Posted on October 24, 2023 by Lindsay Taylor 5

An expanded notion of the duty to undertake an REF (Review of Environmental Factors) under Division 5.1 of the EPA Act?

Before carrying out or approving an activity under Division 5.1 of the Environmental Planning and Assessment Act 1979 (‘EPA Act‘), determining authorities are required to consider the environmental impacts of the activity. This is commonly referred to as a review of environmental factors (‘REF‘).

In Palm Beach Protection Group Incorporated v Northern Beaches Council [2020] NSWLEC 156, Preston CJ in the Land and Environment Court of NSW (‘Court‘) examined the obligations imposed on determining authorities under Division 5.1 when undertaking an REF. His Honour also expanded upon the kinds of decisions that constitute an ‘activity’ for the purpose of the Division. The decision was followed by Pain J in Narrawallee Beach Environmental Group Inc v Shoalhaven City Council [2023] NSWLEC 78.

This Post provides a refresher on REFs under Division 5.1 of the EPA Act in light of Palm Beach and Narrawallee Beach. We discuss the noteworthiness of the two decisions and their implications for public authorities.

When does Division 5.1 of the EPA Act apply?

Division 5.1 of the EPA Act applies to an ‘activity’ that a determining authority proposes to carry out or approve.

What is an ‘activity’ under Division 5.1?

Pursuant to section 5.1(1) of the EPA Act, an ‘activity’ is:

‘(a) the use of land, and
(b) the subdivision of land, and
(c) the erection of a building, and
(d) the carrying out of a work, and
(e) the demolition of a building or work, and
(f) any other act, matter or thing referred to in section 3.14 that is prescribed by the regulations for the purposes of this definition,
but does not include—
(g)  any act, matter or thing for which development consent under Part 4 is required or has been obtained, or
(h)  any act matter or thing that is prohibited under an environmental planning instrument, or
(i)  exempt development, or
(j)  development carried out in compliance with a development control order, or
(k)  any development of a class or description that is prescribed by the regulations for the purposes of this definition.’

In the recent cases beginning with Palm Beach referred to above, the Court held that the following were activities for the purposes of Division 5.1 of the EPA Act:

• declaring a public place as an off-leash area under section 13(6) of the Companion Animals Act 1988 (Palm Beach at [130] and Narrawallee at [154]),
• allowing dogs on-leash on public land (Palm Beach at [247]),
• amending a boundary of an off-leash area (Narrawallee Beach at [113]),
• allowing timed off-leash areas (Narrawallee Beach at [170]).

In both Palm Beach and Narrawallee Beach, the activity did not involve a physical use of land by the determining authority but rather a decision enabling a physical use of land by others.

Who is a ‘determining authority’ under Division 5.1?

Pursuant to section 5.1(1) of the EPA Act, a ‘determining authority’ is ‘a Minister or public authority and, in relation to any activity, means the Minister or public authority by or on whose behalf the activity is or is to be carried out or any Minister or public authority whose approval is required in order to enable the activity to be carried out.’ [Our emphasis]

Section 1.4(1) of the EPA Act defines ‘public authority’ to include ‘a public or local authority constituted by or under an Act’, which includes a local council. Thus,  Council is a determining authority for the purposes of Division 5.1 of the EPA Act if its approval is required in order to enable the activity to be carried out.

What is an ‘approval’?

Section 5.1(1) of the EPA Act defines an ‘approval’ to include ‘a consent, licence or permission or any form of authorisation ...’ [Our emphasis]

In Palm Beach, Preston CJ held at [251] that the concept of an approval is defined in section 5.1(1) of the EPA Act in the widest of terms.

As was the case in that decision, an approval may include a declaration that an existing public place can be used as an off-leash dog area under section 13(6) of the Companion Animals Act 1998, constituting an approval that enables a ‘use of land’. This is even where the overall nature and use of the land is unchanged as a result of the declaration.

The duty under section 5.5(1)

Section 5.5(1) of the EPA Act provides:

‘(1) For the purpose of attaining the objects of this Act relating to the protection and enhancement of the environment, a determining authority in its consideration of an activity shall, notwithstanding any other provisions of this Act or the provisions of any other Act or of any instrument made under this or any other Act, examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity.’

[Our emphasis]

The word ‘shall’, when used in relation to a duty imposed by legislation, means that the duty must be performed: section 9(2) of the Interpretation Act 1987. Therefore, any determining authority proposing to carry out an activity or approve an activity must perform the duty in section 5.5(1) of the EPA Act: that is to say, it must undertake an REF in relation to the proposed activity.

When undertaking an REF, the determining authority must take into account the environmental factors specified in any relevant environmental factors guideline prepared by the Planning Secretary. If no such guideline exists, then the determining authority must take into account the factors listed at section 171(2) of the Environmental Planning and Assessment Regulation 2021 (‘Regulation‘).

Section 171A of the Regulation identifies further factors for consideration if the activity is proposed to be carried out in a regulated catchment.

In certain circumstances, the REF must also be published on the determining authority’s website or the NSW Planning Portal: see section 171(4) of the Regulation.

The nature and scope of the duty

In Palm Beach, Preston CJ stated the following at [260] in relation to the duty imposed by section 5.5(1) of the EPA Act:

• the duty is mandatory, and compliance is pivotal to the working of Division 5.1 of the EPA Act,
• the duty to ‘examine and take into account’ requires positive action from the determining authority,
• the duty to ‘examine’ involves inspection, inquiry and investigation of the environmental impact,
• the duty to ‘take into account’ is more than consideration, but also involves some responsiveness and reflectiveness to the environmental impact,
• the duty must be undertaken by the determining authority in relation to the environmental impact of an activity, in consideration of the activity,
• the phrase ‘to the fullest extent possible’ sets a high standard, but should be reads as ‘to the fullest extent reasonably possible’,
• the duty is not restricted by any timeframe and for that reason, a matter affecting or likely to affect the environment that first came to the attention of a determining authority after commencing to carry out the activity cannot be ignored, and
• the ‘environment’ to which the duty is owed includes the subject land and the geographic location and the area to which it forms part.

Discharging the duty imposed by section 5.5(1) requires a reasonable and practical REF to be undertaken, considering all matters that are ‘foreseeable’: Narrawallee Beach at [176].

Exceptions for undertaking an REF

Under section 5.4 of the EPA Act, a determining authority is not required to undertake an REF for:

• the modification of an activity for which an REF has been undertaken, and that will reduce overall environmental impact,
• a routine activity such as maintenance that the Minister considers has a low environmental impact, and
• an activity that has been approved or is to be carried out by another determining authority.

An expanded notion of ‘activity’ – implications for public authorities

The subject of the Palm Beach case was Northern Beaches Council’s declarations under the Companion Animals Act concerning on-leash and off-leash dog areas in a public place, being Station Beach. The overall use of Station Beach did not change as a result of the declarations: it was being used for public recreation before either of the Council’s declarations and following the declarations it continued to be so used .

The noteworthiness of Preston CJ’s decision is that it arguably extended the understood scope of Division 5.1.

His Honour’s decision was consistent with the settled law on Division 5.1:

• each Council declaration made under the Companion Animals Act enabled a use of land that constituted an activity,
• each declaration was  ‘required in order to enable the activity to be carried out’, and
• each declaration amounted to a ‘form of authorisation’ by the Council as determining authority.

Nevertheless, it is reasonable to assume that most local councils would not have thought that an REF would have been required in connection with the making of declarations under the Companion Animals Act.

Arising from the Palm Beach and Narrawallee Beach cases, we can rhetorically pose the following questions: would the REF duty under section 5.5(1) of the EPA Act apply to the decision by a council to approve a plan of management for community land under Chapter 6 of the Local Government Act 1993 to the extent that the plan expressly authorises specific uses of the land? Would the REF duty apply to a decision by the Minister to make a local environmental plan permitting specific land uses as development without consent? Would the duty apply to the decision by a roads authority to regulate traffic in connection with road work under the Roads Act 1993 or to temporarily close a public road for the purpose of enabling road work under that Act?

In light of Palm Beach and Narrawallee Beach, public authorities would be prudent to consider whether the duty to undertake an REF under section 5.5(1) of the EPA Act applies when exercising different kinds of regulatory powers that relate to the use of public land. It may be that case that an REF is now required to be undertaken in circumstances where the public authority had not previously thought the duty applied.

Consequences of not undertaking an REF

Where no REF is undertaken or it has not been undertaken sufficiently, and if a challenge is brought to the Court, the Court may decide to:

• declare that an activity is in breach of the EPA Act,
• declare that any approval made by the determining authority is invalid,
• quash any approval made by the determining authority.

(see Palm Beach at [353] and Narrawallee Beach at [204])

Requirement of an EIS (Environmental Impact Statement)

If a proposed activity is ‘likely to significantly affect the environment’, then section 5.7(1) of the EPA Act requires the determining authority to examine and consider an environment impact statement (‘EIS‘). In practice, an EIS is more robust than an REF, and the standard imposed on determining authorities to discharge the duty is higher.

There exists a lot of law on the duty imposed by section 5.7(1) and the requirements for an EIS, including the decisions in Palm Beach, Narrawallee Beach and Natural Grass, which is beyond the purpose and scope of this post.

If you have any questions in relation to the above, please leave a comment below or contact Lindsay Taylor on 02 8235 9701 or Adrian Guy on 02 8235 9729.