In the recent decision of Gunlake Quarries Pty Ltd v Minister for Planning [2022] NSWLEC 1570, the Land and Environment Court dismissed the appeal commenced by Gunlake Quarries Pty Ltd (Gunlake) concerning the proposed modification of its development consent which sought approval to reduce the minimum size of the Biodiversity Area required to be offset.

The case

In 2017, Gunlake secured a Court granted consent for the Gunlake Quarry Extension Project (State significant development application no. 7090 (SSD 7090)) (2017 Consent) following the refusal of Gunlake’s proposal by the Planning Commission. The Court’s judgment ultimately gave effect to an agreement reached by the parties following without prejudice discussions relating to Gunlake’s proposed expansion of its quarry operations. Relevantly, Condition 27 in Schedule 3 of the 2017 Consent required a total vegetation offset area of 76.54 ha. 

 Gunlake subsequently sought to modify the 2017 Consent pursuant to section 4.55(8) of the Environmental Planning and Assessment Act (EP&A Act) (a provision enabling an applicant to apply to the Court for a modification to consents granted by the Court). The modification application sought approval to amend Condition 27 to reduce the size of its biodiversity offset areas from 78.82 to 39.55 hectares because, it was submitted among other reasons, the quantum of offset was miscalculated (Proposed Modification).

To be capable of approval by the Court, the Proposed Modification was required to satisfy a number of jurisdictional prerequisites.

Key points from the decision

The following three jurisdictional prerequisites were identified as applying to the Proposed Modification:

  1. subclause 7.4(4) of the relevant (Goulburn Mulwaree) Local Environmental Plan (LEP) which requires that the consent authority must be satisfied, in relation to certain matters listed, that the development is compatible with the objectives of this clause and with the specific matters included in clause 7.4. This included subclause 7.2(3)(b) requiring a description of any proposed measures to be undertaken to ameliorate any potential impact on a native vegetation community;
  2. clause 14 of the State Environmental Planning Policy (Mining, Petroleum and Extractive Industries) 2007 (Mining SEPP) (now section 2.20 of the State Environmental Planning Policy (Resources and Energy) 2021) (2021 SEPP) required that, before granting consent for development for the purposes of mining, petroleum production or extractive industry, the consent authority must consider whether or not the consent should be issued subject to conditions aimed at ensuring that the development is undertaken in an environmentally responsible manner, including conditions to ensure the following:…’(b) that impacts on threatened species and biodiversity, are avoided, or are minimised to the greatest extent practicable’; and
  3. ‘substantially the same development test’ imposed under section 4.55(2)(a) of the EP&A Act required the Court, as the relevant consent authority, to be satisfied that the 2017 Consent as modified by the Proposed Modification would constitute substantially the same development as the development for which the 2017 Consent was originally granted, and before that consent as originally granted was modified (if at all).

The Court held that Gunlake had failed to satisfy all of the abovementioned jurisdictional prerequisites.

In respect of subclause 7.4(4) of the relevant (Goulburn Mulwaree) LEP, there was no report produced by Gunlake addressing these matters, the expert witnesses were not directed to address the LEP and there was no mention of any measures to ameliorate ongoing adverse impacts of the Proposed Modification (such as restoring the vegetation on the site). Evidence which endeavoured to address the subject matter of the report in Court was also considered deficient in meeting the LEP’s standards.

The Mining SEPP required consideration to be given to whether the impacts on threatened species and biodiversity are avoided or minimised to the greatest extent practicable. The Court held that the focus of this inquiry should be on minimisation given that any quarry-related impacts cannot avoid impacts on biodiversity. Despite the compilation of extensive documentation discussing elements of biodiversity produced in the matter, it was deemed to fall below the requirements of the Mining SEPP (now incorporated into the 2021 SEPP).

In relation to the substantially the same development test, it was noted that the consent authority needs to know what the proposal is and what it sets out to achieve. In this regard, the Acting Commissioner stated that the Proposed Modification was not substantially the same development as:

  • the reduction in offset area was too large; and
  • the proposed non-offset area would be subject to an uncertain future with no appropriate long-term management and the possibility of other development proposals being conducted on it.

Importantly, it was observed that even if what the Proposed Modification involved would result in an improved outcome, this did not change the result. In other words, the reduction of the area of offsets still rendered the Proposed Modification incompetent for its failure to satisfy the substantially the same development test.

What does this mean for proponents in similar situations?

Proponents should be aware of the jurisdictional prerequisites that, if not satisfied, could hinder approval of modification applications seeking a reduction in offsets, and must be mindful to ensure their application directly and adequately addresses these requirements. Proponents will also need to be more proactive in addressing the impact of not protecting, maintaining or enhancing biodiversity offset areas when making similar applications. Separately, the case reinforces the need for the Land and Environment Court and other consent authorities to give clear reasons (addressing the consideration given to all applicable jurisdictional prerequisites and providing an explanation as to why the relevant prerequisites have been met) when endorsing an section 34 agreement reached during conciliation. Further, parties must be proactive in providing a supporting jurisdictional statement to the Court that clearly documents the jurisdictional prerequisites relevant to the decision and commentary on how these have been satisfied. In this case, there was limited information available to the Court in respect of the granting of the 2017 consent judgment as the background agreement that led to this consent did not adequately address what jurisdictional prerequisites were considered nor the reasons for the decision which must also be considered pursuant to section 4.55(3) of the EP&A Act.

With thanks to Michael Lin for his assistance in preparing this article.

[MCR1]ML: unsure where the case was going with this but it’s from [222] to [230] and [269].

[MCR2]ML: refer to [274]