The recent Land and Environment Court of NSW decision of Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc v MACH Energy Australia Pty Ltd [2024] NSWLEC 86, concerned the judicial review of a decision of the Independent Planning Commission of NSW (Commission) to grant development consent to extend the life of the Mount Pleasant Coal Mine. In his decision, his Honour Justice Robson confirmed the Court’s position regarding the Commission’s functions and the statutory provisions that govern the performance of those functions and the exercise of its relevant powers – in the context of climate change and the impact of greenhouse gas emissions.

Key Takeaways

• Section 4.15 of the EPA Act imposes mandatory considerations – failure to consider a mandatory consideration is a legal error, which means the decision can be challenged in judicial review.
• The duty in s 4.15 is a duty ‘to consider’, and a challenge to a decision based on an alleged failure to consider should not be turned into an assessment of the adequacy of the consideration in a particular case.
• A duty to consider a matter does not carry with it a duty to refer to every piece of evidence and every contention made – this applies to submissions made in respect of a development application, particularly on uncontroversial matters.
• The duty in clause 2.20 of the Resources SEPP is a duty to consider whether conditions should be imposed and does not require a consent authority to impose conditions.

Mandatory considerations of climate change

As we know, s4.15 of the Environmental Planning and Assessment Act 1979 (NSW) (the EPA Act) sets out the mandatory considerations for consent authorities to take into consideration when evaluating a development application, as are of relevance.

Failure to take a relevant mandatory consideration into account by a consent authority is a legal error that may render the consent authority’s decision invalid.

This was the focus of the Court’s judgement in Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc v MACH Energy Australia Pty Ltd [2024] NSWLEC 86.

Background

This case concerned the judicial review of a grant of consent for a State significant development application for an extension of the life of the Mount Pleasant coal mine by 22 years.

Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc (Denman), a local community organisation concerned with the impacts of coal mining in the Upper Hunter, commenced judicial review proceedings in the Land and Environment Court against the decision of the Independent Planning Commission of NSW (Commission) to grant consent to the development. The grounds of review concerned whether the Commission failed to take into account the mandatory considerations in s 4.15 of the EP&A Act.

Denman contended that the consent for the proposed development was invalid on eight grounds:

1. the Commission failed to consider mandatory considerations under s 4.15(1)(a)(i), as it failed to consider whether the consent should be subject to conditions aimed at ensuring that greenhouse gas (GHG) emissions are minimised to the greatest extent practicable and failed to assess Scope 3 emissions, as required by cl 2.20(1) of the State Environmental Planning Policy (Resources and Energy) 2021 (Resources SEPP);
2. the Commission failed to consider mandatory considerations under s 4.15(1)(b) and/or engaged in an irrational or illogical form of reasoning, as it failed to consider the likely impacts of Scope 3 emissions and misconstrued the expression ‘likely impacts of the development’;
3. the Commission failed to consider mandatory considerations under s 4.15(1)(e) and/or engaged in an irrational or illogical form of reasoning, as it failed to consider the likely impacts of Scope 3 emissions in its assessment of the public interest;
4. the Commission engaged in an irrational and illogical form of reasoning in assessing the public interest under s 4.15(1)(e), in relation to conditions of consent for reducing emissions;
5. the Commission failed to consider mandatory considerations under s 4.15(1)(d), as it failed to consider Denman’s submissions and expert reports in relation to the effect of Scope 3 emissions;
6. the Commission erred in its construction and application of s 4.63(3)(a), as it failed to determine what development ‘could have been carried out but for the surrender of the [pre-existing development] consent’;
7. the Commission constructively failed to exercise its statutory power under s 4.15(1)(b) in relation to the impacts of the proposed development on the Legless Lizard; and
8. the Commission failed to adhere to the standard of reasonableness when reaching its conclusions in respect of the impacts of proposed development on air quality and the social impacts of the proposed development.

Judgment

Justice Robson held that Denman did not make out any of the grounds of appeal and dismissed the proceedings. In doing so his Honour summarised some key principles with respect to mandatory considerations (at [23] to [27]).

Grounds 1 to 5 concerned the Commission’s consideration of the impact of GHG emissions of the proposed development. In respect of these grounds, Justice Robson held that the Commission’s reasons for granting development consent were couched in three uncontroversial matters (at [68]):

1. anthropogenic climate change poses global environmental risks and that additional GHG emissions exacerbate the problem irrespective of where they occur;
2. that many countries through the Paris Agreement (and Australia's participation and adoption of consequential policies) seek to limit the extent of climate change and, while this aim is centred in the Paris Agreement, regulatory settings throughout the world call for a fundamental transition away from emissions activities to achieve net zero emissions; and
3. it is clear that there will be an ongoing demand for coal, at least in the short to medium term, which is not inconsistent with the Paris Agreement as it requires a managed transition away from a reliance on fossil fuels.

Justice Robson also found that:

• In relation to Ground 1, clause 2.20 of the Resources SEPP does not impose a duty on the Commission to impose conditions – it merely requires the Commission to consider whether or not to impose conditions and the Commission could choose not to. The Commission did not have a duty to detail all the policies it had considered.
• In relation to Ground 2, the Commission was not required to refer to certain discrete aspects of climate change to satisfy the requirement to consider mandatory considerations.
• In relation to Ground 3, the requirement to have regard to the public interest operates at a high level of generality, and the Court did not accept that the Commission had disregarded the impact of Scope 3 emissions in considering the public interest.
• In relation to Ground 4, the Commission had not engaged in illogical or irrational reasoning. The conditions that had ‘tipped the balance’ of the development from refusal to approval were reasonable and not based upon hypothetical future possibilities.
• In relation to Ground 5, the Commission’s failure to refer in detail to specific submissions in its reasons, particularly where the submissions addressed uncontroversial matters, is not indicative of that it had failed to consider the submissions.
• In relation to Ground 6, the Commission had not erred in its application of s 4.63(3)(a) and had correctly interpreted the consent.
• In relation to Ground 7, the Commission’s imposition of conditions of consent for biodiversity credits and a Biodiversity Management Plan did not constitute an impermissible deferral or delegation of its statutory power.
• In relation to Ground 8, the Commission’s conclusion on the development’s impact on air quality was one that was reasonably available to it.