On 20 May 2011, the Land and Environment Court gave its decisionin Capital Airport Group Pty Ltd v Director-General of the NSW Department of Planning (No 2)  NSWLEC 83.
The Court examined whether Council's decision to submit a draft Local Environment Plan to the Director- General of the Department of Planning and Infrastructure was infected with apprehended bias. This required the Court to consider whether apprehended bias in the nature of prejudgment (as opposed to bias based on interest) had tainted the Council's decision.
Capital Airport Group Pty Ltd (Applicant) challenged the validity of two decisions made at intermediate stages of the process for making the draft Local Environment Plan (LEP) for South Tralee, NSW. The draft LEP provides for the rezoning of South Tralee for residential and other purposes. The Applicant is associated with the nearby Canberra Airport and has for many years opposed the rezoning of South Tralee.
These proceedings were the second legal challenge by the Applicant to Queanbeyan City Council's preparation of the draft LEP. The other respondents were the Director-General of the (then) Department of Planning (Director- General) and The Village Building Company Pty Ltd (Village), being the majority owner of the land at Tralee.
The Applicant challenged the Council's decision to submit the draft LEP to the Director-General and its request that the Director-General permit Council to exhibit the draft LEP publicly (Submission Decision) on several grounds, including apprehension of bias. Specifically, the Applicant asserted amongst other matters, that:
- Village had a central role in Council's preparation of the draft LEP and environmental study of the land (environmental studies) as Village was the proponent for, and had a financial interest in, the rezoning. Village had paid for and commissioned a number of reports which were considered as part of the environmental study
- Village had an "association" with Council as it had a representative on the Technical Working Group responsible for addressing deficiencies in existing and future road networks
- Council had a "financial interest" in the outcome of the process due to benefits to be received by Village under a draft Voluntary Planning Agreement (VPA)
- Council "prejudged" the issue of rezoning having formed a concluded view on matters central to the preparation of the draft LEP and environmental study.
The Court found there were no grounds to support a finding of apprehended bias on the part of Council. In dismissing the Applicant's claim, the Court held that:
- consideration by Council of studies commissioned by Village did not give rise to an apprehension of bias on the part of Council
- Village's membership on the Technical Working Group did not mean that Council's Submission Decision was affected by apprehended bias
- the VPA was in draft form only and Council could not have a financial interest in the outcome of the process as the developer's contribution under the VPA was for a "public purpose" only
- Council had not "prejudged" the issue of rezoning.
The Court re-affirmed the "two might's test" and noted that the test applies to both judicial decisionmakers and administrative decisionmakers. The Court noted, however, that a fair minded lay observer will not necessarily have the same expectations of an administrative decision-maker they would have of a judicial decision maker. The Court expounded the legal principles regarding apprehended bias at :
- "There is attributed to the fair minded lay observer knowledge of the actual circumstances of the case": Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 87
- "However, there should not be attributed to the fair minded lay observer a detailed knowledge of the law and the judicial process": Webb v R (1994), 181 CLR 41 at 51.
The Court set out other factors generally taken into account in determining whether a decision had been affected by apprehended bias by prejudgment, including:
- the precise role of staff members of the decision-making body and whether those staff members have "central roles" in the decisionmaking process
- that the nature of the statutory task is a critical consideration, and
- the "passage of time" and the events occurring between the impugned conduct and the actual decision said to be tainted by bias, which may remove any real connection between the impugned conduct and the relevant decision made.
Determining authorities under the Environmental Planning and Assessment Act 1979 (NSW) should be aware of the risk of their decisions being tainted by apprehended bias in the nature of prejudgment.
This "two might's test" hinges heavily on the circumstances surrounding the decision subject to a claim of apprehended bias. Determining authorities should be aware of the contextual issues and circumstances when making decisions, including:
- the role of staff members in making decisions and factors which may influence their decisions
- any previous decisions which may have an impact on future decisionmaking
- events occurring between previous decisions which may impact on future-decision making, and
- any other circumstances surrounding the decision and the context in which it was made.
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