Belongil Progress Association Inc v Byron Shire Council

[1999] NSWLEC 271

Reported Decision: (1999) 106 LGERA 202

Land and Environment Court

of New South Wales

CITATION:

Belongil Progress Association Inc v Byron Shire Council and Anor [1999] NSWLEC 271

PARTIES

APPLICANT
Belongil Progress Association Inc

RESPONDENT
Byron Shire Council and Anor

NUMBER:

40050 of 1999

CORAM:

Cowdroy J

KEY ISSUES:

Environmental Planning Instruments :- amendment to local environmental plan - no environmental study as required by Minister’s direction under s 117 - Minister not advised of non-compliance in report provided by s 69 - failure to consult with government authority under s 62 - whether failure to consult is unreasonable in the sense of Wednesbury unreasonableness - error in advertisement as required by s 66 - doctrine of severability applicable - invalidity of LEP

LEGISLATION CITED:

Environmental Planning and Assessment Act 1979 s 54, s 57, s 62, s 65, s 66, s 68, s 69, s 70, s 74, s 117
Interpretation Act 1987 s 32(2)

DATES OF HEARING:

11/03/1999; 11/04/1999; 11/05/1999; 12/06/1999

DATE OF JUDGMENT DELIVERY:

12/22/1999

LEGAL REPRESENTATIVES:

APPLICANT
Mr W Davison SC with Ms L Byrne (Barrister)

SOLICITORS
Hill Thompson & Sullivan

FIRST RESPONDENT
Mr J Maston (Barrister)

SOLICITORS
Wilshire Webb Solicitors

SECOND RESPONDENT
Mr D Parry (Barrister)

SOLICITORS
Department of Urban Affairs and Planning

JUDGMENT:

IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES MATTER No. 40050 of 1999
CORAM: Cowdroy J
DECISION DATE: 22/12/99

Belongil Progress Association Inc

Applicant

v

Byron Shire Council

First Respondent

Minister for Urban Affairs and Planning

Second Respondent

JUDGMENT

Background

1. In this application, Belongil Progress Association (“the applicant”), challenges the validity of Amendment no 66 to the Byron Local Environmental Plan 1988 (“the LEP”). The relevant history commences on 25 September 1997 and is detailed hereunder.

The New South Wales Coastal Policy

2. In 1990 the New South Wales Government formulated a policy entitled ‘The New South Wales Coast - Government Policy’ which was designed to impose restrictions upon the development of coastal land in this state. In 1997 a substitute coastal policy was issued entitled ‘NSW Coastal Policy 1997 - A Sustainable Future for the New South Wales Coast’. Since the policies are virtually identical they are hereafter referred to as “the coastal policy”.

The Direction

3. On 14 September 1997 a direction was issued by the Minister for Planning pursuant to s 117(2) of the Environmental Planning and Assessment Act 1979 (“the Act”) known as Direction s 26 (hereafter referred to as “the direction”). It provided:-

A Council in preparing a draft LEP must:

(a) include provisions that give effect to and are consistent with the Government publication entitled NSW Coastal Policy 1997: A Sustainable Future for the New South Wales Coast (as amended from time to time); and

(b) not alter, create or remove existing zonings unless an environmental study relating to the draft LEP has been prepared and considered by Council

4. Section 117 relevantly provides:

117 (1) The Minister may direct a public authority ... to exercise those functions at or within such times as are specified in the direction.

(2) In addition to any direction which may be given under subsection (1), the Minister may direct a council -
(a) to exercise its functions under Division 4 or 5 of Part 3 in relation to the preparation of a draft local environmental plan in accordance with such principles, not inconsistent with this Act as are specified in the direction; and
(b) without limiting paragraph (a), to include ... provisions which will achieve or give effect to such principles or such aims, objectives or policies, not inconsistent with this Act as are specified in the direction.
(3) A public authority ... to whom a direction is given under subsection (1) or (2) shall comply, and is hereby empowered to comply, with the direction in accordance with the terms of the direction.
(4) ...

The direction applied to the New South Wales coast area described in the coastal policy and affected the lands the subject of these proceedings zoned 7(f2)(Urban Coastal Land Zone) under the LEP.

Council’s resolution

5. On 9 September 1997 Byron Shire Council (“the council”) resolved to prepare a draft LEP (Amendment no 6/97) (“the draft LEP”) to amend various provisions in the LEP.

6. On 25 September 1997 the council advised the Department of Urban Affairs and Planning (“DUAP”) pursuant to s 54 of the Act of its decision to amend the LEP, and stated that an environmental study was not required. It requested DUAP to issue a certificate under s 65 of the Act, the effect of which was to authorise exhibition of the draft plan. The certificate was issued on 5 December 1997 under cover of a letter which stated:-

Pursuant to section 74(2)(b) of the Environmental Planning and Assessment Act 1979, no direction has been made that sections 57 and 61 should apply in respect of the draft plan. No environmental study is therefore necessary. As requested a section 65 certificate is enclosed to allow public exhibition of the amendment.

While no environmental study is being required, the proposed Amendment affects land within the Coast Policy area (section 117 direction S26 of 14 September, 1997) and also relates to coastal management issues (unnumbered section 117 direction of 5 February, 1996). In these circumstances the Council should exhibit with the Amendment information explaining the relationship between the Amendment and the NSW Coastal Policy 1997, and with the procedure set out in the “Coastline Management Manual” 1995.

7. Public exhibition of the draft LEP took place between 7 December 1997 to 11 February 1998. On 17 December 1997 and 14 January 1998 the council advertised the draft LEP in the Byron Shire News.

8. On 23 June 1998 council resolved to alter the draft LEP. The result of this alteration was two further amendments, namely Amendment no 65 and Amendment no 66. Amendment no 66 is the subject of these proceedings.

9. On the 11 December 1998, Amendment no 66 was gazetted by the Minister for Urban Affairs and Planning as the ‘Byron Bay Local Environmental Plan 1988 (Amendment no 66)’. The aims and objectives of the plan are stated as follows:-

2. This plan aims to amend Byron Local Environmental Plan 1988 to prohibit clubs, commercial premises, hostels, motels, residential flat buildings, shops, tourist facilities and dual occupancy in certain areas of the Urban Coastal Land zone.

Amendment no 66 provides:-

(4) The council shall not consent to the carrying out of development for the purpose of clubs, commercial premises, hostels, hotels, motels, residential flat buildings, shops, tourist facilities or dual occupancy on land shown edged heavy black and stippled on the map marked Byron Local Environmental Plan 1988 (Amendment No. 66).

Applicant’s challenges

10. The applicant makes three challenges to the validity of the amendments to the LEP.

I) Failure to undertake environmental study

11. Section 74(1) of the Act relevantly provides:-

74 (1) An environmental planning instrument may be amended in whole or in part by a subsequent environmental planning instrument whether of the same or a different type.
(2) A subsequent environmental planning instrument shall be made in accordance with the provisions of this Part except that -

(a) ...

(b) where the subsequent instrument is a local environmental plan - the provisions of sections 57 and 61 shall not apply, unless the Director directs to the contrary.

(3) In this section, “amended” includes altered, varied or repealed.

12. Section 57 provides, inter alia, that where a council decides to prepare a draft local environmental plan it shall prepare an environmental study of the land to which the draft local environmental plan is intended to apply. Section 61 requires a council when preparing the plan, to have regard to the environmental study prepared under s 57. In the absence of any direction from the Minister, a council is not required to prepare an environmental study where a local environmental plan is being amended (by virtue of s 74(2)(b)).

The submissions

13. The applicant submits that whilst the operation of s 74 of the Act dispenses with the need for an environmental study, the direction is specific and requires that an environmental study be made and considered by council. In the absence of an environmental study, the applicant submits that Amendment no 66 is invalid.

14. The council argues that despite the requirement of the direction it may be inferred from the fact that the Minister made the plan that an environmental study was not required by the Minister. As an alternative argument the council submits that Amendment no 66 does not ‘ alter, create, or remove existing zonings’ .

15. The council also submits that the discretion provided to the Minister by virtue of s 117 is not such as can override the express provision contained in s 74 of the Act. It argues that s 117(2)(a) authorises a Minister to direct council to exercise its functions under Div 4 or Div 5 of Pt 3 in the preparation of a draft environmental plan in accordance with the principles not inconsistent with the Act. Council submits that the objects of the direction are merely expressions of ‘principle’ and as such cannot have the effect of derogating from the dispensation provided by s 74. Lastly, the council submits that the direction does not amount to a direction by the ‘Director’ as is referred to in s 74(2)(b), but rather is a direction from the Minister.

Relationship of the direction to s 74 of the Act

16. The provisions of s 117(2)(b) invest the Minister with power to issue directions in the very circumstances that arise in these proceedings. There is no basis for the submission that a direction so issued cannot apply to contradict the dispensation of an environmental study permitted by s 74. A direction issued under s 117 has a unique statutory force and is to be given effect accordingly.

Alteration to zoning

17. Amendment no 66 creates an alteration to existing zonings. It purports to prohibit certain uses in a zone and its gazettal implements the change. The word ‘alter’, as judicially defined ‘ imports notions of degree of change’ (per Kirby P in Provincial Insurance Ltd. v Consolidated Wool Products Pty Ltd (1991) 25 NSWLR 541 at 551). Section 74(3) indicates expressly that ‘amended’ is to include ‘altered’ or ‘varied’. Section 74(1) is not to be construed as applicable only to an alteration to the boundaries of the existing zonings, for such restriction is not stated and there is no basis for implying such limitation.

Statutory provisions

18. On behalf of the Minister numerous submissions were made to the effect that the direction does not have mandatory effect and that the ‘principles’ referred to in s 117 do not create statutory obligations.

19. Section 68(4) of the Act and s 69 support the Minister’s submission that the direction does not have mandatory effect. By virtue of s 70, such sections operate as pre-conditions to the exercise of the Minister’s discretion (see Vanmeld Pty Ltd v Fairfield City Council [1999] NSWCA 6; (1999) 46 NSWLR 78). The Court must therefore consider whether the requirements of those sections were satisfied. If so, the non-compliance with the direction may be disregarded.

20. Compliance with s 68(4) is essential to the validity of an LEP (see Noroton v Friends of Katoomba (1996) 98 LGERA 335 at 353). Section 68(4)(d) imposes an obligation upon council to provide a statement which not only identifies the directions which have been taken into consideration (s 68(4)(d)(ii)), but also furnishes details of inconsistency between a draft plan and a direction and the reasons therefor (s 68(4)(d)(ii)). The presence of such requirements suggests that a departure may be made from a s 117 direction if it is explained. In this case, the statement provided by council in purported fulfilment of s 68(4) satisfies the statutory requirements in that all relevant statutory information is present.

21. Section 69 of the Act imposes an obligation upon the Director to provide the Minister with a statement identifying any inconsistencies with any s 117 direction and whether it is justifiable. Section 69 of the Act relevantly provides:-

69 The Director shall furnish a report to the Minister as to -

(a) whether the draft local environmental plan submitted under section 68(4) is inconsistent with any State environmental planning policy, regional environmental plan, or relevant direction under section 117, applying to the land to which the draft plan applies;

(b) if there is such an inconsistency - whether the inconsistency is justifiable in the circumstances;

(c) ...

(d) the relationship between the draft plan, and other proposed and any existing environmental planning instruments, and any relevant directions under section 117, applying to the land to which the draft plan applies; and

(e) ...

Failure to comply with s 69

22. The report pursuant to s 69 of the Act made in respect of Amendment no 66 states that an environmental study ‘ was not required’ . Whilst the report contains a reference to s 117 of the Act, there is no reference whatsoever to the direction nor to the fact that such direction required an environmental study. The report merely stated that ‘ the proposal is consistent with the Coastal management provisions of the North Coast Regional Plan (REP Clause 32) and the Coastal Policy 1997’ .

23. It is apparent that council’s opinion that an environmental study was not required was adopted by DUAP without question for the purpose of the s 69 report but not for the report prepared in relation to s 65. In the s 65 report the following notation appears in relation to the ‘ s. 26 Coastal Policy’ ,:-

Inconsistent because no environmental study being required. However, this amendment is a number of ‘tidy-up’ issues and has no coastal relevance.

24. No reference to such inconsistency was disclosed to the Minister as required by s 69. Had the Minister’s attention been directed specifically to the existence of the direction and of its requirements concerning an environmental study it might have been inferred that the Minister was prepared to ignore the direction. In the absence of such detail no such inference can be drawn.

25. The Minister, by s 70(1) may ‘ after considering the Director’s report made under s 69’ make a plan or decline to do so. The Minister’s discretion is thus predicated upon compliance with the requirements of s 69. Upon the evidence the Minister did not have before him the important information necessary for him to exercise his discretion properly.

26. Applying the test of statutory interpretation established in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 72 ALJR 841, it can be readily inferred that a failure to abide by a direction made pursuant to s 117 may not lead to invalidity if the Minister is informed of such details by the statement required by s 69. The obligation imposed upon the Director by s 69 is expressed in mandatory terms. If the Minister is not informed of the matters referred to in s 69, the factual basis for the exercise of the Minister’s discretion to make the LEP pursuant to s 70 is misleading.

II) Absence of consultation

27. As a second ground of challenge the applicant submits that in the preparation of the draft LEP the council formed no opinion concerning public authorities or bodies which might be affected by the amendment. Section 62 provides:-

In the preparation of an environmental study or a draft local environmental plan, the council shall consult with -
(a) such plan authorities or bodies (including authorities of the Commonwealth or other States) as, in its opinion, will or may be affected by that draft local environmental plan
(b) where the draft local environmental plan applies to land adjoining a boundary between the council’s area and another area - the council of that other area; and
(c) such other persons as the council determines.

28. As an alternative the applicant submits that council’s failure to consult was so unreasonable that no council, properly advised could have arrived at such decision within the principle enunciated in Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223.

29. The evidence establishes that the council did form an opinion that consultation with three government authorities was not required, namely the State Rail Authority (“SRA”), the Department of Land and Water Conservation (“DLWC”) and DUAP. In relation to the SRA, its only interest in the land affected by Amendment no 66 was its ownership of a corridor of land for railway purposes and a lot which was at all times administered by the council. Taking into consideration the alterations to the draft LEP the council’s decision not to consult with the SRA could not be said to be unreasonable within the Wednesbury principles.

30. DLWC was the registered proprietor of several parcels of land which would be affected by the proposed amendments. Pursuant to the coastal policy, DLWC had a prime responsibility shared with five other government authorities for developing a system of ‘ comprehensive and adequate protected areas representative of all ecosystems within coastal and marine - estuarine bioregions in NSW’ .

31. Significantly DLWC was the only government authority having the responsibility shared with local councils, in this case Byron Shire Council, to formulate detailed management plans for the coastline and estuaries in accordance with the Coastline Management Manual and Estuary Management Manual and to implement the governments’s Coastline Management Program. Accordingly DLWC had a vital interest in the coastal land affected by Amendment no 66.

32. In the preparation of Amendment no 66 the council did not consider it necessary to consult with DLWC since it formed the view that Amendment no 66 was ‘ correcting an anomaly in the LEP’ which permitted the development of coastal land. In its opinion Amendment no 66 restored the development controls that existed prior to the 1988 LEP.

33. When DLWC later became aware of the exhibited plan being Amendment no 66 it lodged an objection thereto. Correspondence reveals that it was, to say the least, surprised that it had not been consulted. DLWC considered that since Amendment no 66 affected the 7(f2) Urban Coastal Lands Zone it was therefore a coastline management planning matter and one of obvious importance to it.

34. As a result of subsequent consultations, correspondence and meetings, the objections of DLWC were withdrawn. The issue however is whether there has been a breach of s 62 because council’s decision not to consult was ‘unreasonable’.

35. The remaining authority, DUAP owned land affected by Amendment no 66. Such land being acquired pursuant to the ‘Coastal Policy - Coastal Land Acquisition Scheme’. The council formed the opinion that it was unnecessary to consult DUAP for the reason that it was considered DUAP would never wish to develop its land.

36. There is no question that the obligation to consult as required by s 62 is mandatory requirement. Although dealing with a different section of the Act the New South Wales Court of Appeal in Leichhardt Municipal Council v Minister for Planning and Director of Planning (1992) 78 LGERA 306 considered the requirements of such an obligation (at 335 - 336) and reviewed numerous authorities. They were also reviewed by Pearlman J in Darling Casino Ltd v Minister for Planning and Sydney Harbour Casino Pty Limited (1995) 86 LGERA 186. These authorities confirm the principle that the requirement of consultation ‘ is never to be treated perfunctorily or as a mere formality’ (per Lord Morris of Borth-y-Guest in Port Louis v Attorney General of Mauritius [1965] AC 1111 at 1124). Such principle was recently affirmed by this Court in John Brown Lenton and Co Pty Ltd v Minister for Urban Affairs and Planning and Ors [1999] NSWLEC 213. Further in Vanmeld all judges of the Court of Appeal agreed that consultation is an integral part of the mandatory statutory scheme for procedural fairness in the making of a local environmental plan.

37. Section 62 requires consultation with statutory authorities only if council forms the view that they ‘ will or may be affected’ by the draft local environmental plan. Since DLWC has a pivotal role in the administration of coastal lands the conclusion can readily be drawn that it ‘ will or may be affected’ (s 62(a)) by the draft plan. The same conclusion can be drawn in relation to DUAP since they owned land affected by the LEP. In these circumstances, council’s decision not to consult with these authorities was unreasonable in the Wednesbury sense. Accordingly there was a breach of s 62(a) of the Act.

III) A different plan to that advertised?

38. As a third ground of challenge the applicant submits the draft plan as advertised was different from that which was exhibited. Pursuant to Pt 3 of the Act one of the procedural steps required in the formulation of the local environmental plan is the giving of public notice (s 66(1)(a)) after the council has received a certificate under s 65. Section 66(1)(b) requires council to exhibit inter alia a copy of the draft local environmental plan (s 66(1)(b)(i)). Compliance with s 66 is essential to the validity of an LEP ( Canterbury District Residents and Ratepayers Association Inc v Canterbury Municipal Council and Anor (1991) 73 LGERA 317 at 321).

39. The advertisement which was published in accordance with s 66(1)(a) was deficient because it omitted to refer to a proposed prohibition in the 7(f2)(Urban Coastal Zone) of the use of ‘hotels’. Accordingly it is submitted that any member of the public would be mislead by such an omission. The council agrees that the advertisement is misleading and has indicated that it is prepared to take steps to have the words ‘ hotels ’ deleted from Amendment no 66.

40. The effect of s 32(2) of the Interpretation Act 1987 is to save so much of an enactment which is intra vires. The council relies upon such section to justify the validity of the plan. In Darling Casino Pearlman J referred to the decision of the Victorian Supreme Court in Olsen v City of Camberwell [1926] VLR 58 at 68 in which the court observed that severance could not be permitted in circumstances where it could be said that the legislature would not have made the enactment unless the whole instrument were valid. The applicant submits that there is lack of power to make the whole instrument because it is different from that which was exhibited. In Switzerland Insurance Australia Ltd v Mowie Fisheries Pty Ltd (1997) 144 ALR 234 at 279 the judgment of the majority of the full Federal Court observed that the analogous provision contained in the Interpretation Act (Vic) did not authorise the re-writing of a subordinate instrument so as to give it a valid operation.

41. In view of the findings already made it is unnecessary for the Court to decide whether ‘hotels’ should be severed, whether no change should be made or whether the plan is invalid because of the erroneous advertisement. However the Court for completeness will state its finding. In the Court’s opinion the appropriate order but for the other findings would be to order severance of the word ‘hotels’ from Amendment no 66. The deletion of ‘hotels’ from Amendment no 66 does not alter the valid operation of the instrument. The use of ‘hotels’ is discrete therefore the Court does not regard the decision of Litevale Pty Limited v Lismore City Council (1997) 96 LGERA 91 to be of direct relevance. In that case the whole notice was grossly misleading. No such consideration arises in this case.

Conclusion

42. The Court has found that there have been breaches of the Act in the preparation of Amendment no 66. In summary, they constitute the failure to bring to the Minister’s attention council’s non compliance with the direction. Secondly, the failure to consult with DUAP and DLWC as required by s 62 of the Act. Since DLWC has withdrawn any objection to the council’s failure to consult, and since DUAP made no complaint the Court would not as a matter of discretion, grant injunctive relief on this ground. However injunctive relief is warranted in consequence of DUAP’s failure to inform the Minister of the non compliance with the direction.

43. The Act provides that the Minister may appoint an administrator to a council in circumstances where the provisions of a direction under s 117 is not fulfilled (see s 118). Such provision demonstrates the obvious significance of a Minister’s direction. To ignore both the direction and the fact that the Minister was never made aware of the failure to comply therewith when exercising power under s 70, would be to overlook fundamental requirements for the making of an LEP. These reasons justify the Court declaring Amendment no 66 to be invalid.

Orders

44. The Court makes the following declaration and orders:-

1. A declaration that Byron Local Environmental Plan Amendment no 66 is invalid and of no effect.

2. The question of costs be determined upon application by either party.

3. The exhibits be returned.