Questions for Hornsby Shire councillors and staff that will be asked at the Advocate's August 7 public forum on the acquisition of the former CSR Quarry.
Q1. What are some of the options being considered for the future of the Quarry?
Hornsby Quarry has been the subject of considerable study, analysis and community consultation concerning the future use and development of the site. Council engaged a consultant, Parsons Brinkerhoff, to prepare a Land Capability Study and Masterplan for the Quarry and its environs.
The Study and Masterplan recommends development of both Hornsby Quarry and Old Mans Valley with mixed residential and recreational uses. Concentrated residential development would be consistent with State Government urban consolidation strategies and the provision of multi-purpose sports fields would address the demand for active open space areas within Hornsby Shire. The Masterplan also recommends the partial filling of the Quarry with water and reuse on the proposed playing fields and landscaped areas.
When Council had the Hornsby Quarry & Environs Study and Masterplan reviewed in terms of its economic viability, it found that the infrastructure costs associated with the development scenario for both the Quarry and Old Mans Valley could not be justified. In consequence, Council is looking at alternatives to the development scenario put forward in the draft Masterplan to determine what other options are available.
The Hornsby Quarry and Environs Land Capability Study notes that the weathered walls and rock faces of the Quarry pit are unstable and unsafe. Rock falls are likely to be an ongoing problem within the Quarry, especially after rainfall events. As such, the Quarry pit provides a high constraint to future land uses and development of the study area.
The Land Capability Study recommends that the geotechnical risk should be managed by prohibiting development and restricting access to the northern slope fill area and within the Quarry pit. The Masterplan Report also recommends the retention, protection and management of the geologically significant diatreme in the Quarry pit including provision for the long tem management of the Quarry walls and faces. The draft Masterplan identifies that filling the Quarry pit with water may provide an option for future management. The Land Capability Study recommends that further geotechnical assessment should be undertaken.
In light of the demonstrated need for further consideration of the long term management of the Quarry pit and associated costs, it is essential that further geotechnical evaluation be undertaken of the Quarry pit and measures identified for its ongoing management. Accordingly, Council has resolved to undertake investigation into options for the management of the Quarry pit and the economic feasibility of the various options.
At its meeting on 9 August 2006 , Council will consider a report on tenders for Geotechnical Investigation of the Quarry Site. It is anticipated that the findings and recommendations of the Study will inform further consideration of options for the future use of the site.
Q2. How much has been spent on ‘legal opinions' from Tim Robertson, SC, and others over the quarry in the past two years?
$44,000 - Mr Tim Robertson, Senior Counsel
$20,000 - Mr Michael Inglis, Tax Barrister
$50,000 - Storey and Gough Solicitors
$114,000 - TOTAL
Q3. In February this year the legal opinion from Mr Robertson, SC, on council's handling of the quarry acquisition was handed to council. Mr Robertson's responses to questions about the Valuer-General's obligations to find out from CSR about environmental problems with the site were kept confidential. Why was this allowed to occur? What measures have been taken regarding this part of his submission, if any? Why, more than five months after that advice was handed to council, can ratepayers not get access to it? What were those observations?
In view of the findings of the Hornsby Quarry Land Capacity Study and Feasibility Review, Council sought advice from Mr Tim Robertson, SC, to advise whether there is an avenue of appeal against the Valuer-General's determination. Mr Robertson advised that the process of the acquisition was lawful. Not only was the acquisition effected pursuant to court order, the foundation for the court order was sound. Council had no discretion to refuse to resume the land. The Council's legal advice that it must do so was correct and Council's action in doing so was lawful and indeed, obligatory.
Mr Robertson also provided advice on whether there is an avenue of appeal against the Valuer-General's determination. This advice is the subject of current investigation by Council and its legal representatives and is therefore subject to legal professional privilege. Those paragraphs of Mr Robertson's advice, which can be made public whilst retaining legal professional privilege on the balance, are available to the community.
In accordance with Mr Robertson's advice, on 15 March 2006 , Council requested information from both CSR Limited and the Valuer General. On 20 April 2006, Council forwarded a letter to the Department of Lands requesting, under the Freedom of Information Act, 1989 (NSW), a copy of all documents relating to the determination of compensation of Council to CSR Limited for the Hornsby Quarry site. Council also forwarded a letter to CSR Limited requesting all documents and reports submitted to the Valuer General concerning Hornsby Quarry to assist Council in consideration of its options including the ongoing management and capabilities of the site . No response has been received from CSR Limited.
On 29 June 2006 , a response was received from the Department of Lands. The response includes the release of limited documentation in the Department's possession and refuses access to other documents on the basis of objections raised by the Contract Valuer and CSR Limited. Council has requested an internal review of the determination by the Department of Lands .
Q4. In 1966 the former [offer (sic)] owner of the quarry, Farley and Lewers offered to give the quarry to the council at no cost. Cr Berman has said the council rejected this offer in 1973. Could you please supply the minutes of the meeting that rejected that offer and if these minutes do not do so, please outline the reasons why that offer was rejected.
Council records include multiple references to offers by Farley and Lewers concerning the Company's Quarry lands over the period 1966 to 1973.
However in 1973, Council considered a Shire Clerk's Report concerning the construction of sporting ovals in Old Mans Valley . The Report noted that in 1966 Farley and Lewers made an offer to dedicate to Council lands owned by the Company once the pit had been worked. The Report notes that Council accepted this offer and that the offer went into abeyance until 1969, when the Company made a fresh offer that did not include the dedication of land. The Report notes that Council could determine the status of the offer by direct enquiry of the Company.
Council resolved to receive the Report and reallocate monies for piping to appropriate ridings (now wards), i.e. the Council did not determine the status of the offer by direct enquiry of the Company
This matter was previously researched by Abbott Tout Solicitors, including interviewing the former Shire Clerk, Mr Keith Woodward in 2002, to determine if there was any contractual obligation upon CSR Limited to make Hornsby Quarry lands available to Council free of cost or otherwise. Abbott Tout Solicitors formed the opinion, on the available evidence, that there was no obligation on CSR Limited to transfer the Hornsby Quarry lands to Council at no cost.
On 15 March 2006 , Council instructed its solicitors, Storey and Gough, to obtain legal advice from Mr Tim Robertson, Senior Counsel, confirming whether there was any contractual obligation upon CSR Limited to make Hornsby Quarry lands available to Council free of cost or otherwise.
The instruction noted that a submission has been received from a Hornsby Shire resident expressing the view that there may have been a legal agreement between Council and Farley & Lewers Limited. It was submitted that the nature of the agreement was that Farley & Lewers Limited would be able to fill the Quarry and transfer it at no cost to Council.
Notwithstanding the above, Mr Robertson was requested to provide a further opinion as to whether Council has any contractual rights arising from a purported offer made in 1966 by Farley and Lewers Limited (and subsequently upon CSR Limited) to transfer the Hornsby Quarry lands to Council free of cost or otherwise. Council's solicitors have advised that the opinion is currently being finalised. Upon receipt, the advice will be reported to Council.
Q5. In June of this year Cr Berman said that the council was seeking legal advice on the validity of the Farley and Lewers offer. What is that advice and why has it taken so long to be made public?
As indicated in the answer to Question 4, Council has instructed its solicitors, Storey and Gough, to obtain legal advice from Mr Tim Robertson, Senior Counsel, to determine whether there was any contractual obligation upon CSR Limited to make Hornsby Quarry lands available to Council free of cost or otherwise.
Mr Robertson, SC has submitted preliminary draft advice to Council's solicitors. Council's solicitors have advised that the opinion is currently being finalised. Upon receipt, the advice will be reported to Council.
Q6. In 2001 CSR offered to rehabilitate the quarry and dedicate much of the quarry land for public open space in exchange for permission to develop part of the land. Council has said this would have been risky. Please explain the nature of this risk and the reasons the offer was rejected.
Council entered into numerous meetings and Mayoral Interviews with representatives from CSR from the mid 1990s onwards. Options considered included filling the Quarry with spoil from the Parramatta to Chatswood railway tunnel and M2 motorway. CSR was advised by Council that a Development Application could be lodged for filling the Quarry under the existing zoning.
The options presented by CSR raised concerns from an environmental perspective and did not demonstrate a community benefit. The landfill options were reliant upon the transport of soil material to Hornsby by road which was inappropriate on grounds of traffic safety and congestion. Accordingly, Council resolved to express its opposition to the use of the Quarry as a landfill site.
Following Council's resolution not to support the progression of a proposal by CSR to fill the Quarry, CSR served notice on Council to acquire the site. Council also received a letter from CSR advising that the value of the property is $24 million.
Council continued to enter into discussions with CSR concerning land use options for the Quarry site following receipt of the Acquisition Notice. On 14 August 2001 , a meeting was held between the Mayor, General Manager, Executive Manager, Planning Division and representatives of CSR. CSR's planning consultant, Urbis, presented three land use options. A representative from CSR stated that its claim for Council to acquire the land would be deferred should Council accede to one of its preferred options.
On 15 August 2001, the Executive Manager, Planning Division prepared a discussion paper of CSR options for discussion with legal representatives. The Paper noted that:
“It is considered inappropriate for Council to be considering land use options whilst the land acquisition claim remains outstanding to the value of $24 million claimed by CSR. Council should consider land use options for the site, free of any constraint or pecuniary interest. Only in this manner would Council be perceived by the community to be considering land use options objectively in terms of their environmental consequences and not the fiscal implications.”
On 11 September 2001 , Council received a letter from CSR advising of its intent to instruct its solicitors to commence Land and Environment Court proceedings seeking orders for Council to acquire the land.
On 12 September 2001 , based on legal advice from Council's Solicitor and Senior Counsel, the General Manager wrote to CSR inviting the withdrawal of the Acquisition Notice and lodgement of a development application. Specifically, the letter stated that:
“I refer to previous discussions between representatives of the Council and CSR regarding proposals which CSR has for the redevelopment of the above site.
During those discussions, several “options” were advanced by CSR.
The purpose of this letter is to place on record the view which is held by the Council, namely, that CSR is legally entitled to and is welcome to submit to the Council a development application for any proposal for redevelopment of the site. In saying that, Council is not indicating a preference for any option but assures the company that any application which may be lodged will be assessed on its merits.
…Given the existence of those “acquisition notices”, if a development application for the redevelopment of the site is lodged with Council, Council will, in accordance with established probity requirements, refer the application to external consultants for assessment. Notwithstanding that external assessment, however, it is the Council which will ultimately need to resolve one way or the other in relation to that development application.
Given the public perception which, notwithstanding assessment by external consultants, would exist given the presence of the acquisition notices, when a final determination of any development application is made by the Council, Council is of a view that those acquisition notices should be withdrawn by CSR. This is so that Council may make any decision on any application with an open mind and not directly or indirectly or subjectively be influenced or possibly be seen or be considered to be influenced in the decision making process by the existence of the acquisition notices”.
On 25 October 2001 , Council received further advice from About Tout Solicitors stating that:
We confirm that we had a short conference with Mr Ayling of Senior Counsel on 24 October 2001 .
Mr Ayling's advice as previously advised was that if Council entered onto negotiations with CSR in relation to any development of the subject property there was no practicable way in which those negotiations could be conducted which would not prejudice the question of compensation if the land is subsequently acquired.
Only if Council was reasonably confident that the outcome of those negotiations was development rather than having to acquire the land then it was probably reasonable to take the risk. However, if Council was entering into negotiations without an expectations that those negotiations would be successful for the purpose of trying to delay the current proceedings and thereafter any acquisition process than it would be preferable for the Council not to enter into those negotiations at all because of the risk impact on the ultimate value of the land.
Of course if CSR were to submit a development application to Council for the redevelopment of the land, presumably on the basis of existing use then Council would be obliged to deal with such an application under the Environmental Planning and Assessment Act 1979.
By memorandum dated 30 October 2001, the Executive Manager, Planning Division advised all Councillors of the advice contained in the letter from Council's Solicitor dated 25 October 2001 and that:
“it would be inappropriate for Council to enter into negotiations with CSR Limited for development of the site as it may prejudice the valuation of the land and any valuation compensation.
Council has engaged Mr Kent Wood, Valuer and Mr Malcom Drummond, Consultant Planner, to represent Council in the proceedings on the recommendation of Abbott Tout, Solicitors.”
Accordingly, should Council have wished to take alternative action, it could have done so by Notice of Motion or Council resolution.
On 27 September 2001 , CSR commenced Class 4 proceedings (No. 40177 of 2001) in the Land and Environment Court by CSR Limited against Council seeking orders that Council acquire the land and costs.
On 28 February 2002 , Orders were made by the Land and Environment Court that Council acquire Hornsby Quarry and that Council seek the approval of the Minister to give a proposed Acquisition Notice.
Minter Ellison, Lawyers on behalf of CSR Limited, wrote to Council and advised that, given Council's refusal to discuss the amount of compensation, they had been instructed to commence proceedings in the Land and Environment Court concerning the compensation.
Abbott Tout Solicitors, on behalf of Council, wrote to Minter Ellison Lawyers, on 26 September 2002 , advising that:
“We are instructed that our client cannot negotiate with your client in the absence of evidence of the basis of a claim of $29.5 million. This would include town planning as well as valuation material. Our client cannot make any offer in the absence of this material nor in the absence of advice from the State Valuation Office. To date this has not been forthcoming.”
CSR subsequently commenced Court proceedings to force the acquisition.
Q7. In August last year the NSW Court of Appeal ruled against the Valuer-General's valuation of a Caltex refinery at Birchgrove compulsorily acquired by the State Government, on the grounds that the valuation was based on the wrong planning rules. Do council's officers agree that the situation was similar to the situation that existed with the Hornsby Quarry. What steps have been taken to explore council's chances of a similarly successful appeal? If no steps have been taken, why not?
No, the Birchgrove matter was not similar to the situation of Hornsby Quarry. In the case of the Birchgrove matter, the State Government was seeking to purchase land zoned for industrial purposes. Whereas, Hornsby Quarry is zoned for open space purposes which comprised a reservation of land and associated obligation upon the Council to acquire the land upon receipt of a request from the owner of the property to do so. Consequently, there is no direct relevance of the Birchgrove matter to the compulsory acquisition of Hornsby Quarry.
With respect to whether Council explored options to challenging the valuation of the Quarry, Abbott Tout Solicitors and Senior Counsel were requested to review the basis of the valuation to determine whether it was manifestly unreasonable and whether Council could challenge its validity. Ms Jane Jagot, Barrister at Law, advised that, based on the available information, the Valuer-General was without power to contract the undertaking of the valuation to an independent valuer. Therefore, Ms Jagot advised that the valuation would appear to be unlawful. Council's Solicitor was subsequently instructed to file proceedings with the Supreme Court of NSW seeking a declaration that the valuation was unlawful. Council was advised that Ms Jagot would provide advice to Council on prospects on the matter when documents had been subpoenaed from the Valuer-General. Council was also advised that on receipt of advice on prospects, Council should resolve whether to pursue the Supreme Court proceedings.
Joint advice was subsequently received from Mr Geoffrey Flick SC and Ms Jayne Jagot indicating that Council's prospects were poor. This was due to the fact that the Valuer-General had powers to grant delegations to an independent valuer to make the valuation and had subsequently appeared to have reviewed and endorsed the recommended valuation, rather than ‘rubber stamping' the same.
The advice stated, therefore, that any real prospect of success in the proceedings must be found in a legal error in the manner in which the valuation itself was carried out, rather than the manner in which the Valuer-General decided to adopt the valuation. Abbott Tout Solicitors were instructed to obtain further valuation advice in this regard. Council was advised that if there was any material error of principle disclosed from the Valuer's advice, then Council's legal representatives would need to seek leave to amend its claim before the Supreme Court. If no such error was disclosed, or leave was not granted by the Supreme Court in the event that there was such an error in valuation, then it would remain the view of Counsel that Council had poor prospects of success.
Council was advised that once the valuation report had been received by Council's Solicitor and considered by Counsel, it would be further advised on prospects in this matter with a recommendation whether or not to proceed with the pending litigation in the Supreme Court. Valuation advice was subsequently sought from Mr Kevin Gothard. Mr Gothard's review did not identify any error of valuation principle or identify any matter that had been disregarded in undertaking the valuation.
Upon reviewing Mr Gothard's report, Ms Jayne Jagot and Mr John Ayling, SC provided preliminary advice to the effect that there was no error of law in the Valuer-General's valuation. A meeting was subsequently convened between Council's Solicitor, the General Manager, the Executive Manager, Planning Division, Ms Jagot and Mr Ayling to explore all options available to Council in the pending proceedings. The discussions resulted in Counsel remaining of the view that there was no error of law in the valuation.
A joint memorandum of advice was subsequently prepared by Mr John Ayling and Ms Jayne Jagot affirming that they were not able to identify any error of law which would sustain proceedings to vitiate the Valuer-General's determination. Consequently, Abbott Tout Solicitors recommended that Council withdraw the proceedings in the Supreme Court of New South Wales. In accordance with the legal advice, Council resolved to discontinue the legal proceedings.
In view of the findings of the Hornsby Quarry Land Capability Study and Feasibility Review, Council sought further advice from Mr Tim Robertson, SC, to advise whether there is an avenue of appeal from the Valuer-General's determination. Mr Robertson has advised that the process of the acquisition was lawful. Not only was the acquisition effected pursuant to court order, the foundation for the court order was sound. Council had no discretion to refuse to resume the land. The Council's legal advice that it must do so was correct and Council's action in doing so was lawful and, indeed obligatory.
Mr Robertson also provided comment on whether there is an avenue of appeal from the Valuer-General's determination. This advice is the subject of current investigation by Council and its legal representatives and is therefore subject to legal professional privilege.
Q8. Council has been accused of misleading the National Australia Bank over the information it gave in borrowing money for the acquisition. Did Council's officers tell the National Australian Bank that the land was a serious bushfire risk and that the land was unsuitable for development or not? If so, please provide documents that bear this out.
Following expressions of concern by the community that Council had made misleading representations to the National Australia Bank in raising the loan, verbal contact was made with senior management of the Bank.
During that conversation, the Council staff explained to the Bank's representatives issues surrounding the loan documentation, the Bank making information available to the Hornsby community, issues relating to the rehabilitation of the area, the financial feasibility of the development proposed in the Master Plan and the special rate considerations.
These discussions were subsequently confirmed in writing to the bank together with a copy of the Land Capability Study, Executive Manager's Report No PLN97/05 and the Ministerial Instrument approving the introduction of the Special Rate for 10 years.
An invitation was extended to the bank to contact the General Manager if the Bank had any concerns or enquiries in respect of the matter.
No approach was received from the Bank.
Q9. Were submissions by members of the public to the Department of Local Government's inquiry into the council's handling of the acquisition altered in any way? If so, why? Were the authors of those submissions advised of the relevant amendments. If not, why not?
No submissions by members of the public were altered in any way. A full copy of all written submissions to Council on the Quarry matter was submitted to all Councillors prior to consideration by Council and to the Department of Local Government. Furthermore, Council invited residents to make submissions directly to the Department concerning Council's handling of the acquisition of the Quarry.
By way of background, it is advised that a t its meeting on 27 July 2005 , Council considered a Notice of Motion proposing that all aspects of the acquisition of Hornsby Quarry be reviewed. Council resolved that, following receipt of a report responding to community and Councillor questions surrounding the compulsory acquisition of the Quarry and consequent actions by Council, Council refer the whole matter to the Department of Local Government for its investigation and recommendation.
In response to Council's resolution, one hundred and eighty six (186) questions were raised by Councillors and members of the community. Council also sought legal advice from Mr Tim Robertson, Senior Counsel, to advise whether there is an avenue of appeal from the Valuer-General's determination in view of the findings of the Hornsby Quarry Land Capability Study and Feasibility Review. Mr Robertson was also requested to provide answers to a number of the questions raised by Councillors and residents, most of which related to the resumption process. Mr Robertson was also asked to review Council's decision making on the resumption to ascertain whether all proper and appropriate steps had been taken by Council to protect its interests.
Mr Bogumil Eichstaedt of Hornsby made submissions to Council dated 25 July and 28 July 2005 . In replying to residents' questions, Council reproduced only part of Mr Eichstaedt's submissions. Mr Eichstaedt considered that this caused his submission to be taken out of context and to have breached the Copyright Act 1968. He subsequently took action in the Federal Magistrates Court.
To enable the matter to be amicably resolved and without admission Council agreed to settlement of Mr Eichstaedt's concerns by the deletion of his questions from the document produced by Council and not to further distribute the original report. Consequently, questions Nos. 1 to 12 were deleted from the document.
At its meeting on 22 February 2006 , Council considered Executive Manager's Report No. PLN35/06 informing Council of the answers to the questions raised by Councillors and the community concerning the acquisition of Hornsby Quarry. The Report also provided the legal advice from Mr Robertson on the opportunities of challenging the Valuer General's valuation of the Quarry. In summary, the advice states that the Hornsby Shire Local Environmental Plan 1994 obliged Council to acquire the land once, a notice had been served on Council by CSR. The notice was served and Council acquired the land. The process was lawful. Not only was the acquisition effected pursuant to court order, the foundation for the court order was sound. Council had no discretion to refuse to resume the land. The Council's legal advice that it must do so was correct and Council's action in doing so was lawful and, indeed obligatory.
Following a presentation by Mr Robertson on his legal advice and representations by members of the public, Council discussed the matter and resolved (in part) as follows:
1. Any member of the public and those persons who have made statements at this Workshop be invited to send any further submissions to the Department of Local Government.
2. Council forward to the Minister for Local Government, Report PLN35/06, together with its attachments.
3. The Minister for Local Government be invited to review all the material submitted and to advise whether any further investigation or action is warranted.
In accordance with Council's resolution, on 3 March 2006 , letters were sent to submitters and attendees at the workshop, inviting them to send any further submissions to the Department of Local Government. A copy of Executive Manager's Report No. PLN35/06 was forwarded to the M