Posted on November 30, 2015 by Sue Puckeridge
An LEP is not an ‘action’ for the purposes of the Environmental Protection and Biodiversity Conservation Act 1999
The Full Court of the Federal Court has confirmed that in circumstances where land may be subject to the Environmental Protection and Biodiversity Conservation Act 1999 (‘EPBC Act‘), the Federal Minister for Environment (‘Federal Minister’) has no power to prohibit the rezoning of land, because the rezoning of land is not an ‘action’ for the purposes of the EPBC Act.
In Esposito v Commonwealth of Australia  FCAFC 160 (‘Esposito‘), the owners of land known as ‘The Heritage Estates’ (‘Land’) and Shoalhaven City Council (‘Council’) were seeking to rezone the Land for residential development. The area of Land comprised of 1,232 existing lots.
The Land is situated between the Jervis Bay and Booderee National Parks. The evidence showed that this Land was a habitat for threatened species listed under the EPBC Act and a habitat corridor and a natural corridor between the two parks for nearby species and ecosystems. The parks are land owned by the Commonwealth.
Developers, on behalf of the owners of the Land, had approached Council with a proposal, which comprised of two aspects:
- the rezoning of 730 of the 1,232 lots of the Land to permit residential development; and
- the construction of infrastructure works by Council – considered necessary to support the scale of the anticipated residential development to follow.
The infrastructure works contemplated by Council, as a precursor to any residential development, had the potential to impact on threatened species, giving rise to the need to obtain approval from the Federal Minister, in accordance with the EPBC Act.
Council referred the matter to the Federal Minister and described the proposal by reference to both the proposed rezoning and the infrastructure works. The Federal Minister concluded that the ‘action’ under the EPBC Act involved both the rezoning and the infrastructure works and refused Council’s application purporting to prevent both the rezoning and the infrastructure works from proceeding.
Power of the Federal Minister to prohibit rezoning
One of the arguments raised by the appellant related to the power of the Federal Minister to make the decision in relation to the rezoning. It argued that the prohibitions in the EPBC Act did not regulate the State’s ability to exercise legislative power and therefore the Federal Minister’s decision to prevent the rezoning was liable to administrative review because it was beyond power.
Under the EPBC Act ‘actions’ which have significant impact on listed threatened species or endangered communities are prohibited without approval (ss18 and 19).
An ‘action’ under s523(1) includes a project, a development, an undertaking, an activity or series of activities and an alteration of any of those things.
Section 524 provides that a decision by a State government body is not an action.
The Court determined that the making of an environmental planning instrument does not constitute an ‘action’ for the purpose s523 of the EPBC Act holding that:
‘… we do not accept, and it was not suggested that we should, that an exercise of State legislative power which does not relate to any development in particular and which merely empowers a Council to grant its approval to future developments thereby engaging s76A can be described as a project, development, undertaking or activity or series of activities within the meaning of s523. Nor, should we say for completeness, do we accept that the Council’s role as a ‘consent authority’, or its obligation to prepare a draft planning instrument for the Minister, leads to any different outcome.’ 
Consequently, to the extent that the Federal Minister’s decision purported to refuse permission to the State Minister to make an amendment of the Shoalhaven LEP it was beyond power.
In arriving at this conclusion the Court distinguished this case from an earlier decision of the Federal Court in Save the Ridge Inc v Commonwealth  FCAFC 203, where the Full Court had declined to decide whether an amendment to a local environmental plan was ‘action’ within the meaning of s523.
Outcome and effect of decision
Even though the Federal Minister’s decision was partially invalid, the Court in its discretion refused to set aside the Federal Minister’s decision in its entirety finding that the assumption that the zoning process required approval was plainly severable from the balance of the Federal Minister’s decision.
The practical effect of the decision is that the State Minister is free to rezone the land if he chooses, however, the Council will remain prohibited by the EPBC Act from carrying out the infrastructure works to support any subsequent residential development. Consequently, it is possible that the Council will receive applications for development consent for the construction of homes that cannot be serviced by infrastructure. As such, as the Court noted, any such application would necessarily be fairly basic.
The case deals with the legislative provisions relating to the making of local environmental plans prior to their amendment in 2008 when planning proposals were introduced, however, this does not impact upon the findings.
Prepared with the assistance of Alex Kelly