Belmorgan Property Development Pty Ltd v GPT Re Ltd

[2007] NSWCA 171

Reported Decision: 153 LGERA 450

New South Wales

Court of Appeal

CITATION:	Belmorgan Property Development Pty Ltd v GPT Re Ltd & Anor [2007] NSWCA 171 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	1 June 2007
JUDGMENT DATE:	18 July 2007
JUDGMENT OF:	Beazley JA; Tobias JA; Basten JA
DECISION:	Appeal dismissed with costs
CATCHWORDS:	DEVELOPMENT CONSENT – Validity – Delegation of Council powers– Power to determine a development application – Whether a delegation of power to approve a particular development application is a valid delegation – Whether a delegation to approve a particular development application fettered the delegate’s previously delegated power to determine development applications with respect to that particular application – Local Government Act 1993 s 377 – Environmental Planning and Assessment Act 1979 ss 79C(1), 80(1)
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 Interpretation Act 1987 Local Government Act 1993 Local Government (Meetings) Regulation 1999
CASES CITED:	Attorney-General ex rel Goddard v North Sydney Municipal Council [1971] 2 NSWLR 373 Attorney-General (NSW); ex rel McKellar v The Commonwealth (1977) 139 CLR 527 Australian National Airways v The Commonwealth (1945) 71 CLR 29 Centro Properties Ltd v Hurstville City Council (2004) 135 LGERA 257; [2004] NSWLEC 401 Everall v Kuringai Municipal Council (1991) 72 LGRA 369 Fuller v Bellingen Shire Council [1988] NSWLEC 40 GPT Re Ltd v Wollongong City Council (2006) 151 LGERA 116; [ 2006 ] NSWLEC 303 The Minister for Urban Affairs & Planning v Rosemount Estates Pty Ltd (1996) 91 LGERA 31 Silk Bros Pty Ltd v State Electricity Commission of Victoria (1943) 67 CLR 1 Singh v Minister of Immigration, Local Government & Ethnic Affairs (1989) 90 ALR 397 Weal v Bathurst City Council [1999] NSWLEC 132 Weal v Bathurst City Council (2000) 111 LGERA 181; [2000] NSWCA 88
PARTIES:	Belmorgan Property Development Pty Ltd GPT Re Ltd Wollongong City Council
FILE NUMBER(S):	CA 40855/06
COUNSEL:	A: S Austin QC / S Balfoutis R: S Gageler SC / S Pritchard
SOLICITORS:	A: Norman Waterhouse, Sydney 1R: Allens Arthur Robinson, Sydney 2R: DLA Phillips Fox
LOWER COURT JURISDICTION:	Land & Environment Court
LOWER COURT FILE NUMBER(S):	LEC 41279/05
LOWER COURT JUDICIAL OFFICER:	Biscoe J
LOWER COURT DATE OF DECISION:	9 June 2006
LOWER COURT MEDIUM NEUTRAL CITATION:	GPT Re Limited v wollongong City Council & Anor [2006] NSWLEC 303

CA 40855/06
LEC 41279/05

BEAZLEY JA
TOBIAS JA
BASTEN JA

Wednesday 18 July 2007

BELMORGAN PROPERTY DEVELOPMENT PTY LTD v GPT RE LTD & ANOR

Judgment

1 BEAZLEY JA: I agree with Tobias JA. I also agree with the additional reasons of Basten JA which, as his Honour observes, are not inconsistent with the reasons of Tobias JA.

2 TOBIAS JA: On 9 June 2006 Biscoe J of the Land and Environment Court held that Development Consent No. 2004/1565 dated 1 August 2005 (the Consent) granted by the second respondent, Wollongong City Council (the Council), to the appellant, Belmorgan Property Development Pty Ltd (Belmorgan), was invalid upon the ground that the Council’s resolution delegating authority to its General Manager to grant the Consent was itself invalid: GPT Re Ltd v Wollongong City Council (2006) 151 LGERA 116; [2006] NSWLEC 303. On 7 July 2006 his Honour formally declared that the Consent was void and of no effect and ordered that Belmorgan be restrained from carrying out any works pursuant thereto. Belmorgan now appeals to this Court from that decision.

The background facts

3 On 27 August 2004 Belmorgan lodged a development application (the application) with the Council in respect of a site of 11,795m² having frontages to Crayon Street to the north, Corrimal Street to the West and Burelli Street to the south, located within the eastern part of the Wollongong City Centre.

4 The application proposed the demolition of all existing buildings upon the site and the erection of a seven storey retail shopping centre and commercial office complex (the development). The main components of the development comprised a discount department store, a full-line supermarket, two mini-major stores, a number of speciality shops, an eight cinema complex and commercial offices together with basement car parking facilities. The development proposed a total gross floor area of 26,036m² corresponding to a floor space ratio of 2.46:1.

5 The site was generally zoned 3(a) General Business in Wollongong Local Environmental Plan 1990 (the LEP) under which the proposed development was permissible with consent. As the height of the development ranged from 19.43m to 28.85m, which was in excess of a 15m height limit imposed by the LEP, the application was accompanied by an objection pursuant to State Environmental Planning Policy No.1 (SEPP1).

The Council’s assessment of the application

6 The application was the subject of a detailed and lengthy report (the report) to a meeting of the Council’s Environment & Planning Committee held on 1 August 2005. The Council’s Manager Development Assessment and Compliance, Mr R Zwicker, prepared the report. It totalled 116 pages of which 57 pages comprised the substantive text of the report whilst the remainder comprised attachments which provided background information.

7 The report recommended against the approval of the application unless the ground floor supermarket and associated retail floor space were deleted from it. It favoured the development insofar as it included a discount department store and multiplex cinema complex which were in line with the recommendations of previous studies into the Wollongong City Centre. However, because the site was outside the retail core of the City Centre, the approval of the development in its current form was likely to result in a number of existing businesses being subjected to direct competition from the proposed speciality retail, restaurants and food outlet stores contained within it.

8 Accordingly, Mr Zwicker considered that the proposal was inconsistent with the retail hierarchy strategy contained in the Council’s adopted Wollongong Retail Centre Study since it was likely to result in the further fragmentation of the retail core of the City Centre. He concluded that the proposal was unsupportable in its current form and, therefore, recommended that Belmorgan be requested to redesign the development deleting the proposed ground floor supermarket and speciality retail floor space. The consequent reduction in the amount of retail floor space in the development was likely to reduce the potential adverse impact upon the retail core of the City Centre whilst enabling the provision of a discount department store operation within the City.

9 The report concluded in the following terms:

“Accordingly, it is recommended that Council forward correspondence to the applicant requesting a redesign of the proposed development involving the deletion of the ground floor supermarket and ground floor speciality retail stores and the associated reconfiguration of the building. This correspondence is also recommended to include a request for the applicant to advise Council within 7 days from the date of Council’s correspondence that a redesign of the proposal will be undertaken.
It is also recommended that delegated authority be granted to the General Manager, in the event that no correspondence is received within 7 days from the applicant confirming that the redesign of the development will be undertaken by way of the deletion of the supermarket anchor and other speciality retailing outlets on the ground floor level of the building and the associated reconfiguration of the building.”

10 It will be appreciated that on its face there is an ambiguity in the last paragraph recorded above in that Mr Zwicker does not indicate what it is that the General Manager should have delegated authority to do. However, that ambiguity is resolved in the section of the report immediately preceding the heading “CONCLUSION” where, under the heading “OPTIONS” the following is recorded:

“1. Redesign of the development to seek the deletion of the ground floor supermarket and associated ground floor retail floor space – this option is recommended to be pursued to reduce the quantum of retail floor space being proposed upon a site outside the defined retail core in the city whilst still enabling the provision of a discount department store and multiplex cinema complex in line with previous retail studies undertaken for the Wollongong City Centre.
2. Refusal of the application – This option is not recommended as the first option but in the event that the application is unwilling to undertake redesign of the development in line with the recommendation, the refusal of the application is then recommended.
3. Approval of the application – This option is not recommended since the proposed centre is outside the retail core of the city centre and is likely to result in two separate shopping centres trading at opposite ends of the city centre. This is likely to result in some decline in the middle section of the retail core particularly in the lower part of the mall. However, the approval of the application would guarantee the provision of a discount department store and a multiplex cinema complex in the city centre, albeit outside the identified retail core of the city.”

11 Of particular significance is the formal recommendations made by Mr Zwicker at the commencement of the report:

“ RECOMMENDATION
1. The applicant be requested to redesign the proposed development by way of the deletion of the ground floor level supermarket and ground floor speciality retail floor space and the associated reconfiguration of the remainder of the building. This shall include a written request requiring the applicant to provide written advice to Council within 7 days from the date of the correspondence confirming the applicant’s agreement to undertaken the redesign of the development in line with Council’s request.
2. In the event the applicant does not provide a written response within 7 days from the date of Council’s correspondence confirming the applicant’s agreement to undertake a major redesign of the proposal, the General Manager be granted delegated authority to determine the application based on relevant planning, urban design and economic grounds . ” (Emphasis added)

The Council’s decision

12 Had the Council adopted Mr Zwicker’s recommendations as set out in the preceding paragraph, there could be no doubt that delegated authority to the General Manager in the terms referred to in par 2 of those recommendations would have empowered him to determine the application in accordance with s 80(1) of the Environmental Planning and Assessment Act 1979 (the EPA Act) by

“(a) granting consent to the application, either unconditionally or subject to conditions, or
(b) refusing consent to the application.”

13 However, in determining whether to grant or refuse consent the General Manager would have been bound to take into consideration those matters referred to in s 79C(1) of the EPA Act as were relevant to the development.

14 The Council did not adopt Mr Zwicker’s recommendations. Rather, it was moved that:

“1. The General Manager be delegated authority to approve Development Application 1565/2004 as per Option 3 of the report [of Mr Zwicker].
2. The consent not be issued until Councillors are informed of the conditions.
3. A 2 metre setback be placed on the Crown Street frontage in line with Council policy.”

15 An amendment was moved that

“The General Manager be delegated authority to refuse the application on a number of planning, urban design and economic impact grounds.”


The amendment was lost on being put to the vote. The motion was then put and carried, it being common ground that it became the decision of the Council. However, it was accepted by the parties and found by the primary judge (at [28]) that that decision did not purport to be a grant of consent to the application by the Court itself.

The General Manager approves the application

16 On 5 August 2005 Mr Zwicker sent an email to the General Manager in the following terms:

“The Consent for Dwyers will be finalised by 12 noon today.
As you are aware, Council’s resolution on 1 August 2005 included Part 2 which required the consent not be issued until Councillors are informed of the conditions. This resolution is unfortunately unclear as to the time lag between when Councillors are forwarded the consent and the applicant is able to receive the consent. However, it appears to be framed to enable Councillors to review the conditions and possibly make alterations to the conditions of consent.
Accordingly, I seek your advice as to how you would like this consent to be forwarded to Councillors (i.e. whether or not it should be faxed today or placed in today’s mail) and what period of time should elapse between the delivery of the consent to Councillors and the consent being issued to the applicant. Additionally, it would be appreciated if you could confirm as to whether or not the resolution enables Councillors to make any amendments to the consent conditions.”

17 The General Manager replied by email of the same date:

“Councillors only wish to be provided with a copy of the conditions for information. The info could be sent to them today by fax/e-mail. The issue of the consent should not be delayed by this resolution. As I indicated councillors don’t wish to approve the conditions only be made aware of what they are. Therefore you should issue the consent whenever it is ready to go. Thanks for all your help and expeditious completion of the consent.”

18 Mr Zwicker then sent an email to a Ms K Mion, the Development Project Officer of the Council, stating:

“As per the General Manager’s advice, please forward to Councillors first and then forward consent to the applicant.”

19 It would appear that Ms Mion arranged for Mr Zwicker to sign the Notice of Determination of Development Application, which she then issued under s 81 of the EPA Act. The Notice of Determination, although apparently issued on 5 August 2005, was dated 1 August 2005 and contained some 174 conditions of consent as well as a number of deferred commencement conditions, the details of which are not presently relevant.

The institution of proceedings

20 On 28 October 2005 the first respondent, GPT RE Ltd (GPT) instituted proceedings in Class 4 of the Land and Environment Court’s jurisdiction seeking a declaration that the Consent was void and of no effect. A number of grounds of invalidity were alleged, one of which was that the Council’s resolution of 1 August 2005 delegating authority to the General Manager to approve the application as per Option 3 of Mr Zwicker’s report (the 2005 resolution) was itself invalid.

21 The proceedings were heard by the primary judge on 18 and 19 April 2006 and on 9 June 2006 his Honour delivered judgment in which he dismissed all grounds of challenge other than the that alleging invalidity of the 2005 resolution, which he upheld.

The primary judge’s reasoning

22 It was common ground between the parties that the 2005 resolution, when read with Option 3 in Mr Zwicker’s report and the defeated amendment to the motion referred to in [15] above, authorised the General Manager to grant consent to the application but did not authorise him to refuse consent thereto. This notwithstanding, Belmorgan submitted that the resolution should be construed as authorising the General Manager to exercise his discretion in any of three ways: first, by approving the application without conditions; second, by approving it with conditions determined by him; and third, impliedly, by not exercising his delegated power at all.

23 The primary judge agreed (at [30]) that the resolution authorised the General Manager to approve the application with or without conditions but he disagreed (at [31]) with the proposition that the General Manager was authorised not to exercise his power of approval at all. His Honour considered that if the General Manager did nothing, there would be a deemed refusal under s 82(1) of the EPA Act which would be the same as if he had expressly refused consent.

24 Since it was common ground that the 2005 resolution did not authorise the General Manager to refuse consent to the application, his Honour was unable to accept a construction of the resolution that impliedly gave the General Manager authority not to exercise the power of approval with the result that refusal would be deemed. He considered (at [32]) that an implied authority to do nothing would, therefore, be inconsistent with the express authority to approve, but not reject, the application.

25 In these circumstances GPT had submitted that the 2005 resolution was an invalid exercise by or fetter on the power of the General manager because it authorised him only to approve the application but not to refuse it. It was contended that under s 80(1) of the EPA Act the Council had a single indivisible function to determine an application either be granting consent conditionally or unconditionally or by refusing consent.

26 In response Belmorgan submitted that the Council had power to make the 2005 resolution as there was no principle of law restricting the terms upon which a delegator may delegate its powers to another and that it was consistent with the purpose of the Local Government Act 1993 (the LG Act) when read with the provisions of s 49(2)(a) of the Interpretation Act 1987, to allow a delegation limited in the manner described in the resolution.

27 The primary judge referred (at [40]) to the power of the Council under s 377 of the LG Act to:

“delegate to the general manager … any of the functions of the council ..” (with specified exceptions not presently relevant).

28 The relevant function of the Council in the present case was contained in s 80(1) of the EPA Act which empowered a consent authority to determine a development application either by granting consent unconditionally or subject to conditions or by refusing consent to the application. In making that determination it was mandatory for the consent authority to take into consideration the matters prescribed by s 79C(1) insofar as they were relevant. As the primary judge observed (at [44]), it was well established that the consent authority must give “proper, genuine and realistic” consideration to those matters: Centro Properties Ltd v Hurstville City Council (2004) 135 LGERA 257; [2004] NSWLEC 401 at 266-267 [37] where McClellan CJ summarised the principles articulated by this Court in Weal v Bathurst City Council (2000) 111 LGERA 181; [2000] NSWCA 88.

29 The primary judge then referred (at [45]-[46]) to the decision of Keely J of the Federal Court of Australia in Singh v Minister of Immigration, Local Government & Ethnic Affairs (1989) 90 ALR 397 where (at 402) he considered that a power vested in the Minister under a provision of the Migration Act 1958 (Cth) was an indivisible one (namely, whether to grant resident status or to refuse it) so that a delegation by the Minister to an officer of his Department of the power to decide against granting resident status whilst at the same time withholding from that officer the power to grant such status, was beyond power. Spender J followed this decision in Singh v Castello, Federal Court of Australia, 16 July 1990 (unreported) at [32]-[33].

30 The primary judge then observed (at [47]) that the conclusion that the s 80(1) function of determining a development application was indivisible was supported by the provisions of s 79C(1) as it was the whole of the s 80(1) determination function that had to be exercised in accordance with that provision. His Honour observed that it would be

“…difficult to see how s 79C matters can be properly, genuinely and realistically considered in making a determination if the determination can only go one way. To delegate to the general manager a power to approve only is a limitation on the nature of the opinion that can be formed and, I think, inconsistent with the statutory scheme that the delegate standing in the shoes of the council must make a s 80 determination on relevant matters referred to in s 79C.”

31 Accordingly, his Honour (at [50]) rejected Belmorgan’s submission that it had the power to delegate a function to the General Manager defined only by reference to s 80(1)(a) of the EPA Act, namely, the power to grant consent, in this case, subject to conditions and to exclude the s 80(1)(d) power to refuse consent. His Honour further rejected (at [52]) a submission by Belmorgan that s 49(2)(a) of the Interpretation Act (which provides that a delegation “may be general or limited”) permitted the divisibility of the s 80(1) function of determining a development application by limiting that determination to one of granting consent only.

32 Although Belmorgan relied upon two unreported decisions of single judges in the Land and Environment Court (Fuller v Bellingen Shire Council [1988] NSWLEC 40, Hemmings J, 16 June 1988, unreported and Weal v Bathurst City Council [1999] NSWLEC 132, Bignold J, 11 June 1999, unreported), the primary judge considered (at [54] and [56]) that each was distinguishable from the present case.

33 His Honour then canvassed and rejected a number of other alternative submissions by Belmorgan which do not require detailing. However, it submitted (at [59]) that a restriction of a council’s powers of delegation, if GPT’s submissions were to be accepted, would have a serious effect on a council’s operations. It submitted that in particular a council should have power to delegate the power to approve, but not refuse, a development application under a particular monetary value in circumstances where the development was not contentious or complied with all relevant council planning controls. It was not unusual, it was suggested, for a council to delegate to a senior planning officer the power to determine a development application where it related to development under a particular monetary value or in circumstances where it was otherwise non-contentious. But generally in these cases the delegation is general in its terms in that it applies to a particular class of development applications rather than, as in the present case, to a particular application. In these circumstances, the delegation of authority to grant consent to such applications would, impliedly, carry with it the power to refuse such consent. His Honour was conscious of this distinction when he observed (at [34]) that the present case is

“… different from a case where an instrument of delegation simply refers to a power ‘ to approve ’ (for example for approved applications up to a prescribed value). In the latter type of case I think that such words, without more, ordinarily would implicitly carry with them the additional words ‘ or refuse ’. In the peculiar circumstances of the present case, there was no delegated power of refusal.”

34 In summary, the primary judge held, first, that there was no power in the Council to delegate its function to the General Manager under s 80(1) of the EPA Act to determine the application by only granting consent thereto; and, second, that in any event, to delegate authority to the General Manager to only grant consent to the application would constitute an impermissible fetter upon the General Manager’s authority to determine the application in a manner which complied with the mandatory requirements of s 79C(1).

35 Belmorgan had a second string to its bow. It submitted that even if the 2005 resolution was invalid, nevertheless the General Manager had a general authority to determine the application pursuant to a resolution of the Council of 7 April 2004 (the 2004 resolution)

“that in accordance with the provisions of Section 377 of the LG Act 1993, Council delegate to the General Manager all of the functions of council as provided in the Act, subject to any policies and procedures that may be determined from time to time.”

36 It was common ground that by virtue of s 22 of the LG Act the Council had the functions conferred or imposed on it by or under any other Act which included the EPA Act. Accordingly, there was no issue but that the Council had the power pursuant to s 377 to delegate to the General Manager its functions under the EPA Act including those conferred by s 80(1).

37 Belmorgan therefore submitted that even if the 2005 resolution was invalid, the General Manager had an alternative and independent source of power to grant the Consent. It submitted that the 2004 resolution remained in force as an alternative source of power notwithstanding the 2005 resolution as s 372(1) of the LG Act provided that a

“… resolution passed by a council may not be altered or rescinded except by a motion to that effect of which notice has been duly given in accordance with regulations made under section 360 and, if applicable, the council’s code of meeting practice.”

38 The relevant regulation was cl 35 of the Local Government (Meetings) Regulation 1999 which provided that notice specifying the time, place and date of the business proposed to be transacted at a meeting before the council was to be provided to each councillor not less than three days before the meeting. His Honour noted (at [62]) that that notice was duly given but that it did not refer to a motion to alter the General Manager’s delegated authority. Belmorgan submitted that if councillors had intended to vary the 2004 resolution notice was required to be given in accordance with cl 35.

39 The primary judge rejected Belmorgan’s reliance upon the 2004 resolution on two grounds. The first was that that resolution was expressed to be “subject to any policies and procedures that may be determined from time to time”. At [64] his Honour considered that the 2005 resolution came within the ambit of that qualification.

40 Second, his Honour considered that there was an inconsistency between the 2004 and 2005 resolutions which suggested that the latter was intended to partially rescind the former. In this respect, his Honour sought support from the decision of Hope J in Attorney-General ex rel Goddard v North Sydney Municipal Council [1971] 2 NSWLR 373 where at 379 his Honour said:

“No doubt in appropriate circumstances the second resolution dealing with the same subject matter as an earlier resolution may impliedly rescind that earlier resolution without especially referring to it.”

41 The primary judge found held that further support was to be found in a passage from the judgment of Hemmings J in Everall v Kuringai Municipal Council (1991) 72 LGRA 369 at 376 where, after considering the provisions of cl 25(a) of Ordinance 1 made under the LG Act 1919 (since repealed) and which was in similar terms to s 372 of the LG Act, he concluded that that provision related solely to procedural matters and did not prevent a council from rescinding its decision on the same subject matter by duly made resolution at a properly convened meeting. Hemmings J said:

“However, in appropriate circumstances a resolution dealing with the same matter as an earlier resolution may impliedly rescind it without expressly referring to it: Attorney-General ex rel Goddard v North Sydney Municipal Council [1971] 2 NSWLR 373 at 379. Whilst obiter, I understand Hope J to be also saying that strict compliance with clause 25 as a procedural matter was not necessarily essential to the validity of the resolution having the effect of ‘negativing’ an earlier decision.”

42 The primary judge then concluded (at [66]) that the 2005 resolution (which was limited to the application) carried with it an implied partial rescission of the earlier inconsistent general 2004 resolution, the former being a later and specific purported exercise of the Council’s power under s 377(1) of the LG Act. Accordingly, he found (at [67]) that the Consent was invalid as the 2005 resolution was invalid and relevantly rescinded the 2004 resolution so that so that there was no valid delegation by the Council to the General Manager to grant the Consent.

The submissions on the appeal

43 In its written submissions in chief, Belmorgan did not challenge the primary judge’s decision that the 2005 resolution was invalid notwithstanding that it did so in its grounds of appeal. Rather, it challenged his decision that that resolution impliedly rescinded the 2004 resolution insofar as it otherwise would have empowered the General Manager to grant consent to the application. It was submitted that there was no evidence that when granting consent to the application the General Manager was purporting to act pursuant to the 2004 resolution as opposed to the 2005 resolution. Accordingly, as there were two sources of power available to the General Manager and even if he purported to act pursuant to the 2005 resolution, nevertheless if that resolution was invalid, he was empowered by the 2004 resolution to grant the Consent: The Minister for Urban Affairs & Planning v Rosemount Estates Pty Ltd (1996) 91 LGERA 31 at 85-89.

44 In its written submissions GPT submitted that the 2005 resolution purported to provide a particular delegation to the General Manager limited to the application and limited to its approval. That delegation was thus wholly inconsistent with the general delegation of all the functions of Council to the General Manager pursuant to the 2004 resolution. Accordingly, by necessary implication the former rescinded the latter with respect to the granting of consent to the application. It further submitted that Belmorgan’s contention that no principle or authority justified the primary judge’s conclusion that the invalid 2005 resolution was ineffective according to its terms but nevertheless was effective to partially rescind the 2004 resolution, should be rejected. It was submitted that there was principle or authority justifying such an approach: Silk Bros Pty Ltd v State Electricity Commission of Victoria (1943) 67 CLR 1; Attorney-General (NSW); ex rel McKellar v The Commonwealth (1977) 139 CLR 527; Australian National Airways v The Commonwealth (1945) 71 CLR 29.

45 GPT also submitted that the intention of the 2005 resolution to rescind the 2004 resolution with respect to the application although not express, was nevertheless unequivocal. This was because it delegated only the power to grant consent to the application and did not authorise the General Manager to exercise the power under s 80(1) of the EPA Act to refuse consent - a power he would otherwise have had under the 2004 resolution.

46 GPT further submitted by way of a Notice of Contention that even if the 2005 resolution did not relevantly rescind the 2004 resolution, the exchange of emails between the General Manager and Mr Zwicker established that the former proceeded only on the basis that he was acting pursuant to the authority of the 2005 resolution. If this was so, then in order to validly exercise his authority under the 2004 resolution, the General Manager was required to determine the application only after taking into consideration the matters prescribed by s 79C of the EPA Act insofar as they were relevant. This he had not done. He had merely performed the only act that he was authorised by the Council to do, namely, to grant consent to the application subject to conditions and had not exercised or purported to have exercised any discretion independently of the Council’s direction to approve the application.

47 Accordingly, it did not assist Belmorgan to rely upon the principle that where there are two sources of power for an administrative act and there is a mistake in the source of the power, the act is valid even if the incorrect source of power is mistakenly invoked. This was because the validity of the administrative act, relevantly the determination of the application, depended not only upon the existence of the relevant power but also upon whether the power had been validly exercised in the particular case.

48 In the present case the General Manager not only apprehended but also obeyed the limitation/condition as to the outcome, which effectively controlled the exercise by him of any discretion he otherwise would have had under the 2004 resolution to determine the application by granting or refusing consent.

49 It was thus submitted that a fetter in the nature of a limitation/condition that controlled the outcome of a discretion would invalidate any decision made if it amounted to a direction to the decision-maker as to how the discretion was to be exercised in an individual case. It followed that even if in theory the general delegation under the 2004 resolution had been available to support an exercise of power by the General Manager to determine the application by granting consent thereto, there was no valid exercise by him of that power as he had been directed by the Council to exercise his discretion in one way only which he had obeyed.

50 In reply Belmorgan submitted that none of the authorities relied upon by GPT for the purpose of supporting the primary judge’s decision that the 2005 resolution had partially rescinded the 2004 resolution, related to resolutions passed by a council but, rather, were concerned with a later statute containing a provision which expressly repealed an earlier statute and that GPT’s approach would result in both the 2004 resolution and the 2005 resolution being invalidated or rescinded with the result that the General Manager would no longer have any authority to deal with any development application at all.

51 As to GPT’s argument based on its Notice of Contention, it was submitted that the onus of establishing an invalid exercise of power lay upon GPT where the evidence was that the General Manager had been involved in the consideration of the application from the time of pre-lodgement discussions. Furthermore, the presumption of regularity required an assumption that all conditions necessary for the exercise of a power or the doing of an act had been fulfilled. Given the wealth of material on the Council’s file relating to the application there was nothing to suggest that the General Manager had not had regard to that material at the time that he determined to grant consent to the application following the meeting of 1 August 2005.

52 Finally, Belmorgan challenged the correctness of his Honour’s decision that the 2005 resolution was invalid on the ground that it only purported to delegate to the General Manager part of the Council’s function under s 80(1) in circumstances where that function was indivisible. It was submitted that the 2005 resolution did not fetter the exercise of the General Manager’s authority but granted to him the power to approve the development application with or without conditions or to not exercise the power at all. It was contended that the primary judge should have found that the 2005 resolution authorised, but did not compel, the General Manager to approve the application and that the Council was empowered to delegate in that manner. In any event, the combined operation of s 377 of the LG Act and s 49(2)(a) of the Interpretation Act (the latter providing that a delegation “may be general or limited”) permitted a delegation limited in the manner described in the 2005 resolution. To the extent to which the primary judge relied on the decision of Keely J in Singh he was in error as his Honour was dealing with legislation quite different in terms to that presently under consideration.

The appeal should be dismissed

53 In essence, GPT advanced the following propositions:

(a) The 2005 resolution was invalid as a delegation by the Council under s 377 of the LG Act of its function under s 80(1) of the EPA Act as the proper characterisation of that function was that it empowered the Council “to determine a development application”. Although the Council could “determine” such an application by either granting consent conditionally or unconditionally on the one hand or refusing consent on the other, nevertheless there was only one function that was capable of being delegated, namely, the function to determine the application. It was in that sense that the function was indivisible so that a delegation to determine a development application by only granting consent thereto was not a delegation of the function at all. In this respect, the word “function” was defined in the Dictionary to the LG Act to include a power, authority and duty. In the present context, the relevant function was the power “to determine a development application” in one of three ways. An authority to only determine such an application by granting conditional consent would not constitute a delegation of the function (or power) to “determine” the application within the meaning of s 80(1).

(b) If the 2005 resolution was ineffective as a delegation of a function of the Council pursuant to s 377 of the LG Act, it still constituted a decision of the Council within the meaning of s 371 of that Act and, as such, operated to displace the 2004 resolution either because, as the primary judge held, it constituted a procedure which the Council had determined should be followed in the present case being a procedure to which the authority of the General Manager under the 2004 resolution was expressly subject or, notwithstanding that it was not expressly referred to in the 2005 resolution, it was impliedly rescinded by that resolution with respect to the application.

(c) Even if there had been no such rescission of the 2004 resolution so that it remained available as an alternative source of the General Manager’s power to grant the Consent, the Council by its 2005 resolution had fettered the General Manager’s power as to the manner in which he could exercise his discretion to determine the application pursuant to s 80(1) of the EPA Act. It was clear from the form of that resolution and its context, incorporating as it did Option 3 of Mr Zwicker’s report, that the General Manager was being directed as to how to exercise his power of determination under s 80(1), namely, by only granting consent to the application. As the emails between him and Mr Zwicker made clear, that is exactly what the General Manager did. Being a clear fetter upon his discretion to which he acceded, there was no valid exercise by him of the power to determine the application pursuant to the terms of the 2004 resolution as he did not take into consideration relevant matters under s 79C(1).

54 In my opinion the first and third of GPT’s propositions should be accepted. As to the second, there must be implied into the words “subject to any policies and procedures that may be determined from time to time” in the exception to the 2004 resolution that what are being referred to are procedures that are validly determined by the Council from time to time. Accepting for present purposes that a delegation of authority to the General Manager to determine a particular development application is a “procedure”, it was not a valid delegation and, therefore, not a procedure validly determined for the purposes of that exception.

55 So far as the question of partial rescission of the 2004 resolution by the 2005 resolution is concerned, his Honour’s finding raises some difficulties with which it is unnecessary to grapple given my acceptance of GPT’s first and third propositions. It brings into consideration the correctness of the obiter remarks of Hope J in the North Sydney Council case as well as those of Hemmings J in Everall. I would prefer to deal with those issues when they are required to be determined as necessary to the disposition of an appeal.

56 As to the first proposition, in my opinion it is correct to categorise the relevant function of the Council under s 80(1) of the EPA Act delegable pursuant to s 377 of the LG Act, as being the function “to determine a development application” rather than the function to determine that application in a particular manner. The Council’s function is to lawfully exercise its discretion in determining a development application either by granting consent conditionally or unconditionally, or refusing consent. It is not the function of the Council to determine the application only in one way as this would not only be inconsistent with the terms of the function itself but also would be inimicable to the valid exercise of that function in terms of the duty to take into consideration relevant matters prescribed by s 79C(1).

57 In the present case, there can be no doubt in my view that the 2005 resolution did not delegate to the General Manager any discretion with respect to the granting or refusing consent to the application. In particular, it did not contemplate that he could refuse such consent by declining to exercise the authority specifically delegated to him. He was given no choice except with respect to the content of the conditions which were to be imposed upon the grant of consent. The former may have been negotiable but the latter was not. The giving of a direction requiring a discretionary power or function of the Council to be exercised in only one way was not a valid delegation of the Council’s function to determine the application within the meaning of s 80(1) of the EPA Act.

58 The foregoing is also supported by the context in which the 2005 resolution was passed. First, it expressly required the General Manager to approve the application “as per Option 3 of” Mr Zwicker’s report. That option, which was not recommended by him, was to approve the application. Second, the negativing of the amendment to the motion that the General Manager be delegated authority to refuse the application on planning, urban design and economic impact grounds was a clear manifestation of the intention of those councillors who voted for the motion that the General Manager was not being delegated a discretion which included the refusal of the application. On the contrary, he was being directed to approve the application subject to conditions.

59 Accordingly, the 2005 resolution did not constitute a valid delegation by the Council of the relevant function and the primary judge was correct to so hold for the reasons set forth in [47] of his judgment as set out in [30] above. Rather. as a resolution it constituted a direction to the General Manager to issue a consent to the application.

60 As to the third proposition, it is clear from the emails upon which GPT relied that the General Manager was not purporting to exercise any independent discretion as to whether or not to grant or refuse consent to the application based upon the s 79C(1) considerations set forth in great detail in Mr Zwicker’s report. Furthermore, there is nothing in the material to which we were referred that would indicate that the General Manager disagreed with Mr Zwicker’s recommendations. It will be recalled that his formal recommendation was that the General Manager be granted delegated authority to determine the application based on relevant planning, urban design and economic grounds. Clearly, if the Council had adopted that recommendation it would have vested in the General Manager the power to determine the application by refusing consent in accordance with the strong views expressed in Mr Zwicker’s report.

61 However, it cannot be inferred from the emails that the General Manager considered that he had any discretion at all in determining the application. On the contrary, the emails make it clear that he apprehended that he had been directed to grant consent subject to conditions and that that was what he was proposing to do. On the other side of the coin, the emails demonstrate that the General Manager never considered that he was authorised by the 2005 resolution to determine the application by refusing consent. The fact, if it be the fact, that the General Manager had been involved in the application since prior to its lodgement is neither indicative nor probative of whether he took into account before granting consent to the application, the possibility or probability that he should “determine” it by refusing consent in light of its deficiencies as covered in detail in Mr Zwicker’s report.

62 Furthermore, although it may be accepted that the Council relevantly considered the matters contained in Mr Zwicker’s report before it passed the 2005 resolution, the General Manager did not consider them. However, that does not assist Belmorgan as it was common ground, as I noted in [15] above, that the 2005 resolution did not constitute a grant of consent to the application by the Council itself.

63 As I have indicated, the fact that the 2005 resolution rejected the form of delegated authority recommended in Mr Zwicker’s report emphasises the lack of any discretion purportedly granted to or exercised by the General Manager when he acceded to the Council’s direction to determine the application by granting the consent.

64 In my opinion it follows that to the extent to which the General Manager was purporting to exercise the authority delegated to him under the 2004 resolution, he did not validly exercise the function of determining the application in accordance with law.

Conclusion

65 In my opinion the challenges by Belmorgan to the primary judge’s decision declaring the Consent void and of no effect should be rejected. It follows that the appeal should be dismissed with costs.

66 BASTEN JA: The issue which arises on this appeal is whether the consent given to the Appellant's development application on 5 August 2005 involved a valid exercise of statutory power. The Wollongong City Council, as the relevant consent authority, was required to determine the development application either -by granting the consent, conditionally or unconditionally, or refusing consent: Environmental Planning and Assessment Act 1979 (NSW) ("the EP&A Act), s 80(1). It was not disputed that, in order validly to determine the application, the consent authority was required "to take into consideration" such of the matters set out in s 79C as were "of relevance to the development the subject of the development application".

67 The Council was not required to determine the application itself: there had been, on 7 April 2004, a resolution, the validity of which was not in question, delegating to the general manager "all of the functions of Council as provided in the Act, subject to any policies and procedures that may be determined from time to time". The reference in that resolution to "the Act" was a reference to the Local Government Act 1993 (NSW) and, although the relevant function was conferred by s 80 of the EP&A Act, it was common ground that that function was within the phrase "as provided in" the Local Government Act, because s 22 of the Local Government Act provides that a Council "has the functions conferred or imposed on it by or under any other Act or law".

68 On 1 August 2005 the application came before the Council with a report identifying three options for the Council's consideration: see at [10] above. The recommendations of the responsible council officer (Mr Zwicker) were not adopted and the resolution passed was that set out at [13*]. Because approval was not recommended, the report did not include appropriate conditions. The Council did not purport to identify those conditions, except for the requirement of a two metre setback, referred to in par 3 of the resolution of 1 August. Otherwise, it resolved to delegate authority to the general manager "to approve" the application.

69 The ultimate approval included 174 conditions, which were not before the Council at its meeting on 1 August. No doubt for this reason, it was common ground that the Council resolution of 1 August did not purport to determine the application in accordance with s 80 of the EP&A Act. In other words, the Council did not exercise that power.

70 If the resolution of 1 August constituted a further delegation of power to the general manager, that was unnecessary and ineffective. The general manager already had power to determine the application pursuant to s 80(1). To describe the resolution of Council on 1 August as an implied repeal of the general delegation, with respect to this application, together with a new conferral of authority to determine it, but only by approving it, with appropriate conditions, requires a rewriting of the resolution with, as will be seen below, several elements of speculation. This approach gave rise to a question, much debated in the proceedings, as to whether a power to act in one way, but not another, was a valid delegation of statutory authority. The preferable understanding of the resolution is that it constituted a direction by the Council to the general manager as to how the power should be exercised, albeit the formulation of conditions was left to the general manager as a matter for exercise of discretion.

71 That gave rise to a further question as to whether such a direction fell within the proviso to the general delegation, namely the conferral of power "subject to any policies and procedures that may be determined from time to time". As a matter of ordinary usage, "policies and procedures" are likely to be understood as matters of general application, and not as matters specific to a particular decision. Putting procedures to one side, defined policies have a legitimate role in administrative decision-making, because they promote the justifiable outcome of treating like cases alike: see Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189 at 206 (French and Drummond JJ). In the case of determining development applications under the EP&A Act, such policies may be contained in planning instruments of various kinds, including development control plans: see s 79C(1)(a). However, it was the failure of the development to conform to existing planning policies which led the responsible Council officer to recommend rejection.

72 If an application which did not comply with planning policies were thought to warrant approval, that might have provided at least part of the reason for referral of the application to Council, because, consistently with the terms of the delegation, the general manager might have been constrained to refuse the application.

73 If the Council were to approve the application, it would have been required to give due consideration to the matters set out in s 79C of the EP&A Act and to consider and approve relevant conditions. This, it was common ground, was not done by the Council. However, given the terms of the resolution, and the subsequent directions given by the general manager to Mr Zwicker (set out at [16]-[18] above) it is clear that the general manager did not determine the application on the basis of an independent assessment of the factors set out in s 79C of the EP&A Act. Indeed, I would infer that the report prepared by the responsible officer (Mr Zwicker) was known to and at least tacitly approved by the general manager before it went to Council. From that fact one may draw the inference that had he not been acting subject to direction, the general manager might well have exercised his power to refuse the application. That consideration provides further support for the conclusion that the general manager acted in accordance with what he understood to be the intention of Council, in compliance with the Council resolution of 1 August.

74 However, unless the general delegation was varied, at least by removing the proviso referring to "policies and procedures", or those policies themselves were varied for the purpose of determining this application, the power conferred on the general manager, if properly exercised, may well not have resulted in a valid approval, because the application did not conform to relevant existing policies of the Council. The more straightforward course would have been for Council to remove the constraints imposed by existing policies. But to do that in a proper fashion, the resolution of 1 August 2005 should have done that clearly and expressly and, further, should have identified the policies which were not to be applied to this application. In fact, the resolution did neither. It would be speculation to say that this course was intended; it would be to add a further layer of speculation to say what policies were not to be applied. But even this exercise in reconstruction would fail to assist the Appellant, because the evidence indicated that the general manager did not purport to address the s 79C considerations, unfettered by specific policies, or at all.

75 On the assumption that both the general manager and the Council had power to determine the application (see Bayly v Sydney Municipal Council (1927) 28 SR(NSW) 149 at 152 (Street CJ, Gordon and Ferguson JJ concurring)) the apparent division of responsibility which took place in the present case resulted in neither forming the necessary satisfaction, taking into account the mandatory statutory considerations set out in s 79C of the EP&A Act. The exercise of power therefore miscarried and the application has not been validly determined.

76 I do not think that this reasoning is inconsistent with the approach of Tobias JA, nor, for that matter, with the reasoning of Biscoe J in the Land and Environment Court. However, I would not adopt the passage in the judgment below, quoted above at [28] in which it is said that the consent authority must give "proper, genuine and realistic" consideration to the matters prescribed by s 79C: GPT Re Ltd v Wollongong City Council [2006] NSWLEC 303 at [44]. Biscoe J, in my view correctly, noted the need to apply those epithets cautiously lest they "encourage a slide into impermissible merit review", referring to Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23, (2006) 143 LGERA 277 where that risk was noted at [74]-[79]. That caution was reiterated in Azriel v NSW Land and Housing Corporation [2006] NSWCA 372 at [49]-[51].

77 By way of explication, it may be noted that use of the word "proper" may be understood to invoke the requirement that a power can only be used for the purpose or purposes for which it is conferred and not for some extraneous purpose: see, eg, Sydney Municipal Council v Campbell [1925] AC 338 and The Queen v Toohey; Ex parte Northern Land Council (1980­81) 151 CLR 170 at 232-233 (Aickin J). Similarly, the word "genuine" may be understood to reflect the well-established principle that the decision-maker must undertake his or her function in good faith, a requirement bound up in the concept of "improper purpose", as explained by Aickin J in Ex parte Northern Land Council. Nevertheless, both those obligations are properly related to the exercise of power, rather than some discrete aspect of the exercise, namely taking into account a particular mandatory consideration. The third limb of the trinity, "realistic" finds no ready referent in the language of judicial review.

78 That is not to say that to give grossly inadequate weight to a matter of some importance may not provide a basis for review; however, to qualify as a ground of judicial review, such conduct must satisfy the test of manifest unreasonableness as applied to the exercise of the power: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985-86) 162 CLR 24 at 41 (Mason J). It is not helpfully reflected in a supposed obligation to give "realistic" consideration to a particular matter.

79 For these reasons, I agree that the appeal should be dismissed with costs.

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20/07/2007 - Minor amendment to quote from judgment of Biscoe J. - Paragraph(s) [33]