ACI OPERATIONS PTY LTD v PORT STEPHENS COUNCIL and OTHERS [1998] NSWCA 5

ACI OPERATIONS PTY LTD v PORT STEPHENS COUNCIL

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MASON P, MEAGHER and SHELLER JJA 26 November 1998, 17 December 1998 [1998] NSWCA 5

Local Government — amendment of local environment plan — rezoning of land — whether improper purpose — procedural fairness — Port Stephens Local Environment Plan (Amendment No 84)

Local Government — amendment of local environment plan — rezoning of land — whether improper purpose — whether council seeking to avoid inclusion of acquisition clause — procedural fairness — insufficient evidence to establish a reasonable expectation — Port Stephens Local Environment Plan (Amendment No 84)

ACI Operations Pty Ltd, the appellant, owns land on the Tiligerry Peninsula at Port Stephens which contains a valuable deposit of mineral sand. Under the Port Stephens Local Environment Plan 1987, mining was permissible subject to various consents and concurrences. In 1992 a survey identified koala habitat on the Peninsula. The Port Stephens Council, the first respondent, subsequently considered altering the zoning of the land to one which placed greater restrictions on development generally, and in particular did not permit mining in any form.

Throughout 1994 extensive consultation and public debate took place regarding the rezoning proposal. In November 1994, there was a meeting of councillors at which the possibility of compensation claims arising out of the proposed rezoning was discussed. After the completion of various procedural steps involving the Director of Planning, the second respondent and the Minister for Planning, the third respondent, the Port Stephens Local Environmental Plan (Amendment No 84) ("the 1995 LEP") was gazetted on 1 September 1995, prohibiting mining on the appellant's land.

Proceedings challenging the validity of the 1995 LEP on various grounds were dismissed in the Land and Environment Court. The challenge to the 1995 LEP continued in the Court of Appeal on three grounds. First, that the 1995 LEP contained a range of uses which were included for an improper purpose, namely to avoid the inclusion of an acquisition clause. Secondly, that the second and third respondents failed to afford procedural fairness to the appellant in the making of the 1995 LEP and finally, that the decision by the first respondent to proceed with the 1995 LEP was not made to further the object of the Act, but for other purposes. During the hearing of the appeal, it was held that it was not open to the appellant to challenge the 1995 LEP on the grounds of Wednesbury unreasonableness.