Warkworth Mining Limited v Bulga Milbrodale Progress Association Inc

Warkworth Mining Limited operated an open cut coal mine in the Hunter Valley and sought approval under Part 3A of the Environmental Planning and Assessment Act 1979 to extend the mine spatially to the west and southwest. The Planning Assessment Commission, as delegate to the Minister for Planning and Infrastructure, approved the Project on 3 February 2012. The Bulga Milbrodale Progress Association Inc appealed to the Land and Environment Court, where Preston CJ of LEC disapproved the Project on 15 April 2013. His Honour found significant and unacceptable impacts on biological diversity (including endangered ecological communities), noise impacts, and social impacts. The proposed extension would have cleared approximately 766 ha of four types of endangered ecological communities, including the unique Warkworth Sands Woodland, and would have brought mining operations closer to the village of Bulga (from 4 km to approximately 2.8 km). Warkworth appealed to the NSW Court of Appeal on multiple grounds including denial of procedural fairness, errors of law relating to the Director-General's report, and failure to properly consider the public interest.

• Whether there was a denial of procedural fairness in relation to background noise levels, impacts on threatened fauna, and the use of a polycentric approach
• Whether the Director-General's Environmental Assessment Report was required to be treated as a 'fundamental element' or 'focal point' in the decision-making process
• Whether the primary judge erred in his assessment of biodiversity offset measures
• Whether the primary judge failed to properly determine the public interest
• Whether the Mining Act 1992 was 'relevant legislation' that must be considered under s 39(4) of the Land and Environment Court Act 1979
• Whether the primary judge took into account irrelevant considerations regarding measures of avoidance
• The proper approach to Class 1 appeals in the Land and Environment Court

Appeal dismissed with costs. Cross-appeal dismissed with costs. Summons dismissed with costs. The decision of Preston CJ of LEC disapproving the Warkworth Extension Project was upheld.

The binding legal principles established are: (1) A statutory requirement to consider a report does not automatically require that report to be treated as a 'fundamental element' or 'focal point' unless the legislation specifies limited, discrete mandatory factors. Section 75J(2) of the EPA Act required consideration of the Director-General's report but did not elevate it to a fundamental or focal consideration requiring prima facie weight. (2) In exercising statutory discretion involving balancing of multiple factors, and absent statutory indication of weight, a decision-maker is entitled to designate weight to particular matters prior to undertaking the overall balancing exercise (following Minister for Aboriginal Affairs v Peko-Wallsend Ltd). (3) Procedural fairness requires that parties be given opportunity to respond to critical issues, but does not excuse parties from adducing necessary evidence. Where expert evidence is required, it is not sufficient to expect underlying bases of opinions to be revealed in cross-examination. (4) The requirement under s 38(1) of the Land and Environment Court Act that Class 1 proceedings be conducted with minimal formality does not abrogate fundamental requirements of procedural fairness. (5) Development consent under environmental planning legislation and the grant of mining authorities under the Mining Act are separate and distinct processes - s 65 of the Mining Act requiring development consent before grant of mining lease indicates this separation. (6) A statutory requirement to consider 'public interest' operates at a high level of generality and is capable of embracing principles of Ecologically Sustainable Development notwithstanding separate legislative provisions requiring consideration of those principles.

The Court made several non-binding observations: (1) The characterization of decision-making as involving 'polycentric problems' may be a useful conceptual framework but should not distract from the actual legal requirements - it is preferable to focus on what the decision-maker actually did rather than theoretical frameworks. (2) While Benefit Cost Analysis and Choice Modelling can be useful tools, they have inherent limitations in addressing polycentric problems, equity considerations, and interdependent impacts. (3) The Court expressed the view that the circumstances of administrative review from a primary decision-maker to a tribunal (as in Macedon Ranges Shire Council v Romsey Hotel) are of a different nature to statutory rights of appeal under s 75L(3) of the EPA Act. (4) The Court noted that in Class 1 appeals, the court may emphasize factors differently than found in the Director-General's report because of the adversarial nature of proceedings, cross-examination of experts, and additional evidence that may be adduced. (5) The Court observed that where a decision involves 'managerial authority' in resolving complex, interdependent factors, classic forms of adjudication may be less appropriate, though this does not render decisions non-justiciable or unreviewable.

This case is significant in South African and Australian environmental and administrative law for several reasons: (1) It clarifies that while the Director-General's environmental assessment report under Part 3A of the EPA Act is a mandatory consideration, it does not require prima facie weight or treatment as a 'fundamental element' in decision-making; (2) It confirms that the terminology of 'focal point' or 'fundamental element' is appropriately used to emphasize mandatory considerations only where legislation specifies limited factors or discrete requirements; (3) It establishes that in polycentric decision-making involving balancing of numerous factors, a decision-maker is entitled to weight particular matters before undertaking the overall balancing exercise; (4) It confirms that procedural fairness does not require decision-makers to raise every possible issue with experts - parties bear the onus of adducing necessary evidence; (5) It demonstrates the Court's approach to biodiversity offsetting, particularly the 'like-for-like' principle and the hierarchy of avoidance, mitigation, and offsetting; (6) It clarifies that development consent processes under environmental planning legislation are separate and distinct from the grant of mining authorities; (7) The case is a leading authority on the proper approach to merits review appeals in Class 1 jurisdiction of the Land and Environment Court and the differences between such appeals and administrative tribunal reviews.