Land and Environment Court New South Wales

• Medium Neutral Citation: Boral Cement Pty Ltd v SHCAG Pty Ltd; Minister for Planning and Infrastructure v SHCAG Pty Ltd [2013] NSWLEC 203
• Hearing dates: 7 - 9 August 2013
• Decision date: 29 November 2013
• Jurisdiction: Class 1
• Before: Pain J

Decision

1. The judgment and orders in SHCAG Pty Ltd v Minister for Planning and Infrastructure and Boral Cement Limited [2013] NSWLEC 1032 are set aside.

2. The proceedings are to be remitted to a commissioner or commissioners (other than O'Neill C or Adam AC) or to a Judge of the Court for re-hearing and re-determination.

3. Exhibits are to be returned.

4. Costs reserved.

• Catchwords: APPEAL - two s 56A appeals against commissioners' decision to refuse extension of existing colliery operation - denial of procedural fairness to parties in giving substantial weight to objectors' submissions on noise, dust and traffic at view without notice to parties of intention to do so - failure to give reasons which address issues raised by appellants at the merits hearing - appeal upheld - exclusionary remitter order made
• Legislation Cited: Environmental Planning and Assessment Act 1979 Pt 3A, Sch 6A; Land and Environment Court Act 1979 s 39, s 56A; Environmental Planning and Assessment Regulation 2000 cl 8K; Mining Act 1992 s 74
• Cases Cited: Aldi Stores v Newcastle City Council [2010] NSWLEC 227; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139; Ballantyne v WorkCover Authority of NSW [2007] NSWCA 23; Baulkham Hills Shire Council v Basemount Pty Ltd [2003] NSWCA 189; (2003) 126 LGERA 339; Botany Bay City Council v Pet Carriers International Pty Ltd [2013] NSWLEC 147; Brimbella Pty Ltd v Mosman Municipal Council (19985) 79 LGERA 367; Carstens v Pittwater Council [1999] NSWLEC 249; (1999) 111 LGERA; Castle Constructions Pty Limited v North Sydney Council [2007] NSWCA 164; (2007) 155 LGERA 52; Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 239; Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65; (2010) 173 LGERA 456; Davis v Gosford City Council [2013] NSWLEC 49; Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233; Goodwin v Commissioner of Police [2012] NSWCA 379; Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd (1983) 53 LGRA 325; Hussein v Minister for Immigration and Multicultural Affairs [2001] FCA 1777; Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390; Mansfield v Minister for Planning and Hanson Construction Materials Pty Ltd [2012] NSWLEC 1063; Mifsud v Campbell (1991) 21 NSWLR 725; Neate v Shellharbour City Council (No 2) [2007] NSWLEC 541; Newcastle & Hunter Valley Speleological Society v Upper Hunter Shire Council [2010] NSWLEC 48; Nominal Defendant v Saleh [2011] NSWCA 16; Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; Shao v Hornsby Shire Council [2001] NSWLEC 254; (2001) 116 LGERA 462; SHCAG Pty Ltd v Minister for Planning and Infrastructure and Boral Cement Limited [2013] NSWLEC 1032; State Super SAS Trustee Corporation v Cornes [2013] NSWCA 257; Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141; Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133; (2006) 146 LGERA 10; Wiki v Atlantis Relocations (NSW) Pty Ltd [2004] NSWCA 16; (2004) 60 NSWLR 127
• Texts Cited: Mark Aronson and Matthew Groves, Judicial Review of Administrative Action, 5th ed (2013) Thomson Reuters; Beazley P "The distinction between questions of fact and law: a question without answer?" (2013) Vol 11 No 3 The Judicial Review 279
• Category: Principal judgment
• Parties: Boral Cement Pty Ltd (Appellant/Second Respondent); SHCAG Pty Ltd (First Respondent); Minister for Planning and Infrastructure (Appellant/Second Respondent)
• Representation: Mr N Hutley SC and Mr C Ireland (Appellant/Second Respondent); Mr I Hemmings and Mr N Eastman (First Respondent); Mr J Hutton (Appellant/Second Respondent); Minter Ellison (Appellant/Second Respondent); Environmental Defenders Office (First Respondent); Department of Planning and Infrastructure (Appellant/Second Respondent)
• File Number(s): 10215 of 2013; 10228 of 2013

Decision under appeal

• Citation: SHCAG Pty Ltd v Minister for Planning and Infrastructure and Boral Cement Limited [2013] NSWLEC 1032
• Date of Decision: 2013-02-27 00:00:00
• Before: O'Neill C and Adam AC
• File Number(s): 10752 of 2012

Judgment

Two section 56A appeals against decision of Commissioners refusing colliery extension

1 The two proceedings before the Court are appeals under s 56A of the Land and Environment Court Act 1979 (Court Act) from a determination by two commissioners of this Court of a Class 1 merits appeal, SHCAG Pty Ltd v Minister for Planning and Infrastructure and Boral Cement Limited [2013] NSWLEC 1032. The appeals are brought by Boral Cement Limited (Boral) and the Minister for Planning and Infrastructure (Minister) respectively. An appeal under s 56A is enabled in relation to a question of law alone, to be distinguished from a question of fact.

2 The principles applicable in s 56A appeals are well established and have been discussed in numerous cases. Most recently these were helpfully summarised in Davis v Gosford City Council [2013] NSWLEC 49 by Pepper J at [22].

3 The Commissioners upheld the appeal and refused major project approval under Pt 3A (now repealed) of the Environmental Planning and Assessment Act 1979 (EPA Act) for the continued operation of the Berrima colliery (the project). The project was approved under s 75J by the Planning Assessment Commission (PAC), as the delegate of the Minister on 20 June 2012. The applicant before the Commissioners, SHCAG Pty Ltd (SHCAG), here the First Respondent, made submissions to PAC, and exercised its right of (merits) appeal to the Court under former s 75L. The appeal was a de novo appeal. The Commissioners had all the functions and discretions of the PAC as the Minister's delegate in respect of this major project application under s 39(2) of the Court Act.

4 The major project application before the Commissioners (MP 10_0172) sought in summary:

(a) the continued underground mining of coal using the bord and pillar method within the approved subsidence management plan (SMP) area;

(b) production of up to 460,000 tpa of run of mine (ROM) coal consistently with historic production rates;

(c) continued operation of existing mining facilities and support structures; and

(d) continued transportation of product by road using trucks to current and future markets or to stockpiling areas.

5 The requirement for planning approval under the EPA Act for the expansion of operations to 460,000 tpa maximum capacity and (depending on the scope of any existing use rights) the continued operation of the Berrima colliery arose because of the repeal of s 74 of the Mining Act 1992 (Mining Act) subject to a transition period in cl 8K of the Environmental Planning and Assessment Regulation 2000 (the EPA Regulation) 30 September 2012, according to the parties. As a result this process was the first time this project had been assessed under the EPA Act in addition to the Mining Act.

6 Section 75J, as continued in force by cl 3 of Sch 6A of the EPA Act, provided (and provides) as follows:

75J Giving of approval by Minister to carry out project

(1) If:

(a) the proponent makes an application for the approval of the Minister under this Part to carry out a project, and

(b) the Director-General has given his or her report on the project to the Minister,

the Minister may approve or disapprove of the carrying out of the project.

(2) The Minister, when deciding whether or not to approve the carrying out of a project, is to consider:

(a) the Director-General's report on the project and the reports, advice and recommendations (and the statement relating to compliance with environmental assessment requirements) contained in the report, and

(b) if the proponent is a public authority-any advice provided by the Minister having portfolio responsibility for the proponent, and

(c) any findings or recommendations of the Planning Assessment Commission following a review in respect of the project.

(3) In deciding whether or not to approve the carrying out of a project, the Minister may (but is not required to) take into account the provisions of any environmental planning instrument that would not (because of section 75R) apply to the project if approved. However, the regulations may preclude approval for the carrying out of a class of project (other than a critical infrastructure project) that such an instrument would otherwise prohibit.

(4) A project may be approved under this Part with such modifications of the project or on such conditions as the Minister may determine.

(5) The conditions of approval for the carrying out of a project may require the proponent to comply with any obligations in a statement of commitments made by the proponent (including by entering into a planning agreement referred to in section 93F).

Proceedings before Commissioners

7 Before the Commissioners, there was detailed affidavit evidence provided by seven qualified scientific experts, and three joint reports. The applicant SHCAG's experts were Mr John Lee (groundwater), Dr Remko Leijs (stygofauna and groundwater dependent ecosystems), and Dr Ian Campbell (water quality and stream health). The Appellants' experts included an expert ecologist (Dr David Robertson), Mr Hugh Middlemis (groundwater and stygofauna), Mr Paul Anink (stygofauna and groundwater dependent ecosystems and stream health) and Dr Steve Perrens (water quality).

8 The case began with a site view at the Berrima colliery and Medway village on 4 February 2013. Statements of resident objectors were taken. The hearing resumed with oral opening addresses in Sydney the next day.

9 The groundwater experts Messrs Lee and Middlemis gave concurrent evidence over two days, commencing on 5 February 2013. The stygofauna experts Messrs Leijs, Middlemis and Anink gave concurrent evidence on 6 February 2013. The water quality experts Messrs Campbell and Perrens gave concurrent evidence on 7 February 2013, and the stream health experts Messrs Campbell and Anink gave concurrent evidence on the same day.

10 There were detailed written (opening and closing) submissions, and oral submissions.

Evidence in this appeal

11 A bundle of documents was tendered by the Appellants which included much of the material in evidence before the Commissioners (exhibit A). The Environmental Assessment (EA) was also tendered (exhibit B). The Neutral or Beneficial Effect on Water Quality Assessment Guideline 2011 by the Sydney Water Catchment Authority (exhibit C) and the major project application (exhibit D) were also tendered.

Boral/Minister's grounds of appeal

12 The grounds of appeal are summarised below:

(1) Ground 1 denial of procedural fairness in deciding the proceedings on the basis of resident objectors' views as to traffic, noise and dust impacts.

(2) Ground 2 failure to have regard to evidence concerning traffic, noise and dust impacts.

(3) Ground 3 failure to determine issues of groundwater and surface water quality

(4) Ground 4 denial of procedural fairness by not considering submissions and evidence on the proposed conditions of approval.

(5) Ground 5 denial of procedural fairness by failing to consider submissions and evidence on potential groundwater and surface water impacts.

(6) Ground 6 error of law in concluding that categorising the water management plan as an "adaptive management regime" was a necessary precondition to approval.

(7) Ground 7 error of law in finding that there was a lack of data to support assessment of the potential impacts of the project on surface water quality.

(8) Ground 8 error of law in concluding that Boral was required to prove that the project was not harmful to the environment or demonstrate that the water management plan (WMP) could be categorised as an adaptive management regime.

(9) Ground 9 error of law in not considering whether the project was harmful to the environment.

(10) Ground 10 error of law in not properly applying the precautionary principle in deciding whether the project remained harmful to the environment.

(11) Ground 11 error of law in not considering submissions and evidence on the proposed conditions of approval.

(12) Ground 12 error of law in finding that the risk of significant harm due to the project was uncertain.

(13) Ground 13 error of law in failing to provide adequate reasons.

(14) Ground 14 error of law by reviewing decision of PAC for legal error.

13 The Minister adopted grounds of appeal 1 - 14 of Boral and pursued additional grounds 15 and 17. Directions have been made that evidence in one appeal will be evidence in the other. Several of the grounds of appeal are related, as will be discussed further below.

Commissioners' judgment

14 It is necessary to set out or summarise parts of the judgment to understand the parties' submissions. In the opening paragraphs the Commissioners identify the proceedings are a merit appeal under former s 75L of the EPA Act and a hearing de novo.

Issues

4 In summary, the Applicant's contention in the matter is that the proposal is not in accordance with the principles of environmentally sustainable development (ESD) because:

· The impact of the proposal on groundwater levels has not been adequately identified or modelled and consequently, the risk of environmental harm is uncertain and not adequately mitigated;

· The proposal will adversely impact on the health of the Wingecarribee River by discharging pollutants in the water discharged from the mine, which may be harmful to aquatic life, which relies upon the river.

The site and its context

5 The Berrima Colliery (the colliery) is one of, if not the, oldest operating collieries in the state. Coal extraction is carried out using the bord and pillar method. The colliery is located immediately west of the Wingecarribee River, approximately 7km west of Berrima in the town of Medway and 5km west of the Hume Highway, in the Southern Highlands. Delta Mining Pty Ltd operates the colliery on behalf of the Second Respondent, Boral Cement Limited (Boral).

6 The predominant land use over the mining area is rural, where the land has been cleared and farmed. There are patches of native vegetation surrounding the Wingecarribee River.

7 The underground workings of the colliery, by virtue of a very long history of operations, extend over a large area north and west of the pit top.

Site inspection and public submissions

Pars 36 - 40 set out what was viewed on the site inspection and the evidence given by lay objectors concerning the impact of the coal haulage on their amenity, the impact on property values and the need for upgrading infrastructure

Expert evidence

Pars 41 - 51 summarise the expert evidence given on surface and groundwater impacts and river water quality.

Submissions

52 The Second Respondent submits that continued operation of the existing colliery is important for ongoing employment and investment in the region and for its significant role in supplying coal for production of cement at the cement works.

53 The Second Respondent submits that the Court does not have jurisdiction to review the past operation of the colliery.

Findings

54 The whole of the mine is required to be dewatered, including all the historically mined components in addition to the new areas, as access to the proposed areas for mining is through the existing mine. As the Court is required to assess the environmental impacts of continued mining, the dewatering of the aquifer over the whole mine workings and its impacts are relevant.

Impacts of the coal haulage route being located along Medway Road

Pars 55 to 62 describe Medway village, Medway Road, the current and expected use of Medway Road by the colliery, considers the evidence of resident objectors concerning this and concludes that the impacts warrant refusal.

Water Management Plan

Pars 63 to 70 outline the Director-General's Requirements on surface and groundwater, the groundwater study prepared by Australian Groundwater and Environmental Consultants Pty Ltd (AGE report) included in the environmental assessment report and the observations in the Director-General's report concerning the AGE report.

Pars 71 to 80 outline condition 31 imposed by PAC, observations made by PAC in its report concerning surface and groundwater and the need for adequate information to assess the issues of groundwater and river quality associated with the project.

Adaptive management regime

81 The intention of the WMP is to provide an adaptive management regime, under which management actions would be modified in response to the results of the monitoring program. Preston CJ held in Newcastle & Hunter Valley Speleological Society Inc v Upper Hunter Shire Council and Stoneco Pty Limited [2010] NSWLEC 48 (Speleological Society) at [184] that,

'in adaptive management, the goal to be achieved is set, so there is no uncertainty as to the outcome and conditions requiring adaptive management do not lack certainty, but rather they establish a regime which would permit changes, within defined parameters, to the way the outcome is achieved.'

82 It follows that it is necessary for there to be precise limits imposed on the cumulative operations of the colliery. His Honour found that an adaptive management approach might include monitoring of impacts of management or decisions based on agreed indicators, at [164].

83 The experts agree that the current draft of the WMP does not set precise limits on the cumulative operations of the colliery, as there is yet no agreement as to all the indicators against which monitoring would be assessed and where monitoring points should be established and sampled.

84 In our opinion and based on the expert evidence, there is a distinction between the WMP before us, which is in a draft state, as the groundwater model is still being developed and calibrated and the baseline data to establish indicators are still being collected; and an operational WMP which will be subject to continued fine tuning, where management actions will be modified in response to a stable monitoring system. There are data available from previous monitoring of river flows and river conditions from the SCA and for groundwater and there are post 2005 data from the mine. However, data on stygofauna and the SGDE, river health and the delineation of the mixing zone are still sparse and temporally limited. For example, table 40 (Exhibit L, Folio 1365 - 1380) provides detailed Trigger Action Response Plans for a number of attributes of the system, but as yet none for stream health, stygofauna and the SGDE.

Ecologically sustainable development (ESD) and the precautionary principle

87 ESD is development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Telstra Corporation Limited v Hornsby Shire Council (2006) 146 LGERA 10 (Telstra) at [108]). ESD can be achieved through the implementation of a number of principles, including the precautionary principle.

88 Preston CJ held in Telstra at [150], the following, in regard to the precautionary principle and the shifting of the evidentiary burden of proof:

If each of the two conditions precedent or thresholds are satisfied - that is, there is a threat of serious or irreversible environmental damage and there is the requisite degree of scientific uncertainty - the precautionary principle will be activated. At this point, there is a shifting of an evidentiary burden of proof. A decision-maker must assume that the threat of serious or irreversible environmental damage is no longer uncertain but is a reality. The burden of showing that this threat does not in fact exist or is negligible effectively reverts to the proponent of the economic or other development plan, programme or project.

89 We are satisfied that the precautionary principle is activated as the risk of significant environmental harm currently remains uncertain, based on the evidence before us, as the proposal may result in the following:

· The dewatering of the Hawkesbury Sandstone groundwater aquifer, which would change its ecology and may prevent future access to bore water for irrigation purposes; and/or

· an adverse impact on the health of the Wingecarribee River by discharging pollutants in the water discharged from the mine.

90 The burden of proof that the proposal is not harmful falls on the proponent, Boral. The imposition of an adaptive management regime as a way of managing the risks of significant environmental harm is accepted as appropriate (Speleological Society at [185]). As found earlier in the judgment, we are not satisfied that the WMP can be categorised as an adaptive management regime while it is still in a draft state.

Conclusion

91 In our opinion, the impact of the proposed haulage route along Medway Road on the amenity of the residents of Medway is sufficiently detrimental to warrant refusal of the proposal.

92 Having regard to the AGE report, we find that there was a lack of data to support an assessment of the impacts of the proposal on surface water and groundwater in the application and that this left unresolved major and fundamental issues associated with the proposal, that could not be deferred for later resolution via a condition of consent.

93 We are not satisfied that the WMP can be categorised as an adaptive management regime as it is still in a draft state and consequently we find that there is inadequate information with which to determine the major and fundamental issues of groundwater and river water quality associated with this proposal and we are unable to grant an approval.

94 In our opinion, the precautionary principle is activated, as the risk of significant environmental harm remains uncertain and is not mitigated by an adaptive management regime.

95 Given the above findings, it is not necessary to deal with the contentions regarding the conditions of consent.

Failure to accord procedural fairness in relation to traffic, noise and dust - ground 1, in the alternative ground 2

15 Ground 1 states the Court erred in law in that the Appellants were denied procedural fairness particularised as follows:

(a) The Court based its decision to uphold the appeal and refuse approval on the on-site oral and written submissions of the lay resident objectors and their views as to the asserted traffic, noise and dust impact of the haulage of coal through Medway village in circumstances where:

(i) none of these matters were identified as issues in the applicant's Statement of Facts and Contentions (SOFC), nor were they the subject of either respondents' Statement of Facts and Contentions in Reply;

(ii) traffic, noise and dust impacts were not issues in the proceedings and were not a matter of contest between the parties;

(iii) the Court did not identify traffic, noise or dust impact as an issue, whether as an issue on which the case may be decided or in any other sense, at hearing to the Appellants, or to any party;

(iv) the oral and written expert evidence, and the issues in the proceedings (being those in SHCAG's SOFC) concerned potential groundwater, stygofauna and surface water impacts, and not traffic, noise and dust impacts (to any extent whatsoever);

(b) in the above circumstances the Appellants were deprived of an opportunity to address the matter identified for the first time in the Court's judgment as its sole reason (or in the alternative, its principal reason) for decision, namely the impact of the haulage route along Medway Road on the amenity of the residents of Medway.

(c) in the above circumstances the Appellants have been denied their entitlement to have the proceedings determined on the outcome of a trial of the issues before the Court at hearing.

16 Traffic, noise and dust impacts were not identified as issues in contention by the parties' SOFC. I was informed and it is not disputed that expert evidence was not called on these topics by any party. In accordance with usual court practice the residents made oral submissions and handed up material. There was no cross-examination of residents by any party. Notes of the oral submissions and draft conditions of consent proposed by residents were tendered by the Minister. Reference was made to the proposed conditions to manage traffic, noise and dust, during the hearing, the Minister's counsel stating none of these issues were in contention. No party addressed substantively in opening or closing on the issues of traffic, noise or dust impacts. The Commissioners did not indicate at any stage they were treating traffic, noise and dust impacts as contested issues in the proceedings.

17 The parts of the Commissioners' judgment considering these issues are contained in a summary of public submissions at [38] - [40], impacts of coal haulage route being located along Medway Road at [55] - [62] and conclusion, at [61] and [91], that these impacts warranted refusal of the project.

Boral's submissions

18 One of the reasons for refusal given by the Commissioners were impacts from traffic, noise and dust on residents due to truck movement along Medway Road. No issues of traffic, noise and dust impacts were raised by the parties, most relevantly SHCAG's SOFC filed 31 August 2012. SHCAG did not adopt the concerns of the residents. The importance of the SOFC in identifying issues in dispute is recognised in cl 22 and Sch C of the Land and Environment Court Practice Note Class 1, 2 and 3 Miscellaneous Appeals. No expert statement of evidence was tendered by any party on issues of traffic, noise and dust impacts of the mine, in contrast to the detailed evidence on the contested issues of groundwater, stygofauna and water quality/stream health. A party is entitled to conduct its case on the basis that the statement of facts and contentions and replies identify the critical issues or factors on which a court's decision will turn and there is a denial of procedural fairness if a court does not put a party on notice that any additional issues are regarded by the court as matters of importance on which the court's decision may turn: Hussein v Minister for Immigration and Multicultural Affairs [2001] FCA 1777 at [27] - [31] per Branson J.

19 If a court contemplates deciding a case on a different basis to that presented by the parties it must inform them of that intention: Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208 at [78] per Ipp JA (Mason JA concurring). Further if the Court had alerted the Appellants to the possibility that it would decide the appeal on traffic, noise and dust issues, there would have been an opportunity to make submissions on the basis of the evidence before the Court in the EA on these matters (exhibit B: EA at 65-66 (and Table 12.3 in particular) and Appendix "G" at pages 18 and 21, EA at 83 and Appendix "H" at page 49), and an opportunity to seek an adjournment to obtain expert evidence on each of these issues (which had not been the subject of expert evidence as they were not identified as issues in the case by the parties). Boral was denied the opportunity to undertake either course of action by the Court's failure to act fairly in this way and that was a denial of procedural fairness.

20 There was plainly the possibility of a different outcome in the case absent this denial of procedural fairness as there was a possibility of a different outcome on this issue and therefore the case as a whole: Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 at [11] - [12]. Expert evidence could have been called and the residents' issues tested had the Appellants been aware of the Commissioners' view.

Minister's submissions

21 Although a commissioner of the Court on a merits appeal is not bound to determine the proceedings solely by reference to the issues raised by the parties, if the proceedings are to be determined by reference to matters outside the issues raised by the parties, then procedural fairness requires that the parties be put on notice that some additional issue is raised and may be relied on by the Court in determining the proceedings.

22 Firstly, traffic, noise and dust impacts on local residents were not referred to as an issue or reason for refusal in the statements of facts and contentions, extensive written submissions or transcript. Secondly, the present case involves a merits appeal from a project approval decision under the former Pt 3A. Part 3A projects are typically complex and raise a very large number of potential merits issues. In the present case, one need only peruse the Director-General's Report to see the range of potential merits issues raised. They included, in addition to the matters referred to in these submissions, subsidence impacts, alleged inadequacy of community consultation, ecological issues, native title issues and the adequacy of vegetation offsets.

23 It would be unworkable if a respondent were required to put forward its strongest case (submissions and expert evidence) in relation to every single merits issue involved in a particular Pt 3A project against the possibility that project approval might be refused on that basis. That would certainly not have been practically possible in the present case. Fairness dictates that a respondent in such proceedings should be entitled to proceed on the assumption that approval will not be refused by reference to matters beyond those identified by the parties as being in dispute without some notification and opportunity to make submissions on these matters (and an opportunity to put on additional evidence if that is shown to be appropriate).

24 Thirdly, the Minister and Boral were plainly prejudiced by the fact that they did not have any notice or any proper opportunity to address the issue of traffic, dust and noise impacts. If the Court had flagged these issues then submissions could have been made on them. The very brief references given in opening address were not comprehensive (or even put in the form of submissions, rather simply notifying the Court of relevant background). There was a significant amount of material relating to assessment of traffic, dust and noise impacts in evidence to which the Court was not taken (and which were not referred in the Commissioners' judgment). That material revealed that the traffic, dust and noise impacts were within accepted impacts, as assessed by reputable consultants retained by Boral, and as set out in the Director-General's Report, the PAC Report and the Project Approval.

25 A decision may well have been made to seek to recall the resident objectors for cross-examination (it now being apparent that their evidence was relevant to a matter the Court considered potentially to be determinative) or to test their evidence in other ways. For example, the Court proceeded on the basis that the road bypass or rail option was the only option acceptable to local residents (Commissioners' judgment at [62]). However the documents handed up by the resident objectors do not bear that out. One of the slideshow presentation pages states under the heading "Medway Road": "One of two things have to happen: Upgrade the entire Medway Road to AUSTROAD standards or construction of a bypass road around the village of Medway PRIOR TO ANY APPROVAL". There would have been scope for exploration of the extent to which the upgrade that the objectors considered to be necessary differed from the upgrade of Medway Road that Boral had already agreed to perform. Boral and the Minister were not given an opportunity to explore that issue.

26 Further work could have been done to address those issues. For instance, the PAC took the view that traffic issues would be addressed by the requirement that Boral upgrade Medway Road and prepare and implement a Road Transport Protocol (referred to in the Commissioners' judgment at [59]). The Court was not satisfied that the proposed conditions, including the preparation of a Road Transport Protocol, would satisfactorily ameliorate the traffic impacts. However, the Court did not have a Road Transport Protocol before it. Had the parties been aware that the Court considered traffic impacts to be relevant and potentially dispositive, Boral could have prepared such a protocol (possibly with review by the Department) and made submissions on how (and to what extent) it would ameliorate traffic impacts. That may well have resulted in a different outcome than was reached in circumstances where the Court considered the issue in a vacuum.

27 Further expert evidence on noise, traffic and dust impacts on local residents could have been prepared and adduced. Further there was no direct evidence of the cost or feasibility of the two alternative transport options put forward by the Court in its judgment, at [62]. If the Minister and Boral had understood traffic impacts to be an issue, expert evidence could have been prepared on those alternatives which may well have cast doubt on their viability.

SHCAG's submissions

28 The Commissioners considered the evidence of the resident objectors as they are entitled to do in conducting a Class 1 hearing. At no point during both the site hearing and balance of the hearing did Boral or the Minister object to this evidence, nor did either party seek to question any of the objectors. There was clear comment by the Minister in relation to the evidence provided by the objectors on the second day of the hearing to the effect that such matters were considered in the PAC report. Boral had put its case on increased traffic and its impacts in its environmental assessment documents, that material was before the Court, and it was open to the Court to make a finding regarding traffic and its impacts. The matters were referred to by the Minister in the course of the hearing.

29 It is accepted that a failure to afford procedural fairness is an error of law: Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 239. Reference to traffic issues was made in opening by Boral referring to the concerns raised by residents on the view and stated that detailed conditions proposed met these concerns. The Minister also referred to the Minister's concerns and referred to relevant sections of the environmental assessment report in opening. This was referred to in the judgment. On the last day a set of conditions from the resident objectors was tendered. While traffic issues were not in the contentions there was evidence which Boral and the Minister had the opportunity to deal with during the hearing. One of the criticisms made of the Commissioners is that there was a failure to take into account materials that could have been put to them. The Minister for example referred to material in the evidence relevant to this topic. The ARUP Traffic Assessment Report was provided to the Commissioners and in substance is referred to by them in the judgment at [57]. There was no denial of procedural fairness in the context of the hearing. Public participation is encouraged under the EPA Act and that needs to be balanced with the procedural requirements for case preparation.

Failure to accord procedural fairness on traffic noise and dust issues established

30 Appeals under s 56A concern a decision on a question of law. Appeals from commissioners under s 56A must not be overly critical of commissioners' decisions, mindful that commissioners are not lawyers, as found in the many authorities referred to in Davis at [22(c)]. Denial of procedural fairness has been recognised as an error giving rise to a question of law that founds an appeal under s 56A: Castle Constructions at [20], Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65; (2010) 173 LGERA 456 at [39] and Aldi Stores v Newcastle City Council [2010] NSWLEC 227 at [41].

31 The content of procedural fairness in adversarial proceedings including merit appeals requires that notice be given to the parties if the proceedings are to be determined by reference to matters not raised by the parties. This requirement has been expressed, as submitted by the Minister, in the following ways:

(i) "... if the determination is to be made by reference to matters beyond the issues identified or argued by the parties, then procedural fairness requires that the parties be given notice of those additional matters and afforded the opportunity to be heard upon them": Cavasinni at [39]; Aldi at [41].

(ii) "If, however, the proceedings are to be determined by reference to matters outside the issues, then procedural fairness would require that the parties be put on notice that some additional issue is raised": Castle Constructions at [20], citing Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233 at [70] and Shao v Hornsby Shire Council [2001] NSWLEC 254; (2001) 116 LGERA 462.

32 Boral made a similar submission relying on Seltsam at [78] per Ipp JA (Mason JA concurring) where his Honour states that:

...although the basis on which the parties conduct a trial does not bind the judge, if the judge contemplates determining the case on a different basis he or she must inform the parties of this prospect so that they have an opportunity to address any new or changed issues that may arise.

33 Boral also relied on Hussein at [27] - [31] (per Branson J) where her Honour stated at [27] that:

Although the statements [of facts and contentions] did not restrict the material that it was open to the Tribunal to consider, it can be inferred that the applicant understood that the statements identified the critical issues or factors upon which the Tribunal's decision would turn. Unless the applicant was placed on notice, either expressly or implicitly, that additional issues or factors were regarded by the Tribunal as of importance, the applicant might not have regarded it as appropriate to respond to them.

34 The question of whether the failure to accord procedural fairness gives rise to an error on a decision on a question of law was also considered recently in Botany Bay City Council v Pet Carriers International Pty Ltd [2013] NSWLEC 147 at [99] in terms of the legal position before and after the High Court decision in Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390 on the basis that the question was not settled. Preston CJ considered that cases decided before Kostas took a narrower view whereas the High Court in Kostas took a broader view. Referring to Cavasinni and Aldi and extra-judicial writing of Beazley P "The distinction between questions of fact and law: a question without answer?" (2013) Vol 11 No 3 The Judicial Review 279, 291. Preston CJ concluded that a failure to accord procedural fairness in the circumstances before him was amenable to an appeal under s 56A. In Pet Carriers the appeal was based on the decision of a commissioner not to impose a draft condition of development consent which had been agreed by the parties. No failure to afford procedural fairness was found. In his reasoning, Preston CJ stated at [101]:

It may be accepted that, as a general rule, if a Commissioner or Judge hearing a Class 1 appeal is to determine the proceedings by reference to matters beyond the issues identified by the parties, then procedural fairness requires that the parties be given notice of those additional matters and accorded the opportunity to be heard upon them: see Cavasinni Constructions Pty Ltd v Fairfield City Council at [39]. This is because ordinarily, the Court determines the proceedings on the substantive issues joined between the parties: Segal v Waverley Council [2005] NSWCA 310; (2005) 64 NSWLR 177 at [42], [95] and Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233 at [37], [38]. If, however, the Court considers that there are issues additional to those joined between the parties that need to be considered, procedural fairness requires the parties to be notified and given an opportunity to be heard in relation to the additional matters.

35 I accept the submissions of Boral and the Minister for the extensive reasons articulated by them as summarised above, that the Commissioners' consideration of noise, traffic and dust issues raised by lay objectors as warranting a refusal of approval gave rise to a breach of procedural fairness in the circumstances of this case. Noise, traffic and dust issues were not contested issues between the parties and did not appear in the SOFCs (as outlined above at par 16 and 22). I agree with Boral's submission that while statements of facts and contentions, and the replies thereto, do not restrict the material that it was properly open to the Commissioners to consider, a party is entitled to conduct its case on the basis that statements of facts and contentions and replies identify the critical issues or factors on which a decision will turn in the absence of any indication that another issue is relevant to the Commissioners' consideration. There would be a denial of procedural fairness if the Court did not put a party on notice that any additional issues beyond the statement of facts and contentions are regarded by the Court as matters of importance and may be matters on which the decision could turn. That is the thrust of the finding in Hussein by Branson J referred to in par 33.

36 SHCAG submitted that the Court considered the evidence of lay objectors as it was entitled to do and that Boral addressed traffic in the EA and this material was before the Court, as it was. SHCAG also submitted that as reference was made to evidence relevant to traffic issues in the opening by Boral and the Minister and also in closing submissions, these parties had the opportunity to fully address the matter. The Commissioners referred to the AMP Transport Impact Assessment (exhibit N) at [57] and to PAC's conclusions on this topic at [59]. I consider all of that appears correct but this consideration by the Commissioners does not satisfy the requirements of procedural fairness in this case because the parties were not made aware by the Commissioners that approval may be refused on this basis, which Cavasinni, Aldi, Castle Constructions, Seltsam and Pet Carriers suggest is necessary. Nothing was said to the parties during the hearing or before delivering judgment to suggest that this issue was likely to be material to the Commissioners' deliberation. Consequently I accept that the Appellants engaged on matters of traffic noise and dust on a perfunctory basis given their understanding that it had no particular importance in their respective cases.

37 As a rule of thumb parties receiving a judgment should not be surprised by the basis (as opposed to the outcome) on which a decision is reached by a court. Mark Aronson and Matthew Groves, Judicial Review of Administrative Action, 5th ed (2013) Thomson Reuters, state at [8.230]:

Decision-makers in adversarial proceedings are required to advise the parties of...proposed conclusions that are surprising or made by reasoning that could not be easily anticipated.

38 A finding in this appeal that the conduct of these proceedings in relation to traffic, noise and dust was not unfair and was not a denial of procedural fairness would have significant and adverse case management, time and cost consequences for all merits appeals, as the Minister submitted. These include:

(a) a need for proponents to prepare and tender (or have ready for tender) expert evidence on all potential merits issues (for example all those addressed in the Director General's Requirements (DGRs)) regardless of whether they are raised by an applicant objector (or consent authority) in its statement of facts and contentions; and

(b) a need for proponents to exhaustively cross-examine resident objectors and to then adduce expert evidence to respond to their assertions on matters not raised as issues by an applicant objector (or consent authority) in its statement of facts and contentions.

39 Additional practical consequences for hearings are summarised in the Minister's submissions in par 22 - 24, focussing particularly on the consequences for complex projects likely to be the subject of Pt 3 approvals.

40 Where a decision-maker comes to a view after the hearing is concluded that an issue not raised by the parties may be determinative, then the parties should be recalled to alert them to the relevance of the new, from the parties' perspective, issue and provide them with the opportunity to address this. The ways these issues could have been addressed by the Appellants through greater consideration of the evidence of resident objectors, cross-examination of objectors and the calling of expert evidence is identified in the Minister's submissions at par 25 - 27. The Appellants have established all the particulars on this topic in their grounds of appeal identified in par 15.

41 I consider there was a failure to accord procedural fairness to the parties in these circumstances and I consider ground 1 should be upheld.

42 Ground 2 was an alternative to ground 1 and I do not need to consider it in light of my finding on ground 1.

Failure to consider Appellants' cases - grounds 3 - 14 of Boral/Minister

43 In the Commissioners' judgment the issues in the case identified at [4] are those of SHCAG. Expert evidence on groundwater was provided by Mr Middlemis, on behalf of Boral and Mr Lee on behalf of SHCAG. Expert evidence on stygofauna and subsurface groundwater dependent ecosystems (SGDE) was provided by Mr Anink and Mr Middlemis for Boral and Dr Leijs for the Applicant. Expert evidence on river water quality was provided by Mr Anink and Dr Stephen on behalf of Boral and Dr Campbell on behalf of SHCAG.

44 The expert evidence on potential impacts on groundwater and SGDE, stygofauna and river water quality is summarised at [43] - [51]. Under a heading Water Management Plan the planning history of the project before the Department of Planning and PAC is set out at [66] - [72]. The Commissioners state why they do not agree with the Department of Planning's recommendation to approve and PAC's approach in approving the project at [73] - [77] as they considered that approach relied on the preparation of a WMP. They state in [77] that the surface and groundwater issues are major and fundamental issues in regard to the proposal and cannot be left for later resolution through a WMP. Whether the draft WMP proposed to be a requirement under condition 31 is an adaptive management regime is critical to their reasoning process as set out in [78] - [85] and they conclude it is not at [86] and [93]. This is because there is a lack of data about the nature and extent of past impacts from the operation of the mine in relation to groundwater, stygofauna and the riverine ecosystem despite more data being gathered since the approval by PAC, at [79].

45 The Commissioners considered the precautionary principle is activated due to the risk of significant environmental harm currently remaining uncertain at [88] - [89]. The burden of proof that the proposal is not harmful falls on Boral and the imposition of an adaptive management regime could be accepted as a means of managing risk but no such plan had been provided to the Court, at [90]. Consequently the appeal was upheld.

46 The hearing took five days, one day was a view with a substantial part of the remaining hearing time spent on expert evidence related to water impact issues (see above pars 9 and 43). I agree with the Appellants' description of the hearing that before the Commissioners when they delivered their judgment on 27 February 2013 was extensive oral evidence of the respective experts as to groundwater, stygofauna, surface water quality and stream health. Apart from the site view, which was not recorded, the hearing occupied 311 pages of transcript, and around two thirds of the recorded hearing was taken up by the concurrent expert evidence on the issues of groundwater, stygofauna and surface water quality/stream health.

Grounds 3, 5, 12 and 13

47 Boral/Minister submitted in several related grounds of appeal as follows:

3. The Court misconceived its role and function, erred in law and constructively failed to exercise its jurisdiction under the Land and Environment Court Act 1979 and the Environmental Planning and Assessment Act 1979 by failing to determine after trial any of the groundwater and river water quality issues the subject of the contested hearing.

Particulars

a. The Court expressly found and concluded that it would not determine the issues of groundwater and river water quality as:

i. it was not satisfied that the Water Management Plan (WMP) could be categorised as an "adaptive management regime"; and

ii. that consequently there was inadequate information with which to determine those issues;

b. In reasoning as above the Court failed to determine the contested issues in the proceedings.

5. The Court denied the Appellant procedural fairness by failing to consider and evaluate the Appellant's submissions and expert evidence on the contested issues at hearing in the proceedings concerning the potential groundwater and river water quality impacts of the Project.

Particulars

The Court expressly did not engage in this task as it concluded that the WMP was not an "adaptive management regime" and that consequently there was inadequate information with which to determine the issues of groundwater and river water quality.

Ground 12

12. The Court erred in law, in finding that the risk of significant harm due to the Project remained uncertain:

(a) contrary to the evidence;

(b) without considering, evaluating or having any regard to the expert evidence, and in particular to the oral expert evidence given at hearing; and

(c) without providing reasons for rejecting that evidence.

13. The Court erred in law in failing to provide adequate reasons for the decision appealed against, including in the respects particularised below.

Particulars

a. The Court failed to provide adequate reasons, based on an assessment and evaluation of the expert evidence, as to why it concluded that there was a significant risk of significant environmental harm (or uncertainty thereto).

b. The Court failed to provide adequate reasons, based on an assessment and evaluation of the written and oral expert evidence, as to why there was inadequate information with which to determine the issues of groundwater and river water quality.

c. The Court failed to give reasons for rejecting the evidence and the Appellant's submission on a central contested issue between the parties which was whether the groundwater discharge into the Wingecarribee River (as varying from time to time) had any material adverse environmental impact on the Wingecarribee River.

d. The Court failed to give reasons for rejecting the Appellant's submission that there would be no material impact on groundwater drawdown (and aquifer impact) due to the Project as all groundwater experts accepted and agreed that the area and extent of impact would not materially change from that which has already occurred from 85 years of mining at the Berrima Colliery.

e. The Court failed to give reasons for rejecting the expert evidence that the Project would be in compliance with Ecologically Sustainable Development if the conditions agreed between the experts in joint conference were imposed.

f. The Court failed to give reasons, based on an assessment and evaluation of the competing expert evidence in the expert statements of evidence, joint reports and the oral evidence given at hearing, for not concluding that there was a sufficient body of credible evidence to support an approval of the Project by the Court.

g. The Court failed to give reasons for rejecting the submission that the conditions of approval and the WMP, together, could be categorised as an "adaptive management regime", or could otherwise acceptably manage the environmental impacts of the Project.

48 These four grounds can be considered together as although expressed differently they are based on the same issue. Boral and the Minister essentially argue that the Commissioners failed to address their respective cases at all but rather focussed exclusively on the case SHCAG presented in closing submissions in finding that because the draft WMP was not an adaptive management plan that was a basis for refusing development consent. Such an approach was impermissible as it did not adjudicate on the issues put to the Court by all the parties about the project's environmental impact or provide reasons in relation to the Appellants' submission concerning that impact. It was necessary to resolve those issues in order to resolve the key issues in the proceedings.

49 To understand these grounds an overview of the nature of the parties' statements of contentions, the written and oral submissions to the Commissioners and the expert evidence is required. The detailed contentions identified by SHCAG's SOFC were:

(i) The project was inconsistent with ecologically sustainable development (ESD) principles (par 65).

(ii) The project involves risk of environmental harm to groundwater which is uncertain and not adequately mitigated and the project was therefore not in accordance with ESD's precautionary principle ((b), (c)). Numerous areas of foreseeable environmental risk of harm which are uncertain were identified such as cumulative impact on the groundwater ecosystem, project impact on groundwater levels, calculation of groundwater recharge and impact of mining on aquifer damage induced by dewatering. Mitigation measures proposed were insufficient to prevent the likelihood or severity of harm to the groundwater as there were insufficient groundwater monitoring bores and a lack of performance criteria including trigger levels of groundwater drawdown as part of a groundwater management plan (GMP) (d) (par 66).

(iii) The project will impact permanently on surrounding groundwater systems breaching the principle of intergenerational equity (par 67).

(iv) Loss of groundwater was very likely to critically impact local Groundwater Dependent Ecosystems (GDE). Stygofauna residing in groundwater dependent ecosystems would be impacted by the increased drawdown of groundwater and the introduction of foreign elements from seepage of the Wingecarribee River into the aquifer. The project involves risk of foreseeable environmental harm to GDEs in the groundwater which is uncertain and not adequately mitigated in breach of the precautionary principle (par 68, 69).

(v) Surface water pollution of the Wingecarribee River will occur through discharge of various pollutants. The risk of environmental harm to surface water and hence to aquatic and terrestrial life is uncertain and not adequately mitigated and is not in accordance with the precautionary principle (par 70, 71).

50 Boral responded in a detailed SOFC in reply that:

(i) The project was not inconsistent with ESD principles (par 34) responding to SHCAG par 65

(ii) On groundwater impacts, the project's impacts on the quantity of groundwater have been modelled to address scientific uncertainty. While there are some potential risks and associated residual uncertainty, the predicted impacts have not been underestimated so that any impacts will not be significantly greater than predicted. The available data and analysis demonstrates that the current extent of cumulative impacts on groundwater levels due to mining are within 1 km of the mine, predicted dewatering rates are within the measured range over many years, there is no particularly serious risk to groundwater levels and the SHCAG's contention is disproved by the available evidence, the groundwater management plan required by the conditions will include adequate mitigation measures (very lengthy particulars (a) - (y)) (par 35 responding to SHCAG par 66).

(iii) There would be no material loss of groundwater impacting on landowners' groundwater sources (par 36 responding to SHCAG par 67).

(iv) On groundwater biodiversity (par 37 responding to SHCAG par 68, par 38 responding to SHCAG par 69) denies the project will very likely critically impact local GDEs for various particularised reasons ((a) - (h) par 37).

(v) On surface water pollution (par 39 responding to SHCAG par 70), there is adequate and appropriate information to assess the project's impacts on surface water as detailed in particulars (a) - (p) in par 39. Paragraph 40 responding to SHCAG par 71, denies the project involves a risk of environmental harm to surface water which is uncertain and not adequately mitigated, particulars (a) - (h).

51 There was reliance on a WMP or its constituent parts such as a GMP as required by condition 31 at 35(d) particular (w) concerning groundwater responding to par 66 of SHCAG, par 36(b) responding to par 67 of SHCAG concerning impact on landowners' groundwater resources, par 37(h) responding to SHCAG par 68 concerning groundwater biodiversity and par 38 responding to par 69 of SHCAG. Paragraph 38 states:

In relation to paragraph 69, the Second Respondent says that the GMP requirements imposed under condition 31 of the Project approval adequately address the requirements of ESD, and its precautionary principle, in relation to possible impact on GDEs. In the alternative, the Second Respondent says that the precautionary principle is not triggered by the Project as there is no threat of serious or irreversible harm to GDEs, nor is there any uncertainty in relation to the nature and scope of the threat of harm to GDEs due to the continued operation of the mine.

52 A WMP is also referred to in par 40(b), (d) (the Surface Water Management Plan (SWMP)) and (g) responding to SHCAG's par 71 concerning surface water pollution. The Minister's SOFC adopted Boral's contentions and also submitted that condition 31 was adequate to meet the concerns of SHCAG in its SOFC par 66 and 67, and conditions 29, 30 and 31 met concerns in SHCAG's par 70 and 71.

53 The Appellants created a document in tabular form in this appeal headed "The Commissioners' findings on the Second Respondent's submissions and the Minister's submissions and statement of facts and contentions in reply" (Commissioners' findings document) in which nine issues raised in closing submissions are identified as follows:

(1) There is a sufficient body of credible information before the Court enabling the assessment of the impacts of the project (Boral's closing submissions par 14, transcript page 275 lines 5 -15; Minister's closing submissions par 30, transcript page 301 lines 30 - 45, page 303 line 42 to page 305 line 3).

(2) Refusal of this project application in all the circumstances would be a quite disproportionate response to environmental impacts that are addressed in the material before the Court and of which the project approval conditions require investigation, monitoring and management (Boral's closing submissions par 15, transcript, page 290 lines 46-50, 291 lines 1- 9; 298 at lines 15 -20, page 274 lines 34 -50).

(3) The impacts of the continued mining, when considered alongside the existing land features and the significant legacy impacts of past mining carried out over 85 years by multiple operators, are not themselves significant and are best and properly manageable by legally enforceable conditions and the Applicant's chief environmental concern, namely the flow of natural groundwater through the mine into the Wingecarribee River, would occur absent further mining (Boral's closing submissions, par 34(a) and (b), transcript page 270 lines 30-46, page 271 lines 25-39, page 278 lines 33-40, page 287 lines 23-50, page 288 lines 1-4, page 289 lines 6-50, page 290 line 8, and page 296 lines 41-47; Minister's closing submissions par 21 - 36, transcript page 300 lines 33 - 45).

(4) Maximum or very near maximum groundwater drawdown has occurred already, with hydrological equilibrium having been reached and the area and impact of this drawdown unlikely to change with continued mining (Boral's closing submissions, par 34(c), transcript page 275 at lines 45-50 to 276 line 34; Minister's closing submissions par 47, 41 - 45, 52 - 54, transcript page 303 lines 42 - 50).

(5) The downstream concentrations of various minerals in the groundwater (Mn, Ni etc.) are within the relevant ANZECC guideline trigger value (Boral's closing submissions, par 34(e), transcript page 278 at lines 41-50, page 283 lines 25-44; Minister's closing submissions par 56 - 60).

(6) The Applicant's stygofauna expert Dr Remko Leys has confirmed that the project, conditioned with the stygofauna monitoring condition agreed in the Joint Report, would be in line with ESD and that additional mining will be a low risk of impact on stygofauna biodiversity (Boral's closing submissions par 34(h), transcript page 280, lines 21-35; Minister's closing submissions par 55 - 57, transcript page 304 lines 33 - 38).

(7) There is no adverse water quality impact at the site boundary (the mining lease boundary) leading to compliance with the Nor Be guidelines (Boral's closing submissions, par. 34(j), transcript page 282 lines 8-50, page 283 lines 1-24; Minister's closing submissions par 61 - 62, transcript page 303 lines 22 - 33).

(8) There is no likely causal link on the evidence between the future discharge from the mine and the levels of minerals, such as Mn and Ni, in the downstream Wingecarribee River. Ultimately, there was no causal link argued for by Dr Campbell, who now attributes the downstream levels (which are acceptable in any event) to the agitation of minerals in the sediment in the river itself (which were placed there by a variety of sources perhaps over many years or decades) at times of high flow, not to the actual real time discharge from the mine (Boral's closing submissions par 34(k), transcript page 283 lines 25-50 to page 285 lines 1-31; Minister's closing submissions par 59).

(9) Ecotoxicological and stream health analysis reveals that there is good recovery of stream health downstream of the adit discharge, with almost identical SIGNAL scores upstream and downstream, including close to the adit within the mixing zone as close as 250m from the discharge (Boral's closing submissions par 34(l); transcript page 285 line 50 to 288 lines 1-19; Minister's closing submissions par 60, transcript page 304 line 43 to page 305 line 3).

54 Seven of these submissions (1, 4, 5, 6, 7, 8, 9) are on topics relating to surface and groundwater impacts and expert evidence in relation to these. Submission 2 is that refusal of the project in all the circumstances was a disproportionate response to the environmental impacts. Submission 3 is that the impacts of continued mining considered alongside existing land features and the significant legacy impacts of past mining carried out over 85 years by multiple operators are not significant. Reference to each issue in the statements of facts and contentions, written submissions, transcript and expert evidence is identified. The final column records that none of the issues (and therefore no findings and reasoning) are referred to in the judgment. In relation to topic 9 concerning ecotoxicological and stream health analysis the document states that:

... there is no specific finding, rather there is a general and incomplete recording at [49] the third bullet point of which records a positive finding based on Anink and Perrens. The last bullet point is not based on any evidence. There is no reasoning and there are no conclusions in the judgment as to why despite this evidence, the Court found at [89] that the proposal may result in significant environmental harm that includes an adverse impact on the Wingecarribee River by discharging pollutants in the water discharged from the mine.

55 I was taken to the multiple references to these topics in the written and oral submissions of Boral and the Minister and the evidence of the groundwater, stygofauna and surface water experts where relevant to these topics. The SHCAG did not challenge the contents of the Commissioners' findings document and it argued the subject matter is irrelevant to this appeal. I accept the contents of this document as accurately reflecting the conduct of the matter during the first instance hearing to the extent the document deals with that.

Boral's/Minister's submissions

56 The Commissioners' task was to decide whether the major projects approval should be granted under former s 75J of the EPA Act on the basis of all the material which was in evidence before them, and engage with parties' submissions. The Commissioners did not do this. An essential issue was the extent to which the Commissioners could be satisfied that the expected impacts of the project on groundwater, stygofauna and surface water were either acceptable or at least understood with a sufficient level of certainty so as to enable the project to proceed subject to conditions (or, I add, be refused due to likely unacceptable environmental impacts).

57 The Commissioners found (at [89]) that the proposal may result in significant environmental harm being the dewatering of the Hawkesbury Sandstone groundwater aquifer and/or an adverse impact on the health of the Wingecarribee River by discharging pollutants in the water discharged from the mine. However, at no point did the Commissioners explain based on the expert evidence given in the proceedings (whether the statements of evidence, the joint reports or the oral evidence given at hearing) how they arrived at the view expressed at [89] that the proposal may result in significant environmental harm. Indeed, the Commissioners, four paragraphs later at [93], simultaneously found that they could not determine these groundwater and river water quality issues, as the WMP was not an adaptive management regime.

58 This failure to consider, determine and express reasons one way or another on contested issues was an error of law because a decision in favour of the Appellants on the contested issues to the effect that there was no significant impact at all would have resulted in a different outcome in the case (assuming the Appellants' success on either ground of appeal 1 or 2 dealing with the non-contested traffic, noise and dust impacts, which was the only other ground of refusal: [91] - [95]: see Segal at [43] - [44] and [93] - [94] per Tobias JA).

59 The Appellants' SOFC in reply contended that the project approval should be granted subject to the project approval conditions. This contention was not conditioned on or subject to the existence and adequacy of any groundwater management plan, surface water management plan or WMP draft or otherwise. The Appellants' case was never that no approval could or should be granted absent an adequate WMP but was multi-layered and properly took the Court to the proper application of the precautionary principle. The principal contentions of the Appellants' case were that material environmental impact, serious or irreversible harm, was denied, that even if this existed it had been properly assessed, and was in any event not unacceptably uncertain in scope. The parties did not proceed on the basis that the project had "major and significant" impacts such that the only issue was whether the WMP tendered by Boral was an "adaptive management regime". In the event these contentions were unsuccessful, or in parallel and the alternative it was contended that adequate mitigation could be implemented.

60 The Appellants never contended that the draft WMP was a substitute for the resolution by the Commissioners of the actual issues in the case as to the materiality and significance (seriousness or irreversibility) of any risk of environmental impact to groundwater, stygofauna or surface water and as to how any impact that was found to exist in the evidence could be most appropriately conditioned or managed consistently with ESD.

61 Assuming that SHCAG submitted the project was required to be refused as the draft WMP was inadequate, the Court was not at liberty to select this submission without deciding the actual issues between the parties that if decided in the Appellants' favour would have changed the result. These issues are identified in the Commissioners' finding document.

62 In reasoning in this way, the Court expressly closed its mind to the body of material in the oral and written expert evidence and apparently failed to appreciate that it was that body of evidence before it, given at hearing, on which it was required to determine the contested issues: see [92] - [93].

63 A failure to consider submissions or evidence and to make findings on contested matters of fact may amount to a denial of procedural fairness: see Castle Constructions Pty Ltd. Where expert evidence is in conflict, the court or tribunal is obliged to subject the evidence of both expert witnesses to rational analysis: Nominal Defendant v Saleh [2011] NSWCA 16 at [307]-[308], applying Wiki v Atlantis Relocations (NSW) Pty Ltd [2004] NSWCA 16; (2004) 60 NSWLR 127.

64 The expert evidence in the joint reports prepared prior to trial (at exhibit EKW-1 Tabs 19, 20 and 21), at judgment [43]-[51] is recorded (albeit incompletely and incorrectly). In the judgment no record of any consideration of the oral evidence given by the experts at hearing appears. A reasonable inference available on a fair reading of the judgment is that the consideration of the expert evidence stopped at the pre-trial stage, and that the Commissioners did not consider and grapple with the oral evidence. The Court was obliged to consider the oral expert evidence given over three full hearing days at trial and determine the contested issues to which that evidence went: Mifsud v Campbell (1991) 21 NSWLR 725; Segal at [69], [77] and [90] and [93]-[94]. This included giving reasons for decisions on the contested issues per Segal at [66].

65 The Commissioners provided a partial overview of the expert evidence (judgment at [43]-[51]) but did not set out or address the parties' submissions or make any determination as to which expert views should be preferred where the views of the experts were in conflict. Although there was a measure of agreement between the experts in relation to groundwater and stygofauna, the parties put competing submissions about exactly what had been agreed and the implications of agreement. In relation to surface water, the relevant experts clearly had different views on the critical issue of whether there was a biological or stream health impact beyond 250m from the adit discharge point (Mr Anink opined that there was not). The parties were clearly at issue as to which expert's opinion was to be preferred. The Commissioners never determined these contested issues.

66 In reply, there is no indication from the Commissioners about why they dealt only with the SHCAG issue of the WMP and no issue related to impacts identified by Boral or the Minister. Boral denied any serious groundwater impact existed, denied the project was very likely to critically impact stygofauna or have material impact on stygofauna, denied the existence of a significant risk of harm due to surface water discharges or to surface water quality. These were issues in the case which the Commissioners did not address. If they had come to a conclusion that there was no serious risk in these various topics then 35(d) of SHCAG's case would have been irrelevant. The WMP would have been assessed in a different context of little risk to the environment if Boral's case was accepted by the Commissioners.

67 The Minister submitted that as a matter of logic, a decision-maker can only assess whether an adaptive management regime is adequate by reference to findings on particular impacts (including the risk of them occurring and their extent), as identified Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133; (2006) 146 LGERA 10 at [161]:

The type and level of precautionary measures that will be appropriate will depend on the degree of seriousness and irreversibility of the threat and the degree of uncertainty.

68 SHCAG submitted incorrectly that this step can be bypassed by considering whether something is an "adaptive management regime" in the abstract. Identification of the environmental impacts of the project, including making findings on the level of risk of particular surface water and groundwater impacts occurring, and the extent of the particular impacts if they occurred, was an "essential issue" in the proceedings that had to be addressed by reference to the detailed expert evidence and submissions, and was not addressed.

SHCAG's submissions

69 Various grounds of appeal do not raise any errors of law but raise an issue of the attribution of weight to an issue or evidence by the Commissioners, which is not an error of law. Further the submissions mischaracterise the manner in which the Court approached the task when the judgment is read as a whole. The Commissioners considered the evidence of the experts in relation to the impacts the project would have on the relevant water resources. The Court had lengthy written and oral evidence and was satisfied on all of the evidence that there was inadequate material to be satisfied that the impacts of the project on water resources would not be harmful such that it could approve the project. This finding was open to the Court in the exercise of its discretion. There was no failure to exercise jurisdiction.

70 The focus of the Commissioners on the WMP reflected SHCAG's case as contained in final submissions. SHCAG in closing submissions at par 35B submitted that project should be refused as it is an unacceptable approach to approve now and assess later. The PAC report was referred to. Dissatisfaction with the draft WMP process alone was submitted to be sufficient for refusal. The inaccuracies in the draft WMP were admitted by Mr Middlemis in cross-examination who identified that a factor of two inaccuracy was considered normal, and that first generation models are necessarily inaccurate, at par 35I. The final position of SHCAG was that in the absence of a WMP the project should be refused and that is the approach the Commissioners adopted. SHCAG's case was that if there was no WMP the Commissioners did not need to be satisfied about the full extent of impacts on the environment because Boral and the Minister submitted these would be managed under a WMP.

71 Boral did rely on a WMP as a response to the lack of data on water impacts as a basis for granting approval. Significant hearing time was spent on debating with the experts in their respective fields whether the WMP was adequate or was still a draft (not related simply to it being called a draft). The Court accepted SHCAG's submission that there was no WMP. It was unnecessary for the Court to consider the many issues raised by Boral given the threshold significance of the WMP.

72 The Commissioners were well aware of their task in a hearing de novo. The existing mine has been operating for 80 years and discharges 3ML of contaminated water into the Wingecarribee River every day. There was no assessment of the impact of this discharge downstream in the river. The Commissioners found that they must consider the whole of the mining operations, not just the proposed expansion, as the only way to get to new areas was through areas that were otherwise flooded because the coalmine had pierced the aquifer at [54]. The coalmine was full of water hence there are groundwater quality problems. The Commissioners held that they must consider the environmental impacts of continued mining including the dewatering of the aquifer over the whole mine workings and its impacts. SHCAG raised the issue of the drawdown of groundwater and whether mining had and would continue to drain groundwater.

73 Reasoning in the judgment from [80] on concerning an adaptive management scheme reflects the case found on the evidence as assessed by the Commissioners. There is no allegation of no evidence or that the Commissioners were illogical and unreasonable. Their finding that the WMP cannot be categorised as an adaptive management regime is a finding of fact. The Commissioners undertake a logical process in their conclusion. They refer to the AGE report and the lack of data.

74 The EA document identifies volumes of water being discharged as 3ML per day, a large percentage of the flow when some days the overall flow is 4 ML per day up to thousands of megalitres.

75 The Commissioners accurately summarise the evidence of the various experts in relation to groundwater, stygofauna and surface water. Much of that expert evidence was directed to the adequacy of the WMP. The joint report of the groundwater experts (Middlemis, Lee) (tab 20) recommends that the Berrima colliery water management plan December 2012 must be released to all parties (the first iteration of the WMP) as it provides objective information on key areas in several places, such as topic 1.4 foreseeable environmental risks. Topic 4.2 WMP preparation and implementation recommends the release of the WMP to all parties. The hearing commenced on 4 February 2013. The version before the Court was dated 11 January 2013, updated on 11 February 2013. The joint report on groundwater impacts referred to a WMP as a means of dealing with several issues, for example at topic 2.2, poor understanding of current cumulative impacts baseline dataset, 2.3 extent of drawdown in the Hawkesbury sandstone, topic 2.5 groundwater model is highly recommended the experts agree a ground water model is required and should be released to all the parties.

76 The stygofauna experts' joint report (tab 21) stated that many of the concerns have been addressed by new data contained in the January 2013 WMP. Some issues were still not resolved and further hydrogeological monitoring and modelling was required and there was lack of information to establish cumulative impacts to date. Paragraph 6 stated sampling outlined should be undertaken to meet the compliance measures of condition of approval Sch 3 cl 31 for the GMP.

77 Condition 31 was fundamental to the contentions of Boral and the Minister at the hearing. Boral and the Minister relied on this condition extensively in their submissions. The WMP as an adequate mitigation measure was referred to in Boral's SOFC in numerous locations (identified above at par 51 - 52). Boral's case was that they would try and demonstrate the impacts are acceptable but in any event rely on condition 31. If the WMP is inadequate that is the first step in their approach. Boral submitted to the Commissioners that there was an appropriate adaptive management tool to address issues concerning the uncertainty of potential impact of the project approval conditions. The Minister submitted similarly. The Commissioners were addressing that approach.

78 PAC identified concerns with lack of data about impacts from mining activities as set out in [72] of the Commissioners' judgment and decided despite these concerns to grant approval. The Commissioners decided otherwise as they were entitled to do. The experts agreed there were unknown risks and baseline data was lacking. The Court was not satisfied the January version of the WMP appropriately managed the environmental risks.

79 There was a demonstrated risk of environmental harm in the evidence concerning the extent of the mixing zone given the wide margin of error in the modelling done.

80 There is no challenge to the finding of fact in [84] of the judgment that the WMP is in a draft state. It was open to the Court not to be satisfied with the WMP as submitted by SHCAG.

81 Segal at [93] identifies a judge's duty is to provide reasons on the essential ground or grounds on which the decision rests, not on all the submissions that were made. There was no obligation to address the nine issues identified in the Commissioners' findings document in the judgment. The Court accepted SHCAG's approach that if the WMP was not adequate they should refuse the approval. The finding that the WMP was inadequate is a finding of fact. In Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd (1983) 53 LGRA 325, referred to in Segal, the Court of Appeal stated that there is no requirement to deal with all the arguments made by the parties. In Carstens v Pittwater Council [1999] NSWLEC 249; (1999) 111 LGERA 1 Lloyd J at [66] - [68] referred to Brimbella Pty Ltd v Mosman Municipal Council (19985) 79 LGERA 367 in identifying the need to consider whether in a judgment commissioners provided adequate reasons in the knowledge they are not a judge.

82 In terms of the specific grounds identified in the summons, the Commissioners' findings document handed up by the Appellants is not relevant to the inquiry the Court must make. It is not an error of law not to have addressed all the submissions made where those are not relevant. In order to succeed the Appellants must show error of law in relation to the ground on which the Commissioners correctly determined the issues between the parties. There was only one substantive issue on which the Court had to be satisfied. That other grounds raised were not dealt with is not an error of law.

83 The Appellants' real complaint is not with the content of the judgment but that the Court has accepted the submissions made by SHCAG. The Court was entitled to accept that submission and therefore not to go into the full detail of the other parties' submissions. The attribution of weight to the evidence is not a denial of procedural fairness.

84 No error of law is demonstrated in grounds 3 and 5. There was no need to consider these in light of the permissible approach taken to the WMP. The complaint is that the Commissioners failed to deal with issues the Appellants would have liked them to deal with but which they were not bound to deal with. Ground 12 is part of ground 3. Ground 13 is not established.

Failure to consider Appellants' cases established

85 The number of grounds of appeal in this part of the Appellants' cases (fourteen) is unnecessary given that several grounds of appeal overlap. One broad concern underpins them. The Appellants' principal complaint is a failure to consider their cases by the Commissioners thereby not exercising jurisdiction, in breach of the Court's duty to make findings and to give reasons for those findings giving rise to a denial of procedural fairness. A failure to refer to an essential issue at all in a judgment has been described as a failure to exercise jurisdiction by a Court per Ballantyne v WorkCover Authority of NSW [2007] NSWCA 23 at [127]; State Super SAS Trustee Corporation v Cornes [2013] NSWCA 257 at [10] - [12]; Goodwin v Commissioner of Police [2012] NSWCA 379 at [18] - [25]. There are two aspects to the complaint, being a failure to refer to and consider the Appellants' issues and, separately but linked, a failure to analyse expert evidence, particularly oral expert evidence given at the hearing, in relation to all relevant issues before concluding that the risk of significant harm resulting from the project was uncertain. This complaint is identified most squarely in grounds 3(b), 4(a) and (b), 5, 11 (the failure to consider draft conditions of consent), 12(b) and (c) (failure to consider expert evidence). Ground 13 is a catch all ground alleging a failure to give adequate reasons in relation to numerous issues already identified in other grounds in the context of a failure to consider various issues and evidence. Not very helpfully these grounds of appeal restate the same issue in several different ways, not always in a manner permissible in a s 56A appeal.

86 Some of the grounds of appeal focus on the Commissioners' findings that the WMP was not an adaptive management regime on the basis this was an error of law variously described. As SHCAG submitted, that is a finding of fact and is a complaint about the attribution of weight to evidence by the Commissioners as part of their decision-making function in a merits review. To the extent certain grounds of appeal require that I second guess the merits of the Commissioners' conclusions about the inadequacies of the WMP, it is not open to me to do so in this s 56A appeal. For example, grounds 3(a), 6, and 12(a) squarely raise merit issues. As SHCAG submitted, no challenge can be raised about attribution of weight by the Commissioners to evidence or to an issue, with the caveat that a relevant issue must be identified.

87 The scope of the obligation of commissioners of the Court to make findings and give reasons for these findings in Class 1 merit appeals was considered by the Court of Appeal in Segal by Tobias JA (Beazley and Basten JJA agreeing). The parties rely on different passages from that judgment as supportive of their case. At [43] Tobias JA held that:

43 Accordingly, in my opinion, it does not necessarily follow that a Commissioner or judge of the Land and Environment Court is required to give reasons only with respect to his or her subjective thought processes in coming to their particular decision. Notwithstanding those thought processes, their duty to give reasons would be contravened if they failed to address an issue joined between the parties which, if decided in a particular way, would result in a different decision to that to which the Commissioner or judge has arrived. Thus, if issues A, B and C be joined between the parties and the Commissioner or judge only addresses issues A and B, he or she will have erred in law by failing to address issue C if the resolution of that issue in favour of one or other of the parties would have resulted in a different outcome to that arrived at upon a determination of issues A and B. On the other hand, if issue C would have had no bearing upon the outcome arrived at in accordance with the determination of issues A and B, then it need not be addressed.

88 Tobias JA went on to emphasise that commissioners are bound to address the contested issues that are joined between the parties in [44]. At [93] his Honour held:

93 In my opinion, it follows that the statements in the authorities to which I have referred above to the effect that the judge must enter into the issues canvassed before him or her and explain why he or she prefers one case over the other (Flannery), or that for a judge to ignore evidence critical to an issue in a case contrary to an assertion of fact made by one party may promote a sense of grievance in the adversary (Mifsud), or that it is the duty of a judge to expose his or her reasons for his or her decision where a point is vital and where its resolution is crucial to the contest between the parties (Ligon), need to be read in context and are not, in my opinion, authority for the proposition that every argument or issue advanced by a party in support of the principal issues must be considered by the judge and reasons given for accepting or rejecting it. A judge's duty to give reasons is, in my opinion, confined to the essential ground or grounds upon which the decision rests (Soulemezis) and does not include a requirement to deal with a submission or argument that is otherwise unnecessary to the decision arrived at provided that, in respect of that decision, the judge's reasoning process is articulated and relevant findings made (Tatmar).

89 The essential issue which flows from Segal and the parties' arguments in this appeal is whether the exercise of jurisdiction to determine the merits issues before the Court could be met by the Commissioners considering only one issue, the adequacy of the WMP as an adaptive management regime as determinative (meaning the appeal should be upheld) as they did at [63] - [86]. While the Commissioners considered separately the application of ESD principles at [87] - [90], their conclusion at [90] that the onus of proof they considered Boral bore was not satisfied because the WMP could not be categorised as an adaptive management regime turned on their earlier finding on that critical issue.

90 The parties before me were in furious agreement that the case as decided by the Commissioners reflected the closing case of SHCAG. Considering the Commissioners' judgment in light of the principal complaint of the Appellants, the two issues identified at [4] in the judgment are a broad summary of issues identified by SHCAG. The first reference to Boral's submissions at [52] is that the continued operation of the existing colliery is important for ongoing employment and investment in the region. That issue is not referred to again in the judgment. Further, at [53] the submission of Boral that the Court did not have jurisdiction to review the past operation of the colliery is identified. The Commissioners provide their finding on that topic at [54]. There is no reference to any other contention or submissions of Boral or any reference to contentions or submissions of the Minister in the judgment. The summaries of the expert evidence in the judgment are, I infer, relatively brief given the extensive written and oral expert evidence before the Commissioners. The discussion of the experts' evidence is not analysed in the context of the issues identified by Boral and the Minister. There is no explicit reference to oral evidence. According to the Appellants no reference is made in the judgment to the oral evidence given during the hearing before the Commissioners. A key part of the Commissioners' reasoning is their approach to the WMP. It is unclear from the judgment how that came to be central to the Commissioners' determination but as already agreed by the parties this was the essential submission of SHCAG in closing.

91 The parties' respective SOFCs, the written and oral evidence of the experts, and opening and closing submissions in the Commissioners' finding document were referred to at length during the hearing. I have summarised the SOFCs above in par 49 - 52. The numerous water related issues were complex as reflected in the SOFC of SHCAG and SOFCs in reply of Boral and the Minister (to a lesser extent), which had extensive and detailed particulars and were the subject of lengthy written and oral submissions. It is clear from the Appellants' SOFCs in reply and written submissions to the Commissioners particularly in closing that the issue that the project could be refused if the WMP was inadequate was not accepted by the Appellants as determinative in the sense that a number of issues were identified which went to the extent of the risk of environmental harm and uncertainty about that. Boral submitted that the issues it raised were the materiality and significance of any risk of environmental impact to groundwater, stygofauna or surface water, and as to how any impact that was found to exist on the evidence could most appropriately be conditioned or managed consistently with ESD. The various submissions put to the Commissioners in closing by Boral are outlined in par 23 of the reply submissions in this appeal and are identified in the Commissioners' findings document. The Minister made similar submissions, as reflected also in the Commissioners' findings document. I accept the submissions of the Appellants that issues central to their respective if similar cases were not considered by the Commissioners.

92 I am mindful of SHCAG's submissions (above at par 75 - 77) and accept that Boral and the Minister did rely on the implementation of a WMP as required by condition 31 as part of their respective cases, as SHCAG emphasised in its submissions. The numerous references to the WMP or its constituent parts such as a GMP and a SWMP in the SOFCs in reply are outlined above at par 51 - 52. References in the joint report of the groundwater and stygofauna experts to the WMP as a necessary part of the framework for managing impacts are also identified in SHCAG's submissions and I was also directed to these during the hearing. Reliance on the WMP was not however the only part of the Appellants' case put before the Commissioners, as reflected in the Commissioners' findings document and the numerous issues in the SOFCs in reply and the parties' extensive written submissions which do not refer to the WMP in all contexts by any means. I accept that Boral submitted the terms of condition 31 proposed to the Court provided for the Director-General's satisfaction of approval of the WMP and it was never intended as other than a draft before the Commissioners. That is reflected in the wording of proposed condition 31.

93 As found in Segal at [43] - [44] there is an obligation on the Commissioners to make findings on the issues identified by the parties where these are material to the Court's consideration. In a merits appeal of considerable complexity, such as this matter, commissioners generally undertake a multifaceted evaluation of a proposal guided by the parties' SOFC. In the absence of agreement from the Appellants that the WMP issue was determinative as SHCAG submitted in closing, the Commissioners had a duty to identify and make findings about the issues which potentially impacted on their conclusion that it was. The Appellants' submission that no findings or reasoning on the nine topics identified in the Commissioners' findings document was not in dispute. These issues required the Commissioners to determine the level of risk of substantial environmental harm as the necessary context in which the proposed conditions of approval including the WMP in condition 31 were to be addressed. There is a failure in the judgment to identify and address these issues as a result of the focus solely on the adequacy of the WMP.

94 In the absence of agreement from the parties that one or more merit issues were determinative, the Commissioners needed to consider whether they must address other issues raised before them. If a decision-maker considers that a particular approach to the merits advocated by one party is the appropriate and determinative approach, they must consider and be seen to consider in the judgment whether the issues identified by another party impact on that conclusion. In this case that necessary process of reasoning did not occur in the judgment. Generally in complex merits assessments a commissioner is likely to be evaluating and balancing a number of issues in determining what the environmental and other impacts are. I consider there was a failure to provide findings and reasoning on material issues identified by the parties, a requirement identified in Segal at [43]. Given this finding the observations in [93] of Segal citing Tatmar are not as applicable to the circumstances of this case.

95 It was not generally disputed (but for one finding the subject of appeal ground 7) that the summary of the evidence of various experts on groundwater, stygofauna and surface water was accurate, as SHCAG submitted. The Appellants' case is that more needed to be done in relation to the expert evidence in order to carry out the necessary evaluative function required of the Commissioners. The two Court of Appeal cases cited by the Appellants above at par 63 identify that a court has a duty to analyse expert evidence critical to a party's case, particularly Wiki at [58] - [59] citing Mifsud. Failure to do so is an error in the fact finding process, giving rise to a denial of procedural fairness, as found in Saleh per McColl JA (Beazley and Giles JJA concurring) at [307] - [310], applying Wiki.

96 In relation to the consideration of expert evidence before the Commissioners, I agree with the submissions of the Appellants (above at par 57) that there is a failure to identify in the judgment the basis in the evidence for the conclusion at [89] of significant environmental harm because of the dewatering of the Hawkesbury sandstone groundwater aquifer, which would change its ecology and may prevent future access to bore water for irrigation purposes and/or have an adverse impact on the health of the Wingecarribee River by discharging pollutants in the water discharged from the mine. There was also a failure by the Commissioners to expressly state why they preferred one expert's evidence over another and to analyse the extent of any disagreement in terms of the issues as framed by the parties. As identified in Saleh at [307], where expert evidence is material to the issues identified by the parties so that evaluation of that evidence may be probative of a party's case, a failure to undertake such an evaluation is recognised as a failure in the fact-finding process.

97 I am not intending to express any view on the merit issues the subject of the expert evidence but can illustrate an absence of consideration of expert evidence in the judgment based on the submissions in this appeal. SHCAG's counsel made submissions in this s 56A appeal in relation to the scale of dewatering of the mine. This topic is referred to in the judgment at [54] as a conclusion that dewatering of the mine would be considered as part of the assessment by the Court. Boral responded in reply before me that it was a fact that the dewatering of the whole mine was required to allow the continuation of mining and that this is what the Commissioners were saying at [54]. However, Boral submitted this ignores the uncontradicted evidence of Dr Perrens and evidence of Mr Lee and the Appellants' submission that even without mining the historical flows (estimated by Dr Perrens as 3ML per day) would continue. Boral submitted dewatering of the whole mine was not a result of continued mining in the sense that the mine void would continue to naturally dewater itself absent any mining. There is no reasoning or finding in the judgment on this evidence. Given the parties' submissions on this topic before me, it appears a disputed and material issue is absent from the judgment.

98 A similar observation arises in relation to the extent of the mixing zone of pollutants in the Wingecarribee River, an issue also raised by SHCAG in its submissions before me. In reply Boral submitted before me that the precise length of the mixing zone was not relevant to the Appellants' submission that the stream health of the Wingecarribee River was not materially or significantly impacted by the groundwater flow from the mine as identified in the Commissioners' findings document at items 5, 7, 8 and 9. There was no finding by the Commissioners on the extent of the mixing zone, a material issue in dispute by the experts assuming that issue had the importance attributed to it by the SHCAG.

99 I should stress again that it remains open for a commissioner(s) to conclude that approval of this project should be refused because the WMP was not an appropriate condition to impose given any inadequacies identified by the commissioner(s). That decision must be framed by all the parties' relevant issues and consideration of the expert evidence in light of those issues.

100 The permissible part of ground 3 is particular (b). I agree there was a constructive failure to exercise jurisdiction in the failure to address relevant issues raised at the hearing by the Appellants. Ground 5 raises the same issue framed as a denial of procedural fairness. Ground 12 particulars (b) and (c) identify more of the same and can be upheld. Particular (a) is an impermissible merits issue dressed up as an error of law.

101 Ground 13 is related to the earlier grounds of appeal 3, 5 and 12, focussing on a failure to address contested issues as an extension of that ground to an absence of reasons, particularised in numerous ways. It follows from my reasoning above that this ground of appeal should also be upheld.

102 My collective finding on grounds 3, 5, 12 and 13 means that I will uphold this appeal. The grounds of appeal upheld vitiate the Commissioners' judgment and orders.

103 I will consider some of the balance of the numerous grounds of appeal. It is strictly unnecessary to do so given my finding in the previous paragraph.

Error of law by denial of procedural fairness by not considering submissions and evidence on the proposed conditions of approval

104 Grounds 4 and 11 state:

4. The Court erred in law in that it denied the Appellant procedural fairness and failed to have regard to the evidence, in:

(a) concluding that the proposal could not be categorised as providing an "adaptive management regime" without considering the submissions and evidence on the parties' competing proposed conditions of approval, which provided goals and performance criteria that may have remedied any deficiency in the WMP as an "adaptive management regime"; and

(b) not considering and deciding the contested issue between the parties as to whether the proposed conditions of consent constituted an "adaptive management regime" addressing the proposal's environmental impact.

11. The Court erred in law in not considering the contentions, submissions and evidence on the parties' competing proposed conditions of approval addressing the environmental impacts of the Project.

Particulars

The parties competing conditions of approval were in evidence and provided for goals and performance criteria that could be considered part of an "adaptive management regime", or otherwise mitigate the environmental impacts of the Project.

105 Boral and the Minister submitted as an inevitable result of the failure to consider and determine the issues in the case, the Commissioners expressly failed or declined to consider the parties' competing conditions of approval: at [95]. Despite expressly disregarding and not considering the proposed conditions of approval, the Commissioners nevertheless categorised the proposal as one that "cannot be categorised as providing an adaptive management regime ..." (at [86]).

106 The express failure to consider the proposed conditions of approval constituted a failure to consider the Appellant's submissions that any uncertainty in the environment of the project on groundwater and surface water was mitigated by the conditions of approval (not just by the WMP), and that overall what was proposed was an adaptive management regime.

107 The parties led expert evidence and made extensive submissions on the adequacy of the proposed conditions of approval. A number of marked-up iterations of the proposed conditions of approval were tendered.

108 The Commissioners' express exclusion of the proposed conditions of approval as a consideration involved an error on a question of law, in the form of the Commissioners misdirecting themselves on a matter of law, or asking the wrong question, or defining a question of fact otherwise than in accordance with law (as to which, see Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156). Such an error can found an appeal under s 56A. To the extent that, as a result of the misdirection, the Commissioners failed to consider relevant evidence and submissions (on the adequacy of the proposed conditions of approval) the approach also involved a denial of procedural fairness.

109 SHCAG made essentially the same submissions as above on these grounds, namely, it was unnecessary for the Commissioners to consider the proposed conditions given their approach to the WMP.

Finding

110 Grounds 4 and 11 express in slightly different terms the issues which arose in relation to grounds 3, 5, 12 and 13. To the extent these grounds articulate a failure to give reasons on the issues in dispute between the parties they can be upheld for the reasons given above at par 100 - 101. Ground 11 focusses on the failure to consider other conditions proposed by the Appellants and to the extent this raises the same issues as already considered should also be upheld.

111 That is the only permissible question of law identified in these grounds. To the extent the grounds allege there is some error of reasoning by the Commissioners that amounts to an error of law, that is not a question of law but simply the Commissioners assessing the merits. They did not misdirect themselves on a matter of law or define a question of fact otherwise than in accordance with law. Azzopardi is irrelevant to the consideration of the judgment in this regard.

Ground 6

112 Ground 6 states:

6. The Court erred in law in concluding that categorising the WMP as an "adaptive management regime" was a mandatory or necessary precondition for the grant of Project approval.

113 The Appellants submitted that the Commissioners' finding that the WMP could not be characterised as an adaptive management plan due to significant uncertainties resulting from a lack of baseline data and therefore the project had to be refused was not a correct interpretation of Newcastle & Hunter Valley Speleological Society v Upper Hunter Shire Council [2010] NSWLEC 48. Adaptive management is an approach that may be taken where the consequences of a decision are not fully known at the time the decision is made as a means of retaining a margin of error until all the consequences of the decision to proceed are known, at [181].

114 The ultimate question is whether the threat of environmental damage is adequately managed, not whether an approach is properly characterised as "adaptive management". That is apparent from the statement of principle given by Preston CJ in Newcastle Speleological Society at [182]:

The measures adopted should also be proportionate to the threat of environmental damage. A reasonable balance must be struck between the stringency of the precautionary measures, which may have associated costs, such as financial, livelihood and opportunity costs, and the seriousness and irreversibility of the threat: Telstra Corporation Ltd v Hornsby Shire Council at [167]. Considerations of practicability must be taken into account: at [169]. The cost consequences of increasing levels of precaution must be evaluated: at [171]. There should be an assessment of the risk-weighted consequences of various options: at [172] and [173].

115 There is no warrant for reading the decision as making the characterisation of a plan as an "adaptive management plan" a necessary precondition to the giving of project approval under s 75J. The ultimate question remains whether the impacts and risks of the project in question are adequately managed by conditions of approval. The characterisation of conditions as imposing an "adaptive management regime" is only a guide to assist in answering that question. Other matters, such as the costs of the precautionary measures and the risk-weighted consequences, may properly be taken into account.

116 The approach taken by the Commissioners involved an error on a question of law because it treated the question of characterisation of the WMP as being the ultimate question. The Commissioners therefore did not address the real ultimate issue, being whether the groundwater and surface water risks would be adequately managed having regard to the proposed conditions of approval. The error provides another basis for allowing this appeal.

Finding

117 To the extent the ground addresses a failure to address an ultimate issue, which I have already considered, this ground is repetitive of issues already raised. However, I agree with SHCAG that ground 6 does not identify an error of law but seeks impermissibly to attack a factual finding that could be made in this merit appeal. There is no identified error in the application of the ratio in Newcastle Speleological Society which I note as a s 56A appeal in another merits appeal is to be considered on its own facts and does not operate to constrain decision-making by other commissioners of the Court in the manner for which it is relied on by the Appellants. I repeat that in any rehearing, provided the decision-making process is correctly framed by the parties' relevant issues, it may be the case that a commissioner comes to a similar conclusion to this case.

Ground 7

118 Ground 7 states:

7. The Court erred in law and found contrary to the evidence that the river water quality experts had agreed that there was a lack of data to support assessment of the impacts and discharge volumes.

119 The Appellants alleged errors in fact finding by the Commissioners that surface water experts agreed there was a lack of data at [49] on the basis there was no such agreement. The finding was contrary to the evidence and such an agreement neither appears in the relevant joint report, which the Court refers to at [49] nor in the oral evidence at the hearing.

120 As SHCAG submitted ground 7 is not an error of law. The observations of Glass JA in Azzopardi are pertinent. At 155 - 156 Glass JA held:

To say of a finding that it is perverse, that it is contrary to the overwhelming weight of the evidence, that it is against the evidence and the weight of the evidence, that it ignores the probative force of the evidence which is all one way or that

no reasonable person could have made it [may involve an error of fact, but it does not involve an error of law].

Grounds 8, 9, 10 (error of law in application of precautionary principle)

121 It is unnecessary to deal with these grounds of appeal given my findings concerning grounds 3, 5, 12 and 13.

Ground 14 error of law in reviewing decision of PAC for legal error

122 Ground 14 states:

14. The Court erred in law and misconceived its role and function in having regard to the decision of Mison v Randwick Municipal Council & Anor (1991) 23 NSWLR 734, and in thereby purporting to review for legal error the condition in the PAC Approval requiring a WMP to be prepared, by reference to that decision (as if on judicial review).

Particulars

Paragraphs [73] - [77], and [92] of the decision

123 The Commissioners referred to the PAC at [73] - [77] of the judgment. The Appellants submitted that the Commissioners purported to review the PAC decision and regarded that review of the PAC decision as determinative and therefore misconstrued their task.

124 I agree with SHCAG's submissions that this ground mischaracterises this section of the judgment. In those paragraphs the Commissioners explain why they decided to take a different approach to the PAC. These paragraphs summarise the Commissioners' decision and quite properly refer to the planning history of the matter before the PAC, surely relevant context to explain their conclusion. Their finding in [77] was not assessing any legal aspect of the PAC decision but was included to explain their approach to the facts of the case before them. No error of law is demonstrated in this part of the judgment.

Minister's additional grounds of appeal

Ground 15 error of law in proceeding on basis that required to satisfy all Director-General's requirements

125 Ground 15 states:

15. The Court erred in law in finding or in proceeding on the basis that:

(a) the PAC decision deferred consideration of a matter that the PAC was required to consider and determine in accordance with the DGRs;

Particulars

properly construed, there is no express or implied requirement in s 75J or otherwise that the terms or conditions of a Project approval must address every matter raised by the DGRs or that there must have been complete compliance with the DGRs.

(b) it is necessary for Project approval to be given under s 75J for the conditions of approval to address or comply with every matter raised by the DGRs.

Particulars

The Minister repeats the particulars to subparagraph (a) above.

(c) the condition of the PAC Approval requiring the preparation of the WMP left open the possibility that development carried out in accordance with that approval might be significantly different from the development for which the application was made;

Particulars

The terms of the WMP did not affect the amount of coal permitted to be extracted, the mine footprint, the rate of extraction or any other matter that was fundamental to the identification, scale or nature of the particular development in question.

126 The Minister submitted that at [73] the Commissioners stated that it was necessary for the proponent to address all of the DGRs and that the Minister or the PAC was under an obligation to consider and determine all relevant matters as required by the DGRs.

127 SHCAG submitted that ground 15 proceeds on an erroneous basis. The Commissioners identified the appeal was a hearing de novo. The PAC decision was part of the background planning history identified by them and no more.

128 I agree with the SHCAG's submissions. The Commissioners were entitled to refuse the project on the basis of ground and surface water impacts. The project was not refused on the basis of a failure to satisfy the DGRs. No error of law is demonstrated in this ground.

129 Ground 16 was not pressed.

Ground 17

130 Ground 17 states:

17. The Court erred in law and misapplied the principles relating to adaptive management in finding that the WMP could not be characterised as an "adaptive management regime" because it was in "draft" rather than final form.

131 The Minister submitted that the Court concluded that it was not satisfied that the WMP could be "categorised as an adaptive management regime" as it was "still in a draft state" and, "consequently we find that there is inadequate information with which to determine the major and fundamental issues of groundwater and river water quality associated with this proposal and we are unable to grant an approval" (at [93]). That approach was plainly wrong as a matter of principle. The Court has in the past approved projects where a draft management plan was presented (see for example Mansfield v Minister for Planning and Hanson Construction Materials Pty Ltd [2012] NSWLEC 1063).

132 I agree with SHCAG's submission that this is a finding of fact dressed up as an error of law. Each case depends on its facts so that whether in another merits appeal the Court approved a project where there was a draft management plan is irrelevant. No error of law is demonstrated in this ground.

Conclusion on final orders

133 I have upheld ground 1 concerning procedural fairness and traffic issues, and parts of grounds 3, 4, 5, 11, 12 and 13. As these findings vitiate the decision of the Commissioners this s 56A appeal is allowed, and an order remitting the matter for a new hearing should be made.

134 The Respondents submitted that I should make an exclusionary remitter order so that the matter is returned to a differently constituted Court because there has been prejudgment of the matter by the Commissioners who would be otherwise still seized of the matter, citing Baulkham Hills Shire Council v Basemount Pty Ltd [2003] NSWCA 189; (2003) 126 LGERA 339 at [21] - [24]. The actions of the Commissioners in determining traffic issues without notice to the parties constitutes prejudgment of a high order. Further there has been a thoroughgoing miscarriage of fact finding in multiple aspects of the case which give rise to serious denials of procedural fairness, as held in Seltsam by Mason P at [11] - [13] and Castle Constructions Pty Limited v North Sydney Council [2007] NSWCA 164; (2007) 155 LGERA 52 Tobias JA (Bell JA agreeing) at [70] - [73].

135 SHCAG submitted that unless there can be some suggestion of an apprehension of bias in the Commissioners it would be inappropriate to make an exclusionary remitter order. The appropriateness of an exclusionary remitter order would depend on the grounds, if any, the Appellants are successful. There would be no reason to make an exclusionary remitter order if the Court is otherwise satisfied there was an error of law.

136 In Neate v Shellharbour City Council (No 2) [2007] NSWLEC 541 I considered whether to make an exclusionary remitter order under s 56A(2) of the Court Act. In the circumstances of that case I held such an order was not appropriate having considered the findings of Tobias JA in Basemount and Castle Constructions. Each case must depend on its own facts. As I identify at [7] in Neate citing Basemount at [23] merely because a commissioner's decision is set aside in a s 56A appeal on the ground of error of law should not give rise to an exclusionary remitter order. In Basemount an exclusionary remitter order was made because there was a denial of natural justice by the commissioner who had imposed a condition concerning traffic egress without notice to the council or evidence or argument and this gave rise to a reasonable apprehension of bias. I also observed in Neate that in Castle Constructions the commissioner had expressed dislike of the proposal in trenchant terms giving rise to a reasonable apprehension that he may not decide the case on remitter impartially (at [88]) also resulting in the Court of Appeal making an exclusionary remitter order. An additional authority the Appellants' rely on is Seltsam. Mason P at [12]-[13] agreeing with the leading judgment of Ipp JA identified that the power to order a rehearing before a different judge should be used sparingly. Proceedings below conducted so as to give rise to a reasonable apprehension of bias will generally justify such an order. The Appellants relied on [13] where his Honour stated that cases where a complicated fact-finding process has miscarried also suggest that the interests of justice may require a differently constituted court on a rehearing.

137 In this case, the extent of the failure to afford procedural fairness in relation to traffic issues in ground 1 has some similarity to the facts in Basemount. The failure to deal with the parties' substantive submissions which underpins most of the rest of the grounds of appeal arises in part from a miscarriage of a complex fact finding process as referred to in Seltsam at [13]. While I consider exclusionary remitter orders should not be made lightly I do consider one is appropriate in this matter given the nature of my findings when considered in light of the authorities discussed.

Orders

138 The Court orders that:

(1) The judgment and orders in SHCAG Pty Ltd v Minister for Planning and Infrastructure and Boral Cement Limited [2013] NSWLEC 1032 are set aside.

(2) The proceedings are to be remitted to a commissioner or commissioners (other than O'Neill C or Adam AC) or to a Judge of the Court for re-hearing and re-determination.

(3) Exhibits are to be returned.

(4) Costs reserved.

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Decision last updated: 02 December 2013