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Issue # 1427      9 September 2009

Catherine Hill Bay celebrations – with a note of caution

Last week the NSW Rees government suffered a humiliating defeat when the NSW Land and Environment Court found that prior approval of development at Catherine Hill Bay, south of Newcastle, was illegal.

The development application involved construction by the Rose Group of 600 new houses alongside 60 early 20th-century houses at Catherine Hill Bay, and another 187 houses at nearby Gwandalan. A second application involves further developments at both sites by Coal and Allied Industries. The proposals, which involved rezoning areas of bushland previously reserved for conservation, were bitterly contested by local residents and concerned organisations, including the National Trust of Australia.

Before the Catherine Hill Bay application was considered, the proposed development areas had been rezoned, and the government had accepted an offer of 300 hectares of bushland owned by the Rose Group, for inclusion in the state’s national parks. The offer was made in anticipation of the government approving the project, and Justice David Lloyd described the agreement as a “land bribe”, which would bias the minister’s judgement when considering whether a proposal.

In a particularly stinging summary, the judge commented that “former Minister for planning, Frank Sartor seemed to be enamoured with the whole proposal of a land bribe in exchange for rezoning and associated development; again, it is to be noted, before receiving and considering the Director-General’s report. Far from bringing an impartial mind to his determinations, the minister committed himself to bringing a partial mind to the applications.”

To add salt to the wound, the government has been ordered to pay the legal costs of the local community organisation, the Gwandalan Summerland Point Group, which had brought the matter to the court and was represented by the NSW Environmental Defender’s Office.

Major ramifications for developers

Not mentioned during the hearing was the persistent issue of donations to the ALP by corporations or individuals who need government approval for major development proposals. The NSW Greens claim to have detected a close correlation between the donations and development approvals over a number of years. The government has, of course, indignantly denied the accusation. Nevertheless, the court’s decision will throw into doubt many current or previous development proposals involving the transfer of land to the government prior to consideration of the applications.

With so much hanging over the outcome of the Catherine Hill Bay case, it is entirely possible that the developers will make a new application, which the government will support. Sartor has described the court decision as “perplexing, because the judge found bias in deciding the development applications, but no bias in rezoning the land, which still stands.” He also stated that the Planning Act needs to be revised, presumably to permit the government to approve whatever it likes, without fear of Court intervention.

For her part, the current Minister for Planning, Kristina Keneally, has announced that the government will not appeal the decision, nor will it enact retrospective legislation to permit it to proceed with the previous applications. However, she has also stated that she will not revoke the land rezoning, which had been carried out as part of the development process. This leaves the way open for the Rose Group and Coal and Allied to lodge new development applications, as they are still entitled to do.

The government claims it simply erred in a matter of procedure, and refuses to acknowledge that development approval would have been inappropriate because it would have violated the significance of the tiny, exquisite Catherine Hill Bay village. Last week Keneally declared: “Because the court identified that the MOU (memorandum of understanding) and deed were invalid we need to look at how far back in the planning process we need to go, in order to redetermine … these applications.”

Another nail for the government’s coffin

The Catherine Hill Bay case illustrates just how overconfident the government had become in its entrenched practice of smoothing the way for big developers. Officials and legal advisors had warned the government it might lose the case. In 2007 a lawyer working for the Department warned that “the government should only approve the relevant concept plan on its merits”, and that “If the minister’s … grant of approval to a project or a DA (development application) is based on the commercial benefits deliverable by a planning agreement, then this approval can be invalidated by a court.”

The government ignored this advice. Since then, Sartor’s loud protestations of innocence have only drawn attention to the government’s failings, and added to the overwhelming public perception that it is thoroughly corrupt. Moreover, Sartor has most unwisely compared his own actions with those of the Rudd government, asking “Did Kevin Rudd’s announcement of the Gorgon gas project in Western Australia bias (Environment Minister) Peter Garret’s approval of the project some weeks later?” The answer must surely be “yes”!

In a totally new development, members of the NSW and federal ALP governments are now rumoured to have accepted bribes from business interests, in return for favoured treatment. The Rudd government may be able to shrug off such accusations, but it is impossible to believe that the NSW ALP government will survive the next state elections.

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