Re Council of the Municipality of Botany v Australian Postal Corporation [1989] FCA 229; (1989) 68 Lgra 263 (23 June 1989)

FEDERAL COURT OF AUSTRALIA

Re: COUNCIL OF THE MUNICIPALITY OF BOTANY
And: AUSTRALIAN POSTAL CORPORATION
No. G991 of 1989
FED No. 317
Administrative Law - Environment Protection (Impact of Proposals)
Act 1974
[1989] FCA 229; (1989) 68 LGRA 263

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Lockhart J.(1)

CATCHWORDS

Administrative Law - Administrative Decisions (Judicial Review) Act 1977, s. 5 - failure to take into account relevant considerations - failure to observe procedures required by law - error of law.

Environment Protection (Impact of Proposals) Act 1974 - Obligation of statutory authority to comply with procedures - whether agreement between statutory authority and Department constitutes exemption within meaning of para. 11 of Administrative Procedures Under the Environment Protection (Impact of Proposals) Act 1974 Order - legal status of such agreement - whether in circumstances of case environmental objections of Council waived - whether relief should be denied on discretionary grounds.

Administrative Decisions (Judicial Review) Act 1977

Environment Protection (Impact of Proposals) Act 1974: ss. 5, 6.

Administrative Procedures Under the Environment Protection (Impact of Proposals) Act 1974 - Order para. 1, 2, 3, 11.

HEARING

SYDNEY
23:6:1989

Counsel for the Applicant: Mr. G. Flick

Mr. W. Davidson

Solicitors for the Applicant: Houston Dearn & Associates

Counsel for the Respondent: Mr. C.J. Stevens

Solicitor for the Respondent: Gillis Delaney

ORDER

The decision of Australian Postal Corporation communicated to Council of the Municipality of Botany by letter dated 2 February 1988 to proceed with the calling of tenders for a new post office at the corner of Bay and Chegwyn Streets, Botany be set aside.

Australian Postal Corporation shall pay the costs of Council of the Municipality of Botany of this proceeding.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

Council of the Municipality of Botany ("the Council"), seeks an order of review of the decision of Australian Postal Corporation (formerly Australian Postal Commission) (I shall refer to it as "Australia Post") communicated by letter dated 2 February 1988 from Australia Post to the Council, to proceed with the calling of tenders for the construction of a new post office at the corner of Bay and Chegwyn Streets, Botany. The application is made under the Administrative Decisions (Judicial Review) Act 1977 ("the Judicial Review Act").

2. Botany Post Office is about sixty years old. Australia Post has recognised since 1979 that the post office is inadequate for the following reasons:

(a) the working conditions for the staff are
unsatisfactory;
(b) the working conditions and facilities do not comply
with Australia Post's policy to provide a safe working
environment for all staff;
(c) there are problems with vehicle access; and
(d) there are limited facilities with which to service the
needs of customers.

3. In an endeavour to correct this situation, searches were commenced in August 1981 by Australia Post to locate a suitable alternative site in the area upon which a new post office could be erected. In August 1984 a site was located at the south-western corner of Bay and Chegwyn Streets, Botany with an area of 891.5m2. It is zoned "General Industrial 4(a)(1)" under Interim Development Order No. 19 Botany. Subject to ascertaining the views of the Council in relation to the proposal, Australia Post decided to purchase the site so that the construction of a new post office could proceed. Alternatives to the purchase of the Bay and Chegwyn Streets site were considered by Australia Post, but they were not considered suitable.

4. Australia Post holds the view that there is no statutory responsibility upon it under Federal or State law to consult with State or Local Government Authorities on either the siting or the nature of construction of Australia Post's buildings. However, it is the policy of Australia Post that, whilst it does not seek the Local Authority's approval to proceed, it does inform it of the siting and the extent and nature of proposed buildings. "Wherever appropriate", Australia Post conforms to requirements of the Local Authority.

5. Having decided that the proposed site on the corner of Bay and Chegwyn Streets, Botany ("the proposed site") was suitable, Australia Post wrote a letter dated 14 August 1985 to the Council stating that it intended to purchase the proposed site and that, should the purchase be successful, it was intended to construct the new post office building during the 1986/1987 financial year. The letter stated that building plans were not yet available. The letter concluded with a paragraph reading:

"It would be appreciated therefore if Council would
give a formal expression of opinion to the
proposed establishment of a new Post Office on the
... site."

6. The Council replied by letter dated 8 November 1985 in which it stated, so far as relevant:

"Council considered the request at its meeting of
4th November, 1985, and resolved that you be
advised that it has no objection to the subject
land being used as a Post Office; and that you
also be advised that such a proposal would require
the land to be rezoned.
Council, at this stage, has not resolved to
proceed with the rezoning, but will await further
notification from your Authority regarding your
intentions."

7. The proposed site was then purchased and the purchase was settled on 27 March 1986.

8. Mr. W.H. Broadbridge, the Manager for New South Wales of Australia Post, gave evidence in this case. He said that, had the Council made an objection to the use of the proposed site as a post office, Australia Post would not have purchased it.

9. By letter dated 27 June 1986 the Council informed Australia Post that the Local Traffic Committee consisting of representatives of the New South Wales Police Department, the Department of Main Roads, the Urban Transit Authority, the "Local Member's" representative and the Council, had considered the intention of Australia Post to establish the post office at the proposed site and had resolved

"that it does not favour the establishment of a
post office on the subject land as the traffic
conditions at the intersection of Bay Street and
Botany Road are considered to be critical and the
generation of additional traffic arising from the
establishment of the post office would adversely
affect the movement of traffic along Botany Road,
thus preventing it from performing its function as
an arterial road. Therefore, if Australia Post
intends to proceed with the development of a post
office at this location, it is considered that an
environmental impact study is necessary."

10. This was followed by meetings between representatives of the Council and Australia Post on 13 August 1986 and 2 February 1987 to attempt a resolution of the dispute which had arisen.

11. Attempts were made by Australia Post to find an alternative site for the new post office, but they were unsuccessful.

12. Plans for the proposed post office were lodged with the Council by Australia Post on 24 November 1986. Mr. Broadbridge said that he considered those plans

"to only be reflective of acquainting Council with
the design, as distinct from leaving available for
reconsideration by the Council whether or not the
site could be used for the erection of a post
office, that matter having been determined in my
mind by reason of the letter from the Council
dated 8 November 1985."

13. On 23 December 1986 the Council informed Australia Post that it had resolved to disapprove of the use of the proposed site for the erection of a post office.

14. A further meeting was held between representatives of the parties on 4 December 1987, but it did not solve the problems.

15. By letter dated 2 February 1988 Australia Post informed the Council:

"We now have no alternative, but to proceed with
the calling of tenders for a new building at the
Bay and Chegwyn Street site.
It is expected that a contract will be let for
construction of the building to take place during
the 1988/89 financial year.
In accordance with established practice, Australia
Post seeks Council's formal 'Expression of
Opinion' on the plans for the new post office
building, forwarded herewith."

16. The Council replied by letter of 29 February 1988 stating that the Council was opposed to the proposal for the erection of a post office on the proposed site for reasons which I summarise as follows:-
1. The amount of traffic likely to be generated by the development is unsatisfactory especially at the intersection of Bay Street and Botany Road, Botany;
2. Inadequate provision has been made for the parking of staff vehicles;
3. "The circumstances of the case and the public interest". The letter also referred to Council's concern in relation to the building itself with respect to certain matters which it is not necessary to state for present purposes.

17. Australia Post replied by letter of 30 March 1988 disagreeing with some of the statements made by the Council and with its attitude of opposition and saying that Australia Post was prepared to meet Council's requirements in certain respects with respect to the proposed building.

18. The Council then commenced this proceeding. The Council challenges the decision of Australia Post communicated to it by letter of 2 February 1988 to proceed with the calling of tenders for the new post office on the proposed site upon various grounds which echo certain of the provisions of s. 5 of the Judicial Review Act. The issues in the case concern the Environment Protection (Impact of Proposals) Act 1974 (Cth) (to which I shall refer as the "Environment Protection Act" and an Order made under s. 6 of the Environment Protection Act known as the Administrative Procedures Under the Environment Protection (Impact of Proposals) Act 1974 (to which I shall refer as the "Administrative Procedures Order"). The case also concerns the status and effect of a document titled:

"Statement of Understanding between Australia Post
and the Department of Environment, Housing and
Community Development on the application of the
Environment Protection Act (1975) and its
administrative procedures to Australia Post"

(to which I shall refer as the "Statement of Understanding").

19. Central to the case is the Environment Protection Act. Sub-section 5(1) provides, so far as relevant:

"5(1) The object of this Act is to ensure, to the
greatest extent that is practicable, that matters
affecting the environment to a significant extent
are fully examined and taken into account in and
in relation to -
(a) the formulation of proposals;
(b) the carrying out of works and other
projects; ...
by, or on behalf of, the Australian Government and
authorities of Australia either alone or in
association with any other government, authority,
body or person."

20. "Environment" is defined by s. 3 as including "all aspects of the surroundings of human beings, whether affecting human beings as individuals or in social groupings". Sub-section 6(1) empowers the Governor-General from time to time by Order to approve administrative procedures for the purpose of achieving the object of the Act. Sub-section 6(2) provides:

"Without limiting the generality of sub-section
(1), the approved procedures may provide for -
(a) enabling the Minister to require the supply
of information for the purpose of
consideration, by or on behalf of the
Minister, of the necessity for environmental
impact statements or public environment
reports;
(b) authorizing the Minister to direct the
preparation or obtaining, and the submission
to the Minister, of statements to be known
as environmental impact statements;
(ba) authorizing the Minister to direct the
preparation or obtaining, and the submission
to the Minister, of reports to be known as
public environment reports;
...
(g) the examination of those statements and
public environment reports by or on behalf
of the Minister and the making by or on
behalf of the Minister of comments,
suggestions or recommendations concerning
the matters to which those statements and
public environment reports relate, including
suggestions or recommendations concerning
conditions to which approvals, agreements
and other matters should be subject; ..."

21. An Order of the Governor-General under s. 6 must be notified by publication in the Gazette and laid before each House of the Commonwealth Parliament (s. 7).

22. The Governor-General by Order under s. 6 dated 29 May 1987 approved of the administrative procedures set out in the schedule to that Order which came into operation on 1 June 1987. That Order is the Administrative Procedures Order to which I now turn.

23. The definition paragraph is para. 1.1 and it defines "proposed action" as meaning a matter referred to in any of the paragraphs of s. 5 of the Environmental Protection Act. Paragraph 1.3 provides:

"Before a proposed action is completed, the
proponent shall do all things necessary to ensure
that these procedures are complied with in
relation to the proposed action."

24. The supplying of information is dealt with by paras. 2.1, 2.2 and 2.3. Those paragraphs provide as follows:

"2.1. As soon as possible after the Department
has been informed of a proposed action under
paragraph 1.2.1. or 1.2.4., the proponent shall
supply to the Minister, or the Department, such
information as is required by these procedures, or
is otherwise necessary, for the purpose of
consideration, by the Minister or on the Minister's
behalf, of the necessity for an environmental
impact statement or a public environment report
report in relation to the proposed action.
2.2. For the purpose of paragraph 2.1., the
information required by these procedures shall, to
the extent appropriate in the circumstances of the
case, be information -
(a) summarizing any preliminary planning,
consideration or work undertaken in relation
to the proposed action and, in particular,
describing any feasible and prudent
alternative to the proposed action
considered by the action Minister or the
proponent;
(b) describing the environment that is likely to
be affected by the proposed action and by
any feasible and prudent alternative to the
proposed action;
(c) indicating the potential impact on the
environment of the proposed action and of
any feasible and prudent alternative to the
proposed action, including any enhancement
of the environment;
(d) describing any safeguards or standards for
the protection of the environment intended
to be adopted or applied in connection with
the proposed action; and
(e) stating any investigations or studies
intended to be made of the possible impact
on the environment of the proposed action.
2.3. For the purpose of consideration, by the
Minister or on the Minister's behalf, of the
necessity for an environmental impact statement or
a public environment report in relation to a
proposed action, the Minister, or the Department
on behalf of the Minister, may require the
proponent to provide, within a reasonable period,
such other information as is specified and is
necessary for that purpose."
Paragraph 3.1.1. provides:
"3.1.1. Subject to the Act and these procedures,
the Department shall, as soon as possible after
the information referred to in paragraph 2.1., and
any further information or further information
required under paragraph 2.3, has been received in
relation to a proposed action -
(a) determine, on behalf of the Minister, that
the preparation or obtaining, and submission
to the Minister, of an environmental impact
statement or a public environment report in
relation to the proposed action is not
required for the purpose of achieving the
object of the Act; or
(b) refer the question whether the preparation
or obtaining and submission to the Minister,
of an environmental impact statement or a
public environment report in relation to the
proposed action is required for the purpose
of achieving the object of the Act to the
Minister who shall forthwith determine the
question and shall make a direction accordingly."

25. Paragraph 4.1. makes provision for the contents of environmental impact statements.

26. Paragraphs 11.1., 11.4. and 11.5. provide:

"11.1. A Minister, Department or an authority of
Australia may request the Minister to exempt a
proposed action, or a class of proposed actions,
from all or any of the requirements of these
procedures."
"11.4. Subject to these procedures, the Minister
may, by written instrument exempt a proposed
action, or a class of proposed actions, from the
requirements of these procedures or such of those
requirements as are specified."
"11.5. Unless the Minister is satisfied that to
do so would be contrary to the public interest, an
exemption under para. 11.4., and a summary of the
reasons for granting the exemption, shall be made
public."

27. It appears that in 1978 the Minister for Environment, Housing and Community Development and the Minister's Department reached an understanding with Australia Post which is embodied in the Statement of Understanding.

28. This document was in evidence before me and the relevant parts provide as follows:

"Coverage of Environment Protection (Impact of
Proposals)
1. The object of the Environment Protection
(Impact of Proposals) Act (hereunder the Act)
is to ensure that environmental factors are
given proper consideration in the
Commonwealth's decision making processes.
2. In the application of the Act and its
Administrative Procedures to the
responsibilities of the Australian Postal
Commission (hereunder Australia Post),
subject to paragraph 3 the following are not
considered to be matters likely to affect the
environment to a significant extent:
(a) movement of personnel, equipment,
vehicles or vessels for the conduct of
the functions of Australia Post;
...
(g) acquisition of sites for and
acquisition or construction of post
offices other than general post offices
and mail centres;
...
3. A matter referred to in the preceding
paragraph may be regarded as affecting the
environment to a significant extent should
any of the following circumstances apply:
...
(b) local government objections of an
environmental nature are not resolved
to the satisfaction of both parties;
...
(j) the following matters (where
applicable) have been given
consideration by Australia Post and are
considered to be significant in
relation to the proposed action:
...
. effects on traffic and pedestrian
safety;
..."

29. Australia Post took the view that the "Statement of Understanding" absolved it from preparing environmental impact statements for the purchase and construction of post offices other than general post offices and mail centres. It is common ground that the proposed post office is not a general post office or a mail centre for the purposes of paragraph 2(g) of the Statement of Understanding. Mr. Broadbridge said in evidence that he took the view that the statement by the Council in its letter to Australia Post of 8 November 1985 that it "had no objection to the subject land being used as a post office" meant that the Council waived any rights which it may have had to protest on environmental grounds to the proposed purchase or construction of the post office.

30. The first question that arises concerns the status of the "Statement of Understanding". The responsible Minister may by written instrument exempt a proposed action or a class of proposed actions from the requirements of the procedures under the Administrative Procedures Order (exemption 11.1. and 11.4.) but there is evidence and it is common ground, that there is no such written instrument unless the Statement of Understanding itself constitutes the necessary exemption.

31. An affidavit was sworn by Mr. B.J. Odgers, the Director of the Procedures and Agreements Section in the Environment Assessment Branch of the Department of the Arts, Sport, the Environment, Tourism and Territories. Mr. Odgers deposed as follows:-

"2. The Memoranda of Understanding have been
developed since 1975 to provide guidance to
responsible authorities about their obligations
under the Act. The Memoranda attempt to
streamline administration and to ensure that
responsible authorities understand their
obligations. In particular the Memoranda are
designed to assist such authorities to determine
whether a matter is affecting the environment to a
'significant extent' pursuant to Section 5 of the Act.
3. The Memoranda assist in furthering the object
of the Act as set out in Section 5. They do not
purport to be exemptions within the meaning of
sub-paragraph 11.1 of the Environment Protection
(Impact of Proposals) Act Administrative Procedures.
4. The Australian Postal Corporation was the
first authority to enter into a Memorandum of
Understanding. The Australian Postal Corporation
signed that Memorandum in 1978.
5. The practice was and remains that when
Memoranda of Understanding are entered into the
Minister responsible for the Environment is informed.
I believe that practice would have been followed
in relation to the Australian Postal Corporation."

32. The Statement of Understanding is therefore a guide to Australia Post for the purpose of proper public administration. It does not on its face purport to be an exemption under paras. 11.1 or 11.4 of the Administrative Procedures Order; now could it be so construed. It thus cannot contradict the law, but must be consistent with it both in its terms and operation. It is common ground that Australia Post did not comply with the administrative procedures laid down under the Environment Protection Act and the Administrative Procedures Order. Non-compliance with those procedures could not be supported by resort to the Statement of Understanding. Exemption from the requirements of the Administrative Procedures Order can be obtained by invoking its exemption provisions (paragraphs 11.1. to 11.5.), but not by the Statement of Understanding.

33. The Statement of Understanding may be a sensible means of achieving efficient administration of Australia Post congruently with the objects of the Environment Protection Act and the Administrative Procedures Order; but the Statement of Understanding is simply what Mr. Odgers said it is, namely, a guide to Australia Post about its obligations under the relevant legislation. It cannot serve a different purpose; and the ultimate source of Australia Post's powers and obligations must, for presently relevant purposes, be found in the Environment Protection Act and the Administrative Procedures Order. That legislation cannot be supplanted by the Statement of Understanding.

34. Even if the Statement of Understanding could constitute an exemption under the Administrative Procedures Order it is clear from its own terms that Australia Post was not absolved from complying with the administrative procedures to which reference has been made.

35. The purchase of the proposed site and the construction of the new Botany Post Office fall within paragraph 2(g) of the Statement of Understanding with the result that prima facie Australia Post would be absolved from complying with the administrative procedures. Paragraph 2 of the Statement of Understanding is, however, subject to paragraph 3 which includes sub-paragraph (b) mentioned earlier. Hence, paragraph 2 would not absolve Australia Post from complying with the administrative procedures if there are "Local Government objections of an environmental nature" which "are not resolved to the satisfaction of both parties".

36. The objections of the Council to the proposed construction of the new post office relate essentially to traffic likely to be generated by the development and the stress that it will place on the capacity of the road system in the vicinity of the proposed site, in particular, at the intersection of Bay Street and Botany Road; and to what is said to be the inadequate provision on the proposed site for parking staff vehicles.

37. It was not disputed, nor could it be, that objections of this nature are "of an environmental nature" within the meaning of the Statement of Understanding. The word "environment" according to its ordinary meaning would encompass such objections and the Environment Protection Act itself defines "environment" in terms of such width as to encompass objections relating to traffic problems.

38. I turn to the letter from the Council to Australia Post of 8 November 1985 which is relied on by Australia Post to found the proposition that the Council agreed to the use of the proposed site for the construction of a post office, so that it constituted a resolution of "local government objections of an environmental nature" to the satisfaction of the Council, and therefore, Australia Post, for the purposes of paragraph 3(b) of the Statement of Understanding, with the result that paragraph 2(g) applied to exempt Australia Post from compliance with the administrative procedures which otherwise would have been required by the relevant legislation already mentioned. An alternative argument was put on behalf of Australia Post that the letter constituted a waiver by the Council of its objections of an environmental nature to the development of the proposed site as a post office. The letter is perhaps couched in unfortunate terms in stating that the Council "has no objection to the subject land being used as a post office;" but that statement must be read in the context of the letter as a whole, the circumstances in which it was written and the statutory framework in which it must be understood. The letter from Australia Post dated 14 August 1985 to which the Council's letter was in reply asked for "a formal expression of opinion" to the proposed establishment of a new post office on the proposed site and made it clear that it was intended to construct the new post office building, but that the building plans were not yet available. This in itself suggests that the writer of the letter of 14 August 1985 on behalf of Australia Post assumed it likely that building plans, when available, would be submitted, perhaps, not by legal requirement, but in the interests of comity. The statement to which I have just referred in the letter of 8 November 1985 was immediately followed by the statement that Australia Post's proposal "would require the land to be rezoned" and the cautionary note that the "Council, at this stage, has not resolved to proceed with the rezoning, but will await further notification from your Authority regarding your intentions". It must have therefore been clear to Australia Post that in the Council's view it would be necessary for Australia Post to request that the proposed site be rezoned or at least that it should await the outcome of a rezoning application.

39. If a rezoning application had been made to the Council the customary procedures and requirements of the Environmental Planning and Assessment Act 1979 (NSW) would have to be followed involving notification to the public of the intention to rezone, consideration of objections, consultation with relevant government instrumentalities including the Department of Main Roads and Police Department, and, finally, consideration and decision by the responsible State Minister. Australia Post must be taken to have been aware of those procedures and requirements notwithstanding its view that it was not bound in law by them. Also, Australia Post was aware that it is Federal Government policy that, while Federal Authorities may not be bound by relevant State legislation with respect to rezoning or development applications for land or buildings of the Commonwealth, Federal authorities should co-operate wherever practicable with State and Local Government bodies and their planning requirements.

40. There is a clear distinction in law between land use and the construction of buildings on the land. Whilst land may be rezoned for a specific use as a post office, the nature of the building and the services which it is proposed to provide in and from it are relevant considerations in determining effect upon the environment, especially with respect to questions of traffic, parking, loading and unloading. Australia Post must have had knowledge of those matters.

41. In these circumstances it cannot be successfully contended either that the Council waived its objections of an environmental nature to the proposed development of the site as a post office including the construction of of the particular building upon it or that the Council's objections had been resolved to the satisfaction of both parties. Hence, if the Statement of Understanding could operate as an exemption, paragraph 3(b) would and paragraph 2 would not apply. In the result the obligation of Australia Post to comply with the administrative procedures prescribed by the Environment Protection Act and the Administrative Procedures Order would remain. Further, in so far as Australia Post sought to contend that the Council could waive its objections of an environmental nature the contention must fail because its acceptance would be based on the fallacy that a local Council could absolve a federal statutory body from complying with federal law.

42. Australia Post has proceeded on the assumption that it is not bound to comply with the administrative procedures laid down by the Environment Protection Act and the Administrative Procedures Order because of the view which it must have taken of the Statement of Understanding, a view which underlay its decision to proceed with the calling of tenders. When making that decision, Australia Post (a) failed to take a relevant consideration into account in the exercise of Australia Post's powers, namely, the obligation to comply with the Environment Protection Act and the Administrative Procedures Order, (b) did not observe the procedures that were required by law to be observed in connection with the making of the decision and (c) erred in law (see s. 5 of the Judicial Review Act).

43. It was submitted on behalf of Australia Post that the Court ought not in the exercise of its discretion to make any orders against Australia Post, in particular, because the Council took advantage, so it was said, of the erroneous view of Mr. Broadbridge as to the effect of the letter of 8 November 1985. I do not regard this submission as sound. My earlier reasons sufficiently deal with it, nor does the evidence justify any such conclusion.

44. It was also submitted that the Court should, in its discretion, decline to make the orders sought by the Council because the challenge went only to Australia Post's decision to call for tenders and not to the underlying decision to purchase the site for development. The alleged futility in reviewing only the later decision to call for tenders is said to be a basis for refusing the relief claimed. The essence of the challenge made by the Council relates, however, to the failure of Australia Post to abide by certain requirements of the Environment Protection Act and the Administrative Procedures Order. There can be no question of futility when the effect of the Court's order is to require a party to comply with certain legal obligations which it had previously failed to do. I therefore reject this submission.

45. In all the circumstances, including Australia Post's misconception as to its statutory obligations, there is no basis established for denying discretionary relief.

46. The appropriate course for this Court to take is to set aside the decision of Australia Post communicated to the Council by the letter of 2 February 1988 to proceed with the calling of tenders for a new post office on the proposed site. I shall make that order. Australia Post must pay the Council's costs of the proceeding.