Australia: NSW Court of Appeal reaffirms LEC decision to refuse Rio Tinto’s proposed expansion of the Warkworth Coal Mine

On 7 April 2014, the NSW Court of Appeal handed down its decision in Warkworth Mining Limited v Bulga Milbrodale Progress Association Inc [2014] NSWCA 105, which concerned an appeal against the refusal of Rio Tinto's proposed extension of the Mount Thorley Warkworth coal mining operations in the Hunter Valley.

The Court unanimously rejected all 13 grounds of appeal raised by Warkworth Mining Ltd (Warkworth) against the first instance decision in the NSW Land and Environment Court. Most significantly, the Court held that Warkworth's economic modelling was deficient and the primary judge had not made an error of law in deciding that the significant impacts of the mine extension on the Bulga residents and the environment outweighed its economic benefits.


Warkworth operates the Warkworth open cut coal mine near the village of Bulga in the Hunter Valley. The mine operated under a 2003 development consent issued by the Minister for Planning and Infrastructure (Minister). The consent imposed a biodiversity offset condition requiring Warkworth to conserve non-disturbance and habitat management areas.

In 2010, Warkworth lodged a major project application seeking approval under Part 3A of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) (Part 3A is no longer in force) to enlarge the Mine and prolong the duration of its operation (Project). This involved clearing around 766ha of endangered ecological communities and removing significant local landforms. On 3 February 2012 the PAC, acting as the Minister's delegate, approved the Project under section 75J of the EPA Act (now repealed) (Approval).

A residents action group brought an objector appeal against the approval under section 75L(3) of the EPA Act (now repealed). In Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited [2013] NSWLEC 48 (LEC Decision), Chief Justice Preston refused the Project and overturned the Approval on the basis that it would have significant and unacceptable impacts on biological diversity, including endangered ecological communities, as well as noise, dust and social impacts. More details about this decision are set out in an earlier Corrs In Brief.


Warkworth challenged the validity of the LEC Decision on 13 grounds, including that the LEC had not dealt with the Project's economic benefits and had taken irrelevant issues into account.

In particular, Warkworth claimed that Chief Justice Preston had denied Warkworth procedural fairness in relation to the following matters:

  • background noise levels had been set too high;
  • there was insufficient evidence to establish that Project impacts on threatened fauna would be offset by the remote biodiversity areas;
  • Chief Justice Preston had used a polycentric approach in his reasoning to discount expert evidence without raising this intention with the parties or the experts;
  • Chief Justice Preston's polycentric approach to considering various factors in the decision-making process was a departure from the balancing exercise required under section 75J of the EPA Act; and
  • the LEC had failed to deal with the question raised by Warkworth that natural regeneration of the Warkworth Sands Woodland supported an inference that assisted regeneration would be successful, and that the Northern and Southern Biodiversity Areas provided an offset for the Project's clearing of the Warkworth Sands Woodland. Warkworth also claimed this was a constructive failure to exercise jurisdiction.

In addition, Warkworth contended that Chief Justice Preston had made errors of law by:

  • failing to consider the Director-General's report and approval recommendations as a 'fundamental element' or 'focal point' of matters considered in the decision-making process;
  • failing to have regard to the objects of the Mining Act 1992 (NSW), which are relevant due to the operation of s 39(4) of the Land and Environment Court Act 1979 (NSW);
  • failing to determine the public interest by not making findings on the positive aspects of the Project; and
  • holding that only an offset of the same ecological community that would be impacted by the Project could be considered in addressing the impacts of the Project.

The Minister also appealed the decision by way of cross-appeal.


Procedural fairness

The Court rejected all of Warkworth's grounds of appeal regarding the denial of procedural fairness.

With regard to the issue of background noise levels, the Court held that Warkworth had failed to adduce appropriate expert evidence and that the LEC had given correct regard to acoustics reports prepared for Bulga. The Court also found that the LEC had correctly considered evidence concerning Project impacts on threatened fauna. Further, the Court rejected Warkworth's arguments on polycentricity. It held that Warkworth's framing of the LEC's reasoning as incorrectly polycentric was without substance, since determining whether an error of law had been made should be done with reference to the LEC's reasons, rather than Chief Justice Preston's description of the approach taken. In any event, the weight given to various matters was for the LEC's discretion and did not depart from the balancing exercise under section 75J of the EPA Act. Finally, the Court found that the LEC had dealt sufficiently with the issue of regeneration, as evidenced by Chief Justice Preston's reference to expert evidence in his reasoning.

Director-General's Report

The Court held that section 75J(2) of the EPA Act did not require a decision maker to consider the Director-General's report and recommendations as a 'fundamental' or 'focal' consideration in deciding applications for project approval. Whilst section 75J(2) required the report to be taken into account, the section did not require the decision-maker to give the report primary weight, implement it, or justify why it should not be followed.

Instead, a decision maker was allowed to balance multiple considerations and choose what weight should be given to particular matters (unless the statute specified otherwise). The Court also emphasised that s75J(2)(a) of the EPA Act requires the Minister (and the judge on appeal) to not only consider the Director-General's report and the recommendation contained therein, but the various material contained within that report. This includes expert and technical reports, submissions and contrasting opinions. The Court held that to give the department's view primary importance, would be an unauthorised interference with Ministerial responsibility. Additionally, the LEC is not limited to considering material before the Minister and it is open to the court to emphasise factors differently to that in the Director-General's report.

In coming to this view, the Court considered the decisions of Zhang v Canterbury City Council 51 NSWLR 589 and R v Hunt; Ex Parte Sean Investments Pty Ltd 180 CLR 322, which Warkworth considered authorities for its claim that a statutory provision was 'fundamental' or 'focal' in the decision making process. The Court disagreed, holding that whether a matter included in statute becomes 'focal' depends – as it did in those cases – on the language of the statutory provision in question.

Mining Act

The Court rejected Warkworth's view that Chief Justice Preston had failed to consider the objects of the Mining Act in support of its application for project approval. The Court held that the operative provisions of the Mining Act do not deal with the grant of development consent for mining activities, which is a separate process distinct from Warkworth's appeal on the Project refusal. The Court held that the requirement that development consent under the EPA Act be obtained prior to the grant of an authority under the Mining Act, was a clear indication of these distinct processes and that the objects and operative provisions of the Mining Act are instead directed towards how mining is to be carried out.

Public interest

The Court disagreed with Warkworth's argument that Chief Justice Preston had failed to correctly consider the positive impacts of the Project in his findings on public interest. The Court took the view that a statutory provision requiring regard to the public interest operates at a high level of generality. It is capable of including principles of Ecologically Sustainable Development and balancing these principles against economic issues.

Endangered Ecological Community Offsets

The Court rejected both of Warkworth's arguments on this point. The Court noted that instead of proposing any avoidance or mitigation measures, Warkworth proposed an offsets package which included five remote biodiversity areas. The relevant endangered ecological communities for which the package was created were not included in any of the offset areas. On reaching his findings, Chief Justice Preston had regard to principle 10 of the Principles for the Use of Biodiversity Offsets in New South Wales and concluded that the offsets package did not include any like-for-like offsetting required by this principle. Warkworth argued that such narrow reasoning was an error of law, firstly, because it was not in the public interest, or alternatively, because the LEC ignored expert submissions that remote offsets did have ecological benefits. The Court held that neither of these arguments constituted errors of law because, as to the first argument, it was open to his Honour to determine the appropriateness and importance of the principles in the decision-making process, and as to the second argument, his Honour simply made a finding of fact based on the evidence before him.

Other grounds

The Court of Appeal rejected all of Warkworth's other grounds of appeal. These included Warkworth's claims that Chief Justice Preston had erred in considering measures of avoidance for managing the Project's adverse impacts on biological diversity and in failing to consider whether the risks of the Warkworth Sands Woodland not regenerating would be mitigated by a new condition of approval proposed by Warkworth involving demonstration that the woodland could be re-established.


The judgment demonstrates the willingness of the Courts to give equal weight to all issues surrounding major mining projects, and to overturn PAC rulings and the recommendations of the Director-General where economic benefits are not seen to outweigh other factors, including environmental conservation and social impacts.

The decision also supports the proposition that it is open to decision makers to consider the type of economic modelling submitted for mining projects. Accordingly, the valuations given to environmental and community factors can impact whether approval is granted.

Despite the LEC and Court of Appeal decisions, Rio Tinto has since lodged a fresh request with the Department of Planning and Infrastructure for Director-General Requirements to be issued for the Warkworth coal mine continuation project.

Following the repeal of section 75L of the EPA Act, merits based reviews of project approvals by the LEC are now precluded when the application has been made subject to a public hearing by the PAC. A public hearing can occur at any stage of the planning process and becomes more likely where there are in excess of 25 objections to the project. Consequently, third party challenges to major controversial mining projects are now likely to be mostly confined to administrative law appeals (where available).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.