potential area of displacement around the drilling pad but that this represented a "negligible proportion" of potential foraging habitat for migratory shorebirds, and that otherwise, due to the distance of the drilling platform from other roosting and foraging habitat, it was unlikely that noise levels would have an impact. Moreover, it was noted that any birds present on the subject site and in the Hunter Estuary were already habituated to loud noises due to low flying jet aircraft from the RAAF Williamstown airbase and commercial aircraft movements at the Newcastle airport. In addition, an acoustic assessment indicated that low levels of vibration were predicted at the site and that, therefore, vibrations were unlikely to have a significant impact.

220 I accept Dr Ambrose's evidence, which, in my opinion, is to be preferred to that of Mr Paull. This is because, as the highly effective cross-examination of Mr Paull conducted by the counsel for Dart demonstrated, first, unlike Mr Paull, a general ecologist, Dr Ambrose had considerable specialised ornithological experience and expertise. Second, unlike Mr Paull, Dr Ambrose went to the subject site and conducted ground surveys and collected samples. Third, the methodology employed by Dr Ambrose in arriving at his conclusions, especially his application of the seven-part test of significance to the threatened species he identified as having potential marginal habitat occurring on the site (which excluded the Eastern Grass Owl), was far more comprehensive than that applied by Mr Paull (who did visit the site and who did not conduct a seven-part test of significance on any flora or fauna species). Fourth, it appears that in expressing his opinion that if there was a significant rainfall event, the absence of any sediment control regime could cause the local extinction of the Green and Golden Frog, Mr Paull did not pay full regard to the erosion and sediment control mitigation measures governing the development. Fifth, as Mr Paull agreed in cross-examination, his real concern with the pilot program was that sufficient care had not been taken to minimise impacts from "catastrophic" storm and flood events, or "catastrophic failures of equipment", and that this concern was "speculative" in nature (T199.29-200.05 and 216.40-217.11). And sixth, as the cross-examination revealed, the evidence of Mr Paull lacked vital objectivity, a product, no doubt, of his demonstrable and laudable passion and commitment to environmental conservation.

221 Accordingly, and in conformity with the above discussion, I do not accept that the Department breached s 111 of the EPAA with respect to the four species of fauna identified by Fullerton.

Cumulative Impact

222 This leaves the Department's consideration of the cumulative impact of the proposed pilot program, similarly not foreshadowed in the points of claim, but developed orally by Fullerton during the hearing.

223 On any view, it is unarguable that the cumulative impact of the proposed development were not considered by the Department, either adequately, or at all.

224 Before the Department were analyses of the cumulative environmental impact of the pilot scheme contained in the REF (sections 6.16, 8 and 9), in the Ecological Assessment attached to the REF (in the Executive Summary and sections 6.2 to 6.5, especially at section 6.3), the 25 May 2012 minute and the 1 June 2012 Pt 5 determination. Both separately and jointly, this material provided a detailed analysis of the extent and nature of the environmental impacts of the pilot program during construction and operation, and an evaluation of the likely significance of these impacts. This resulted in the potential impacts of the activity as a whole, having regard to their significance and considering the extent and nature of the impacts (including the impacts on environmentally sensitive areas), being assessed as "medium". To the extent that Fullerton disagrees with the content and conclusions drawn by these analyses, this is a complaint targeting the merits of the consideration of the cumulative environmental impacts of the pilot program by the Department.

225 None of the categories of alleged breach of s 111 having been successfully demonstrated by Fullerton, either with recourse to expert evidence or without, it follows that this ground of review must be dismissed.

There Has Been No Breach of s 112 of the EPAA

226 In relation to the second ground of review, it is alleged that the Department transgressed s 112 of the EPAA because it approved the pilot scheme without first being furnished with an EIS as required by that section. This error is premised upon a failure by the Department to determine that the relevant activity was likely to significantly affect the environment.

227 It was accepted by the parties that "likely" with respect to "significantly affect" means a "real chance" or "possibility", and not "more probably than not" (Jarasius at 94). These formulations were endorsed by Stein J in Drummoyne Municipal Council v Roads and Traffic Authority where his Honour also set out some principles regarding the construction of s 112(1) of the EPAA (at 163):

In my opinion the question of significant effect on the environment is to be approached by first examining the affected environment and the context of the proposal. ...it seems to me appropriate to interpret "likely" in s 112 as meaning a "real chance" or "possibility" rather than "more probably than not". Rephrasing the question then, is there a real chance that the activity will significantly affect the environment?

... for those who feel more comfortable with definitions I am prepared to suggest that a significant effect must be an important or notable effect on the environment, as compared with an effect which is something less than that, that is, non-significant or non-notable. But I must stress that the assessment of the significance must depend upon an assessment of the facts constituting the environment and the activity and its likely effect on that environment.

228 In Newcastle & Hunter Valley Speleological Society Inc v Upper Hunter Shire Council and Stoneco Pty Ltd [2010] NSWLEC 48 Preston J, in the context of discussing the test for assessing "likely to significantly affect threatened species" in s 78A(8)(b) of the EPAA, stated that the word "likely" meant (at [84]):

84 Thirdly, the word "likely" means "a real chance or possibility" and "significantly" means "important", "notable", "weighty" or "more than ordinary": Oshlack v Richmond River Shire Council (1993) 82 LGERA 222 at 233 and cases therein cited; Plumb v Penrith City Council [2002] NSWLEC 223 at [22(1)]; Corowa v Geographe Point Pty Ltd at [52]; Nambucca Valley Conservation Association v Nambucca Shire Council at [82].

229 More generally his Honour elaborated upon the principles of construction, which in my view are equally applicable to s 112(1) (at [83] and [85]-[86]):

83 Secondly, the description of the development the subject of the development application is not restricted to the nature, extent and other features of the development but can also include ameliorative measures to prevent, mitigate, remedy or offset impacts of the development. However, in order to be able to be considered in answering the inquiry of likely impact, the ameliorative measures must be proposed as part of the development application. Ameliorative measures not proposed as part of the development application, but which are imposed afterwards, as conditions of consent or restrictions in construction certificates, are not able to be considered in answering the inquiry as to likely impact. This is because the inquiry required by s 78A(8)(b) focuses on the development and its likely impact before the determination of the application and not afterwards: see Drummoyne Municipal Council v Maritime Services Board (1991) 72 LGRA 186 at 192; Smyth v Nambucca Shire Council [1999] NSWLEC 226; (1999) 105 LGERA 65 at [11]- [13]; Corowa v Geographe Point Pty Ltd at [57].

...

85 Fourthly, in deciding whether there is likely to be a significant effect on threatened species, populations or ecological communities, or their habitats, the consent authority and the Court on appeal must take the factors in s 5A of the EPA Act into account and in particular the factors in the now seven part test in s 5A(2). However, the consent authority is not limited to consideration of these factors; there may be facts and circumstances relevant to the inquiry which are not specifically contained in any of the factors in the seven part test: Plumb v Penrith City Council at [37]; BT Goldsmith Planning Services Pty Ltd v Blacktown City Council [2005] NSWLEC 210 at [12]; and Corowa v Geographe Point Pty Ltd at [52].

86 Fifthly, a positive answer to any one or more of the seven factors does not mandate an affirmative answer to the question of whether there is likely to be a significant effect on threatened species, populations or ecological communities, or their habitats but equally does not preclude a negative answer to the question: Carstens v Pittwater Council [1999] NSWLEC 249; (1999) 111 LGERA 1 at [61]; Masterbuilt Pty Ltd v Hornsby Shire Council [2002] NSWLEC 170 at [11]; Plumb v Penrith City Council at [36]; Nambucca Valley Conservation Association v Nambucca Shire Council at [83].

Section 112(1) of the EPAA Gives Rise to a Jurisdictional Fact

230 As a threshold issue, Fullerton submitted that whether or not the impugned drilling activity is likely to significantly affect the environment pursuant to s 112(1) of the EPAA was a jurisdictional fact that the Court must determine for itself on the basis of all available admissible evidence, including extraneous expert evidence. In support, Fullerton relied on authorities such as Timbarra; Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422; (2004) 61 NSWLR 707 and Oshlack. Recently in Parks and Playgrounds Biscoe J assumed, without discussion, that s 112 involved the determination of a jurisdictional fact.

231 If s 112 of the EPAA does give rise to a jurisdictional fact as Fullerton contends, then expert evidence, namely, the reports of Dr Mudd and Mr Paull, may be admissible to assist the Court in determining for itself the existence or non-existence of that fact (R v Blakeley; Ex parte Association of Architects, Engineers, Surveyors & Draughtsmen of Australia [1950] HCA 40; (1950) 82 CLR 54 at 91-92; R v Ludeke; Ex parte Queensland Electricity Commission [1985] HCA 55; (1985) 159 CLR 178 at 183-184; DMW v CGW [1982] HCA 73; (1982) 151 CLR 491 at 510; Timbarra at [36] and Pallas Newco at [105] and [188]). This is because, as Professor Aronson has observed, jurisdictional fact review is more than something approaching merits review, "it is merits review" (M Aronson, B Dyer, M Groves, Judicial Review of Administrative Action, 4th ed (2009) Law Book Co at 257 cited in M Leeming, Authority to Decide - The Law of Jurisdiction in Australia, (2012) The Federation Press at 62).

232 Of course, as the survey of the authorities below demonstrates, had Fullerton pleaded that the decision to approve the pilot program was manifestly unreasonable, then the expert evidence may have (subject to other objections) been admissible in any event. But, as stated above, Fullerton expressly eschewed this ground of review.

233 Dart and the Department vigorously contested Fullerton's position relying primarily on obiter dictum of Spigelman CJ in Timbarra. This dictum, they claimed, strongly suggested that s 112 is not to be construed as a jurisdictional fact (at [84]). Accordingly, the determination of whether an activity is likely to significantly affect the environment so as to require an EIS is a matter for the determining authority, and not the Court, based exclusively on the material before it.

234 Curiously, with the exception of a pronouncement made by Biscoe J in Oshlack and Parks and Playgrounds (at [132]), the question has not been authoritatively decided. It therefore falls to this Court to engage in this task. In doing so, it will be necessary to review the earlier jurisprudence concerning s 112 of the EPAA.

235 Before examining the relevant case law, it is both useful and convenient to set out some of the now established principles governing the existence of jurisdictional facts.

236 Parliament may make the objective existence of a particular fact a precondition of the exercise of a particular power and thus a jurisdictional fact. The term 'jurisdictional fact' is an expression that, as was noted in Gedeon v Commissioner of the New South Wales Crime Commission [2008] HCA 43; (2008) 236 CLR 120 (at [43] and see a similar description in City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135 at [28]):

43. ... is used to identify a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question. If the criterion be not satisfied then the decision purportedly made in exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker.

237 In Plaintiff M70/2011 French CJ described the term as follows (at [57]) (footnotes omitted):

57. The term "jurisdictional fact" applied to the exercise of a statutory power is often used to designate a factual criterion, satisfaction of which is necessary to enliven the power of a decision-maker to exercise a discretion. The criterion may be "a complex of elements"[64]. When a criterion conditioning the exercise of statutory power involves assessment and value judgments on the part of the decision-maker, it is difficult to characterise the criterion as a jurisdictional fact, the existence or non-existence of which may be reviewed by a court[65]. The decision-maker's assessment or evaluation may be an element of the criterion or it may be the criterion itself. Where a power is expressly conditioned upon the formation of a state of mind by the decision-maker, be it an opinion, belief, state of satisfaction or suspicion, the existence of the state of mind itself will constitute a jurisdictional fact[66]. If by necessary implication the power is conditioned upon the formation of an opinion or belief on the part of the decision-maker then the existence of that opinion or belief can also be viewed as a jurisdictional fact. ...

238 Determining whether a statutory provision gives rise to a jurisdictional fact turns on the terms of the legislation conferring the power. That is to say, it is a matter of statutory construction (Timbarra at [39]; Pallas Newco at [6]; Huntlee Pty Ltd v Sweetwater Action Group Inc; Minister for Planning and Infrastructure v Sweetwater Action Group Inc [2011] NSWCA 378; (2011) 185 LGERA 429 at [115] and Plaintiff M70/2011 at [58]).

239 Generally the question to be asked is whether something is a condition precedent to the exercise of power and, if so, whether the precondition "is "the existence of a fact in the real world" or "merely a state of mind" (Leeming, at 64). The absence of the jurisdictional fact will invalidate the purported exercise of power (Huntlee at [114] and Plaintiff M70/2011 at [59]-[60]).

240 There is no doubt that early decisions in this Court (many of which the Court was taken to by the parties) had recourse to expert evidence for the purpose of determining if s 112 of the EPAA had been breached. These decisions were not, however, explicitly concerned with the concept of jurisdictional fact. Rather, the majority of these cases dealt with s 112(1) in terms of whether the determining authority's decision was reasonably open to it, and more often than not, expert evidence was admitted on the basis of an alleged breach of both ss 111 and 112 of the EPAA and not merely s 112. Their usefulness and application to the present task is accordingly circumscribed.

241 In Kivi v Forestry Commission of New South Wales (1982) 47 LGRA 38, the applicant sought orders restraining the respondent from carrying out logging activities in a State forest and declarations that the proposed logging was an activity to which s 112(1) of the EPA Act applied because it was likely to significantly affect the environment. The respondent submitted that because the activity in this case was logging only in certain compartments of the State forest, it was not. Cripps J held that the proposed activity was likely to significantly affect the environment so as to necessitate the preparation of an EIS. In reaching that conclusion, his Honour was of the opinion that (at 48):

I am entitled to take into account...the ecological and environmental matters referred to by Mr Hitchcock and Dr Recher. In particular, I have paid attention to Dr Recher's evidence concerning the scientific value of this locality.

242 Prineas was a case concerned with the proposed logging of a rainforest. The applicant commenced proceedings seeking declarations that the proposed logging was an activity likely to significantly affect the environment and that the EIS which had been prepared by the Forestry Commission was inadequate. He sought an order that the Commission be restrained from constructing a road that was preparatory and necessarily incidental to the logging. At first instance, the respondents initially denied the applicant's allegations. However, after the applicant had called expert evidence on the issue of the effect of logging within the rainforest, the respondents conceded that the logging was an activity likely to significantly affect the environment within the meaning of s 112(1) of the EPAA (at 405). Principally, the judgment in Prineas was concerned with the adequacy of the EIS. Although accepting the criticisms of the expert witnesses as to the matters omitted from the EIS, Cripps J concluded that the EIS substantially complied with the legislative requirements and dismissed the application. The judgment was upheld on appeal (Prineas v Forestry Commission of New South Wales (1984) 53 LGRA 160).

243 In Leichhardt Municipal Council v Maritime Services Board of New South Wales (1985) 57 LGRA 169, the Maritime Services Board granted approval for the second respondent to temporarily relocate a heliport to a pier at Pyrmont. No EIS was obtained before approving the relocation. The Board had concluded that because the relocation was temporary it would not be likely to significantly affect the environment. Extraneous evidence, both lay and expert, was called by both sides and admitted in relation to the impact of the noise of the development on the amenity of the people living nearby (at 175). Cripps J examined expert acoustic evidence and concluded that the temporary relocation of the heliport was likely to significantly affect the environment (at 177). But in admitting the evidence his Honour sounded this warning (at 177-178):

I accept the submission of Mr Hemmings QC, on behalf of the board, that the matter for determination in these proceedings is not whether the court, on the material before it would conclude that the activity undertaken at piers 22 and 23 was an "activity likely to significantly affect the environment". That is, I reject the submission of Mr Bannon QC, on behalf of the council, that it is for this Court to substitute its own opinion for that of the board. As was pointed out in Prineas v Forestry Commission of New South Wales (1983) 49 LGRA 402 and Guthega Pty Ltd v Minister Administering the National Parks and Wildlife Act (1985), the obligations imposed by s 111 and s 112 are not obligations measured by a standard of absolute perfection but are to be discharged in a reasonable and practicable manner. It would seem to me, therefore, that if it is open to a determining authority to conclude that a particular activity was not likely to significantly affect the environment, it is not open to this Court to substitute its own opinion for that of the determining authority...

...Gibbs J said (at 327 [in Parramatta City Council v Pestell [1972] HCA 59, 128 CLR 305]):

"A court has no power to override the council's opinion on such a matter simply because it considers it to be wrong. However, a court may interfere to ensure that the council acts within the powers confided to it by law. If, in purporting to form its opinion, a council has taken into account matters which the Act, upon its proper construction, indicates are irrelevant to its consideration, or has failed to take into account matters which it ought to have considered, the opinion will not be regarded as validly formed. Even if the council has not erred in this way an opinion will nevertheless not be valid if it is so unreasonable that no reasonable council could have formed it..."

Adopting that principle I am of the opinion that it was not reasonably open to the board to come to the conclusion that the activity for which it gave its approval was an activity that was not likely to significantly affect the environment.

244 Jarasius was another challenge to the grant of logging licences and approvals in the absence of an EIS. In making findings as to the environmental damage that would be caused by the logging and in holding that the activity would be likely to significantly affect the environment within the meaning of s 112 of the EPAA (at 95), the Court had the benefit of a three day view of all relevant areas and activities and an "enormous amount of detailed written and oral, technical and scientific evidence as to impact and the adequacy of data and available research... explained by a large number of highly trained and experienced experts" (at 88). After reviewing the evidence, Hemmings J found that it was not reasonably open to the Commission to conclude that the timber harvesting activity was not likely to significantly affect the environment within the meaning of s 112(1) (at 95).

245 In Drummoyne Municipal Council v Roads and Traffic Authority, however, Stein J refused to admit extraneous expert evidence to assist him in deciding if s 112 had been breached because to do so would be to usurp the opinion of the determining authority (at 164). But his Honour did have regard to evidence from a member of the relevant committee that had made the decision (to erect "No Standing" signs on a road) concerning the matters and material that had been taken into account by the committee in the course of making its decision. In rejecting the claim that ss 111 and 112 of the EPAA had been breached he said (at 163-164):

...I cannot be satisfied that in 1981, when the Technical Committee of the Traffic Authority made its decision that the activity be carried out, the activity was one likely to significantly affect the environment. Hence no environmental impact statement was required. In my estimation the effect of the activity on the environment was not a significant or notable one. It was something less than significant or notable. That is not to say that the effect was insignificant or unimportant. ...But on the material before the Technical Committee and its consideration, I could not conclude that the activity was likely to significantly affect the environment.

Indeed, were I to take into account the additional expert material placed before the Court by the parties, I would come to the same conclusion. However, I do not believe that I should substitute my opinion for that of the determining authority: Leichhardt Municipal Council v Maritime Services Board of New South Wales (1985) 57 LGRA 169 at 177. The question is not do I agree or disagree with the decision.

246 Bailey again concerned a challenge to approve logging in a State forest absent an EIS. The parties called a large amount of extraneous lay and expert evidence. At issue was whether it was open to the Commission to conclude, as it had done, that the proposed logging in particular areas of a State forest was not likely to significantly affect the environment. Alternatively, the applicant framed the debate in terms of whether in fact, according to the Court's own determination, as distinct from that of the Commission, the proposed logging was likely to significantly affect the environment within the meaning of s 112(1). The Court had recourse to the extensive expert evidence to conclude that it was not reasonably open to the Commission to find that the activity would not. The Court, however, made the following remarks (at 211):

The legislation is silent as to the procedure to be implemented or guidelines to determine the likelihood of a significant impact of an environment and therefore the need for an environmental impact statement. It is of course a question of fact and degree. This has led to a number of challenges similar to this matter seeking to dispute the correctness of the conclusions of the public authority, and seeking declarations and orders setting aside the approval as a consequence of the alleged actual likelihood of a significant impact in the carrying out of the activity. This Court has consistently said it should decline to do so, even if it disagrees with the decision, if it is satisfied it was reasonably open to the determining authority; see Bentham v Kiama Municipal Council (1986) 59 LGRA 94, and the cases referred to therein. ...

...this Court must be "vigilant" not to exceed its supervisory role by reviewing an administrative decision on its merits: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24.

247 And later (at 211, emphasis added):

In Pt V it is clearly not intended that an environmental impact statement be prepared with respect to all activities. The determining authority therefore has a duty as a condition precedent to carrying out or granting approval in relation thereto to determine the extent to which an activity is likely to affect the environment. In my opinion, in a review of the lawfulness of a decision made pursuant to Pt V, it is not the function of this Court to substitute its opinion for that of the Forestry Commission because the legislature has vested the determination of matters of fact in that body. Also, it is well settled that in the absence of any statutory indication it is for the decision maker and not the Court to determine the appropriate weight to be given to the matters which are to be taken into account in exercising the statutory duty pursuant to Pt V.

248 Although not framed in the language of jurisdictional fact, Hemming J's use of the term "condition precedent" nevertheless correctly identifies, in my opinion, the nature of the power to be exercised by the decision-maker pursuant to s 112(1).

249 The reasoning in Drummoyne and Bailey was endorsed and followed in Rundle. In Rundle, the second respondent, the Far North Coast County Council, directed the first respondent, Tweed Shire Council, to eradicate a noxious weed (groundsel) from the Tweed Shire Council's rural property. The Tweed Shire Council engaged the Far North Coast County Council to perform the eradication work. The Far North Coast County Council commenced spraying the property with a registered pesticide, and the applicant sought declaratory and injunctive relief. The Court admitted wide-ranging expert evidence going to whether the spraying of 2,4-D pesticide on the groundsel infestation was an activity that required environmental assessment under Pt 5 of the EPAA, and in particular, whether the spraying was an activity likely to significantly affect the environment within the meaning of s 112(1). Ultimately, it was held that the question did not arise because the spraying was not an "activity" within the meaning of s 110 of the Act. However, in obiter remarks Bignold J stated that the "threshold question" as to whether an activity was likely to significantly affect the environment could only be answered by the appropriate determining authority. It was not within the Court's jurisdiction, on a judicial review application, to answer this question itself. Consequently, although a "mass of scientific and medical evidence" had been admitted, this was "essentially irrelevant to the breach by the second respondent of the implied duty under s 112 to determine the threshold question" (at 330). His Honour said that (at 329-330):

The applicant submitted that the proper test in proceedings alleging a breach of s 112 is for the Court to determine for itself on the material placed before it whether the activity is likely to significantly affect the environment. It was submitted that this was the proper test for the Court to apply, flowed directly from the statutory concept of "breach of the Act" (s 122) and the nature of the Court's statutory jurisdiction to remedy or restrain such a breach (s 123 and s 124). Reliance was placed upon the judgment of the Court of Appeal in F Hannan Pty Ltd v Electricity Commission of New South Wales [No 3] (1985) 66 LGRA 306.

This so-called "objective test" approach raises more acutely than does the judicial review approach the problem of what materials upon, and by reference to which, the relevant determination is to be made. In the present case the applicant's case, concerning likely environmental impact of the respondents' activity, relies upon evidence that was not, and because it came into existence later in point of time, could not have been before the respondents when they originally decided to carry out the activity. (The judicial review approach only allows evidence of materials actually or constructively within the knowledge of the determining authority at the time of decision.)

It would be a strange result indeed rendering s 112 practically unworkable if the Court was expected or enabled to determine what has been described in this context as the "threshold question" upon material not relevantly before the determining authority (that is, actually or constructively). This would have the effect of transferring to the Court original jurisdiction to determine the threshold question. This clearly is not the legislative intention because it does violence to the scheme of s 112 and must be rejected. Its rejection supports the prevailing view in this Court that the Court's function in proceedings alleging a breach of s 112 is that of judicial review of the implied obligation imposed upon a determining authority under s 112(1) to determine the threshold question of whether the relevant activity is likely to significantly affect the environment.

250 His Honour's remarks have subsequently been interpreted as a finding that s 112 of the EPAA does not give rise to a jurisdictional fact (Corowa v Geographe Point Pty Ltd [2007] NSWLEC 121; (2007) 154 LGERA 117 at [37] per Jagot J, in a decision concerning s 78A(8)(b) of the EPAA, formerly s 77(3)(d1), a successor to the provision under consideration in Timbarra).

251 The next decision of significance is ULV Pty Ltd v Scott (1990) 19 NSWLR 190; (1990) 69 LGRA 212. Although not a case concerned with s 112 of the EPAA, it is convenient to mention it now given the reliance placed upon it by Dart and the Department in support of their argument that the Court could not have regard to expert scientific evidence in determining whether the Department had breached s 112. In ULV the relevant council had granted development consent to ULV to rebuild a fire damaged factory. The decision was challenged by neighbours on the grounds of manifest unreasonableness. Expert town planning evidence was admitted to demonstrate that the council's decision was unsupported on town planning grounds. The evidence was based on an inspection by the expert of the council files. At first instance the Court upheld the challenge. On appeal the decision was reversed. In so doing, Priestley JA (with whom Kirby P and Samuels JA agreed: at 192) held that the expert evidence was not admissible because it did not take into account what had occurred at the four council meetings and two site meetings prior to the decision being made (at 206-207). Given the divergent factual and legal underpinning of this case, I did not find it to be of assistance.

252 The reasoning in Rundle was followed in Drummoyne Municipal Council v Maritime Services Board (1991) 72 LGERA 186. In Drummoyne, the second respondent operated a marina in the council's local government area. The Maritime Services Board granted numerous approvals to the second respondent for additional moorings at the marina and to make these moorings permanent, and for pontoon and jetty additions. In granting the first approval for 20 additional moorings, the Board concluded that although an increase in the number of moorings at the marina was likely to significantly affect the environment, if certain conditions of consent were imposed there would be no such effect, and therefore, an EIS was not required under s 112(1). Before the Court was the Board's files. Stein J rejected the latter submission. In relation to the first approval, his Honour found that it was not reasonably open to the Board to form the view that the activity was one which was not likely to significantly affect the environment based on the conditions attached to the consent. However, in relation to the approval for pontoon and jetty additions, Stein J held that (at 199):

Carefully considering all the evidence placed before the Court I am unable to find that it was not reasonably open to the Board to conclude that the amended proposal was one which would not be likely to significantly affect the environment. The question is not whether the Court agrees with the Board's decision and in this regard I reject Mr Hale's submission as to the appropriate test, which, as he freely admits, is contrary to a number of decisions in this Court: Leichhardt Municipal Council v Maritime Services Board; Drummoyne Municipal Council v Road Transport Authority (NSW) and Rundle v Tweed Shire Council.

253 The "appropriate test" referred to by his Honour was whether the Court itself was of the view that the amended proposal was one which would be likely to significantly affect the environment.

254 Finally, in Liverpool City Council v Roads and Traffic Authority and Interlink Roads Pty Ltd (1991) 74 LGRA 265 Cripps J, in assessing whether the construction of a 14.5 km freeway with a large toll plaza was an activity likely to significantly affect the environment for the purposes of s 112 of the EPAA, admitted expert evidence in order to assess whether the decision of the Authority that the activity was likely to significantly affect the environment was not reasonably open to it (at 274). This was, he held, a question for the Court to determine (at 274-275). Having decided that it was, and that the EIS was defective, his Honour held there had been a breach of the Act.

255 To summarise, by 1999 the prevailing, albeit not uniform, position adopted by the Court in determining whether s 112(1) of the EPAA had been breached, was that the provision contained an obligation on the decision-maker to consider and decide whether the activity was likely to significantly affect the environment and that this was a matter for the determining authority only. The Court could not substitute its own opinion for that of the decision-maker unless the decision was not reasonably open to the decision-maker. Expert evidence could be admitted to assist the Court in reviewing the reasonableness of the decision (in the Wednesbury sense), but otherwise, whether or not the determining authority had breached the duty contained in s 112(1) of the EPAA, could only be determined on the material before the decision-maker.

256 In 1999 Timbarra was decided. The decision is not actually concerned with s 112(1) of the EPAA. Rather, the principal issue dealt with by the Court of Appeal was whether the former s 77(3)(d1) of the EPAA (now s 78A(8)(b)) contained a jurisdictional fact. As alluded to above, s 112(1) is only mentioned in passing, but in so doing, Spigelman CJ likened s 112(1) to the former s 90(1)(c3) of the EPAA, which his Honour stated in obiter did not involve a jurisdictional fact (at [84]).

257 In Timbarra, the appellant challenged the validity of a development consent granted by Tenterfield Shire Council, the second respondent, to the first respondent, a mining company, for the extension and modification of a proposed gold mine in the Malara State Forest. At the time, s 77(3)(d1) of the EPAA provided that:

A development application shall:

...

(d1) if the application is in respect of development on land that is, or is part of, critical habitat or is likely to significantly affect threatened species, populations or ecological communities, or their habitats, be accompanied by a species impact statement prepared in accordance with Division 2 of Part 6 of the Threatened Species Conservation Act 1995,...

258 The Council, in granting consent, concluded that the proposed development would not have a significant effect on species and therefore that a species impact statement was not required and hence none was prepared. Accordingly, one of the issues raised on appeal was whether a species impact statement was required pursuant to s 77(3)(d1).

259 At first instance (Timbarra Protection Coalition Inc v Ross Mining NL [1998] NSWLEC 19; (1998) 99 LGERA 345) Talbot J held that s 77(3)(d1) did not involve a jurisdictional fact and rejected the appellant's attempts to adduce evidence demonstrating whether or not the development would be likely to affect threatened species. His Honour only had regard to the material before the Council at the time it made its decision. His Honour approached the question in s 77(3)(d1) in a manner similar to the threshold question in s 112(1), namely, whether it was reasonably open for the Council to make the decision it did.

260 The Court of Appeal (Spigelman CJ, with whom Mason P and Meagher JA agreed: at [123]-[124]) held that s 77(3)(d1) did give rise to a jurisdictional fact. Because of the central reliance placed upon this decision by the respondents, it is necessary to set out its reasoning in making this finding in some detail (at [37]-[42], [44] and [94]):

[37] The issue of jurisdictional fact turns, and turns only, on the proper construction of the statute...The parliament can make any fact a jurisdictional fact, in the relevant sense: that it must exist in fact (objectivity) and that the legislature intends that the absence of presence of the fact will invalidate action under the statute (essentiality): Project Blue Sky Inc v Australian Broadcasting Authority (1998) 72 ALJR 841 at 859-861; 153 ALR 490 at 515-517.

[38] "Objectivity" and "essentiality" are two inter-related elements in the determination of whether a factual reference in a statutory formulation is a jurisdictional fact in the relevant sense. They are inter-related because indicators of "essentiality" will often suggest "objectivity".

[39] Any statutory formulation which contains a factual reference must be construed so as to determine the meaning of the words chosen by parliament, having regard to the context of that statutory formulation and the purpose or object underlying the legislation. There is nothing special about the task of statutory construction with regard to the determination of the issue whether the factual reference is a jurisdictional fact. All the normal rules of statutory construction apply. The academic literature which describes "jurisdictional fact" as some kind of "doctrine" is, in my opinion, misconceived. The appellation "jurisdictional fact" is a convenient way of expressing a conclusion - the result of a process of statutory construction.

[40] Where the process of construction leads to the conclusion that parliament intended that the factual reference can only be satisfied by the actual existence (or non-existence) of the fact or facts, then the rule of law requires a court with a judicial review jurisdiction to give effect to that intention by inquiry into the existence of the fact or facts.

[41] Where the process of construction leads to the conclusion that parliament intended that the primary decision-maker could authoritatively determine the existence or non-existence of the fact then, either as a rule of the law of statutory interpretation as to the intent of parliament, or as the application of a rule of the common law to the exercise of a statutory power - it is not necessary to determine which, for present purposes - a court with a judicial review jurisdiction will inquire into the reasonableness of the decision by the primary decision-maker (in the Wednesbury sense Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223), but not itself determine the actual existence or non-existence of the relevant facts.

[42] Where a factual reference appears in a statutory formulation containing words involving the mental state of the primary decision-maker - "opinion", "belief", "satisfaction" - the construction is often, although not necessarily, against a conclusion of jurisdictional fact, other than in the sense that that mental state is a particular kind of jurisdictional fact: see Craig, Administrative Law, 3rd ed (1994) at 368-370; Minister for Immigration and Ethnic Affairs v Teo (1995) 57 FCR 194 at 198C. Where such words do not appear, the construction is more difficult.

...

[44] The authorities suggest that an important, and usually determinative, indication of parliamentary intention, is whether the relevant factual reference occurs in the statutory formulation of a power to be exercised by the primary decision-maker or, in some other way, necessarily arises in the course of the consideration by that decision-maker of the exercise of such a power. Such a factual reference is unlikely to be a jurisdictional fact. The conclusion is likely to be different if the factual reference is preliminary or ancillary to the exercise of a statutory power.

...

[94] Taking all these factors into account, I have concluded that the decision as to whether or not a species impact statement is required plays such a significant role in the legislative scheme that it is appropriate to describe it as an "essential condition": Craig v South Australia (1995) 184 CLR 163 at 179 or "essential preliminary": Colonial Bank of Australasia v Willan (at 443); Ex parte Toohey; Re Butler (at 282; 102); Minahan v Baldock (at 11). It was accordingly a jurisdictional fact which the Land and Environment Court was obliged to decide for itself.

261 An important element of Spigelman CJ's reasoning in arriving at this conclusion was based on a distinction he drew between ss 77(3)(d1) and 90(1)(c3) of the EPAA. At the time, s 90(1)(c3) provided:

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

...

(c3) whether there is likely to be a significant effect on threatened species, populations or ecological communities, or their habitats,...

262 In distinguishing between s 77(3)(d1) and s 90(1)(c3), Spigelman CJ said (at [32]-[33], [46]-[52]):

[32] In exercising that statutory power [under s 90(1)(c3)], the determination by a consent authority of "likely to significantly affect", is a matter incidental to the exercise of the power to grant consent. The reasoning in Londish, on which the applicant relied, would be more clearly relevant.

[33] However, s 77(3)(d1) does not confer a power on a decision-maker. It imposes a requirement on an applicant. The reasoning in Londish does not apply to such a statutory provision.

...

[46] In s 90(1)(c3), the issue of "significant effect" squarely arises in the context of the exercise of a statutory power by the consent authority and accordingly must necessarily be adjudicated upon by the consent authority. The use of the words "whether there is likely to be" indicates a decision on that matter by the consent authority. This is why, as I have said above, the reasoning in Londish is more clearly relevant to s 90(1)(c3).

[47] However, this case is not concerned with s 90(1)(c3). It is concerned with the almost identical formulation in s 77(3)(d1)...

[48] Section 77 does not involve, either explicitly or implicitly, the exercise of any statutory power by a consent authority. Section 77 is directed to the making of development applications by applicants, not the making of decisions by a consent authority.

[49] Section 77 lays down the requirements of an application. Such applications are referred to throughout the Act as being "determined" by the consent authority,...

[50] The making of an application by an applicant is preliminary to, and quite distinct from, the process of "determination" by a consent authority. A factual reference in a statutory formulation relating to the institution of a statutory decision-making process, is more likely, in my opinion, by reason of its extrinsic nature, to turn on an objective fact, than is a factual reference arising in, or in relation to, the conduct of the decision-making process itself.

[51] In the present case, the location of the relevant factual reference in a statutory formulation concerned with the requirements of an application, is a significant factor suggesting that the factual reference is jurisdictional.

[52] One formulation of the relevant distinction is whether the fact referred to is "a fact to be adjudicated upon in the course of the inquiry" as distinct from an "essential preliminary to the decision-making process": Colonial Bank of Australasia v Willan (1874) 5 PC 417 at 443.

263 Critically for present purposes, his Honour, while discussing the application of the term "decision" to ss 77, 90 and 112, said (at [84], emphasis added):

The terminology of "decision" has a clear application in the case of s 90, which is concerned with a list of considerations which the consent authority is required to consider. Similarly in the case of s 112, a decision is required by the determining authority.

264 Applying this analysis, Dart and the Department submitted that s 112(1) cannot give rise to a jurisdictional fact because "the factual reference ... necessarily arises in the course of the consideration by that decision-maker of the exercise of such a power", and this is usually a determinative indication against the existence of a jurisdictional fact (Timbarra at [44], emphasis added). Section 112(1) provides that a determining authority cannot grant an approval for an activity that is likely to significantly affect the environment unless it has obtained an EIS in respect of that activity. The determination of whether an activity is likely to significantly affect the environment is incidental to the exercise of the power to grant approvals and does not give rise to a jurisdictional fact (Timbarra at [32]).

265 Fullerton submitted that the remark by the Chief Justice at [84] is not binding and, in any event, seems to be inconsistent with the earlier reasoning where his Honour said (at [82]):

The present case has the unusual feature that a virtually identical form of words to that found in s 77(3)(d1) occurs at a later stage of the legislative scheme (s 90(1)(c3)), when a discretionary decision is plainly involved. The difference in treatment is, however, entirely explicable because of what follows from the relevant fact of "likely to significantly affect" at the two different stages of the process of granting or refusing consent. At the s 90 stage the relevant fact is one of many considerations to be taken into account. At the s 77 stage the consequence is the obligation to prepare a species impact statement.

266 Fullerton further submitted that under s 112(1), the question of whether the activity is likely to significantly affect the environment is not required to be considered as part of any merit consideration (in contradistinction to s 90(1)(c3)). Rather, similar to s 77(3)(d1)), s 112(1) is a provision that consequently imposes the obligation to prepare an EIS after a preliminary factual inquiry is made. Accordingly, applying the reasoning in Timbarra, the factual reference in s 112 is jurisdictional in character and must be determined by the Court.

267 Although not concerned with s 112 of the EPAA or a statutory provision containing the formulation "likely to significantly affect the environment", shortly after Timbarra, Pallas Newco was handed down. At issue was whether the characterisation of a use as a "drive-in take-away establishment", which was therefore permissible with consent, was a jurisdictional fact. Upon the proper construction of the legislative scheme conferring jurisdiction (s 77(a) of the EPAA), the Court held that it was.

268 In Pallas Newco Spigelman CJ relevantly stated the following principles (at [46]-[49]):

46 Finally, as the Privy Council identified in a seminal authority on this area of the law (Colonial Bank of Australasia v Willan (1874) LR 5 PC 417 at 442-443), there is a distinction between a fact that is an "essential preliminary to the decision-making process" and a "fact ... to be adjudicated upon in the course of the inquiry". (See also, e.g. Amalgamated Society of Carpenters and Joiners v Haberfield Pty Ltd [1907] HCA 37; (1907) 5 CLR 33 at 53; Ex parte Hulin; Re Gillespie (1965) 65 SR (NSW) 31 at 33.)

47 The word "preliminary" does not, in this context, refer to a chronological sequence of events, but to matter that is legally antecedent to the decision-making process. A decision-maker may well determine whether or not s/he has jurisdiction at the same time as s/he carries out the substantive decision-making process.

48 The extrinsic or ancillary or preliminary nature of the relevant fact makes it more likely that the fact is jurisdictional. (See Colonial Bank of Australasia v Willan at 443; R v Nat Bell Liquors Limited [1922] 2 AC 128 at 158; Ex parte Mullen; Re Hood (1935) 35 SR (NSW) 289 at 300; Ex parte Hulin; Re Gillespie at 33; Tasmanian Conservation Trust Inc v Minister for Resources [1995] FCA 1035; (1995) 55 FCR 516 at 539; Timbarra Protection Coalition at [44] and [50]-[60]. See also M Aronson, "The Resurgence of Jurisdictional Facts" (2001) 12 Public Law Rev 17 at 34.)

49 A factual reference that is appropriately characterised as preliminary or ancillary to the decision-making process or which is, in some other manner, extrinsic to the facts and matters necessary to be considered in the exercise of the substantive decision-making process itself, is a reference of a character that the Parliament intended to exist objectively.

269 In outlining the indicators against jurisdictional fact, his Honour opined that (at [56]-[61]):

56 Where issues of fact and degree arise it will often be the case that these are matters which a decision-maker is intended by Parliament to determine and, accordingly, any error is an error within jurisdiction rather than an error going to jurisdiction.

57 Determining whether a factual reference is jurisdictional in the context of classification under an environmental planning instrument will depend on the way the classification is expressed. The degree of flexibility which the Act permits with respect to the description of uses is such that Parliament must be taken to have authorised the adoption of classifications which are not jurisdictional as well as those which are jurisdictional.

58 For example, an environmental planning instrument may require the assessment of a wide range of matters of considerable complexity involving the formation of value judgments. Such a decision-making process is unlikely to involve a jurisdictional fact. (See, e.g. the High Court's endorsement in Australian Heritage Commission v Mount Isa Mines [1997] HCA 10; (1997) 187 CLR 297 at 303-304 of the judgment of Black CJ in Australian Heritage Commission v Mount Isa Mines (1995) 60 FCR 456 at 465-466, an approach also affirmed in Canberra Tradesmen's Union Club Inc v Commissioner for Land and Planning [1999] FCA 262; (1999) 86 FCR 266 at 272.)

59 The decision to grant consent, which is based on a wide range of broadly stated considerations set out in s79C of the Act, is a decision of that character. In my opinion, the process of characterisation of a particular development of the character involved here is not.

60 It is not always the case that matters of judgment involved in determining the existence of facts, let alone matters of fact and degree, mean that the fact is not jurisdictional. For example:

· whether or not a report about an employee was "substantially favourable" was found to be an objective test. (See Sutherland Shire Council v Finch [1970] HCA 49; (1969) 123 CLR 657 at 663-666 and see below Sutherland Shire Council v Finch (1970) 71 SR(NSW) 315 at 324-325 per Mason JA as his Honour then was.)

· whether development was "likely to significantly affect threatened species" was found to be jurisdictional. (Timbarra)

· whether an industry was "likely ... to produce conditions which are, or may become, offensive or repugnant to the occupiers or users of land" was found to be jurisdictional. (City of Enfield fn 16, [6] and [28].)

· whether a particular service was "necessary" for the purpose of enabling the supply of a broadcasting service was jurisdictional. (Foxtel Management Pty Ltd v Australian Competition and Consumer Commission [2000] FCA 589; (2000) 173 ALR 362 at [123]- [124].)

· whether property "may be material as evidence in proving" an offence for which extradition is sought was jurisdictional. (Cabal v Attorney General (Cth) [2001] FCA 583; (2001) 113 FCR 154 at [19], [74]-[76].)

· the High Court divided equally on whether or not a test expressed in terms of the existence of an "irregularity" constituted a jurisdictional fact. (R v Gray; Ex parte Marsh [1985] HCA 67; (1985) 157 CLR 351.)

61 In each case it was the overall statutory context that proved determinative as to whether or not Parliament intended the existence of the fact to both objectively exist and be essential, notwithstanding the element of fact and degree, or even of judgement, that was required in the process of determining whether or not the relevant fact existed.

270 In City of Sydney Council v Royal Botanic Gardens and Domain Trust [2004] NSWLEC 285, the Trust decided to remove 11 trees in the Domain suffering from poor health in order to plant 33 new trees. The council challenged the validity of the decision partly on the ground that the removal was an activity that was likely to significantly affect the environment within the meaning of s 112(1). The Trust had breached this section by not preparing an EIS. Justice Lloyd delivered an ex tempore judgment. His Honour held that the removal of 11 trees from an area of over 3000 trees was not an "activity" within s 110 of the EPAA. In case he was wrong, however, his Honour decided the threshold question in s 112(1) for himself, namely, whether the removal of the trees was likely to significantly affect the environment. He held that it would not. In so doing, Lloyd J appears to have assumed that s 112(1) involved a jurisdictional fact which the Court could determine for itself. Having said this, a separate ground of challenge in the proceedings was that the decision to remove the trees was manifestly unreasonable, which Lloyd J rejected after considering the expert evidence adduced by the parties.

271 A similar assumption appears to have been made by his Honour in 2008 in Goldberg. At issue in that case was the construction of a driveway and whether, pursuant to s 112 of the EPAA, the Court, exercising the power of the relevant roads authority as the determining authority, was required to examine and consider an EIS in deciding to grant consent (at [62]). His Honour determined for himself, based in part on the evidence of visual impact experts, whether or not the construction would be likely to significantly affect the environment (at [63]).

272 As stated above, Parks and Playgrounds, handed down in 2010, is the only decision in which an explicit pronouncement has been made on whether s 112 of the EPAA involves a jurisdictional fact. In that case Biscoe J stated that it did (at [132]):

Under s 112, if the removal of the Trees is likely to significantly affect threatened species or their habitats, a species impact statement is required. That likelihood is a jurisdictional fact for the Court to determine: Timbarra Protection Coalition Inc v Ross Mning NL (1999) 46 NSWLR 55; 102 LGERA 52.

273 In Parks and Playgrounds, the applicant challenged the council's decision to remove 14 fig trees along a street in Newcastle pursuant to s 88 of the Roads Act 1993 on the grounds that:

(a) the removal of the trees was a development which required consent under Pt 4 of the EPAA and no consent had been applied for or had been given;

(b) alternatively, if development consent was not required, the removal of the trees was an activity within Pt 5 of the EPAA and the council had breached s 111; and

(c) alternatively, if s 111 had been complied with, the council had breached s 112.

274 The council contended that on its proper construction, s 88 of the Roads Act was a freestanding provision which did not require development consent under Pt 4 of the EPAA and did not have to satisfy the requirements of either ss 111 or 112 in Pt 5 of that Act. The primary issue therefore was whether s 88 was subject to the requirements of Pts 4 or 5 of the EPAA. The Court held that the council had the power to remove the Trees under s 88 of the Roads Act and that the exercise of the power was not governed by Pts 4 or 5 of the EPAA. However, Biscoe J went on to consider the alternative arguments raised by the applicant and extraneous evidence from bat experts was admitted going to the question of whether the removal of the trees was likely to significantly affect threatened species and their habitats, especially the Greater Broad-nosed bat, a threatened and vulnerable species (at [135]-[151]). On the basis of this evidence Biscoe J held that, if s 112 were applicable, then on the material before him, as a jurisdictional fact, the removal of the Trees was not likely to have a significant effect on threatened species or their habitats (at [155]).

275 Finally, in Oshlack, the respondents were granted approvals and given a direction to add fluorine to particular public water supplies. In order to facilitate this the respondents resolved to approve the construction of certain fluoridation plants. The applicant challenged the validity of these resolutions. The Court was concerned with a preliminary question as to whether the respondents were required to comply with ss 111 and 112 of the EPAA with respect to the impacts on human health and the environment of adding fluorine to the water supply when determining to approve the construction of the fluoridation plants. Whether s 112(1) involved a jurisdictional fact was not strictly in issue, but Biscoe J stated that (at [5]-[6]):

If s 112 of the EPA Act applied, there was a jurisdictional fact, which the Court would determine at the final hearing, whether the activity of adding fluorine to the water supply is likely to significantly affect the environment or threatened species, populations or ecological communities, or their habitats. ...

If s 112 did not apply, as the respondents contend, it will be unnecessary for the parties to call (as they otherwise will) expert scientific evidence as to a jurisdictional fact in s 112. Consequently, the duration of the final hearing is likely to be much reduced and will only be concerned with residual issues. That is the rationale for the preliminary questions.

276 When the matter came to be decided on a final basis, however, the applicant abandoned the alleged breach of s 112 of the EPAA (Oshlack (No 2)).

277 Accordingly, the current post Timbarra s 112 jurisprudence may be summarised as follows, namely, that the decision in Timbarra appears to be equivocal on the issue of whether s 112 gives rise to a jurisdictional fact. On the one hand there are remarks made by Spigelman CJ in that case suggesting that it does not, while on the other, there is at least one decision in this Court (Parks and Playgrounds) that has held that it does.

Plainly Wrong

278 Neither the dictum in Timbarra nor the finding in Parks and Playgrounds is binding on me. It was urged upon me by Fullerton that, as a matter of judicial comity, I should follow Parks and Playgrounds unless I was of the opinion that it was plainly wrong (Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 at 492; Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at [134]-[135] and Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347 at [90]). By contrast, it was urged upon me by Dart and the Department that the obiter dictum in Timbarra was highly persuasive and carried significant weight and therefore should be applied.

279 It has long been the case that the weight accorded to obiter dicta will vary depending on the circumstances in which the remarks are made. Considered dicta of an appellate court, although not strictly binding on courts of a lower position within the judicial hierarchy, must be afforded considerable weight and should only be departed from with caution (Ying v Song [2009] NSWSC 1344 at [19]-[21] per Ward J).

280 In Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 the Court of Appeal considered the meaning of the phrase "plainly wrong" (at [294]-[295]):

294 The phrases "plainly wrong" or "clearly wrong" can be understood to focus on at least one or more of the following attributes of a ruling:

(a) the fact of error is immediately (in the sense mentioned in [283] above) apparent from reading the relevant judgment;

(b) the strong conviction of the later court that the earlier judgment was erroneous and not merely the choice of an approach which was open, but no longer preferred (cf Chamberlain and Clutha), and

(c) the nature of the error that can be demonstrated with a degree of clarity by the application of correct legal analysis.

295 In our view, the first possibility is liable to be highly subjective and should not be required, where the other two possibilities are satisfied. The existence of (b) and (c) is a precondition to the exercise of the power to depart from earlier authority.

281 Admittedly this statement was made in the context of an intermediate appellate court departing from its own decisions in relation to a matter of common law, but I nevertheless do not presently consider this to be a material point of distinction. In any event, the preponderance of authorities emphasise that the test will only be satisfied where it appears that the dispositive adjudication of the controversy has, in some way, miscarried (Informax International Pty Ltd v Clarius Group Ltd [2011] FCA 183; (2011) 192 FCR 210 at [54] per Perram J). Thus in BHP Billiton Iron Ore Pty Ltd v National Competition Council Greenwood J stated ([2007] FCAFC 157; (2007) 162 FCR 234 at [83], quoted in Informax at [54]. And see J D Heydon, "How Far Can Trial Courts and Intermediate Appellate Courts Develop the Law" (2009) 9(1) Oxford University Commonwealth Law Journal 1, 25):

83 The circumstances in which a judge in the exercise of the Court's original jurisdiction might find a decision of a single judge of the Court to be 'plainly wrong' should be approached with real and deliberative caution and would generally involve that class of case where for one reason or another there is transparent error such as the consideration of an incorrect statutory instrument in the resolution of the controversy; consideration of a provision of a statute in a form not enacted at the relevant date of the events or a failure to consider a provision of an Act relevant to the disposition of the cause, thus causing the analysis to fall into error; a failure to apply having regard to the issues raised by the controversy, a binding decision of a Full Court of this Court or the High Court; a failure to apply a decision of a Full Court of this Court, an intermediate Court of Appeal of another jurisdiction or an authority of the High Court expressing a clear persuasive emphasis of opinion in favour of a particular conclusion (particularly concerning legislation of the Commonwealth Parliament); or some other circumstance that has caused a dispositive adjudication of the controversy to miscarry.

282 According to Perram J in Informax, "'plainly wrong' means more than mere, or even strong disagreement with, the decision in question - it requires an actual conclusion that the reasoning process has miscarried" (at [56]).

283 Although neither BHP Billiton nor Informax concerned the proper interpretation of State legislation, in my opinion, they are nevertheless apposite and provide useful guidance as to the application of the 'plainly wrong' test in this instance.

284 The difficulty in the present case is that Biscoe J's pronouncement in Parks and Playgrounds, and his concomitant assumption in Oshlack, that s 112 contains a jurisdictional fact, does not, with respect, disclose the reasoning process dispositive to the controversy. Undoubtedly this is because, in each case, there was no controversy on this point. Put another way, I am unable to tell if the decisions are 'plainly wrong', or conversely, if they are 'not plainly wrong'.

285 Furthermore, although the dictum in Timbarra fell in circumstances that require due deference to be paid to it, the remarks by the Chief Justice relied upon by the respondents (at [84]) cannot, in all fairness to his Honour and with the utmost of respect, be characterised as 'considered' in the sense described by Ward J in Ying (at [21]):

In Brunner v Greenslade [1971] Ch 993 at 1002-1003, Megarry J said (quoted in a footnote in Justice Heydon's article "Limits to the Powers of Ultimate Appellate Courts" (2006) 122 LQR 399 at 415 n 114):

"A mere passing remark or a statement or assumption on some matter that has not been argued is one thing, a considered judgment on a point fully argued is another, especially where, had the facts been otherwise, it would have formed part of the ratio"

(after which Justice Heydon adds the comment: "A statement of this kind has judicial weight nearer to that of a ratio decidendi than an obiter dictum.")

286 It follows, in my view, that the appropriate course in all the circumstances is to examine for myself whether s 112 of the EPAA, upon its proper construction, gives rise to a jurisdictional fact.

287 Some principles of assistance in determining whether a statutory provision gives rise to a jurisdictional fact were usefully summarised by Biscoe J in Calardu Penrith Pty Ltd v Penrith City Council [2010] NSWLEC 50, which I respectfully adopt (at [38]-[39]):

38. The leading cases on jurisdictional fact include:

(a) the seminal decision of the Privy Council in Colonial Bank of Australasia v Willan (1874) LR 5 PC 417;

(b) the decisions of the High Court in Gedeon v Commissioner of the New South Wales Crimes Commission [2008] HCA 43, 236 CLR 120 (a successful appeal from the decisions of the NSW Court of Appeal in the two cases of Dowe and Gedeon v Commissioner of the New South Wales Crime Commission [2007] NSWCA 296); Enfield City Corporation v Development Assessment Commission [2000] HCA 5, 199 CLR 135; Australian Heritage Commission v Mount Isa Mines Ltd [1997] HCA 10; (1997) 187 CLR 297; and Sutherland Shire Council v Finch [1970] HCA 49, 123 CLR 657;

(c) the decisions of the NSW Court of Appeal in Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8, 46 NSWLR 55; Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422, 61 NSWLR 707; and Barrick Australia Ltd v Williams [2009] NSWCA 275, 168 LGERA 43; and

(d) the decision of the Full Federal Court in Anvil Hill Project Watch Association Inc v Minister for Environment and Water Resources [2008] FCAFC 3, 166 FCR 54 at [32].

39. The concept of jurisdictional fact as explained in these authorities may be analysed as follows (refining a little my analysis in Hill Top Residents Action Group Inc v Minister for Planning [2009] NSWLEC 185 at [102], quoted in Casa v City of Ryde Council [2009] NSWLEC 212 at [62]):

(a) the expression "jurisdictional fact" generally "is used to identify a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question. If the criterion be not satisfied then the decision purportedly made in exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker": Gedeon at [43], Enfield at [28];

(b) parliament can make any fact a jurisdictional fact by an intention that it must exist in fact (objectivity) and that its absence or presence will invalidate action under the statute (essentiality): Timbarra at [37], Dowe at [30];

(c) the normal rules of statutory construction apply when determining whether a factual reference is a jurisdictional fact: Timbarra at [39];

(d) where the process of construction leads to the conclusion that parliament intended that the primary decision-maker could authoritatively determine the existence or non-existence of the fact, then a court cannot itself determine the existence or non-existence of the fact, although (if it is in issue) the court will inquire, for example, as to whether the decision was manifestly unreasonable in the Wednesbury sense: Timbarra at [41];

(e) there is a distinction between a fact that is an essential preliminary (ie legally antecedent) to the decision-making process and a fact to be adjudicated upon in the course of the decision-making process: Colonial Bank at 442-443, Timbarra at [52], Woolworths at [46]. If the factual reference is preliminary to the exercise of statutory power, it is more likely to be a jurisdictional fact: Timbarra at [44], Woolworths at [48];

(f) the existence of a jurisdictional fact is often signalled by expressions such as "where X exists" or "when X exists" or "if X exists", then a person is empowered or obliged to act or refrain from action: Anvil Hill at [21];

(g) a jurisdictional fact includes the mental state of a decision-maker as to the existence of X where the statute mandates that that mental state enlivens the exercise of the statutory power. In such a case, judicial review by a court is limited to (i) determining whether that mental state existed and does not extend to determining whether X existed, and (ii) determining whether that mental state was reasonably open on the facts in the Wednesbury sense ie manifestly unreasonable: Timbarra at [41] - [42], Barrick at [35] - [36], [38], Australian Heritage Commission at 306-308;

(h) where a factual reference appears in a statutory formulation containing words involving the mental state of the primary decision-maker - for example, "opinion", "belief", "satisfaction" - the construction is often, although not necessarily, against a conclusion of jurisdictional fact, other than in the sense that the mental state is a particular kind of jurisdictional fact. Where such words do not appear, the construction is more difficult: Timbarra at [42], Enfield at [28] and [34], Sutherland Shire Council at 666, Woolworths at [13] and [25], Anvil Hill at [21], Barrick at [30]- [39].

(i) the fact that questions of degree arise and that there will be room for differences of opinion does not mean that the matter would more appropriately be decided administratively rather than by judicial decision: Sutherland Shire Council at 666. However, the fact that a judgment is required on a matter of potentially significant disputation suggests, but it is not always the case, that it is less likely to be intended to be an objective fact, because it is, characteristically, a matter on which reasonable minds may differ: Timbarra at [89], Woolworths at [60];

(j) the scope and purpose of the legislative scheme may be an indicator of whether or not a factual reference is a jurisdictional fact: Woolworths at [30];

(k) a jurisdictional fact may be suggested by a prohibition of conduct unless a specified fact exists: Enfield at [34], Woolworths at [44];

(l) the location of a factual reference in a statutory formulation concerned with the requirements of an application is a significant factor suggesting that the factual reference is jurisdictional: Timbarra at [51];

(m) inconvenience arising from a jurisdictional fact conclusion is relevant to determining the legislative intention: Timbarra at [91], Woolworths at [63].

288 To this may be added:

(a) if a breach of the statutory provision said to contain a jurisdictional fact does not result in invalidity, the absence of "essentiality" suggests that the relevant provision does not incorporate "objectivity" and is therefore not a jurisdictional fact (Huntlee at [117]); and

(b) where an evaluative judgment or assessment is required to be made by the decision-maker, for example, the determination of the 'suitability' of a matter, this is less likely to be construed as specifying a jurisdictional fact or objective state of affairs (Pallas Newco at [56]-[58] and Huntlee at [118]).

289 There are several textual indicators that suggest that the intention of the legislature was that a determination that an activity is likely to significantly affect the environment in s 112(1) of the EPAA is a jurisdictional fact. First, and in my view, most critically, s 112(1) operates as a preliminary limitation, or condition precedent, on the exercise of power ("shall not...unless"). The "extrinsic or ancillary or preliminary nature of the fact" makes it more likely to be a jurisdictional fact (Timbarra at [44] and [50]-[60]; Pallas Newco at [46]-[49] and Barrick Australia v Williams [2009] NSWCA 275; (2009) 74 NSWLR 733 at [26].

290 This can be demonstrated in the present case, where the decision to approve the pilot program was not made pursuant to either ss 111 or 112 of the EPAA. Section 112(1) does no more than stipulate the circumstances in which a determining authority must obtain and consider an EIS. In other words, the relevant factual reference does not occur within the statutory formulation of power. That power is, as Dart and the Department emphasised in their submissions on jurisdiction, to be found elsewhere, namely, the PO Act. Thus the determination of the fact contained in s 112(1) is preliminary or ancillary to, and quite distinct from, the exercise of statutory power to grant approval to an activity or the carrying out of an activity by the determining authority. As was stated in Timbarra, "a factual reference in a statutory formulation relating to the instigation of a statutory decision-making process, is more likely... to turn on an objective fact, than is a factual reference arising in, or in relation to, the conduct of the decision making process itself" (at [50]).

291 Section 90(1)(c3), as analysed in Timbarra, is distinguishable from s 112(1) on this basis. The factual reference in the former provision occurs within the statutory formulation of the power to determine a development application ("in determining a development application, a consent authority shall..."). The exercise of the power - that is, the conduct of the decision-making process - is simultaneous with the determination of the fact. In s 112(1), by contrast, the exercise of the power is wholly separate from the determination of the factual matters proscribed in that section.

292 Second, the language of s 112 also tells in favour of jurisdictional fact. Similar to s 77(3)(d1) under consideration in Timbarra, what is presently required is a determination that an activity "is an activity that is likely to significantly affect the environment" and not, as stated in s 90(1)(c3), a consideration of "whether there is likely to be a significant effect on" the environment in the determination of a development application (emphasis added in each case). The latter calls for the decision-maker's opinion as to whether that fact will occur, whereas the former demands an objective determination of the existence of that fact. Moreover, not only must the fact that an activity is or is not likely to significantly affect the environment exist as a matter of fact, that fact is essential in the sense that its absence (or presence, if no EIS is furnished or considered) will invalidate the approval given or the activity carried out. The objective character of the assessment to be made in the chapeau to s 112(1) may be contrasted with the subjective "examination and consideration" required to be given to the EIS once obtained or furnished in s 112(1)(a). The latter exercise is demonstrably not one that gives rise to a jurisdictional fact.

293 Third, similar to s 77(3)(d1), s 112(1) offers no distinction between an activity that "is a prescribed activity" or "an activity of a prescribed kind", and "is likely to significantly affect the environment". Whether or not an activity is a "prescribed activity" is entirely an objective fact. It is any development of a class or description that is prescribed by the regulations for the purposes of the definition of "activity" in s 110(1)(k) of the EPAA. It is unlikely that Parliament intended any significant difference in the statutory treatment within s 112 between an activity that is a "prescribed activity" and an activity that is "likely to significantly affect the environment" (Timbarra at [62]). This analysis is also applicable to s 112(1B) (to which the reasoning in Timbarra at [61]-[64] is squarely on point).

294 Fourth, unlike s 90(1)(c3) ("in determining a development application, a consent authority shall take into consideration such of the following matters..."), the relevant fact in s 112(1) is not one of many considerations, rather it is a consequence of a single factual enquiry.

295 Fifth, having regard to the distinction sought to be drawn by Spigelman CJ in Timbarra (at [83]-[84]) between ss 77(3)(d1) and 90(1)(c3) for the purpose of eschewing any suggestion that a "decision" arose under the former pursuant to s 5A of the EPAA (thereby tending against a jurisdictional fact), with the greatest of respect to his Honour I do not agree that the terminology of "decision" has as clear an application to s 112(1), as it does to s 90 (assuming that this is what his Honour's remark was directed to). As the Chief Justice noted, s 90 is concerned with a list of considerations that the consent authority is required to take into account. But the same cannot be said of s 112(1) of the EPAA, notwithstanding the application of s 5A of the EPAA to that provision. There is, in my opinion, no determination or decision to be made in s 112(1) other than in respect of the single factual reference. Significantly, the provision does not state that "in determining to carry out an activity or grant an approval the determining authority shall not...". A determining authority may be required to decide if it has a valid application for, in this case, a pilot program to drill for gas, by reason of a determination that an EIS is required, but the initial decision is not, unlike s 90(1)(c3), made pursuant to s 112.

296 But, even if I am wrong, and a decision is required by a determining authority pursuant to s 112(1), this is but one indicator against the creation of a jurisdictional fact. It is not, of itself, definitive (Timbarra at [87]).

297 Contextually, the central importance of an EIS is reflected throughout Pt 5 of the EPAA, which is concerned with "Environmental assessment". As Spigelman CJ observed in Timbarra, "a species impact statement, when required, plays a critical role in the quality of the decision-making process, by ensuring that detailed information is available to primary decision-makers in a systematic and ordered way" (at [76] and see again at [94]). The comments resonate equally in the context of an EIS in Pt 5. This makes it more likely, in my opinion, that the legislature intended the assessment culminating in the requirement to prepare an EIS to be objectively ascertained and that the decision-maker's opinion is not determinative. Such a finding is in conformity with the objects and purpose of the Act (s 5 of the EPAA).

298 As in Timbarra, it was submitted by Dart and the Department that the fact that the obligation to prepare an EIS was "triggered by a formulation requiring the exercise of a broad judgment on a matter of potentially significant disputation" (Timbarra at [88]) and could result in inconvenience by a determining authority erroneously deciding that an EIS is not required creating the potential for any subsequent decision granting approval or carrying out an activity to be set aside (at [91]-[92]), militated against the finding of a jurisdictional fact.

299 Three responses may be given. First, it is not always the case that matters of judgment involved in determining facts, including matters of fact and degree, mean that the fact is not jurisdictional (see the examples given in Pallas Newco at [60]). Second, as the examination of the earlier case law above demonstrates, the exercise of judgment and the potential for inconvenience is no greater than that already present in any challenge to the reasonableness of a determining authority's conclusion that an EIS is not required because the activity is not likely to significantly affect the environment. And, third, "remedies on judicial review are discretionary and may be refused" (Timbarra at [93]).

300 I therefore find that s 112(1) of the EPAA gives rise to a jurisdictional fact that the Court must determine for itself on all the available evidence, including the expert evidence tendered by the parties, whether or not the pilot program is likely to significantly affect the environment.

Alleged Breaches of s 112

301 There are three ways in which it is alleged that the Department breached s 112(1) of the EPAA:

(a) first, because the overall potential impact of the activity was assessed as "medium" in the 1 June 2012 Pt 5 determination and the ESG2 Guidelines stated that a medium impact statement was "considered significant", and therefore, an EIS was required;

(b) second, the proposed activity is designated development and therefore an EIS was required because designated development was, by its very nature, an activity that was likely to significantly affect the environment; and

(c) third, the Court ought to be satisfied that the pilot program was likely to significantly affect the environment and that an EIS was required because of the likely impact of the activity on the:

(i) the Pacific Golden Plover;

(ii) the Eastern Grass Owl; and

(iii) the cumulative impacts of the pilot program.

The ESG2 Guidelines

302 Fullerton submitted that the pilot program was likely to significantly affect the environment because the assessment carried out by the Department for the purposes of the 1 June 2012 evaluation under Pt 5 of the EPAA concluded that the potential impact of the activity "as a whole" was "medium" and the ESG2 Guidelines designated a "medium" level of impact as "significant". It relied upon the Note in the ESG2 Guidelines that stated that, "a medium or high level of impact is considered significant."

303 For the reasons already discussed, I have concluded that the ESG2 Guidelines are not guidelines for the purposes of cl 228 of the Regulations and that they therefore cannot be determinative of the assessment by the Department of the pilot program for the purposes of s 111 of the EPAA and, it follows in my view, s 112.

304 Dart and the Department submitted that the Note was just that, namely, a note, that did not form part of the Guidelines. The respondents relied on s 35(2) of the Interpretation Act in this regard. But, as stated above, that Act assists neither party. The ESG2 Guidelines are not an "enactment" or an "instrument" attracting the operation of that Act.

305 More fundamentally, at their highest, the ESG2 Guidelines can only amount to a matter to be taken into account in the application of ss 111 and 112 of the EPAA. They do not amount to - the logical corollary of Fullerton's submission - a binding conclusive characterisation of the activity as "likely to significantly affect the environment" that fetters the determining authority's consideration of any other matter that may have a bearing on the discretionary assessment to be made under s 112. This is reinforced by the terms of the EPAA itself. Section 115(a) of the EPAA and cl 228(3) of the Regulations empower only the Director-General to make guidelines for the purposes of s 111 of the EPAA. Indeed, were the Department to rigidly rely on the ESG2 Guidelines to the exclusion of all other material in making its assessment under s 112(1), this would arguably result in jurisdictional error.

306 In addition, as found above, the ESG2 Guidelines themselves (as opposed to the "factors") are not a mandatory consideration and, in any event, the Department took the substance of the factors contained in the Guidelines into account in assessing the proposed activity. The table analysing "the extent and nature of the impacts during construction and operation" in the 1 June 2012 Pt 5 determination considered in detail the impacts, both beneficial and adverse, of the pilot program. There was additional consideration pursuant to s 5A of the EPAA of whether there would be a significant effect on threatened species, populations, ecological communities and their habitats by reason of the pilot program. While it is correct that the potential impact of the activity as a whole was assessed as "medium" this ranking was not uniform across all evaluative criteria comprising the overall assessment (ten were "low" and seven were "medium"). The Department was entitled to have regard to these individual rankings, as well as to the overall ranking of "medium", in concluding that the activity was not likely to significantly affect the environment (in fact the Note in the ESG2 Guidelines relied upon by Fullerton expressly required this).

307 Another difficulty with Fullerton's submission is, as noted in the context of s 111, that it ignores the purpose of the ESG2 Guidelines, which are directed towards the content requirements of a proponent's REF, and not the decision-making processes of the determining authority. That purpose is apparent from the express words in the introduction to the ESG2 Guidelines which states that the Guidelines "have been developed to provide a framework for industry to use in assessing the potential environmental impact of activities requiring the preparation of an REF, EIS or other supporting documentation".

308 I therefore do not consider that because the ESG2 Guidelines designated a potential impact assessment of "medium" as "significant" this required an EIS to be furnished to, and considered by, to the Department pursuant to s 112(1) of the EPAA.

Designated Development

309 As stated at the outset of this judgment, at the hearing Fullerton disavowed, as a discrete breach of s 112, any reliance on the assertion that the pilot scheme was designated development, and therefore, likely to significantly affect the environment requiring an EIS. Rather, Fullerton submitted that the pilot program fell within the class of development identified as "designated development" and that this demonstrated that it was "precisely the sort of Activity for which an EIS should be prepared". In support of this submission Fullerton relied on cl 4 and cl 27(g) of Sch 3 Pt 1 to the Regulations.

310 Clause 4 of the Regulations relevantly provides as follows:

4 What is designated development?

(1) Development described in Part 1 of Schedule 3 is declared to be designated development for the purposes of the Act unless it is declared not to be designated development by a provision of Part 2 or 3 of that Schedule.

311 Schedule 3 deals with development that is classified as "designated development" for the purposes of the EPAA. Clause 27(g) of Pt 1 of Sch 3 states that the following works constitute designated development, namely:

27 Petroleum works

Petroleum works:

...

(g) that are located:

(i) within 40 metres of a natural waterbody or wetland, or

(ii) in an area of high watertable or highly permeable soils, or

(iii) within a drinking water catchment, or

(iv) on a floodplain.

312 As Fullerton argued the pilot program is for the drilling of petroleum exploration wells; the pilot program is located within 40m of a wetland; the pilot program is located on a floodplain and the program is located in an area of high water table, and therefore, the pilot program fell within the definition of "petroleum works" and would otherwise be designated development requiring an EIS. This characterisation informed, Fullerton contended, the debate concerning the likely effect of the pilot program on the environment and reinforced the conclusion that the likely effect of the activity was, for the purpose of s 112, "significant". In short, the pilot program was "precisely the sort of activity for which an EIS should be prepared".

313 Further comfort was drawn by Fullerton from the EIS Guidelines published by the Department of Urban Affairs and Planning in 1996. Appendix C lists, the activities that may require an EIS, including "an activity...located in an area listed as being environmentally sensitive", "areas sensitive because of physical factors" such as "wetlands...or flood prone areas" and "areas where groundwater is at risk, for instance,...areas with a high water table".

314 But this comfort is, in my opinion, misplaced. It ignores the legislative reality that, first, the pilot program is an activity permissible without the need for development consent pursuant to s 76(1) of the EPAA and cl 6 of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 ("the Mining SEPP"). Second, that the pilot program, irrespective of cl 27(g) of Sch 3 of the Regulations, could not, in any event, be designated development under Pt 4 of the EPAA because Div 2 of Pt 4 and s 77A do not apply to the program as these provisions only apply to development that requires consent. And third, it is uncertain whether the pilot program, contrary to the submission of Fullerton, constitutes "petroleum works" and therefore falls within the definition of "designated development" contained in cl 4 of the Regulations.

315 The term "petroleum works" is not defined in the EPAA or the Regulations. The Mining SEPP defines "petroleum related works" in cl 3 as follows:

petroleum related works means any works, structures or equipment that are ancillary or incidental to petroleum production and includes all works, structures and equipment that a production lease under the Petroleum (Onshore) Act 1991, or a production licence under the Petroleum (Submerged Lands) Act 1982, entitles the lease or licence holder to construct, maintain or execute.

316 It is at least arguable therefore that "petroleum works" only refers to works, structures and equipment that are ancillary or incidental to petroleum production and does not apply to petroleum exploration such as the pilot program. Accordingly, if the pilot program is not "petroleum works" it cannot be designated development pursuant to cl 4 of the Regulations.

317 Ultimately I do not need to resolve this interpretation issue because the pilot program is not designated development. The question of whether or not the pilot scheme is an activity that is likely to significantly affect the environment is to be determined by the Court on all the evidence before it and not the construction of a term that has, for the reasons given above, and as was frankly conceded by Fullerton, no application to an activity impugned pursuant to Pt 5 of the EPAA.

Factual Concessions Made by Fullerton

318 In determining whether the pilot program was an activity that was likely to significantly affect the environment, Fullerton made a number of significant factual concessions consequent upon the oral evidence of the experts that are relevant to the remaining aspects of the challenge under s 112:

(a) first, that the absence of a deep groundwater assessment would not, of itself, lead the Court to conclude that the pilot program was likely to have a significant effect on the environment;

(b) second, Dr Mudd agreed that the Douglas Partners Interim Report dated March 2012 was an adequate assessment of shallow groundwater and that he no longer had any concern regarding impacts on shallow groundwater;

(c) third, to undertake the deep groundwater assessment contended for by Fullerton, Dr Mudd conceded that the same potential risks to the environment arose in drilling the necessary monitoring borehole as those that could potentially arise in engaging in the pilot program;

(d) fourth, that based on the seven-part test of significance undertaken by Dr Ambrose and Ms Ashby pursuant to s 5A of the EPAA, the pilot program was not likely to have a significant effect on any of the following individual flora species:

(i) Maundia triglochinoides;

(ii) Persicaria elatior;

(iii) Asperula asthenes;

(iv) Zannichellia palustris;

(v) the Green and Golden Bell Frog; and

(vi) the White-fronted Chat; and

(e) fifth, both Ms Ashby, Dr Ambrose and, significantly, Mr Paull agreed that, in their expert opinions, the pilot program was not an activity that was likely to significantly affect the environment. However, Mr Paull's opinion was qualified subject to the occurrence of the following events:

(i) catastrophic natural disasters;

(ii) significant equipment failures or malfunctions; and

(iii) changes in the future use of the pilot program site.

Groundwater

319 In light of the material before the Department (discussed above in detail in the context of the s 111 challenge), the evidence of Mr Blackam and Mr Naumann, and the concessions made by Dr Mudd and by Fullerton, I do not consider that the impact of the pilot program on groundwater (either shallow or deep) leads, of itself, to a conclusion that the activity is likely to significantly affect the environment.

The Pacific Golden Plover and the Eastern Grass Owl

320 It is convenient to deal with these two species of avifauna together. In respect of both, Fullerton's ultimate complaint, in light of the concession made by Mr Paull, is premised upon the fact that at no stage has a seven-part test of significance been carried out in respect of these two species pursuant to s 5A of the EPAA and that, therefore, it cannot be said that the pilot program activity will not significantly affect the environment.

321 Several preliminary observations should be made in respect of this observation. First, care must be taken in stating the test this way. To do so risks reversing the onus of proof. It is not for Dart and the Department to satisfy the Court that the pilot program is likely to significantly affect the environment.

322 Second, to repeat and distill the authorities referred to above, the term "likely" means something akin to "a real chance or possibility" and the term "significantly" is analogous to "important", "notable", "weighty" or "more than ordinary".

323 Third, for the purposes of making a determination under s 112 of the EPAA, as informed by s 5A of that Act, the Department can take into account any ameliorative measures to prevent, mitigate, remedy or offset the impact of the activity (Newcastle & Hunter Valley Speleological Society at [83] and Parks and Playgrounds at [34]). Ameliorative measures were set out in detail in the body of the REF (sections 3.3.9, 6.1.4, 6.3.4, 6.6.2, 6.7.2, 6.8.5, 6.10.2, 6.11.2, 6.13.1, 6.14.1, 6.15.1, 7 and 8), in the REF appendices for example, in Appendix 3 - Groundwater Assessment Methodology), the Ecological Assessment (Appendix 9, see sections 6.7 and 9.2), in the 22 December 2011 letter providing further information, and in the conditions attached to the PO Act approval itself.

324 In relation to the Eastern Grass Owl, without repeating (but nevertheless relying upon) the evidentiary discussion above in respect of s 111 of the EPAA, I accept and prefer the evidence of Dr Ambrose, over that of Mr Paull (for the reasons already given), that this vulnerable species was not present on the subject site (based on an absence of suitable habitat and any recordings of the Owl during the survey undertaken by him) and that its status would not be impacted by the drilling. Having regard to the evidence of Dr Ambrose, and when consideration is given to the material before the Department (as discussed above), I find that the pilot program would not be likely to significantly affect the environment by reason of its potential impact on the Eastern Grass Owl notwithstanding the absence of a seven-part test of significance. The absence of such a test is not determinative either generally or in the present case. I note again that Mr Paull did not conduct a seven-part test of significance on any flora or fauna species.

325 With reference to the evidence and material discussed above in the context of s 111, I have reached a similar conclusion with respect to the Pacific Golden Plover. Again I accept and prefer the evidence of Dr Ambrose to that of Mr Paull. The site offers unsuitable habitat for this species of migratory shorebird. It was for this reason that no seven-part test of significance was conducted by him. In my opinion, the pilot program would not be likely to significantly affect the environment by reason of its potential impact on the Pacific Golden Plover.

Cumulative Impact

326 Likewise, relying upon but not repeating the discussion above in the context of s 111 concerning the cumulative impact of the pilot program, in my opinion, it cannot be concluded that when regard is had to the total impact of the proposed drilling program, this leads inexorably, as Fullerton submitted, to the conclusion that overall the activity is likely to significantly affect the environment.

327 This is particularly so given the concessions made by Fullerton. Putting to one side the ESG2 Guidelines, the only genuine bases for finding that an EIS was necessary was the potential impact of two wells on a single drilling site for a period of 50 days on the Eastern Grass Owl and the Pacific Golden Plover, the evidence of the existence of which on the subject site was, particularly in the case of the Eastern Grass Owl, as Dr Ambrose demonstrated, limited given the lack of suitable habitat and the already disturbed nature of the area.

328 Based on this evidence, together with the material that was before the Department that, analysed the potential cumulative impact of the activity on the environment, I find that having regard to the cumulative impact of the pilot scheme the activity is not likely to significantly affect the environment as that phrase, and its components, are properly understood.

329 This view accords with that of Mr Paull, who, it must be recalled, ultimately agreed that the pilot program would not, in the absence of a catastrophic natural disaster, a significant equipment failure or malfunction, or a change in the future use of the pilot program site, be likely to significantly affect the environment. There was no evidence before the Court that any of these events would, or were likely to, eventuate.

330 It follows therefore that the challenge to the Department's decision under s 112 of the EPAA must be dismissed.

Discretion to Refuse to Grant Relief

331 Dart argued that on discretionary grounds, even if Fullerton were successful, the relief contended for by Fullerton should be refused in light of its delay in commencing proceedings.

332 In light of the rejection by me of the grounds of review underpinning any claim for relief, it is unnecessary for me to determine this argument.

Costs

333 Because this is an application in Class 4 of the Court's jurisdiction, costs would usually follow the event.

334 However, the parties have jointly requested that any consideration of who is liable for the costs of the proceedings be reserved. In the circumstances of this case, it is appropriate that this course be adopted.

Orders

335 In conformity with the reasons expressed above, the amended summons must be dismissed.

336 The costs of the proceedings are reserved.

337 The injunction granted by Sheahan J on 5 September 2012 in Fullerton (at [42(1)]) is discharged forthwith.

338 Within fourteen days the parties are to list the matter before me for a hearing on costs and the making of a consequential timetable in preparation for this hearing.

339 The exhibits are to be returned.

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Amendments

04 April 2013 - Amended representative of first respondent
Amended paragraphs: Coversheet

25 October 2013 - Admin error
Amended paragraphs: Index added before Judgment

Decision last updated: 25 October 2013