Burwood Area Community Housing Limited v Sutherland Shire Council

[2006] NSWLEC 313

Reported Decision: [2006] 146 LGERA 91

Land and Environment Court

of New South Wales

CITATION:	Burwood Area Community Housing Limited v Sutherland Shire Council [2006] NSWLEC 313
PARTIES:	APPLICANT Burwood Area Community Housing Limited RESPONDENT Sutherland Shire Council
FILE NUMBER(S):	10325 of 2006
CORAM:	Preston CJ
KEY ISSUES:	Question of Law :- whether development application was made only by or on behalf of a local government or community housing provider as required by Sch 3 of SEPP (Seniors Living) - applicant is a community housing provider - applicant entered into deed with third party such that applicant would have only very limited interest in the proposed development - third party is not a community housing provider - applicant acting as agent for the third party - development application was not made only by or on behalf of community housing provider.
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 s 97 State Environmental Planning Policy (Seniors Living) 2004 cl 3, cl 16, cl 17, cl 22, Sch 3
CASES CITED:	Citizens Airport Environment Association Inc v Maritime Services Board (1993) 30 NSWLR 207; R v Portus; ex parte FCU (1949) 79 CLR 428; R v Toohey; ex parte Attorney General (NT) (1980) 145 CLR 374
DATES OF HEARING:	01/06/2006
EX TEMPORE JUDGMENT DATE:	06/01/2006
LEGAL REPRESENTATIVES:	APPLICANT Mr C A Biscoe (barrister) SOLICITORS Johninfo Lawyers RESPONDENT Mr T F Robertson SC SOLICITORS Abbott Tout

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

PRESTON CJ

1 JUNE 2006

10325 of 2006

BURWOOD AREA COMMUNITY HOUSING LIMITED V SUTHERLAND SHIRE COUNCIL

JUDGMENT

1 HIS HONOUR: Burwood Area Community Housing Limited (“BACH”) is a certified and registered community housing organisation.

2 On 8 March 2006, BACH lodged a development application, number DA06/0186, with Sutherland Shire Council (“the Council”), for a seniors living development at 115-121 Georges River Road and 52 Wattle Road, Jannali (“the land”).

3 The proposed development involved the demolition of the existing structures on the land, construction of a residential care facility under State Environmental Planning Policy (Seniors Living) 2004 (“SEPP(SL)”) containing 70 aged care bedrooms in one building and three self-contained community housing units in a smaller building, basement car parking under the residential care facility building, associated landscape works, and the subsequent use of those buildings for those purposes.

4 On 18 April 2006, the Council determined the development application by refusal.

5 On 21 April 2006, BACH appealed to this Court under s 97 of the Environmental Planning and Assessment Act 1979 (“EPA Act”) against the decision of the Council.

6 The Council raises two preliminary questions of law, which the Registrar fixed for hearing today. The questions are:

“1. Is the development application DA06/0186, lodged with the respondent on 8 March 2006 pursuant to SEPP (Seniors Living) 2004 and to be carried out on land within the Sutherland Shire area, an application to carry out development by or on behalf of a community housing provider?

2. If the answer to question 1 is no, is the development proposed in DA06/0186 prohibited development pursuant to SEPP (Seniors Living) 2004?”

7 During the hearing, I asked the parties’ legal representatives whether those two questions could be rephrased more simply as one question, such as:

“Is development application DA06/0186 lodged with the respondent on 8 March 2006 to carry out development allowed by Chapter 3 of the State Environmental Planning Policy (Seniors Living) 2004, and on land within the Sutherland Shire area, an application made only by or on behalf of a local government or community housing provider?”

8 If the answer to this question is no, the development application could not enliven the power of the consent authority, being either the Council at first instance or the Court on appeal, to grant consent to the development proposed in the development application and allowed by Chapter 3 of SEPP(SL).

9 The parties have agreed to proceed on the hearing of this rephrased question.

10 The question arises because of the provisions of SEPP(SL).

11 Clause 22 of SEPP(SL) provides that schedule 3 has effect despite any other provision of the SEPP. Schedule 3 relevantly provides:

“ 2. Development in Sutherland
An application to carry out development allowed by Chapter 3, if the development is to be carried out on land within the Sutherland Shire area, may be made only:

(a) by or on behalf of:
(i) the Director-General of the Department of Housing, or
(ii) a local government or community housing provider...”

12 Chapter 3 of SEPP(SL) allows development for seniors housing despite the provisions of any other planning instrument, if it is carried out in accordance with the SEPP(SL): cl 16 and 17.

13 The term “local government or community housing provider” is defined in cl (3) of SEPP(SL) to mean:

“(a) a local government organisation or a not for profit organisation, that is a direct provider of housing to tenants receiving government housing subsidies, or
(b) an organisation approved by the Minister”.

14 BACH is a “local government or community housing provider” within the meaning of this term.

15 BACH completed the development application form in its own name. The accompanying statement of environmental effects prepared by a consultant states that the document had been prepared for BACH.

16 Mr C Biscoe, counsel for BACH, submitted that the development application was made by a local government or community housing provider and cl (2) of Schedule 3 is therefore satisfied.

17 Mr T Robertson SC who appeared for the Council, submitted that BACH, although in name the applicant on the development application, was in fact acting as agent for or on behalf of another organisation, namely Carecorp Jannali Pty Limited (“Carecorp”).

18 Carecorp is not a local government or community housing provider within the meaning of that term under SEPP(SL).

19 The Council’s submission has its evidentiary foundation in a deed of undertaking between BACH and Carecorp. The deed is dated 8 December 2005 and therefore pre-dates the making of the development application by BACH.

20 The deed makes clear that the development proposed in the development application, except for one aspect which I will come to shortly, is to be carried out by Carecorp. Were development consent to be granted, Carecorp would purchase all of the properties that make up the land, demolish the existing structures on the land, undertake the construction of the whole of the proposed seniors living development, and retain ownership, control and management over the development. The only aspect of the development in which BACH would have any role to play, is in the management of the three, self-contained community housing units in the smaller building, for a management period of initially five years.

21 In order to achieve Carecorp’s development objectives, Carecorp arranged for BACH to make the development application for the whole development (and not just that aspect in respect of which BACH had an interest, namely the management of the three self-contained community housing units).

22 BACH gave a number of warranties regarding the development project in the deed, including:

“8. BACH warrants that it will not have any interest in any of the aged care facility or Independent/affordable living units. BACH’s interest will be limited to any fee paid upon the approval of the DA and any management fees paid in respect to its management of the Independent/affordable living units.

9. BACH warrants that it is registered as a community housing organisation and has an agreement with the NSW Department of Housing in relation to the provision of community housing services and is entitled to lodge an application for Development Application for consideration under State Environmental Planning Policies.”

23 The deed sets out the arrangements in relation to the preparation and making of the development application as follows:

“11. Carecorp shall be responsible for the design and preparation of all plans, drawings and documents required for the Development Application, which shall be based broadly upon the draft plan as attached hereto as Schedule A.
12. When requested by Carecorp, BACH undertakes at the risk and expense of Carecorp to submit a Development Application with the Sutherland Shire Local Council in accordance with the draft development application and plans prepared by Carecorp or its nominees.
13. BACH undertake, but only at the risk and expense of Carecorp, to do everything that is reasonable necessary and incidental to the Development Application, including the lodgement of any documents, attending any meetings, giving any consents or approvals, supplying any further documents, or making any applications.


14. The Development Application shall consist of a quantity of independent/affordable living units, being no less than 3, but no more than the number nominated by Carecorp in its absolute discretion at any time prior to the grant of the DA.

15. The independent/affordable units are to comply with any Community housing requirements, including any requirements set by NSW Department of Housing, or any legislative instrument or planning policy from time to time.
…

17. Upon approval of the Development Applicant [sic] in the form submitted by Carecorp, or in a form substantially the same as submitted by Carecorp, Carecorp agrees to pay BACH a lump sum amount of $72,000 within 28 days of the Development Applicant being approved. The lump sum payment includes any expenses incurred by BACH in relation to the preparation and/or submission of the Development Application, however, if the Development Application is unsuccessful, Carecorp will pay BACH the sum of $2,500 as an agreed amount to cover all costs and disbursements associated with the Development Application.

18. Carecorp fully indemnifies BACH in regards to any liability whatsoever that may arise in relation to the submission of the development application, including any costs incurred in the application or the preparation of the development application.
19. BACH acknowledges and warrants that it does not have and will not claim any interest in the development application, the documents prepared or any of the Development Project Properties.”

24 The deed also describes the arrangement that would be entered into between Carecorp and BACH for the management of the three self contained community housing units, referred to in the deed as the independent/affordable living units as follows:

“20. Carecorp agrees to enter in a property management agreement with BACH in the form attached hereto at schedule B to allow BACH to manage only the independent/affordable living units.
21. BACH shall not have any right to any payment from Carecorp, its nominees or any other person in relation to the management of the properties, other than its management fee as stated in the attached property management agreement.
22. BACH shall not have any management rights or any other rights whatsoever in relation to any other of the aged care units/beds.
23. Carecorp will receive all rents, receipts and revenue from the independent/affordable units.
24. Carecorp will keep title to all properties within the entire development, including the affordable housing units managed by BACH.
25. BACH warrants that the management agreement attached herein incorporates all terms and conditions necessary for BACH’s compliance with its obligations as a Community Housing Organisation or its obligations under any agreement, planning policy or legislation.
26. BACH will be paid an annual fee of $1,500.00 to manage the three independent/affordable living units for the duration of the Management Period paid by equal monthly instalments of $125.00 each on the last day of each month irrespective of the rent received by Carecorp for any of the units.
27. The parties agree that the rent paid by the tenants of the affordable housing units will be at the recommended rental rates as issued by the BACH rebate rental policy from time to time.
28. Carecorp or its nominees will undertake the normal maintenance that is required.

…

30. Carecorp acknowledges and agrees that it will be responsible for all costs and expenses incurred in connection with maintaining the independent/affordable living units in a reasonable condition and state of repair and that BACH will not be responsible for any loss or expense incurred in relation to those units including but not limited to repaid or rectification costs or any loss of rent.
31. Carecorp shall take out and maintain during the management period a policy of rental insurance and shall be responsible for all expenses incurred in relation to the issue of that policy and shall if requested give a copy of that or any other certificate of insurance to BACH within 14 days of the date the insurance is taken out.
…
34. The management rights of BACH relating to the independent/affordable living units shall be subject and subservient to the management by Carecorp or its nominees of the main aged care facility.”

25 The upshot of this deed is that the only interest BACH has in the whole development the subject of the development application is the right to manage, and to receive payment for managing, the three self contained community housing units in the smaller building, for the management period.

26 The question is, therefore, whether the development application for the whole development can be said to be made “only by or on behalf of” BACH.

27 The expression “by or on behalf of” is a composite expression: R v Toohey: ex parte Attorney General (NT) (1980) 145 CLR 374 at 381 per Barwick CJ (in dissent, but not on this point). The meaning of the phrase “on behalf of” is not fixed but is controlled by the context in which it is used: R v Portus; ex parte FCU (1949) 79 CLR 428 at 435, 437-438; per plurality in Toohey at 386. It may signify a relationship as narrow as agency or as wide as one acting in the interests of another: Portus at 440. Where, however, the composite expression is used, “by” will usually include an agency relationship and hence “on behalf of” extends beyond it.

28 In Citizens Airport Environment Association Inc v Maritime Services Board (1993) 30 NSWLR 207, the question arose as to whether work done by a Commonwealth authority and its contractors was done on behalf of a State authority, so that it was a determining authority within the meaning of s 110 of the EPA Act. Mahoney JA considered that the term “on whose behalf” would be superfluous if it merely meant an agent employed to do the work, because if the State board had appointed the Commonwealth corporation as its servant or agent to do the work, it would in law be carried out “by the Board”: at 233. The words “on whose behalf” were intended to extend the meaning of “determining authority” beyond the entity which in law carried out the activity to include those for whom or in whose interests it acted, at least (in the view of Cripps JA at 240C-240D) to the extent that the beneficiary maintain some control of or supervision over the activity.

29 In my opinion, the deed makes it quite clear that BACH, in making the development application, was making it by or on behalf of two persons: first, Carecorp, for the great majority of the development proposed, and secondly, itself, but only in respect of its interest in management of the three self contained community housing units.

30 The deed establishes that BACH has no interest whatsoever in any of the development other than the management of the three self-contained community housing units. In making the development application for that development, BACH can only be considered to be acting as agent for the principal, Carecorp, which did have an interest in that development.

31 BACH’s interest in the management of the three self contained community housing units means that a development application for the development that included those units could also be said to be by or on behalf of BACH.

32 However, cl 2 of Schedule 3 of SEPP(SL) requires that the development application be made “only” by or on behalf of the local government or community housing provider. Although the development application can be seen to be made by or on behalf of BACH, at least in respect of the part of the development relating to the three self-contained community housing units, it cannot be seen to be made “only” by or on behalf of BACH. The vast majority of the development is to be carried out by Carecorp and hence the development application for the development is also made by or on behalf of Carecorp.

33 Hence, the development application cannot be said to be made “only” by a local government or community housing provider within the meaning of the clause.

34 Accordingly, the question should be answered in the negative.

35 Having determined that the preliminary question of law should be answered in favour of the Council and adverse to BACH, the usual rule in relation to the question of costs for a preliminary question of law applies. This is that the unsuccessful party pay the successful party’s costs of the hearing of the preliminary question of the law. This operates as an exception to the usual position in class 1 appeals that there be no order as to costs. In Grant v Kiama Municipal Council [2006] NSWLEC 70 (22 February 2006) at [15], the circumstances in which courts have held that it is fair and reasonable that an order for costs be made in class 1 proceedings are set out. One of these circumstances is where a preliminary question of law is involved and the proceedings lose any character of a merits review. That is the circumstance in this case.

36 Accordingly, the applicant, BACH, should pay the respondent Council’s costs in relation to the preliminary question of law.

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