Australian Unity Funds Management Ltd in its capacity as Responsible Entity of the Australian Unity Healthcare Property Trust v Boston Nepean Pty Ltd & Penrith City Council

[2023] NSWLEC 49

Land and Environment Court

New South Wales

Medium Neutral Citation:

Australian Unity Funds Management Ltd in its capacity as Responsible Entity of the Australian Unity Healthcare Property Trust v Boston Nepean Pty Ltd & Penrith City Council [2023] NSWLEC 49

Hearing dates:

29 September 2022

Date of orders:

12 May 2023

Decision date:

12 May 2023

Jurisdiction:

Class 4

Before:

Pepper J

Decision:

Further amended summons dismissed with costs. The exhibits are to be returned.

Catchwords:

JUDICIAL REVIEW: development standard – maximum building height – whether provision a development standard – whether jurisdictional preconditions met for the grant of development consent – whether requests for variation of development standard properly made – statutory construction – whether decision-maker formed the requisite state of satisfaction in granting consent.

Legislation Cited:

Environmental Planning and Assessment Act 1979, s 1.4

Land and Environment Court Act 1979, ss 25B, 25E

Penrith Local Environmental Plan2010, cll 4.3, 4.6, 6.4, 7.11,

Cases Cited:

Agostino v Penrith City Council [2010] NSWCA 20; (2010) 172 LGERA 380

Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245; (2018) 233 LGERA 170

Blue Mountains City Council v Laurence Browning Pty Ltd [2006] NSWCA 331; (2006) 150 LGERA 130

Canterbury Bankstown Council v Dib [2022] NSWLEC 79

Elimatta Pty Ltd v Read [2021] NSWLEC 75

Gomon Pty Ltd v Council of the City of Sydney [2019] NSWLEC 116

Initial Action Pty Ltd v Woollhara Municipal Council [2018] NSWLEC 118

Nathanson v Minister for Home Affairs [2022] HCA 26

Rebel MH Neutral Bay Pty Ltd v North Sydney Council [2019] NSWCA 130

RIG Consulting Pty Ltd v Queanbeyan-Palerang Regional Council [2021] NSWCA 130; (2021) 249 LGERA 377

Schroders Australia Property Management Ltd v Shoalhaven City Council [2001] NSWCA 74

StrathfieldMunicipal Council v Poynting [2001] NSWCA 270; (2001) 116 LGERA 319

Sydney Municipal Council v PD Mayoh Pty Ltd (No 2) (1990) 71 LGRA 222

Voicu v Owners Strata Plan No 1624 [2020] NSWCA 52

Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118

Wehbe v Pittwater Council [2007] NSWLEC 827; (2007) 156 LGERA 446

Category:

Principal judgment

Parties:

Australian Unity Funds Management Ltd in its capacity as Responsible Entity of the Australian Unity Healthcare Property Trust (Applicant)
Boston Nepean Pty Ltd (First Respondent)
Penrith City Council (Second Respondent)

Representation:

Counsel:
A Pickles SC with T Poisel (Applicant)
A Galasso SC with H Grace (First Respondent)
Submitting Appearance (Second Respondent)

Solicitors:
Allens (Applicant)
Mills Oakley (First Respondent)
Sparke Helmore Lawyers (Second Respondent)

File Number(s):

2021/361686

Publication restriction:

Nil

JUDGMENT

Australian Unity Seeks to Set Aside a Development Consent

1. By its further amended summons filed on 29 September 2022, the applicant, Australian Unity Funds Management Limited in its Capacity as Responsible Entity of the Australian Unity Healthcare Property Trust (“Australian Unity”), seeks a declaration that the development consent granted by the second respondent, Penrith City Council (“the Council”), on 24 September 2021 (“the consent”) to Development Application No. DA20/0767 lodged on 16 November 2020 (“the DA”) is invalid and of no effect.

2. It does so on the basis that in approving the development the subject of this dispute, the Council acted beyond power insofar as it granted consent to a building whose height exceeded the applicable maximum building height controls mandated for the site under cll 4.3(2) and 7.11(3) in the Penrith Local Environmental Plan2010 (“the LEP”).

3. This is refuted by the first respondent, Boston Nepean Pty Ltd (“Boston”), who contends that the consent authority was empowered to grant consent on the basis of variations to either or both controls pursuant to cl 4.6 of the LEP.

4. In my opinion, the controls constituted development standards that were properly varied by the consent authority and the consent was validly granted. The further amended summons must therefore be dismissed.

Australian Unity Proposes to Build a Hotel

5. The DA sought the demolition of an existing dwelling and the construction of a 140 room hotel with a rooftop bar and restaurant, underground parking and associated landscaping (“the proposed development”) at 28-32 Somerset St, Kingswood (“the site”).

6. The site is zoned B4 Mixed Use under the LEP and is identified as being part of the Penrith Health and Education Precinct. Under the zone, the proposed development is permissible with consent.

7. The maximum permissible building height for the site shown on the Height of Buildings map referred to in cl 4.3(2) of the LEP is 18 m. However, if the requirements of cl 7.11 are met, because of the site’s location in the Penrith Health and Education Precinct, the maximum building height may, applying the formula set out in that clause, be increased to 21.6 m.

8. The original DA was accompanied by architectural plans dated 16 November 2020 prepared by Rothelowman (“the plans”), a Statement of Environmental Effects (“the SEE”) of the same date prepared by PPD Planning Consultants (“PPD”), and a cl 4.6 variation request also dated 16 November 2020, similarly prepared by PPD (“the first variation request”).

9. Section 7.1.5 of the SEE acknowledged that the proposal did not comply with cl 4.3 of the LEP:

An assessment of the proposed development’s compliance with the relevant provisions of…[PLEP 2010] has been undertaken and can be found at Appendix 2.

This assessment confirms that the proposed development complies with all the relevant provisions of PLEP 2010 except for Clause 4.3 relating to maximum Building Height. A Clause 4.6 application for an exception to the development standard accompanies this application and can be found at Appendix 3. The Clause 4.6 application provides support for the proposed exception to the building height standard.

10. In respect of the height, the LEP Compliance Table in the SEE noted that the proposed development did not comply with cl 4.3 because:

The maximum permissible building height shown for the subject site on the height of Buildings Map is 18 metres. Pursuant to cl 7.11 of this LEP the maximum building height of the proposed development is 21.6 metres. The proposed building height is 23.21 metres and lift overrun is 24.49 metres and this exceeds the maximum building height identified on the Height of Buildings Map.

11. When the original DA was lodged:

1. the floor-to-ceiling height for both the ground floor and the first floor of the proposed development was 3.5 m, as identified in the first variation request; and

2. the proposed development had a maximum height of 25.2 m (including the lift overrun), as identified in the first variation request.

12. The first variation request identified that the proposed development complied with the floor-to-ceiling 3.5 m height requirements in cl 7.11 of the LEP, but relevantly sought a dispensation from compliance with the maximum bonus height of 21.6 m because the proposed development was higher than this. The request stated as follows:

1.   BACKGROUND

…

The maximum building height shown for the subject site on the Height of Buildings Map in PLEP 2020 is 18.0 metres. Pursuant to cl. 7.11 of the LEP consent may be granted to development on land that exceeds the maximum height shown for that land on the Height of Buildings Map by up to 20% if the floor to ceiling height of both the ground and first floors are equal to or greater than 3.5 metres.

The proposed development avails itself of the additional height provision with floor to ceiling heights on both the ground and first floors equal to 3.5 metres. The maximum permissible building height for the proposed development is therefore 21.6 metres.

At its maximum height, the building is 23.8 metres, or 2.2. metres (+ 10.2%) above the maximum building height permissible. The lift overrun is 25.2 metres high, or 3.6 metres (+16.7%) above the maximum building height permissible. The non-compliance with the maximum building height standard triggers the requirement for a request for an exception to the development standards pursuant to cl.4.6 of PLEP 2010.

The building height non-compliance is directly attributable to the addition of a roof top wellness centre and floor and beverage facility that is over and above the standard requirements for the med-hotel. The provision of this additional level of service does not increase the number of hotel keys in the development but instead is a response to discussions with Nepean Blue Mountains Local Health District that are formalised in correspondence provided at Appendix 1. By letter dated 7 September 2020 the CEO of the Nepean Blue Mountains Local Health District (refer Appendix 1 to the SEE) emphasises how these additional roof top facilities are

“much needed in the area adjacent to Nepean Hospital and will make a valuable contribution to the community generally”

And will:

“support the Nepean health precinct and enhance the total care experience for patients, their families, friends, carers and medical staff”.

Particular consideration has also been given to the supportive comments and suggestions provided by Council’s Urban Design Review Panel (UDRP) following their review of a preliminary concept plan. In particular, the UDRP commented:

“The roof top offering for a food and beverage premise has the potential to be a positive contribution to the precinct…”

A summary of the UDRP comments and the response to the comments in the final DA are detained in Table 2 of the SEE that accompanies the DA.

13. On 17 March 2021 the Council’s Urban Design Review Panel assessed the original DA and made recommendations to Australian Unity. Subsequently, on 26 March 2021, it requested further information from Boston in respect of the DA. This was provided and the DA was amended.

14. On 2 August 2021 the Council uploaded documentation for the amended DA to its online development application tracker. The amended DA was relevantly accompanied by:

1. a letter dated 30 August 2021 prepared by PPD which noted that in respect of building height non-compliance and cl 4.6 considerations, “an Amended Clause 4.6 Request is provided demonstrating sufficient justification for consideration to be given to the request to vary the building height standard (to be read in conjunction with Amended Architectural Plans)”;

2. amended architectural plans dated 9 and 30 July 2021, prepared by the same architects (“amended plans”). The amended plans showed a reduction in the floor-to-floor height of the first floor from 3.7 m to 3.2 m. The amended plans showed a height plane of 21.6 m and did not show the maximum building height of 18 m. It also did not show the natural ground line directly beneath the lift overrun; and

3. an amended cl 4.6 variation request dated 2 August 2021, prepared by PPD (“the second variation request”).

15. The proposed development the subject of the amended DA had:

1. a reduced maximum height of 23.845 m (including the lift overrun), as depicted on drawing TP05.05 Height Plane Diagram of the amended plans;

2. a reduced first floor-to-ceiling height of 3 m, as identified in the second variation request; and

3. a ground floor floor-to-ceiling height of 3.5 m, as identified in the second variation request.

16. The second variation request relevantly stated that the maximum permissible building height for the proposed development was 21.6 m by operation of cl 7.11 of the LEP, and that variations were sought for an exception to the minimum 3.5 m floor-to-ceiling height development standard for the first floor and the building height. There was a mathematical error contained in the second variation request as to the height of the building but this was not, in my view, material and in any event it would not give rise to jurisdictional error (Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118 at [63] and Gomon Pty Ltd v Council of the City of Sydney [2019] NSWLEC 116 at [57]). The request was in these terms:

1.   BACKGROUND

…

The maximum building height shown for the subject site on the Height of Buildings Map in PLEP 2010 is 18.0 metres. Pursuant to cl. 7.11 of PLEP 2010 consent may be granted to development on land that exceeds the maximum height shown for that land on the Height of Buildings Map by or up to 20% if the floor to ceiling height of both the ground and first floors are equal to or greater than 3.5 metres. The proposed development avails itself of the additional 20% height provision with

   a 3.5 metre floor to ceiling height on the ground floor; and

 a 3.0 metre floor to ceiling height on the first floor accompanied by a cl. 4.6 request for an exception to the maximum 3.5 metre floor to ceiling height development standards. Confirmation has been received from Council (email dated 6 April 2021 that Clause 7.11 of the PLEP 2010 is considered a development standard and consequently can be varied by way of cl. 4.6 request to vary a development standard.

Subsequently, the maximum permissible building height for the proposed development is 21.6 metres.

At its maximum height, the uppermost part of the building (excluding lift overrun) is 22.632 metres, or 1.032 metres (+ 4.7%) above the 21.6m maximum building height permissible. The lift overrun is 23.854 metres high, or 2.254 metres (+ 10.4%) above the maximum building height permissible. The non-compliance with the maximum building height standard triggers a second requirement for a cl. 4.6 request for an exception to the maximum building height development standard.

Both floor to ceiling and building height non-compliance are directly attributable to the addition of a roof top wellness centre and food and beverage facility that is over and above the standard requirements for the medi-hotel. The provision of this additional level of services does not increase the number of hotel keys in the development but instead is a response to the discussions with Nepean Blue Mountains Local Health District that are formalised in correspondence provided at Appendix 1. By letter dated 7 September 2020 the CEO of the Nepean Blue Mountains Local Health District (refer Appendix 1 to the SEE) emphasises how these additional roof top facilities are

“much needed in the area adjacent to Nepean Hospital and will make a valuable contribution to the community generally”

and will

“support the Nepean Health precinct and enhance the total care experience for patients, their families, friends, carers and medical staff”.

Particular consideration has also been given to the supportive comments and suggestions provided by Council’s Urban Design Review Panel (UDRP) following their review of a preliminary concept plan. In particular, the UDRP commented:

“The roof top offering for a food and beverage premise has the potential to be a positive contribution to the precinct...”

In summary, the application for a cl. 4.6 exception applies to the following development standards:

1.   a maximum 3.5 metre floor to ceiling height on the first floor level; and

2.   a maximum building height of 21.6 metres.

Because both non-compliances relate to height and are therefore interrelated, one comprehensive and integrated 4.6 written request is considered appropriate and for clarity, each non-compliance is addressed separately.

…

3.   JUSTIFICATION FOR EXCEPTION TO THE FLOOR TO CEILING HEIGHT DEVELOPMENT STANDARD

The preconditions to vary the floor to ceiling height standards are addressed as follows:

3.1    Is the development standard unreasonable or unnecessary in the circumstances of the case?

Strict compliance with this diverse housing standard is considered unreasonable or unnecessary in the circumstances of this case because strict adherence to the standard will not result in a development that is anymore consistent with the desired future character of the locality and will not result in a better outcome.

NSW Land and Environment Court cases dealing with applications to vary development standards resulted in the Court setting out a ‘five part test’ for consent authorities to consider when assessing an application to vary a standard and to determine whether the objection to the development standard is well founded and compliance is unreasonable or unnecessary. Particular attention is to be given to Brigham v Canterbury Bankstown Council [2018] NSWLEC 1406 and the comments by Senior Commissioner Dixon including “you do not need to list all five tests from Wehbe if the first test is relied upon and said to be satisfied”.

…

4.   JUSTIFICATION FOR EXCEPTION TO THE BUILDING HEIGHT DEVELOPMENT STANDARD

The preconditions to vary the Building Height development standard are addressed as follows:

4.1   Is the development standard unreasonable or unnecessary in the circumstances of the case?

The preconditions to vary the Building Height standard is considered unreasonable or unnecessary in the circumstances of this case because strict adherence to the standard will not result in a development that is anymore consistent with the desired future character of the locality and will not result in a better outcome.

NSW Land and Environment Court cases dealing with applications to vary development standards resulted in the Court setting out a ‘five part test’ for consent authorities to consider when assessing an application to vary a standard and to determine whether the objection to the development standard is well founded and compliance is unreasonable or unnecessary.

17. The Council issued a Major Assessment Report for the amended DA on 15 September 2021. The Report noted that the proposed development was amended to address concerns raised by the Council relating to, among other things, “reducing the overall building height by 500mm (0.5m) by lowering the floor-to-ceiling height of Level 1 from 3.5m to 3m.”

18. The Major Assessment Report noted that because the site was located within the Penrith Health and Education Precinct, cl 7.11 of the LEP applied and that:

The clause allows additional height (up to 20% of the applicable height standard) which in this case would allow a maximum building height of 21.6m. The prerequisite for the additional height is that the floor to ceiling height of both the ground and first floors is at least 3.5m. The objective of this requirement is to provide for higher floor to ceiling heights at the two lower levels of buildings so that there is a flexibility in the buildings’ future use to encourage non-residential uses in the two lower floors of buildings in the precinct, and avoid the outcome of wholly residential flat buildings.

19. The Report further observed that notwithstanding the amendments to the proposed development it nevertheless remained non-compliant with controls because:

Notwithstanding the amendments, the proposed development exhibits non-compliance with controls relating to building height, the floor to ceiling height at Level 1, and number of parking spaces. There is also a small non-compliance with the 6m side setback at upper levels. Nevertheless, this Assessment Report will address why the proposed development is acceptable and why dispensation from the above controls can be granted in the circumstances of this proposal.

Prior to the amendment to lower the floor to ceiling height of Level 1, Council staff sought advice from the Local Planning Panel in March 2021 on this suggested change. This was to ascertain whether there was opportunity for the amendment, as this would result in a reduction to the overall height of the building, and a reduction to the proportion of height non-compliance. At the time of the briefing, the Local Planning panel saw some merit in the suggested change but considered that a floor to ceiling height of 3m would provide a better outcome than the standard BCA compliant height of 2.7m. The Local Planning Panel also indicated that they would consider a Clause 4.6 written request that related to both the building height, and the floor to ceiling height (for Level 1), controls.

…

The Local Planning Panel is the consent authority as the proposal seeks a variation of more than 10% to the maximum building height control in the Penrith LEP. The degree of non-compliance is 10.4%, being 2.254m over. This breach occurs at the top of the lift overrun. In addition, the seventh floor, which is the rooftop level, will breach the height control by 1.032m or 4.7% over. The extent of non-compliance with the floor to ceiling height control (for level 1) is 0.5m which is 14.4% over.

…

The amended proposal is acceptable on planning, design, traffic and engineering grounds. The recommendation is that the Panel endorse the Clause 4.6 Written Request to vary the development standards for building height, and the floor to ceiling height of Level 1, and approve the Development Application, subject to conditions.

20. In relation to the maximum building height of 18 m and the floor-to-ceiling height and the floor space ratio, the Report relevantly stated:

Clause 4.3 Height of buildings

The Penrith LEP permits a maximum height of 18m. In addition, Clause 7.11 of the LEP permits an additional 20% above the height development standard, which results in a permissible maximum building height of 21.6m. This additional height is only permitted if a prerequisite is met, being that both the ground and first floor levels have a floor to ceiling height of 3.5m.

While the original proposal as lodged did not comply with the requirement for a higher floor to ceiling height on both the ground and first floors, on the suggestion of Council staff, the first floor was compressed to achieve a floor to ceiling height of 3m. This resulted in lowering the overall building height by 0.5m, although the proposed building height will still exceed the 21.6m control.

The proposed breach of building height and floor to ceiling height at first floor level, is discussed further in the report and the applicant has submitted a written request pursuant to Clause 4.6 to vary the two development standards.

Clause 4.4 Floor Space Ratio

The LEP allows a maximum Floor Space Ration of 3.5.1. The proposed development complies with a FSR of 3.39.1.

Clause 4.6 Exception to development standards

Introduction:

Clause 4.6 of the Penrith LEP allows the applicant to make a written request to vary the applicable development standard that is contravened. In this case, it is two development standards proposed to be contravened. The first relates to maximum building height, and the second relates to the minimum floor to ceiling height of the ground and first floors of a building, being the prerequisite to allowing an additional 20% building height.

The first relating to maximum building height is found at Clause 4.3 of the Penrith Local Environmental Plan 2010. The height control in the LEP is written as a development standard and the control can therefore be varied pursuant to Clause 4.6. In addition, Clause 4.6(8) of the LEP does not exclude the operation of Clause 4.6 from the height development standard.

The second standard relating to floor to ceiling height is found at Clause 7.11 of the Penrith LEP. It is considered that this control is also written as a development standard (discussed below) and can be varied pursuant to Clause 4.6.

The Penrith LEP allows a maximum height limit of 21.6m, which is the base permissible height of 18m plus an additional 20% if the ground and first floors have a floor to ceiling height of 3.5m. Building height in the LEP is defined as the topmost part of the building, so this will also include structures placed on the roof such as balustrades and lift overruns.

Background to Amendments:

The original proposal had a maximum building height of 23.21m (to the top of the building) and 24.49m (to the top of the lift overrun). The height non-compliance of the original proposal was 2.89m, or 13.4% over. At this original proposed height, the ground and first floors had a compliant 3.5m floor to ceiling height. Council staff and the Urban Design Review Panel considered that the proposed roof top level, being the hotel recreation space and food and beverage offering (which would also be available to the public) had the potential to be a positive contribution to the Precinct, and that a portion of the height exceedance was driven by the higher floor to ceiling heights required at first floor level, which added approximately 700mm to the building height.

Council’s Urban Design Review Panel acknowledge that the Clause 4.6 request to exceed the height limit must sufficiently demonstrate that the variation is supported on planning and urban design grounds. With regard to the urban design quality of the rooftop level, the Urban Design Review Panel stated “The proposed top storey (which exceeds the maximum-plus height) comprises a visually-recessive ‘filigreed case’ which would be concealed substantially behind the level five parapet from close quarters vantage points along Somerset and Hargrave Street (but would be visible from easterly locations along Hargrave Street)”.

Given this, Council staff suggested that because the first floor was already proposed to be a non-residential use which supported the functionality of the Precinct, the floor to ceiling height at first floor could be lowered, resulting in a lowering of the overall building height, while still achieving the flexibility sought by the control. The Local Planning Panel, at a briefing in March 2021, indicated that they would be willing to consider a written request pursuant to Clause 4.6 that dealt with the height non-compliance as well as the floor to ceiling non-compliance. The Local Planning Panel also suggested that a floor to ceiling height of 3m for the first floor would provide a better balance than the standard BCA compliant 2.4m, in terms of allowing flexibility and adaptability.

In addition, Council staff sought legal advice to clarify whether the minimum floor to ceiling height requirement at Clause 7.11 of the LEP was a development standard that could be varied pursuant to a written request under Clause 4.6. Although the advice is subject to legal privilege, Council planning staff have formed the view that the control relating to floor to ceiling height can be varied pursuant to Clause 4.6. In particular, the relevant height control and the ability to achieve a 20% bonus height if floor to ceiling heights are achieved, does not act as a prohibition, if the control is exceeded. The controls also have prescribed objectives, which could be achieved in other ways and demonstrated through a written Clause 4.6 request.

Therefore, one amended written request pursuant to Clause 4.6 has been received, seeking to vary both the maximum building height control at Clause 4.3, and the minimum floor to ceiling height control at Clause 7.11 of the Penrith LEP.

21. On the same day, the Council provided to the Penrith Local Planning Panel (“the Panel”), all relevant documents in respect of the amended DA, including the two variation requests and the Major Assessment Report.

22. On 20 September 2021, John Brunton, a member of the Panel sent an email to Mary-Lynne Taylor, the Chair of the Panel, in respect of “the clause 4.6 submission for the hotel at Kingswood”. The email stated:

I wish to highlight a matter on which I would appreciate your input on Wednesday. It relates to the clause 4.6 submissions for the hotel at Kingswood. This cannot prejudice our deliberations because we have to rely on the applicant’s written submission, not what we hear during the meeting.

Firstly, the submission relates to two interconnected development standards concerning height. The applicant argues for the second being dependant on the first.

The first relates to the bonus clause 7.11 of PLEP. The applicant relies on the argument that the objectives of the standard are achieved even though the standard is not satisfied. On page 4 of the submissions it argues the adaptive reuse of the proposed building for health services facilities is encouraged through the built form. There are two hurdles here. The clause relates to the ‘built form’ of the whole building, not just the lower levels where the higher ceilings are required. We need to be satisfied that the built form does this. The second hurdle is that the control requires the development “to encourage” not simply “enable”. The applicant’s comments speak about the ceiling heights being sufficient for health services to be provided, and the future use is more likely to be residential than health. I cannot see any reference to health services facilities being encouraged.

If one was to conclude that the applicant’s submission does not establish that he built form will encourage adaptive reuse for health service facilities, the clause 4.6 variation for clause 7.11 would fail. However, there remains the second development standard. This is where my question arises.

The clause 4.6 submission for modifying the overall building height is construed on the assumption that the first modification is supported. It argues that the height variation is 2.25 metres, only 10.4%. There is no discussion about the height being 5.85 metres (32.5%) in excess of the basic development standard. It does not attempt to justify a variation of this magnitude.

If one was to conclude that the variation to clause 7.11 cannot be supported, does that effectively render the remainder of the argument invalid?

OR, is it open to the Panel to interpret the remainder of the submission as being adequate?

I am mindful that clause 4.6 puts all of the emphasis on the applicant’s written submission. Are you aware of the potential for the consent authority to be ‘inventive’ in its interpretation of the content of the submission?

I would appreciate your legal understanding of this matter. Thanks.

23. The next day, Taylor responded indicating that she was satisfied with the project “and the cl 4.6 – and council’s assessment of it.” She went on to say that while she agreed with him, “if we did not accept the first cl 4.6 the building would be lower but may still need a cl 4.6 for the lift over run.” However, in her view, “I find the 4.6 quite plausible esp on the context of the area and clearly we are supported on the environmental grounds by the urban designers, and the support of the medical people. …both breaches I think clearly allow the use of cl 4.6. Complicated but I think ok.”

24. Brunton also sent an email to Simone Muscat, an employee of the Council, suggesting the following wording to be added to the “DA decision”:

John Brunton supports the concept for the proposed development within the Penrith Health and Education Precinct, and accepts that an increase in building height is reasonable in the circumstances. However, the applicant’s written submission in support of the clause 4.6 request does not establish that the objectives of clause 7.11 are achieved. The built form of the proposed development is not suitable for both residential and health service facilities, and the built form would not encourage or facilitate adaptive reuse for health service facilities should any future residential use cease.

25. The Panel met to consider the amended DA and to hear public submissions from objectors and representatives from Australian Unity and Boston, on 22 September 2021. During the hearing, Clare Brown representing Australian Unity, submitted as follows:

In terms of building height, the proposal is located within the Penrith Health and Education Precinct. The Penrith LEP enables a consent authority to vary the height of a building within this precinct by up to 20 per cent in circumstances where the floor to ceiling heights on the ground and first floor are equal to or greater than 3.5 metres. And that is in order to facilitate adaptive reuse of the buildings in the future, particularly for health purposes.

The proposal before you has a ground floor, floor to ceiling height of 3.5 metres, so that complies, yet a first floor, floor to ceiling height of only 3 metres. So despite the fact that it does not comply with the floor to ceiling heights, the proposal also seeks an additional 2.25 metres of height above the height of building – above the bonus height of building control in order to accommodate additional facilities, such as the rooftop bar and other guest and visitor facilities.

Now those facilities can equally be accommodated within the bonus height control. It is not necessary to add an additional floor in order to accommodate this habitable floor space above height control.

The clause 4.6 variation request before the panel does not demonstrate why compliance is unreasonable or unnecessary in this circumstance nor how the proposal as presented meets the objective of the zone nor the objective of the height of building controls or indeed the bonus height of building controls presented.

26. Later in answer to a question from Brunton about “the height issues”, Brown responded in the following way:

Mr Brunton: Can I ask a question please, Ms Brown. In relation to the height issue, one option for this building to satisfy the requirements of clause 7.11 would be to just increase the height by half a metre, the other option that you have talked about is to just remove one level, would there be advantages do you think in just increasing the height by half a metre?

Ms Brown: I think there are two separate controls at play here. I think there would be an advantage to increase the floor to ceiling height of the first floor by the half a metre because that would achieve or would enable achievement of the adaptability objective of that bonus height of building controls under clause 7.11 of the LEP. However, I would also submit that one floor of the development should be deleted to achieve overall compliance having an additional 20 per cent bonus above the 20 per cent bonus provided by clause 7.11. So in effect the application is seeking a 40 per cent height of building variation to the base control. So I would see merit in the increase in height of the first floor by half a metre but the concurrent deletion of a level of the development.

Mr Brunton:   And if my memory serves me right you have qualifications in law as well as in planning?

Ms Brown:   That is correct.

Mr Brunton:   That is correct?

Ms Brown:   That is correct.

Mr Brunton:   So I don’t want a legal opinion but are you suggesting that the panel should exercise caution in terms of the adequacy of the clause 4. 6 submissions?

Ms Brown: In my opinion as a town planner in this instance, I do not believe that the clause 4.6 variation request has demonstrated in this instance in the circumstances of this case why compliance with the provisions of clause 7.11 is unreasonable or unnecessary in the circumstances of this application and in what way the proposal achieves, the objectives of the zone in which it is found in, the Penrith health precinct in which the site is located and the objectives of clause 7.11. So a short answer is yes, I would – I am requesting that the panel take a precautionary approach to the clause 4.6 request.

Mr Perica:    Can I ask a similar question that was asked in a different way. So of the – I mean, there is an option you are putting forward a comply with the 3.5 at first floor and take out a level to comply with the overall height with the bonus, but of this, if the panel, and we haven’t made a decision yet, but if the panel was minded to be supportive of the height non-compliance overall, what is your position or your client’s position in terms of the relative benefits of this proposal or a building that complies with first floor but is 500 millimetres higher? Which of those two options is more acceptable, accepting your position is that shouldn’t be – neither should be supported because your position is it should be 3.5 and reduce a level somewhere below the top – but of the scenarios of the proposal as put forward verses one that increases it by a further 500mm, which is the preferred one from your and the client’s point of view?

Ms Brown:   If it was a case of increasing the height by 500mm or leaving the height as is, I think the preference would be to leave the height as is and not increase the overall height of the building.

27. Later that day, the Panel granted consent to the proposed development as described in the amended DA, subject to conditions.

28. On 24 September 2022 the Panel issued its Notice of Determination. Consent was granted for:

Demolition of a dwelling and the construction of a seven-storey accommodation hotel with a rooftop bar and restaurant, three levels of basement parking for 63 vehicles, ground floor reception, lounge and dining, and associated site works with consolidation of three lots.

29. The Statement of Reasons for the determination was in the following relevant terms (“the Reasons”):

Reasons for the Decision

The majority of the Panel (hereinafter referred to as ‘the Panel’) agreed with the assessment contained with Council’s Assessment Report.

The Panel considered the applicant’s written requests to contravene the Development standards relating to Building Height and floor-to-ceiling height contained in Clauses 4.3 and 7.11 of Penrith Local Environmental Plan 2010 respectively, made pursuant to Clause 4.6 of that Plan, and formed the view these combined written requests satisfactorily addressed the requisite matters in Clause 4.6(3) of the Penrith Local Environmental Plan 2010. The Panel is of the opinion that the proposal meets the objectives of Clause 4.3 and Clause 7.11 of Penrith Local Environmental Plan 2010, and the objectives of the zone, and granting consent would be in the public interest.

In terms of traffic impact, the Panel noted and agreed with the conclusions within the Assessment Report. Similarly, whilst Council’s Traffic Engineer did not support the proposed parking provision, the Panel concurred with the assessment and conclusions within the Assessment Report that the parking provided was adequate for the proposed use.

…

John Brunton had a dissenting view in that he supports the concept for the proposed development within the Penrith Health and Education Precinct and accepts that an increase in building height is reasonable in the circumstances. However, Mr Brunton is of the view the applicant’s written submission in support of the clause 4.6 request does not establish that the objectives of clause 7.11 are achieved, the built form of the proposed development is not suitable for both residential and health service facilities, and the built from would not encourage or facilitate adaptive reuse for health service facilities should any future residential use cease.

The LEP

30. Clause 4.3 of Pt 6 of the LEP states:

4.3   Height of buildings

(1)   The objectives of this clause are as follows—

(a)   to ensure that buildings are compatible with the height, bulk and scale of the existing and desired future character of the locality,

(b)   to minimise visual impact, disruption of views, loss of privacy and loss of solar access to existing development and to public areas, including parks, streets and lanes,

(c)   to minimise the adverse impact of development on heritage items, heritage conservation areas and areas of scenic or visual importance,

(d)   to nominate heights that will provide a high quality urban form for all buildings and a transition in built form and land use intensity.

(2)   The height of a building on any land is not to exceed the maximum height shown for the land on the Height of Buildings Map.

31. The expression “height of building” or “building height” is defined in the Dictionary to the LEP to mean:

building height (or height of building) means—

(a)   in relation to the height of a building in metres—the vertical distance from ground level (existing) to the highest point of the building, or

(b)   in relation to the RL of a building—the vertical distance from the Australian Height Datum to the highest point of the building,

including plant and lift overruns, but excluding communication devices, antennae, satellite dishes, masts, flagpoles, chimneys, flues and the like.

32. Clause 4.6 permits exceptions to development standards. Relevantly it provides as follows:

4.6   Exceptions to development standards

(1)   The objectives of this clause are as follows—

(a)   to provide an appropriate degree of flexibility in applying certain development standards to particular development,

(b)   to achieve better outcomes for and from development by allowing flexibility in particular circumstances.

(2)   Development consent may, subject to this clause, be granted for development even though the development would contravene a development standard imposed by this or any other environmental planning instrument. However, this clause does not apply to a development standard that is expressly excluded from the operation of this clause.

(3)   Development consent must not be granted for development that contravenes a development standard unless the consent authority has considered a written request from the applicant that seeks to justify the contravention of the development standard by demonstrating—

(a)   that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case, and

(b)   that there are sufficient environmental planning grounds to justify contravening the development standard.

(4)   Development consent must not be granted for development that contravenes a development standard unless—

(a)   the consent authority is satisfied that—

(i)   the applicant’s written request has adequately addressed the matters required to be demonstrated by subclause (3), and

(ii)   the proposed development will be in the public interest because it is consistent with the objectives of the particular standard and the objectives for development within the zone in which the development is proposed to be carried out, and

(b)   the concurrence of the Planning Secretary has been obtained.

…

(8)   This clause does not allow development consent to be granted for development that would contravene any of the following—

(a)   a development standard for complying development,

(b)   a development standard that arises, under the regulations under the Act, in connection with a commitment set out in a BASIX certificate for a building to which State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004 applies or for the land on which such a building is situated…

33. The relationship between Pt 6 and the remainder of the LEP is set out in cl 6.4:

A provision of this Part prevails over any other provision of this Plan to the extent of any inconsistency.

34. Clause 7.11 states:

7.11   Penrith Health and Education Precinct

(1)   The objectives of this clause are as follows—

(a)   to encourage a built form that is suitable for both residential and health services facilities,

(b)   to encourage adaptive reuse of residential buildings for health services facilities in the Penrith Health and Education Precinct where the residential use within the building ceases in the future.

(2) This clause applies to land identified as “Penrith Health and Education Precinct” on the Clause Application Map.

(3) Despite clause 4.3, development consent may be granted to development on land that exceeds the maximum height shown for that land on the Height of Buildings Map by up to 20% if the floor to ceiling height of both the ground and first floors are equal to or greater than 3.5 metres.

Issues for Determination

35. The following issues were agreed to by the parties for the determination. First, the proper construction of the Panel’s reasons having regard to its consideration of the first and second variation requests in determining to grant consent.

36. Second, whether the first and/or the second variation request constituted a written request for the purposes of cl 4.6(3) of the LEP.

37. Third, whether cl 7.11(3) was a development standard capable of being varied pursuant to a cl 4.6 request.

38. Fourth, if it was, then whether it was lawfully open to the Panel to authorise a contravention of the floor-to-ceiling height of the first floor and the height limit imposed by cl 7.11(3) on the basis of:

1. the first and/or second variation request;

2. other written material and oral submissions before it; and

3. its own consideration of the issue.

39. Fifth, if, however, cl 7.11(3) was not a development standard, then whether it was lawfully open to the Panel to authorise a contravention of the height limit imposed by cl 4.3.

40. And sixth, if the consent is infected with jurisdictional error, whether the Court should, in the exercise of its discretion, withhold any part of the relief sought in the further amended summons.

41. In the result, the central questions for resolution were two-fold:

1. whether cl 7.11 of the LEP, which operated so as to increase the maximum building height by 20% from 18 m (cl 4.3(2)) to 21.6 m, could be varied pursuant to cl 4.6 of the LEP to permit consent being granted; and

2. if it was not, could the Panel vary the 18 m building height control in cl 4.3(2) of the LEP in any event having regard to the requests for variation before it?

42. In framing the controversy in this manner, I am conscious that this constitutes a reformulation of the issues put to the Court by the parties, especially by Boston. It was Boston’s central thesis that no recourse to cl 7.11 of the LEP was in fact necessary as a source of power to grant the consent because the Panel was already empowered to, and in fact did, approve the development by permitting a variation to the 18 m maximum building height development standard contained in cl 4.3(2) of the LEP, pursuant to cl 4.6 of that instrument.

A Proper Understanding of the Panel’s Reasons

43. Because the building height of the proposed development exceeded 18 m, cl 4.3(2) could not be satisfied, and therefore, the consent could only have been granted if either the development standard in cl 4.3(2) was varied pursuant to cl 4.6 of the LEP or recourse was had to some other provision of the LEP, such as in this instance, cl 7.11.

44. It is in this context that the reasons of the Panel must be understood.

45. As Boston noted in its written submissions, cll 4.3 and 4.6 have appeared in the LEP since its adoption and apply to all development in all zones under the LEP. The Court may therefore be satisfied that the Panel is familiar with both clauses and has applied them often (Schroders Australia Property Management Ltd v Shoalhaven City Council [2001] NSWCA 74 at [61]-[64]).

46. To reiterate, it was not a matter of controversy that the proposed development, which included a lift overrun, exceeded the 18 m maximum building height in cl 4.3 of the LEP and the Height of Buildings Map and the 21.6 m bonus maximum height afforded by cl 7.11(3) of that instrument.

47. Unlike the Major Assessment Report, the Panel’s reasons were silent on what it considered the applicable height limit for the site to be, however, according to Boston, it ought properly be inferred that the Panel proceeded on the basis that it was 18 m having regard to:

1. the references to the building height requirement of 18 m in both the first and second variation requests;

2. the multiple occasions whereupon the Panel was directed to the terms of cl 4.3;

3. the requirement that the ground and first floors were both required to be equal to or greater than 3.5 m under cl 7.11(3) and the fact that the floor-to-ceiling height of the proposed development’s first floor was not equal to or greater than 3.5 m; and

4. the Panel had before it, and made reference to in the Reasons, the first and second variation requests to “address the requisite matters in Clause 4.6(3)” of the LEP. It also had recourse to the Major Assessment Report that expressly referenced the maximum building height of 18 m. Australian Unity did not attempt to rebut the presumption that the Panel had read the material before it (Schroders at [67]).

48. Boston consequently submitted that at all times the Panel was cognisant of the 18 m maximum building height development standard in cl 4.3 and its determination to grant consent reflected its decision to vary the development standard contained in that clause, and that clause alone, under cl 4.6 of the LEP.

49. The references to cl 7.11 of the LEP in the reasons, Boston contended, were to be construed as no more than an indication of the fact that, in the opinion of the Panel, the objectives of cl 7.11(3) of the LEP would also be achieved even though the proposed development’s first floor was not equal to, or greater than, 3.5 m. Put another way, non-compliance with cl 7.11 was a relevant consideration in deciding to vary the 18 m building height restriction contained in cl 4.3 of the LEP.

50. In my opinion, however, this is not a correct characterisation of the Panel’s reasoning. While the Panel was undoubtedly aware of the 18 m building height limitation contained in cl 4.3 (for example, it was expressly referenced in the Major Assessment Report and the first and second variation requests which were before the Panel), the Panel proceeded to determine the consent on the basis that there were two development standards before it (not just one) that were amenable to variation, namely, cll 4.3 and 7.11.

51. That it did so is unsurprising given the terms of both the first and second variation requests, where cl 7.11 was discussed explicitly and extensively. Although in no way determinative, it is worth noting that it was also the understanding of the Council as stated in the Major Assessment Report that both controls were the subject of variation requests.

52. In granting the consent, the Panel decided to permit the variations to the development standards contained in both those clauses. It expressly said as much in its Reasons. It did not merely form a view as to the suitability of the variation to the building height under cl 4.3 while having regard to the non-compliance with the floor-to-ceiling height stipulated in cl 7.11. The variation of the controls were considered, and decided, conjunctively.

53. Whether this process resulted in error is the subject of the following discussion.

The Proper Operation of Cll 4.3, 4.6 and 7.11 of the LEP

54. The task of the Court in resolving the dispute between the parties demands an interpretation of the three clauses of the LEP referred to above having regard to their text and context, which includes their interaction with each other.

55. The legal principles applicable to the construction of the LEP are well known and were usefully summarised by Robson J in Elimatta Pty Ltd v Read [2021] NSWLEC 75, which I gratefully adopt and apply (at [43]-[45]):

43.   The object of statutory construction is to construe the relevant statutory provision, so it is consistent with the language and purpose of the statue when considered as a whole. As a result, the statutory provision may, in certain (limited) circumstances, not be read in a way that reflects the literal or grammatical meaning of the statutory provision: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69], [78]. As stated by the High Court in SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 at [14]:

“The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.” (citations omitted)

44.   These general principles are applicable to the interpretation of environmental planning instruments: Cranbrook School v Woollahra Municipal Council (2006) 66 NSWLR 379; [2006] NSWCA 155 at [36]. In this respect, while environmental planning instruments should be interpreted in a practical manner (such that meticulous examination of language is avoided), it is clear that this does not override general principles of statutory interpretation nor require “laxity or flexibility” when construing environmental planning instruments: Tovir Investments Pty Ltd v Waverley Council [2014] NSWCA 379 at [54]; Wingecarribee Shire Council v De Angelis [2016] NSWCA 189 at [20]; 4nature Incorporated v Centennial Springvale Pty Ltd (2017) 95 NSWLR 361; [2017] NSWCA 191 at [45].

45.   The approach described above is also consistent with the strictures of s 33 of the Interpretation Act, which applies to environmental planning instruments by virtue of s 5(6) of the Interpretation Act, and provides:

33   Regard to be had to purposes or objects of Acts and statutory rules

In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.

56. On any reading of cl 4.3(2) of the LEP, the maximum height limit for the site is 18 m. There is nothing ambiguous concerning the construction of this clause that requires further elucidation. In its terms, cl 4.3(2) constitutes a precondition to the exercise of statutory power to grant consent to the proposed development. It is an objective jurisdictional fact, the existence of which a decision-maker must be satisfied before approval may be given (Canterbury Bankstown Council v Dib [2022] NSWLEC 79 at [53] and the cases cited thereat).

57. The clause has been held to be a development standard and no challenge to this proposition was advanced by Australian Unity (Dib at [68]).

58. Clause 4.6 permits exceptions to development standards provided that it is not a standard that is expressly excluded from the operation of the clause. Neither cl 4.3 nor cl 7.11 are excluded from the ambit of cl 4.6 (see cl 4.6(2) and (8) of the LEP).

59. The permissive power in cl 4.6(2) to grant consent to development that contravenes a development standard is circumscribed. It is subject to conditions that must be met before the power can be exercised (Initial Action Pty Ltd v Woollhara Municipal Council [2018] NSWLEC 118 at [13]-[14] and [25], Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245; (2018) 233 LGERA 170 at [179], Rebel MH Neutral Bay Pty Ltd v North Sydney Council [2019] NSWCA 130 at [24]). First, cl 4.6(3) requires the consent authority to consider a written request from an applicant who seeks to justify the contravention of the development standard by demonstrating both of the matters in cl 4.6(3)(a) and (b). Second, cl 4.6(4) requires the consent authority to be satisfied of both matters contained in cl 4.6(4)(a)(i) and (ii). Only if the consent authority meets these requirements will the power in cl 4.6(2) to grant consent to development that contravenes the development standard be enlivened.

60. The gravamen of Australian Unity’s complaint, as argued and as set out in the further amended summons, concerned, first, whether either the first or second variation request could properly be characterised as a written request for the purpose of cl 4.6(3) of the LEP; and second, whether in granting development consent, the Panel purported to vary the controls in cl 7.11 when it had no power to do so because it was not a development standard for the purpose of cl 4.6 of the LEP.

61. No issue was taken with the Panel’s state of satisfaction with the matters in cl 4.6(3)(a), (b) or (4) of the LEP. Rather, Australian Unity submitted that no “written request” was in fact made to vary cl 4.3 of the LEP for the purpose of cl 4.6(3) because, first, the variation requests did not properly justify the contravention of the development standard to which they were purportedly directed as required by the language of cl 4.6; and second, even if they did, both were directed to cl 7.11 of the LEP which could not be varied because it was not a development standard.

62. Both are dealt with fully later on the judgment. For present purposes the following observations are made.

63. There is no question that cl 7.11 applied to the site insofar as the proposed development was located within the Penrith Health and Education Precinct on the Clause Application Map. Clause 7.11(3) provides for the granting of development consent to development that exceeds the maximum permissible height on the Height of Buildings Map, in this case 18 m, by up to 20%, namely, 21.6 m. It applies irrespective of whether the objectives contained in cl 4.3 are achieved by the additional height (see words “despite clause 4.3”. The significance of those words is discussed below) and has the effect of circumventing the mandatory language in cl 4.3(2) (“is not to exceed”) to the extent of any conflict.

64. Similar to cl 4.3, cl 7.11 contains a statutory precondition that must be met before the 20% uplift on the maximum building height can apply and development consent can be granted. Relevantly for present purposes, it is that the floor-to-ceiling height of both the ground and first floors must be equal to or greater than 3.5 m.

65. In other words, if the floor-to-ceiling height of both the ground and first floors is not equal to or greater than 3.5 m, then the power contained in cl 7.11 to grant consent to a development that exceeds by 20% or less the maximum building height permitted by the Height of Building Map, is not engaged.

66. It is to be recalled that in the present case it was not in dispute that the preconditions contained in cl 7.11(3) were not met by the proposed development in the amended DA.

67. Therefore, in purporting to grant consent to a development with a building height in excess of 21.6 m, did the Panel act beyond power?

68. Boston submitted that it did not because, first, it was sufficient that the 18 m maximum building height control prescribed by cl 4.3(2) was varied pursuant to cl 4.6 of the LEP to permit the proposed development. And second, that in any event, cl 7.11 was a development standard capable of variation under cl 4.6. Each is dealt with in turn.

To Which Clauses of the LEP Were the First and/or Second Variation Requests Directed?

69. As stated above, Boston submitted that the development standard in cl 4.3(2) had been varied pursuant to either the first and/or the second variation request to permit the proposed development irrespective of the application of cl 7.11 of the LEP. The Panel had regard to cl 7.11, and in particular the objectives of that clause, because it was a material consideration in deciding whether or not to vary the cl 4.3(2) development standard (relying on Wehbe v Pittwater Council [2007] NSWLEC 827; (2007) 156 LGERA 446 at [48] per Preston J). That is to say, whether or not the proposed development met the objectives of cl 7.11 was relevant to a consideration of whether or not the development in cl 4.3(2) of the LEP was unreasonable or unnecessary as it applied to the site, and therefore, whether compliance with it would be similarly burdened.

70. Australian Unity, by contrast, although accepting that both of the cl 4.6 variation requests were before the Council in determining to grant the development consent, argued that, properly read, neither variation request was directed to the development standard of 18 m contained in cl 4.3(2). Rather, they were both directed to what was assumed to be a development standard in cl 7.11, because it was understood by the Council that the location of the site in the Penrith Health and Education Precinct meant that the maximum permissible building height was 21.6 m (cl 4.3 when read together with cl 7.11) and not 18 m.

69. The first and second variation requests were “written requests” made pursuant to cl 4.6 of the LEP, as the Panel found (see the Reasons). On one view this is a finding of fact with which the Court cannot cavil in these judicial review proceedings. They purported to satisfy the requirements of cl 4.6 insofar as they sought to justify that compliance with a development standard was unreasonable or unnecessary in the circumstances of the case and that there were sufficient environmental planning grounds to justify contravening the development standard (cl 4.6(3) and (4) of the LEP).

70. On any fair reading of the text of the first and second variation requests, the requests sought to justify a contravention of the 18 m maximum building height for the site on the Height of Building Map in the LEP and the uplift afforded to that height restriction contained in cl 7.11. This was expressly referenced in both requests. So too were the objectives of cll 4.3 and 7.11. The requests were therefore “written requests” for the purpose of cl 4.6. As Australian Unity conceded, the contravention (or conventions) does not need to be identified numerically.

71. What is less certain, however, and which forms the gravamen of Australian Unity’s complaint, is whether the first and second variation requests were directed to cl 4.3(2), cl 7.11, or both. In my view, the latter conclusion ought to be drawn. That is to say, that the requests cannot be isolated to apply to the development standard contained exclusively in cl 4.3 of the LEP. Such a conclusion would be inconsistent with both the way both variation requests were drafted and the way, as the Major Assessment Report and the Panel’s Reasons demonstrate by their content, they were received and considered by the Panel.

72. It is plain that Boston, the Council, and more importantly, the Panel, were of the opinion that both cll 4.3 and 7.11 were development standards, neither of which could be met, but both of which could be varied by written request pursuant to cl 4.6 of the LEP. Were it otherwise, there would have been no need for the Panel to consider and determine the cl 7.11 variation request, which, as the Reasons disclose, is what it proceeded to do.

73. So much so is evident from the language and structure of the first and second variation requests, which acknowledged the overruns on the building height requirement having regard to the additional height permitted by cl 7.11, the Major Assessment Report, the submissions made in the hearing before the Panel, and the Panel’s Reasons. For example:

1. the references to “development standards” plural rather than singular in the first and second variation requests;

2. the references to cl 7.11 in the variation requests and the calculations of the maximum building height therein that presupposed the application of the additional height afforded by that clause;

3. the reference to a cl 4.6 written request “that related to both the building height and the floor to ceiling height…controls” in the Major Assessment Report. This could only be a reference that included cl 7.11 of the LEP;

4. the references to the maximum building height control found in cl 4.3 of the LEP that could be varied pursuant to cl 4.6 and the reference to the “second standard relating to floor to ceiling height…found at Clause 7.11 which is also written as a development standard” in the Major Assessment Report. According to that Report the second variation request was a request in respect of both standards contained in cll 4.3 and 7.11, respectively;

5. the email from Brunton to Taylor on 20 September 2021 that referred to “two interconnected development standards” identifying the problem that the cl 4.3(2) variation request was dependant on the cl 7.11 variation request because in and of itself the former request could not justify the excess building height;

6. Taylor’s response to the email above on the following day;

7. Brunton’s email to Muscat at the Council accepting that the increase in the building height was reasonable but that the cl 4.6 request in respect of cl 7.11 did not establish the objectives of the latter clause. His opinion was reproduced in the Panel’s reasons;

8. the statements made by Brown on behalf of Australian Unity in at the hearing before the Panel; and

9. the reference by the Panel in its Reasons to the development standards contained in cll 4.3 and 7.11 and Boston’s written requests to contravene both of them.

76. The variation requests cannot be parsed in the manner suggested by Boston. It is clear that the Panel considered variation to the controls contained in both clauses of the LEP as necessary in order to determine whether or not to grant consent. In other words, the determination of the variation requests in Boston’s favour cannot be construed as the consent authority’s approval of the cl 4.3 development standard divorced from the request to vary what Boston, the Council, and the Panel considered to be a development standard in cl 7.11. No proper reading of the Panel’s Reasons supports Boston’s contentions in this regard.

77. In my opinion, the argument by Boston that the first variation request was in and of itself sufficient to permit the ultimate exceedance of the maximum building height consented to ought to be rejected. It is not supported by the language of the request, which was directed primarily at varying cl 7.11, and the Panel in its reasons did not consider the variation of the development control in cl 4.3 to be determinative. Just as the first request for variation of cll 4.3 and 7.11 of the LEP was not framed in the alternative for the purpose of obtaining development consent, nor were the Panel’s reasons for granting consent to the proposed development.

78. In any event, the first variation request was directed to the unamended DA which is not what the Panel approved. Therefore, even assuming that the Panel considered both “requests” (plural) before determining to grant consent, this does not, in my view, assist Boston.

79. In respect of the second variation request, which was directed to the amended DA, the same conclusion follows for similar reasons.

80. The second variation request sought to demonstrate that compliance with cll 4.3(2) and 7.11 was unreasonable and unnecessary in the circumstances of the case having regard to the objectives of both those clauses and the objectives of the B4 Zone, and moreover, that there were sufficient environmental planning grounds to justify contravening the development standards. It also addressed whether the proposed development would be in the public interest. For example, it examined:

1. whether it was compatible with nearby developments having regard to its bulk and scale;

2. its shadow impact;

3. its acoustic impact;

4. its amenity impact with respect to, among other things, views; and

5. whether the provision of a 3 m floor-to-ceiling height would be suitable for residential or health services.

81. It was not suggested that these contentions were inconsistent with the materials before the Panel such as the SEE and the Major Assessment Report.

82. However, the content of the second variation request was largely (although not exclusively) directed not to cl 4.3(2) of the LEP, but to the variation of the purported development standard in cl 7.11 of the LEP in respect of the requirement for the floor-to-ceiling height of the first floor to be reduced from 3.5 m to 3 m to permit an exceedance to the building height uplift of 21.6 m.

83. In conformity with the structure and substance of the second variation request, neither the request nor the Panel’s consideration and determination of it, as manifested in the Reasons, was expressed disjunctively, thereby permitting consent to be granted either pursuant to a variation to the development standard in cl 4.3 or cl 7.11. In my view, Boston cannot, therefore, rely upon the second variation request as a determination only in relation to a variation of the development standard in cl 4.3(2). Not only was this not what was sought by Boston, it was not decided by the Panel in this manner.

84. This conclusion is reinforced by the fact that Boston made variation requests in respect of both cll 4.3 and 7.11 of the LEP. If it was sufficient to obtain consent to vary the maximum building height control in cl 4.3(2) of the LEP, then the request to vary cl 7.11 was otiose, as was the Panel’s consideration of it.

85. In short, for Boston to have succeeded on its primary argument it was necessary for it to demonstrate that the Panel permitted a variation to cl 4.3 of the LEP pursuant to cl 4.6, and that this alone was sufficient to empower the granting of consent. As the discussion above discloses, this is not what occurred and the Panel’s Reasons cannot be construed as such.

86. Finally, it should be noted that if Boston’s analysis is correct, cl 7.11 would have no work to do under the LEP. Variation of the control in cl 4.3(2) of the LEP would be sufficient to permit buildings in excess of 18 m irrespective of their location, provided the objectives of cl 4.3 were met. Such a construction of the LEP ought to be rejected.

87. Alternatively, Boston submitted that the Panel’s Reasons disclosed a two-step process in approving the amended DA: first, the Panel considered the variation to the development standard contained in cl 4.3(2); and second, it considered the request to vary the control in cl 7.11. Further and in the alternative, Boston submitted that it was sufficient for the validity of the consent if the Panel favourably decided, as it did, the request to vary cl 7.11 of the LEP in granting the consent.

88. Both scenarios give rise to the question foreshadowed earlier in this judgment as to whether cl 7.11 can be properly characterised as a development standard.

89. If it cannot, then in my view the Panel misdirected itself by asking the wrong question in its Reasons because it clearly contemplated that cl 7.11 was a development standard, and this formed a central basis for the Panel’s determination to grant consent to the amended DA. As I have found above, a proper analysis of the material before the Panel and its Reasons does not disclose, as Boston submitted, that the Panel merely took into account whether the objectives of cl 7.11 were satisfied in the context of determining whether or not to grant consent pursuant to a cl 4.6 variation for a contravention of the development standard set out in cl 4.3(2) of the LEP.

Is Cl 7.11 a Development Standard Capable of Variation?

90. Australian Unity relied principally on the decision in Elimatta to argue that cl 7.11 was no more than an exception to the development standard in cl 4.3(2) of the LEP, whose requirements are better conceptualised as integers in a formula that determines the availability of the exception for the grant of consent. Where the requirements of cl 7.11 have not been satisfied, the clause cannot be used as a “permissive, facilitative power to be used an exception to” cl 4.3(2) of the LEP and allow for consent to be granted where it would otherwise be prohibited (Elimatta at [55]). The words “despite clause 4.3” in cl 7.11(3) indicate that the clause does not operate on its own but “leverages off the controlling provision” of cl 4.3(2) of the LEP (Elimatta at [54]).

91. By contrast, Boston submitted that cl 7.11 satisfied the statutory definition of “development standards” and that the height restrictions imposed by the clause to engage the additional maximum height permission contained therein were not an essential element of the permitted use. It applied, by analogy, the reasoning in RIG Consulting Pty Ltd v Queanbeyan-Palerang Regional Council [2021] NSWCA 130; (2021) 249 LGERA 377).

92. As discussed above, cl 7.11(3) of the LEP is a jurisdictional fact, the establishment of which is required to engage the statutory power to grant development consent to the permissible development of a hotel within the Penrith Health and Education Precinct, provided that the preconditions contained in cl 7.11(3) are met. Although expressed permissively, the clause nevertheless provides the necessary conditions for the exercise of power to grant consent (RIG at [7] and [58]).

93. The term “development standards” is defined in s 1.4 of the Environmental Planning and Assessment Act 1979 (“EPAA”) to mean:

development standards means provisions of an environmental planning instrument or the regulations in relation to the carrying out of development, being provisions by or under which requirements are specified or standards are fixed in respect of any aspect of that development, including, but without limiting the generality of the foregoing, requirements or standards in respect of—

(a)   the area, shape or frontage of any land, the dimensions of any land, buildings or works, or the distance of any land, building or work from any specified point,

(b)   the proportion or percentage of the area of a site which a building or work may occupy,

(c)   the character, location, siting, bulk, scale, shape, size, height, density, design or external appearance of a building or work,

(d)   the cubic content or floor space of a building,

(e)   the intensity or density of the use of any land, building or work,

(f)   the provision of public access, open space, landscaped space, tree planting or other treatment for the conservation, protection or enhancement of the environment,

(g)   the provision of facilities for the standing, movement, parking, servicing, manoeuvring, loading or unloading of vehicles,

(h)   the volume, nature and type of traffic generated by the development,

(i)   road patterns,

(j)   drainage,

(k)   the carrying out of earthworks,

(l)   the effects of development on patterns of wind, sunlight, daylight or shadows,

(m)   the provision of services, facilities and amenities demanded by development,

(n)   the emission of pollution and means for its prevention or control or mitigation, and

(o)   such other matters as may be prescribed.

94. As is apparent, the definition is broad and by its terms ought not be construed narrowly.

95. While there is a distinction between a provision that may be properly characterised as a development standard and a provision that controls development in some other way (StrathfieldMunicipal Council v Poynting [2001] NSWCA 270; (2001) 116 LGERA 319 at [95]), the demarcation line is far from bright (Dib at [57] and the cases referred to thereat).

96. In Poynting Giles JA set out a two-step process for determining whether a control is a development standard (at [96]-[99]):

96   The matters in the construction of the definition discussed by Mahoney JA in North Sydney Municipal Council v P D Mayoh Pty Ltd (No 2) mean that, in order that a provision fall within the definition as a development standard, there must be a development in respect of an aspect of which the provision specifies a requirement or fixes a standard. A provision prohibiting the development in question (the use of land, subdivision of land, erection of a building etc, see the definition of ‘development’ in the Act) under any circumstances will be a provision controlling development, but it will not be a development standard. The availability of SEPP No 1 will fail at the first step.

97   Beyond this, the debate should be over the second step, whether the provision specifies a requirement or fixes a standard in relation to an aspect of the (non-prohibited) development. I consider one can profitably return to the observations of McHugh JA in Woollahra Municipal Council v Carr, to his Honour's reminder of the need to define the development and its aspects before it can be determined whether the provision in question is a development standard. Referring again to the definition of “development standards”, there must be a provision in relation to the carrying out of development, and then the provision must specify a requirement or fix a standard in respect of an aspect of that development. Having identified the development in relation to which there is the provision, the aspects of that development must be considered in order to say whether the provision specifies a requirement or fixes a standard in respect of an aspect of the development.

98   If the provision does not prohibit the development in question under any circumstances, and the development is permissible in circumstances expressed in the provision (whether positively or negatively, see the forms of provision earlier stated), in most instances the provision will specify a requirement or fix a standard in respect of an aspect of the development. In the absence of control, and subject for example to the private law of nuisance, a landowner may develop his land as he sees fit. Control by complete prohibition on the development in question will not leave room for requirements or standards. But anything less than complete prohibition means that there can be the development in question, and provided a relevant aspect of the development is identified the control will be by imposition of a development standard.

99   In the debate over the second step, whether the provision specifies a requirement or fixes a standard in relation to an aspect of the (non-prohibited) development, the key will be identification of a relevant aspect of the development. The list of aspects in paragraphs (a) to (n) of the definition of ‘development standards’ in s 4(1) of the Act shows that a broad view of what is an aspect of a development should be taken. North Sydney Municipal Council v P D Mayoh Pty Ltd (No 2) must be regarded as a case in which the majority considered that the provision in substance prohibited the development under any circumstances, not because of something in the definition of the development (see Clarke JA's comments on the observations of McHugh JA in Woollahra Municipal Council v Carr) but because, as part of the environmental planning instrument as a whole, in the prohibition on erection of a residential flat building the governing characteristic was land with adjoining high buildings, so there was relevantly a prohibition on development in any circumstances. Healesville Holding Pty Ltd v Pittwater Council must be explained in a similar way. The other cases cited by the appellant in which provisions were held to be development standards must be regarded as cases in which the development was permitted and there was a relevant aspect of the development in respect of which a requirement was specified or a standard fixed - siting of the building (Quinn O'Hanlon Architects Pty Ltd v Leichhardt Municipal Council, Bowen v Willoughby City Council), number of storeys of the building (Scott Revay & Unn v Warringah Council), minimum subdivisible area (Bell v Shellharbour Municipal Council).

97. In Blue Mountains City Council v Laurence Browning Pty Ltd [2006] NSWCA 331; (2006) 150 LGERA 130 Basten JA opined an “essential element” test as follows (at [77]):

77   The language of the definition which provides the surest foundation for distinguishing development standards from other provisions is found in the requirement that they be “in respect of any aspect of that development”. Two important elements of the definition can be derived from that language, albeit read within its statutory context. First, the words “in respect of” indicate a nexus or connection between, on the one hand, the requirement or standard and, on the other hand, the development. As explained by McHugh JA in Woollahra Municipal Council v Carr at 269-270, such language not only must be premised on that dichotomy, but also, and importantly, requires the development and its aspects to be defined, before the test can be applied: see also Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at, eg, 242 (Dawson J). Thus a prohibition on a particular kind of development will not be a development standard if the characteristic or criterion engaging its operation is an essential element of the particular development, rather than a standard or requirement in respect of an aspect of the proposed development: see Lowy v Land and Environment Court (NSW) (2002) 123 LGERA 179 at [36] (Handley JA). …

98. But, as Preston J observed in Dib, “the ‘essential element’ approach to determining whether a provision is a development standard is not without its difficulties” (at [57]).

99. More recently, this Court has emphasised that from the outset it is necessary to define the development that may be carried out with consent (Dib at [51]). This is because a provision of an environmental planning instrument can only be a development standard within the statutory definition if it is “in relation to the carrying out of development” (Poynting at [96], Agostino v Penrith City Council [2010] NSWCA 20; (2010) 172 LGERA 380 at [49] and Dib at [50]). In the present case, the development is for a hotel of a particular height (see the plans accompanying the amended DA. Clause 4.3(2) of the LEP allows the development to be carried out on land to a specified extent, namely, to not exceed the maximum height shown for the land on the Height of Buildings Map.

100. In Sydney Municipal Council v PD Mayoh Pty Ltd (No 2) (1990) 71 LGRA 222 Mahoney JA noted that there is a distinction between a provision in the form of “on land of characteristic X no development may be carried out” and one that says “on such land development may be carried out in a particular way or to a particular extent” (at 234). While the former is not a development standard, the latter is.

101. Turning to the text of cl 7.11 of the LEP, the clause does not operate to define the development that is permitted to be carried out with consent in the B4 Mixed Use Zone, or even, for that matter in the Penrith Health and Education Precinct. Instead, the clause serves the function of specifying the circumstances in which a consent authority can grant consent to a development that exceeds the maximum building height restriction for that land as stipulated in the Height of Buildings Map. Viewed this way, the floor-to-ceiling height of both the ground and first floors being equal to or greater than 3.5 m is not an essential element of the development, rather, it conditions the exercise of power to grant consent to that development.

102. That is, the clause is not a provision that either prohibits the carrying out on land in the B4 Zone development for the purpose of a hotel, or prohibits the carrying out of development in the Penrith Health and Education Precinct. Rather, it is a provision relating to the carrying out of that development on that land for the purposes of a hotel by regulating the circumstance in which development consent can be granted to that development (Dib at [62]-[63]).

103. On this construction, cl 7.11 answers the description of the statutory definition of “development standards” of a provision “in relation to the carrying out of a development”, namely, development for the purpose of a hotel, that specifies a requirement or fixes a standard in respect of the height of the development. That the provision includes a jurisdictional fact does not preclude the finding that it is a development standard (Dib at [66]).

104. This conclusion is reinforced by the express reference to “height…of a building or work” in the definition of “development standards” in s 1.4(c) of the EPAA. Clause 7.11 squarely concerns the height of a proposed development.

105. The conclusion is further buttressed by the context in which the clause appears, namely, “Additional local provisions” in Pt 7 of the LEP, that is, provisions that do not in and of themselves prohibit the carrying out of development but are facultative in effect.

106. In addition, although cl 7.11 is not contained in Pt 4 of the LEP which deals specifically with development standards (including cl 4.3(2)), nothing, in my opinion, turns on this. By its express exclusion of the application cl 4.6(2), cl 4.6(8) contemplates the existence of other development standards contained in the LEP outside Pt 4 of the instrument.

107. Australian Unity relied heavily on the reasoning in Elimatta to submit that cl 7.11 did not itself specify or fix anything, instead it merely provided an exception to the development standard specified by cl 4.3(2) of the LEP (at [53]-[55]).

108. It is not necessary for me to determine whether Elimatta is, as was urged upon me to do so by Boston, plainly wrong. I note that the statutory regime in Elimatta concerned that of subdivision and not building height and is distinguishable on this basis notwithstanding the structural textual similarities between the provisions at issue in that case and to those in the present matter. Having said this, I note that the conclusion in Elimatta appears to be inconsistent with the remarks in RIG that a relevantly similar provision to cl 7.11 was a development standard (at [53] and [68]).

109. Australian Unity placed emphasis on the words “despite clause 4.3” at the commencement of cl 7.11(3) of the LEP and also on cl 6.4 to contend that these were textual indicators that cl 7.11(3) was no more than an exception to the maximum building height standard specified in cl 4.3(2); it did not, by itself, fix a standard in respect of an aspect of the development.

110. The purpose of the words “despite clause 4.3” merely ensures that the operation of cl 7.11 is unaffected by clause 4.3, and in particular, cl 4.3(2) of the LEP (RIG at [22] and [55]):

111. Clause 6.4 of the LEP does not operate because there is no inconsistency. Clause 7.11 prevails over cl 4.3.

112. There are two requirements contained in cl 7.11(3) of the LEP that must be established in order to enliven the power contained in the provision. First, that the floor-to-ceiling height of both the ground floor and the first floor be equal to or greater than 3.5 m, and second, that the height of any building not exceed the maximum height shown for that land on the Height of Building Map by more than 20%. Clause 7.11 makes the power to grant development consent conditional on the satisfaction of both.

113. Properly understood, therefore, cl 7.11 operates not as an exception to the development standard contained in cl 4.3(2), but as a separate development standard in its own right in respect of land zoned B4 located in the Penrith Health and Education Precinct. To the extent that there is a conflict with cl 4.3(2) of the LEP, cl 7.11 prevails by operation of the words “despite cl 4.3”.

114. The purpose of the expression “despite clause 4.3” makes clear that the maximum height limit imposed by cl 4.3(2) does not apply when the conditions in cl 7.11 are satisfied. When the conditions are met, then the height limit imposed by cl 7.11(3) is the standard against which the proposed development’s height is measured.

115. Thus cl 7.11(3) is a provision “by or under which requirements or standards are fixed in respect of any aspect of that development” and is a development standard. Consequently, cl 4.6 applies to cl 7.11 (as earlier observed cl 7.11 is not expressly excluded from the operation of cl 4.6 by cl 4.6(8) of that instrument).

116. As discussed above, the Panel expressly considered whether or not to grant development consent notwithstanding that the proposed development did not comply with the height limit exceedance imposed by the Height of Building Map, having regard to the location of the proposed development in the Penrith Health and Education Precinct and the requirements and objectives of cl 7.11 of the LEP.

117. Upon considering the second variation request from Boston, and upon being satisfied of the matters in cl 4.6(3) and (4) of the LEP, it was within the Panel’s power to grant consent to the amended DA and it did not err in doing so.

118. To the extent that the Panel also had regard to the objectives of, and the development standard contained in, cl 4.3(1) and (2) of the LEP in determining to grant development consent, this informed, but was not uniquely determinative of, its deliberation as to whether or not to grant consent.

Materiality

119. If, however, the above analysis is incorrect, and the Panel did not have the power to grant consent because cl 7.11(3) of the LEP is not a development standard, such that it assessed the amended DA on an incorrect basis, was the error material?

120. Boston submitted that if the Panel’s determination to grant consent was infected by error, the error was immaterial, and therefore, not jurisdictional, with the consequence that Australian Unity was not entitled to any relief. It argued that the Panel was satisfied that the proposed development was consistent with the objectives of the B4 Zone and cll 4.3 and 7.11 and approved the amended DA notwithstanding the non-compliance with the maximum building height in both clauses. According to the Panel, there were sufficient environmental planning grounds to justify the proposed development. Australian Unity cannot accordingly establish that the error could have made a difference to the decision that was made. It was, therefore, not material.

121. Conversely, Australian Unity argued that a development consent issued absent any power to do so because the jurisdictional facts enlivening the exercise of statutory power had not been demonstrated was an error of the kind that was so serious that materiality was readily established. Moreover, it could readily be shown that the error could have made a difference to the decision that was made to grant consent. Because the Panel had asked itself the wrong question and misconceived its power to approve the development, it had proceeded to determine the amended DA on a different maximum building height that was substantially higher than 18 m, namely 21.6m. The ultimate breach of the building height when measured against that permitted by cl 4.3(2) was accordingly considerably more egregious than that understood by the Panel. In these circumstances, had the Panel properly understood this, it is more than arguable that consent would not have been granted to the development.

122. In Nathanson v Minister for Home Affairs [2022] HCA 26 the plurality of the High Court described the content and proof of materiality as follows (albeit in the context of a denial of procedural fairness) (at [30]-[32], footnotes omitted):

30.   Content and proof of materiality of a denial of procedural fairness

In Hossain v Minister for Immigration and Border Protection, a majority comprising Kiefel CJ, Gageler and Keane JJ enunciated a common law principle of statutory interpretation. That principle is that a statute conferring decision-making authority is "ordinarily to be interpreted as incorporating a threshold of materiality in the event of non-compliance". It is well recognised that, generally speaking, legislation should be construed to discourage unnecessary litigation, to reduce wasting time and cost and to preserve the dignity of the law. And, in particular, in relation to the Act, this Court has declined to attribute to the legislation the impractical intention that an error in process, which cannot have affected the outcome of the process, requires that the process be repeated.

31.   In MZAPC, a majority comprising Kiefel CJ, Gageler, Keane and Gleeson JJ explained the evolution of the contemporary understanding of jurisdictional error that supported that principle of interpretation. Their Honours further explained: "The principle accommodates determination of the limits of decision-making authority conferred by statute to the reality that '[d]ecision-making is a function of the real world' by distinguishing the express and implied statutory conditions of the conferral from the statutory consequences of breach and by recognising that the legislature is not likely to have intended that a breach that occasions no 'practical injustice' will deprive a decision of statutory force."

32.   As explained in MZAPC, the materiality of a breach requires consideration of "the basal factual question of how the decision that was in fact made was in fact made". This question is determined by proof of historical facts on the balance of probabilities. Then, it is necessary to consider whether the decision that was in fact made could have been different had the relevant condition been complied with "as a matter of reasonable conjecture within the parameters set by the historical facts that have been determined". The burden falls on the plaintiff to prove "on the balance of probabilities the historical facts necessary to enable the court to be satisfied of the realistic possibility that a different decision could have been made had there been compliance with that condition.

123. However, as Gordon J went on to observe in that case (at [76], footnotes omitted):

76.   A majority in MZAPC acknowledged that there are certain categories of error which necessarily result in "a decision exceeding the limits of decision-making authority without any additional threshold [of materiality] needing to be met" by an applicant. One such category is where the error is so egregious that it will be jurisdictional regardless of the effect the error may have had on the conclusion of the decision-maker. A serious denial of procedural fairness involving a denial of an opportunity to be heard in relation to an important issue in the context of an evaluative decision (as occurred in this case) falls into that category. Put in different terms, "the quality or severity of the error", as a matter of logic and common sense, necessarily gives rise to the conclusion that it does not matter whether the "decision could realistically have been different had [the] error not occurred". …

124. In my opinion, if I am wrong, and cl 7.11(3) is not a development standard, then the quality of the error by the Panel is sufficiently severe that it does not matter whether the decision could realistically have been different had it not occurred. I am not convinced that a different decision could not have resulted given, as Australian Unity pointed out, the difference between the height of the as consented to development and the mandated maximum building height in cl 4.3(2) was approximately that of an extra storey. I arrive at this conclusion notwithstanding my finding that the Panel was aware that the maximum building height was 18 m, with the potential to be increased to 21.6 m. In my view, if cl 7.11(3) could neither be varied nor availed upon, then it is more than possible that, due to the height of the proposed development, consent could have been withheld.

Relief

125. Boston argued that if the Court found that the decision to grant consent was invalid, it should exercise its discretion not to grant relief to Australian Unity on the basis that the error could not possibly have made a difference to the outcome (citing Voicu v Owners Strata Plan No 1624 [2020] NSWCA 52 at [42]-[47]). Where, as in the present case, the information before the Panel amply supported the decision to grant consent, the Court should withhold the relief sought because the error was both trivial and immaterial.

126. According to Boston, the preferable course would be to utilise s 25B of the Land and Environment Court Act 1979 (“the LEC Act”) to empower the Court to make an order suspending the operation of the consent and specifying terms that would validate the consent given that the Panel has determined that the proposed development accords with the objectives of the B4 Zone and the relevant clauses of the LEP.

127. Section 25B of the LEC Act states:

25B   Orders for conditional validity of development consents

(1)   The Court may, instead of declaring or determining that a development consent to which this Division applies is invalid, whether in whole or in part, make an order—

(a)   suspending the operation of the consent in whole or in part, and

(b)   specifying terms compliance with which will validate the consent (whether without alterations or on being regranted with alterations).

(2)   Terms may include (without limitation)—

(a)   terms requiring the carrying out again of steps already carried out, or

(b)   terms requiring the carrying out of steps not already commenced or carried out, or

(c)   terms requiring acts, matters or things to be done or omitted that are different from acts, matters or things required to be done or omitted by or under this Act or any other Act.

128. Australian Unity submits that the appropriateness of making an order under this provision depends on the grounds which have been made out. In circumstances where there was an absence of power to grant consent, Boston could not utilise the device set out in s 25B of the LEC Act.

129. The Court has a duty to consider making such an order instead of declaring the consent invalid under s 25E of the LEC Act.

130. However, if I am wrong, the basis upon which Australian Unity has succeeded relates to an absence of power by the Panel to vary the control in cl 7.11(3) of the LEP, and therefore, an absence of power to grant development consent to the amended DA.

131. There has been considerable judicial discussion as to whether the power in s 25B of the LEC Act extends to permitting an order for conditional validity of a development approval where there has been a complete absence of statutory power to approve it (see Elimatta at [125] and the cases cited thereat). While s 25B is not limited to the rectification of invalidity arising from technical breaches in the granting of a consent, it has been found to have much more limited application to consents granted without power to do so. This is because it is difficult to make orders specifying terms of compliance which will validate the consent (s 25B(1)(b) of the LEC Act).

132. The observation made above is particularly apt in the present case. It is not merely a question of, as Boston suggested, striking out all references to cl 7.11 in the second variation request or the Panel’s Reasons. As held above, the Panel’s reasons were not in the alternative, but were premised upon the relationship between cll 4.3 and 7.11 and the development standards that those clauses were assumed to contain.

133. As Robson J opined in Elimatta, “I would not consider it appropriate to utilise s 25B of the LEC Act in circumstances where…[the Panel] would need to return to an early stage in the decision-making process and undertake the process again” (at [126]). This is precisely what would be required in the present case.

134. For these reasons, had the Court found in Australian Unity’s favour, s 25B of the LEC Act would not support the Court making orders other than those sought in the further amended summons.

Costs

135. As Boston has been successful in these Class 4 proceedings, the usual order that costs follow the event ought to apply. There is no reason to make a contrary order.

Orders

136. The formal orders of the Court are as follows:

1. the further amended summons is dismissed;

2. Australian Unity Funds Management Ltd in its capacity as Responsible Entity of the Australian Unity Healthcare Property Trust is to pay Boston Nepean Pty Ltd’s costs of the proceedings; and

3. the exhibits are to be returned.

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Amendments

31 May 2023 – Pursuant to reg 36.17 of the Uniform Civil Procedure Rules 2005 (“slip rule”) corrections are made as follows:

1. The heading above is changed from “Australian Unity Proposes to Build a Hotel” to “Boston Proposes to Build a Hotel”.

2. The first sentence on this paragraph replaces “Australian Unity” with “Boston”.

Decision last updated: 31 May 2023