Sheahan J has confirmed in Ryan v Minister for Planning [2015] NSWLEC 88 that the final products of planning proposals made under Division 4 of Part 3 of the Environmental Planning and Assessment Act 1979 (EPA Act) are subject to the same community consultation requirements established by the Court of Appeal in Leichhardt Council v Minister for Planning (No 2) (1995) 87 LGERA 78 (Leichhardt Decision). In particular, Sheahan J’s judgment provides important guidance on the scope of amendments that can be made to planning proposals following exhibition where no re-exhibition is to occur.

BACKGROUND

In April 2011, Lismore City Council (Council) resolved to support a planning proposal to rezone approximately 255 ha of land on the North Lismore Plateau (Land), primarily for residential development and environmental protection (Planning Proposal).

Following additional studies and assessments required by the Department of Planning and Infrastructure (as it was then known) (Department) as a condition of its Gateway determination issued on 26 June 2011, Council resolved on 31 July 2012 to forward the Planning Proposal to the Department with a request that it be placed on public exhibition.

Following a further minor revision, the Planning Proposal was approved for exhibition on 15 August 2012 and exhibited for 42 days from 4 October 2012 until 15 November 2012.

In the period between the approval for exhibition and the date on which the Planning Proposal was first exhibited, on 20 September 2012, the Minister for Planning (Minister) announced that the Department would:

  1. review the use of environmental zones;
  2. excise environmental zones from draft local environmental plans (LEPs);
  3. not endorse the use of environmental zones on rural land,

in all Far North Coast LEPs (E Zone Review). This included LEPs within the Council’s local government area.

In February 2013, the Lismore Local Environmental Plan 2012 (2012 LEP) came into effect which, although unrelated to the Planning Proposal, rezoned the Land to RU1 Primary Production and R5 Large Lot Residential. As a consequence, the Minister’s delegate issued an amended Gateway determination to reflect the making of the 2012 LEP and to extend the time for completing the LEP amendment resulting from the Planning Proposal.

On 13 August 2013, Council resolved to forward the Planning Proposal to the Department and request that the amendment to the 2012 LEP be made as soon as possible. That resolution had regard to the content of the Planning Proposal which provided, amongst other things, for the rezoning of:

  1. 28 ha of the Land for E2 Environmental Conservation (E2);
  2. 44 ha of the Land for E3 Environmental Management (E3);
  3. 2.4 ha of the Land for B1 Neighbourhood Centre;
  4. 1.4 ha of the Land for RE 1 Public Recreation;
  5. 8.6 ha of the Land for RU1 Primary Production; and
  6. 171 ha of the Land for R1 General Residential.

The area proposed to be rezoned as E2 and E3 (Environmental Land) had been rezoned RU1 Primary Production under the 2012 LEP and represented an area of 28.5% of the Land.

Following Council’s resolution and the forwarding of the Planning Proposal to the Department, the Department directed Council to make two amendments. First, that the zoning of the Environmental Land be amended from E2 and E3 so that it was depicted as a “deferred matter”. Second, and subsequent in time, that the zoning of the Environmental Land be changed again, from “deferred matter” to RU1 Primary Production (the current zoning), pending the outcome of the E Zone Review.

The Department’s Planning Proposal Summary Report stated that this variation to the Planning Proposal was appropriate.

On 21 February 2014, the Planning Proposal (as amended) was given effect by way of an amendment to the 2012 LEP (LEP Amendment). Relevantly, the LEP Amendment contained no E2 or E3 zones and the Environmental Land retained its RU1 Primary Production zoning.

The applicant in the proceedings, Michael Ryan (Ryan), commenced proceedings in the Land and Environment Court challenging the validity of the LEP Amendment on the basis of its difference from the Planning Proposal as exhibited.

At the time of hearing, only the Minister and Secretary of the Department (Respondents) actively defended the proceedings.

VALIDITY OF THE LEP AMENDMENT

Ryan claimed that the LEP Amendment was fundamentally different from the Planning Proposal as exhibited. On this basis, Ryan further claimed that the LEP Amendment was “not a product of the statutory process for the making of an LEP” under Part 3, Division 4 of the EPA Act, and invalid.

Ryan’s claim was based on the reasoning set out in a line of cases commencing with the Leichhardt Decision and culminating in the decision in Friends of Turramurra v Minister for Planning [2011] NSWLEC 128 (Turramurra Decision), which had all considered the issue of amendments to draft instruments and consultation in the context of the previous regime under the EPA Act for the amendment of LEPs. That reasoning is expressed in the Leichhardt Decision at [84]:

“[The argument was raised concerning] the difference between the draft regional environmental plan as exhibited and that made by the Minister. It was submitted that the difference was of such significance that the plan made by the Minister could not be said to be an outcome of the Pt 3 div 3 process. The submission involved the idea that s 51 is the culmination of a sequence of steps contained in ss 40-52; it is not a free standing section; it goes on the footing that a regional environmental plan made by the Minister pursuant to s 51 is one that is the outcome of the process set in train by s 40. Both the Director (s 49) and the Minister (s 51) may alter the draft regional environmental plan; the Director may alter the draft which was exhibited and the Minister may alter the draft submitted by the Director; but the power to alter must be confined by the need for the ultimate plan to be the outcome of the process which included the public exhibition of the draft plan; if either s 49 or 51 were interpreted so that the power of alteration of the Director and the Minister could bring about the making by the Minister of a plan so different from the publicly exhibited draft that in some important respect it could be said to be a quite different plan, then Pt 3 div 3 would be emptied of any substance.

...

[it is necessary] for the Court to compare the publicly exhibited draft plan with the plan made by the Minister to see what the differences are between them, and how important they are.”

[emphasis added]

Although Ryan challenged the validity of the LEP Amendment on several other bases, none of these were required to be considered by the Court.

In reply to Ryan’s claim, the Respondents claimed that the line of cases involving the Leichhardt Decision and the Turramurra Decision were not applicable, as those cases turned on the “highly prescriptive” and” detailed scheme of consultation and public exhibition” in force at the time but replaced pursuant to the Environmental Planning and Assessment Amendment Act 2008 on 1 July 2009.

The Respondents claimed, in contrast to the requirements of the previous legislative regime, that the LEP making process under the new Division 4 of Part 3 of the EPA Act gave the Minister control over the final content of the amendment to an LEP with “flexibility” to “tailor” the consultation required, if any.

SAVE LITTLE MANLY

After the hearing of the proceedings, but before judgment had been handed down, Pain J delivered judgment in Save Little Manly Beach Foreshore Incorporated v Manly Council (No 3) [2015] NSWLEC 77 (Manly Decision), which involved similar issues to those put forward in these proceedings.

In that case, a panning proposal had been amended following exhibition and Pain J was asked to consider whether the principles of the Leichhardt and Turramurra Decisions were applicable.

While determining that the amendments to the planning proposal were not so significant so as to invalidate the amendment to the LEP, her Honour held at [72]:

“... The process in the current Div 4 provides far greater flexibility in the community consultation arrangements than in the old Div 3 or Div 4. Greater flexibility does not undermine the importance of community consultation in the statutory scheme. Where consultation is required by the gateway determination it is mandatory. The power to alter an instrument from that publicly exhibited was circumscribed by the Court of Appeal in Leichhardt (No 2) and subsequent cases on the basis that the instrument made must reflect the statutory scheme in Div 4 which includes the community consultation requirements. While there are substantial procedural changes in the current Div 4, in substance the significance of the requirement for community consultation remains and there is no basis for distinguishing earlier authorities which considered the old Div 3 and Div 4.

[emphasis added]

Her Honour’s decision thus provided a firm basis for the application of the principles in the Leichhardt and Turramurra Decisions in the current proceedings. In reply, the Respondents claimed that because no infringement of the community consultation requirements was found to have taken place in the Manly Decision, her Honour’s comments were:

  1. merely obiter dicta (not binding); and
  2. consequently, Sheahan J was not required by judicial comity to follow her Honour’s application of principle.

Ultimately, Sheahan J held at [142] that Pain J’s statement constituted a “rule of law expressly or impliedly treated ... as a necessary step in reaching [her] conclusion” and, as a result, Pain J’s comments were ratio decidendi (critical to the rationale for the judgment). In the alternative, Sheahan J stated that even if Pain J’s comments were obiter dicta, her Honour’s reasoning was highly persuasive and to be adopted.

THE PRINCIPLES OF THE LEICHHARDT AND TURRAMURRA DECISIONS APPLY

Having found that the principles in the Leichhardt and Turramurra Decisions were applicable, Sheahan J considered whether the difference between the Planning Proposal (as exhibited) and the LEP Amendment (as made) was so significant that it made the LEP amendment not a “product of the process” required by the EPA Act.

Sheahan J observed that in the Manly Decision, Pain J’s finding that there had been compliance with the plan making process under the EPA Act was based on the fact that:

  1. the proposed amendments to the LEP consisted of two separate “parts” or “schemes”;
  2. those two “parts” or “schemes” were not interdependent (so that one could proceed without the other); and
  3. to implement one “part” or “scheme” and not the other did not vitiate the purpose of public consultation.

In the present case, the Planning Proposal did not contain two or more “parts” or “schemes” or, if it did, they were interdependent. The rezoning of the Environmental Land to an environmental use was found to “play an important role in the abatement of environmental impacts as a result of the rezoning of the plateau for residential purposes” and public submissions would have been informed by this factor.

As a result, the absence of environmental protection zonings in the LEP Amendment “fundamentally altered the nature of the proposal”, with the effect that the LEP Amendment was not a “product of the process” stipulated by Division 4 of Part 3 of the EPA Act.

Accordingly, the LEP Amendment was declared invalid.

IMPLICATIONS

There are two important points that flow from the decision in these proceedings. The first is that the community consultation regime applicable at the time of the Leichhardt and Turramurra Decisions continues to be applicable to the new LEP making regime under the EPA Act.

The second point concerns the way in which the “parts” of a planning proposal need to be considered when making amendments following exhibition. In particular:

the removal of one “part” of a planning proposal, which is not interdependent on another, will generally be considered to be valid (as was the case in the Manly Decision); and

the removal of one “part” of a planning proposal, which is dependent on another, will generally be considered to be invalid (as was the case in these proceedings).

This is an important distinction to be noted by both proponents and planning authorities.