Land and Environment Court of New South Wales CITATION: Willoughby City Council - v - Sydney Water Corporation [1999] NSWLEC 131 PARTIES APPLICANT: Willoughby City Council RESPONDENT: Sydney Water Corporation NUMBER: 40091 of 1999 CORAM: Lloyd J KEY ISSUES: Construction & Interpretation :- approval under Pt 5 EPA Act LEGISLATION CITED: Environmental Planning & Assessment Act 1979, s115A(1); s115B Sydney Water Act 1994, s38, s40, s41 DATES OF HEARING: 05/20/1999 DATE OF JUDGMENT DELIVERY: 06/10/1999 APPLICANT: P Larkin SOLICITORS: Cowley Hearne LEGAL REPRESENTATIVES: RESPONDENT: B Walker SC WITH: B J Preston SOLICITORS: Allen Allen & Hemsley JUDGMENT: IN THE LAND AND Matter No: 40091 of 1999 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 10/06/99 Willoughby City Council Applicant v Sydney Water Corporation Respondent JUDGMENT HIS HONOUR: 1. This is the separate determination of two preliminary questions in proceedings brought by the applicant in relation to the construction by the respondent of a major public work known as the Northside Storage Tunnel project. The power of the Court to determine any question separately from any other question arises from the Supreme Court Rules , Pt 31 r 2 (which applies in this Court by force of the Land & Environment Court Rules Pt 6 r 1). On 19 May 1999 Talbot J made an order by consent that the questions now before me be determined separately from the remaining questions in the case. 2. On 22 December 1997, the Minister for Urban Affairs & Planning ("the Minister") granted an approval ("the approval") pursuant to Div 4 of Pt 5 of the Environmental Planning & Assessment Act 1979 ("the Act") in respect of an activity known as the Northside Storage Tunnel. According to the environmental impact statement prepared for the activity ("the EIS") it is to serve the laudable purpose of intercepting and storing wet weather sewage overflows from the Northern Suburbs Ocean Outfall sewer and the subsequent transfer of such overflows to the North Head Sewage Treatment Plant for treatment and discharge. This will in turn significantly reduce the frequency of the large volume of wet weather sewage overflows in Sydney Harbour and thereby substantially improve the harbour water quality. 3. In granting the approval the Minister imposed a number of conditions, including: 1. The proposal shall be carried out in accordance with:- - the proposal contained in the environmental impact statement (EIS) Northside Storage Tunnel (hereafter referred to as "the EIS") prepared by Sydney Water, dated September 1997; - all identified procedures, safeguards and mitigation measures presented in Section 4 and 5 of the Director-General's report and in Sydney Water's Representations Report; and - the conditions of approval granted by the Minister. In the event of any inconsistency, the conditions of approval granted by the Minister shall prevail. Any modification to the proposal which would be inconsistent with the proposal identified in the EIS or the conditions of approval shall only be carried out with the prior approval of the Minister. 4. The applicant contends that the respondent is carrying out the activity in breach of condition 1 of the approval in two respects and is thus in breach of s 115A(1) of the Act. The applicant further contends that the departures from the approval are to implement changes to the activity and no modification of the approval has been made under s 115BA of the Act in relation thereto. It is the two alleged breaches of condition 1 which are the subject of the two separate questions for determination. 5. It is common ground that the project is an activity for the purpose of Pt 5 of the Act. It is also common ground that the respondent is both the determining authority and the proponent in respect of the activity for the purpose of Pt 5 of the Act. A determining authority is not to carry out such an activity if it is the proponent of the activity unless the Minister has approved of the activity being carried out (s 115A(1)). If the Minister approves of the activity he may do so with or without conditions or modifications (s 115B(2)). The determining authority must comply with any conditions to which such an approval is subject (s 115A(1)). 6. The applicant is concerned to ensure that the respondent complies with the condition of approval in relation to that part of the project which involves the construction of works at Scotts Creek ("the Scotts Creek land"), within the City of Willoughby. 7. The first breach of the condition is said to be the time of commencement of construction and the duration of the construction period. The EIS, referred to in condition 1 of the approval, states that the duration of the construction period on the Scotts Creek land would be six months, commencing in approximately November 1999. The respondent has already commenced the construction of works on the Scotts Creek land and the construction period will now be about 14 months. 8. The second breach of the condition is said to arise from a statement in the EIS that the respondent would compulsorily acquire so much of the Scotts Creek land as is required for construction activities prior to the commencement of construction. Moreover, s 5 of the Director-General's report, referred to in condition 1, also states that the respondent would compulsorily acquire so much of the Scotts Creek land as is required for construction activities prior to the commencement of construction. The respondent has commenced construction on the Scotts Creek land before compulsorily acquiring any of it. Moreover, the respondent only intends to acquire that part of the land to be occupied by permanent structures and not the whole of the land to be used for construction activities. 9. The respondent submits that there has been no breach of the condition and the respondent is carrying out the activity in accordance with the EIS and in accordance with the measures presented in the Director-General's report, referred to in the condition. The respondent further submits that the EIS and the Director-General's report must be read together insofar as they are incorporated into the approval; that on an overall reading of those documents matters of estimate, legal judgment and prediction are not, by their presence therein, stipulated or imposed as conditions of the approval; that substantial compliance with the provisions of the EIS and the Director-General's report is sufficient; that the respondent is substantially complying therewith; and alternatively, the EIS and the Director-General's report are directory rather than mandatory requirements. 10. The issues for separate determination essentially raise for consideration the construction of the condition and the documents incorporated therein, namely the EIS and the Director-General's report. In considering the issues raised it is useful to bear in mind the principles which govern the construction of conditions of approval and of documents incorporated therein. We are not dealing with an Act of Parliament. An overtechnical approach should not be adopted in construing the conditions of the approval and the documents incorporated therein; neither should the words used be scrutinised in the same way as the words used by a parliamentary draftsman ( Weigall Constructions Pty Ltd v Melbourne & Metropolitan Board of Works (1972) 30 LGRA 333 at 351-352, Wollongong City Council v Australian Iron & Steel Pty Ltd (1988) 67 LGRA 51 at 56). 11. What does the EIS say about the construction period and the commencement thereof? It seems clear that the overriding aim of the project is to achieve its purpose (which I have described in paragraph 2 above) by the time of the Olympic Games in the year 2000. There are numerous statements to this effect throughout the EIS: The aim of the tunnel is to significantly reduce the frequency of the largest volume wet weather sewage overflows into the Sydney Harbour Catchment before June 2000, … (p.2) A priority of the plan is to substantially improve the water quality in Sydney Harbour by the 2000 Olympics (p.2) To meet the government's objective of substantially improving harbour water quality by 2000 (p.2) If there is to be a significant improvement in water quality in the harbour in time for the 2000 Olympics, the overflows from the lower NSOOS must be addressed. The largest overflows, at Lane Cove, Tunks Parks, Scotts Creek and Quakers Hat Bay therefore form the focus of the project (p.3) The aim of the tunnel is to reduce the largest sewage overflows into the catchment of Sydney Harbour before the Sydney Olympic Games in September 2000 (p.14) The deadline for the project is important due to the desire to improve water quality in Sydney Harbour by the commencement of the Sydney Olympic Games in September 2000 (p.40) Another key objective is to complete the proposed works before the 2000 Olympics (p.75) The tunnel, however, can be completed in time for the 2000 Olympics and will meet both environmental and project schedule objectives (p.75) The critical outcomes are to complete the project within the proposed timeframe … (p.120) The timetable for the project has been set by the NSW government. The top priority of its Waterways Package is ensuring that the water quality of Sydney Harbour is improved by 2000 (p.279) 12. The EIS also allows flexibility in the carrying out of the project in order to achieve its aims and objectives. For example, the EIS describes the project but not its detailed design. This flexibility is illustrated by the following statements in the EIS. Project components will be designed as required during the construction period, rather than the entire project being designed before construction starts. This approach allows flexibility to change the design to optimise tunnel operation or reduce the environmental impacts and costs of construction and operation. Given the time constraints set by the NSW government for the project, this EIS was prepared during the concept design phase of the proposal. An advantage of this approach is that the design can be relatively easily changed to avoid or minimise potential environmental impacts. (p.14) The desired configuration will be decided in consultation with the Alliance contractors based on the lowest cost combination which satisfies environmental targets and North Head STP requirements. The parameters could typically lead to a tunnel of approximately 6 metres in diameter from North Head to Lane Cove with a nominal 4 metre diameter branch tunnel to Scotts Creek. … The tunnel depth adopted is based on the preliminary geotechnical work done to date. The depth of the tunnel will be finalised following detailed geotechnical investigations along the route. (p.100) Sydney Water will enter into an alliance contract with a selected private consortium in order to meet the required completion date of 30 June 2000. An alliance contract is effectively a joint venture with the private sector which specifies a series of outcome/performance based requirements for design, construction and project management. (p.125) The detailed design of components of the project will be completed throughout the construction period (p.254) 13. The EIS describes the construction period on the Scotts Creek land as being six months (p 209). Under the heading "Construction Schedule", key dates for the commencement of various sections of the project are given, including Scotts Creek as commencing in November 1999. The Construction Schedule also contains the following statement: The dates shown are indicative only, since the final project programme will be determined once the alliance contract has been finalised . 14. The EIS contains a table which sets out the proposed hours of construction. For above ground construction at Scotts Creek the duration of the works is stated as being " six-nine months ". The times of work are stated as being 7 am to 7 pm Monday to Friday and 7 am to 1 pm Saturday. 15. In applying the principles described in paragraph 10 above, the following conclusions may be made. Firstly , there are many statements in the EIS which variously refer to the overriding aim of the completion of the project by the 2000 Olympic Games, which I have described in paragraph 11 above. The words used are variously "the aim", "a priority", "the Government's objective", a "key objective", "the critical outcomes" and "the top priority", being completion of the project by the 2000 Olympic Games. Secondly , whilst containing a general description of the project the EIS does not describe the detailed design and allows flexibility in the carrying out of the work. I have described (in paragraphs 12 above) statements in the EIS to this effect. This flexibility, it seems, is necessary in order to achieve the overriding aim to which I have referred. Thirdly , the estimate of the six month construction period at Scotts Creek appears to be nothing more than an estimate. In the table which describes the proposed hours of construction the estimate is " six - nine months ". Again, having regard to the overriding aim and the acknowledgment of flexibility in the carrying out of the project, I do not regard the estimate in the same way as the words used by a parliamentary draftsman. It seems to me that the EIS permits flexibility in the carrying out of the project in order to achieve the overriding aim and thus includes flexibility in the estimated construction period. This flexibility is reinforced by the opening words to the construction schedule: " The dates shown are indicative only, since the final contract programme will be determined once the alliance contract has been finalised" . Fourthly , no allegation is made that the construction works at Scotts Creek are being carried out outside the nominated hours of 7 am and 7 pm Monday to Friday and 7 am to 1 pm on Saturday. Shortly stated, in looking at the EIS as a whole and applying the relevant principles, I am not persuaded that there has been any breach of condition 1 of the approval insofar as it concerns the time of commencement of construction and the duration of the construction period. This is not to say that other instruments of approval would not be construed in the same way. Every instrument of approval must be construed according to its own tenor. Other instruments may have different overriding aims and may not allow the flexibility allowed by the present EIS. 16. I now turn to the second preliminary question for determination. What do the EIS and the Director-General's report, referred to in condition 1 of the approval, say about compulsory acquisition of the Scotts Creek land? The EIS contains the following statement: Sydney Water will need to compulsorily acquire Crown Land and Community Land because it appears that the relevant plans of management do not include utility installations which are currently on site and recognised in the LEPs. Sydney Water's requirements for these sites include: ¨ obtaining an accessway to the construction sites and permanent infrastructure; ¨ use of the construction sites; ¨ provision for the permanent structures. Table 9.1 identifies the sites which may be acquired so that Sydney Water's operations will be permissible. … Where possible Sydney Water will negotiate with the current owner to reacquire the land once the activity relating to the tunnel construction is complete . (p.194) (emphasis added) Table 9.1 in the EIS refers to a number of construction sites, including relevantly "Scotts Creek" which is said to be required for access and for construction. 17. The Director-General's report states that the areas proposed for compulsory acquisition are outlined in tables 5.1a and 5.1b and in figures 5.2a to 5.2g of the report. Tables 5.1a and 5.1b merely refer to the acquisition of the fee simple interest of land at various construction sites, including "Scotts Creek". The report states that the Department [the Department of Urban Affairs & Planning] favours Sydney Water [the respondent] negotiating with the current owners to reacquire the land once the construction activity is complete. Figure 5.2c is a plan of the Scotts Creek land showing an area currently owned by the respondent, an area required for permanent operations and an area required for construction. The respondent intends to acquire only that part of the land required for permanent operations. 18. The applicant contends that the respondent is required to compulsorily acquire so much of the Scotts Creek land as is required for construction activities, prior to the commencement of construction. The respondent has not done so. Moreover, the notice of intended acquisition refers only to the proposed acquisition of an easement for access and services and of the area required for permanent operations. 20. The question, then, is whether the respondent is in breach of condition 1 of the approval, properly construed, insofar as it relates to the compulsory acquisition of the Scotts Creek land. Figure 5.2c of the Director-General's report clearly delineates the area required for permanent operation and the area to be used for construction. The same report also refers to the need for notification to the owner of any property to be acquired, such notification to be given "prior to access for construction purposes" (p 81). That is to say, the respondent merely needs to give the notice of intended acquisition prior to obtaining access for construction purposes. The respondent does not need to have completed the formalities of compulsory acquisition at that stage. The respondent has notified the application that it intends to acquire an easement of access and services and the fee simple to the land required for permanent operations. 21. The respondent does not, apparently, intend to compulsorily acquire that part of the Scotts Creek land which is not required for permanent operations. The respondent does not need to acquire land which is only to be used during the construction period. Section 38 of the Sydney Water Act 1994 is an alternative source of power which enables the respondent to occupy the area of land to be used for construction without the need to compulsorily acquire it. That section enables the respondent to enter and occupy land for various purposes, including the construction of works on the land. Section 40 of that Act requires the giving of notice before exercising the power under s 38. Section 41 of that Act requires the respondent to compensate the applicant for any damage caused by the exercise of its functions. It is a settled principle that an act authorised under one statutory power may be supported under another statutory power ( Lockwood v The Commonwealth (1954) 90 CLR 177 at 184, Brown v West (1990) 169 CLR 195 at 203, Johns v Australian Securities Commission (1993) 178 CLR 408 at 426, Darling Casino Ltd v Minister for Planning (1995) 86 LGERA 186 at 209-210). The respondent can thus rely upon a power other than the one expressly specified when the EIS and the Director-General's report were made, provided a proper head of power is available to support its action. 22. As noted in paragraph 16 above, the EIS identifies sites which may be acquired (not will be acquired or shall be acquired). Moreover, the EIS, as described in paragraph 12 above, allows flexibility in the carrying out of the project. Moreover, in applying the principles of construction described in paragraph 10 above, the Court is not required to observe the letter of the conditions of the approval and the documents incorporated therein, but must be concerned with practical considerations which lead to a reasonably practical result. The applicant in the present case wants the respondent to compulsorily acquire not only the land needed for permanent operations but also the area of land to be used during construction: the area of land to be used during construction is then to be re-acquired by the applicant once the construction activity is complete. This is an absurd position for the applicant to adopt. What is the point of the respondent compulsorily acquiring the area of land to be used during construction if it is then to be re-acquired by the applicant once the construction activity is complete? All this does is generate unnecessary paper work and a potential dispute as to the quantum of compensation to be paid upon acquisition and again upon re-acquisition. The alternative power under s 38 of the Sydney Water Act is far simpler and equally effective in achieving the purpose, namely, the occupation of the land by the respondent during construction. If there is to be any dispute about the quantum of compensation payable under s 41 of that Act, then at least it gives rise to only one potential dispute rather than two. 23. I therefore conclude that the respondent is not in breach of condition 1 of the approval insofar as it relates to the compulsory acquisition of the Scotts Creek land. Even if the respondent were in breach, then in the exercise of the Court's discretion I would not be inclined to exercise that discretion in favour of the applicant because of the obvious intention of the EIS to allow flexibility in the carrying out of the project, the alternative source of power which is available to the respondent to occupy the land and the absurdity of compulsory acquisition followed by re-acquisition when such action is quite unnecessary. 24. On each of the issues raised as preliminary questions the applicant has failed. The relief claimed which relates thereto, namely paragraphs 5 - 8 inclusive of the application herein, must therefore be refused. 25. It is appropriate that I make the following orders: 1. The prayers for relief contained in paragraph 5 - 8 inclusive of the application herein are refused. 2. The question of costs is reserved. 3. The exhibits shall remain with the Court until the determination of the remaining prayers for relief. 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