Burwood Council v Ralan Burwood Pty Ltd
[2013] NSWLEC 173
•16 October 2013
Land and Environment Court
New South Wales
Medium Neutral Citation: Burwood Council v Ralan Burwood Pty Ltd [2013] NSWLEC 173 Hearing dates: 25, 26, and 27 March; 2, 3, 4, 9, 22, 23, 24, 26, 29, and 30 April 2013; 14 May 2013; 13 August 2013; further written submissions 28 August 2013 Decision date: 16 October 2013 Jurisdiction: Class 4 Before: Sheahan J Decision: 1. Council's Third Further Amended Summons is dismissed.
2. All exhibits are returned.
3. The Council is ordered to pay the costs of all three respondents on a party-party basis, as agreed or assessed, unless within 21 days any one or more of the parties file(s) motion(s) seeking different costs orders.
Catchwords: JUDICIAL REVIEW: application by Council for (1) declarations of invalidity of construction certificates, (2) declarations that developer in breach of Environmental Planning and Assessment Act 1979, and (3) orders for remedial work - validity of certificates - do changes to a project agreed by a certifier make the development "inconsistent" with the consent - whether orders can be made against those not in breach of the Act - whether developer is vicariously responsible for acts of others - utility of declarations - discretion - costs Legislation Cited: Architects Act 2003
Building and Construction Industry Long Service Payments Act 1986
Building Professionals Act 2005
Conveyancing Act 1919
Environmental Planning and Assessment Act 1979
Home Building Act 1989
Land and Environment Court Act 1979
Strata Schemes (Freehold Development) Act 1973
Conveyancing (Sale of Land) Regulation 2010
Environmental Planning and Assessment Regulation 2000Cases Cited: Abret Pty Limited v Wingecarribee Shire Council [2009] NSWLEC 132
Abret Pty Limited v Wingecarribee Shire Council [2011] NSWCA 107; 180 LGERA 343
Ashfield Council v Andrews (1986) 60 LGRA 248
Blue Mountains Conservation Society Inc v Delta Electricity (No 3) [2011] NSWLEC 145; (2011) 81 NSWLR 407
Botany Bay City Council v Ralansaab Pty Ltd [2010] NSWLEC 225; (2010) 178 LGERA 44
Botany Bay City Council v Saab Corp Pty Ltd [2011] NSWCA 308; (2011) 183 LGERA 228
Cessnock City Council v Laila [2012] NSWLEC 206
CTI Joint Venture Company Pty Ltd v CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) (No 3) [2012] NSWLEC 6
Director-General, Department of Environment and Climate Change v Jack & Bill Issa Pty Ltd (No 5) [2009] NSWLEC 232; (2009) 172 LGERA 225
Director-General, Department of Environment and Climate Change v Walker Corporation Pty Limited (No 2) [2010] NSWLEC 73
Director-General, NSW Department of Industry & Investment v Mato Investments Pty Limited (No 4) [2011] NSWLEC 227
Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd [2003] NSWLEC 70, (2003) 128 LGERA 240
Evans v Accident Insurance Mutual Holdings Ltd [1998] 2 Qd R 350
Ex parte Parker; Re Brotherson [1957] SR
(NSW) 326
Friends of Turramurra Inc v Minister for Planning [2011] NSWLEC 128
Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38; (2013) 195 LGERA 229
Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473
Great Lakes Council v Lani; Great Lakes Council v Lani and Lampo Pty Limited [2007] NSWLEC 681
Hatton v Beaumont [1977] 2 NSWLR 211
Hillpalm Pty Ltd v Heaven's Door Pty Ltd [2004] HCA 59; (2004) 220 CLR 472
Holroyd City Council v Murdoch (I994) 82 LGERA 197
Klefend Pty Ltd v Santom Pty Ltd [1994] NSWLEC 201; (1994) 88 LGERA 307
Kogarah City Council v Armstrong Alliance Pty Ltd (No 2) [2013] NSWLEC 32
Lesnewski v Mosman Municipal Council [2005] NSWLEC 99; (2005) 138 LGERA 207
Marvan Properties v Randwick City Council [2005] NSWLEC 9
Murdoch v Holroyd City Council (unreported, 20 November 1996)
Newcastle City Council v Northern Residential Pty Ltd [2009] 165 LGERA 274; (2009) NSWLEC 10
North Sydney Council v Moline (No 2) [2008] NSWLEC 169
North Sydney Municipal Council v Ekstein (1985) 54 LGRA 440
Northern Residential Pty Ltd v Newcastle City Council [2009] NSWCA 141; (2009) 75 NSWLR 192
Pearce v Brooks (1866) LR I Ex 213 at 217
Progress and Properties Pty Ltd v Burwood Council [2008] NSWLEC 1178
Progress and Securities Building Pty Ltd v Burwood Council [2006] NSWLEC 518
Progress and Securities Building Pty Ltd v Burwood Council (No 2) [2008] NSWLEC 135; (2008) 158 LGERA 102
Progress and Securities Pty Ltd v Burwood Council [2006] NSWLEC 706
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Rochford Rural District Council v Port of
London Authority [1914] 2 KB 916
Rossi v Living Choice Australia Ltd (No 3) [2013] NSWLEC 46
Sahade v Mosman Municipal Council
[2000] NSWCA 251
Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 148
WD & HO Wills (Australia) Ltd v State Rail Authority of New South Wales (1998) 43 NSWLR 338
Wilkie v Blacktown City Council and Others [2002] NSWCA 284, (2002) 121 LGERA 444
Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5) [2013] NSWLEC 68
Woods v Bate (1986) 7 NSWLR 560
Woolworths Ltd v The Warehouse Group (Australia) Pty Ltd [2003] NSWLEC 31; (2003) 123 LGERA 341
Wright v West Torrens City Corporation (1996) 91 LGERA 197
Ying v Song [2009] NSWSC 1344
Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661Category: Principal judgment Parties: Burwood Council (Applicant)
Ralan Burwood Pty Ltd (1st Respondent)
Lyall Dix (2nd Respondent)
John Morgan (3rd Respondent)Representation: Mr P Clay SC with Mr S Nash, barrister (Applicant)
Mr P Tomasetti SC with Mr J Johnson, barrister (Respondents)
Houston Dearn O'Connor (Applicant)
Storey & Gough (Respondents)
File Number(s): 40091 of 2013
Judgment
A: Introduction
The proceedings generally
These class 4 proceedings, brought by the relevant local council, concern a major development project at 1-3 Railway Parade, Burwood, and, as the matter finally evolved, especially its external appearance.
Class 4 embraces proceedings concerning environmental planning protection and civil enforcement/judicial review. They are neither criminal proceedings, nor merits review proceedings.
Council's class 4 summons was issued on 12 February 2013 - against the developer, Ralan Burwood Pty Ltd ('Ralan'), and two private certifiers Lyall Dix and John Morgan.
The Council sought, in the original summons, a series of declarations, and restraining orders, and a mandatory order to demolish or rectify the building, because of changes made to some design features, in breach of the consent granted by the court to the subject development ("DC"). Reasonable minds often differ on questions of aesthetics in the execution of an approval, but breach of that approval is a very different matter.
Ralan contended from the outset of the hearing (Tp133, LL16-23 - emphasis mine) that:
... the court has no jurisdiction to make orders against Ralan Burwood Pty Ltd on the basis of the case as framed. Our case is, your Honour, that, as the court knows, with respect, we relied on the construction certificates. The builder went ahead and built the building in accordance with the construction certificate documentation, and Ralan Burwood has done nothing more than fund and coordinate the development and rely on its builder and rely on the architect and rely on a government appointed private certifier to do what he was doing.
Council initially challenged the validity of six construction certificates ("CC"), issued by Dix, between 31 August 2010 and 8 August 2012, and two interim occupation certificates ("IOC"), issued by Morgan, on 19 February and 15 March 2013.
However, many of the Council's initial challenges fell away over time, and, after a series of amendments, and some supervening events, a more confined series of challenges became the subject of this judgment (see [204] below). The focus of the case ultimately became the validity or invalidity of the CCs.
All eight certificates originally challenged were issued in purported compliance with the provisions of Part 4A (ss 109C-109R - see [232] below) of the Environmental Planning and Assessment Act 1979 ("the EPA Act"). Section 109H indicates that the failure of any CC will bring down any IOC reliant on it.
The very many provisions of the EPA Act which were canvassed in these proceedings, including Part 4A, will be set out later, along with other relevant statutory and regulatory provisions, in a separate, comprehensive section of this judgment (section 'F')
Council is represented by Mr P Clay SC and Mr S Nash of counsel, instructed by Timothy James O'Connor of Houston Dearn O'Connor, and all three respondents are represented by Mr P Tomasetti SC and Mr J Johnson of counsel, instructed by Christopher Calvert Gough of Storey & Gough.
Dix and Morgan filed submitting appearances.
The challenged certificates
The notice of commencement of building work, and the appointment of Dix as PCA, was signed on Ralan's behalf by its director, William Patrick O'Dwyer on 17 December 2009, and by Dix as the appointed PCA, on 5 May 2010 (Exhibit C19).
Dix purported to issue all six challenged CCs, on the following dates:
(1) 31 August 2010 (CC 208/10 = "CC1" = Exhibit C2 tab 2a),
(2) on 23 December 2010 (CC 472/10 = "CC2" = Exhibit C3 tab 2b),
(3) 21 October 2011 (CC 245/11 = "CC3" = Exhibit C4 tab 2c),
(4) 12 March 2012 (CC 044/12 = "CC4" = Exhibit C4 tab 2d),
(5) 17 May 2012 (CC 109/12 = "CC5" = Exhibit C5 tab 2e), and
(6) 8 August 2012 (CC 185/12 = "CC6" = Exhibit C5 tab 2f).
Each CC contained the following "description of Building Works" it covered:
Erection of a mixed-use development consisting of 268 dwellings in 3 towers, shops and commercial suites [or "retail at ground floor commercial/retail suites at mezzanine/first floor/level 2"] over 4 levels of basement parking.
To each CC was added a short description of the component of the project covered by that certificate:
CC1 - "Piling associated with Lot 1"
CC2 - "Bulk excavation, shoring and piling"
CC3 - "Structural building works up to Ground Floor"
CC4 - "Building works up to and including Level 3"
CC5 - "Building works up to and including Level 12, excluding civil works in Railway Parade"
CC6 - "Building works for Level 13 and above, excluding external works and landscaping"
It is clear that CCs 1-3 do not bear upon any issues with the external finish/appearance of the project above ground level.
The operative clause in each CC says (emphasis mine):
I certify that:
- the work, if completed in accordance with documentation accompanying the application for the certificate (with such modifications verified by the certifying authority as may be shown on that documentation), will comply with the requirements of Environmental Planning & Assessment (EP&A) Regulation 2000 as are referred to in sec. 81A(5) [of the EPA Act].
(Section 81A(5) merely enables the making of regulations governing CCs)
Four of the five volumes of "Council's bundle" tendered by Mr Clay, namely Exhibits C2-5, purport to contain all the CC documents (in tabs 2a-2f), as well as the CCs themselves. Those documents were said to be "all plans and specifications produced by the second respondent [Dix] to the applicant ...". In respect of each CC in those exhibits, there are, respectively, 545, 366, 278, 100, 97 and 102 folios of supporting material, all said to have been provided to the PCA in the application for the relevant CC.
However, the Council's most relevant officer, Brian Charles Olsen, its Manager Building and Development, deposed (5 February 2013, par 25) that documents attached to the CCs, which were sent to Council, were date-stamped by Council, and that other documents in Council's possession, and relevant to them, may not have been.
In response to the five-volume Council tender, Mr Tomasetti tendered a further bundle comprising documents produced by Dix to O'Connor (Exhibit R3), in response to Council's Notice to Produce ("NTP"), dated 15 February 2013. Dix described them in his covering letter of 20 March 2013 (to O'Connor), as "additional documents ... located during a file review, in a separate box which was not located with the CC". The relevant NTP (included in Exhibit R3) had sought all six CCs "including all plans and specifications in relation to which" each CC "has been issued".
Council alleged that the six challenged CCs were issued by Dix without his having obtained appropriate design verification, and without his satisfying the requirement that the works be "not inconsistent" with the DC.
In the cases of some of the later CCs (Nos 3-6), Dix is said to have relied on inadequate verification by Ralan architect Stephen John Bowers (Managing Director and Principal of the company Stephen Bowers Architect Pty Ltd, which also trades as "Sd Masterplan" - "Sd"), who insists to the court:
(1) that he is appropriately qualified to provide design verification (see cl 143A, and accompanying note, in [233] below), and
(2) that, as project architect, he has built the project in strict accordance with the CCs.
The Council challenged the two IOCs on the principal basis that Morgan had not been validly appointed as the PCA for the development, and so lacked the power to issue either of them. The IOCs allegedly also lacked appropriate design verification, and the building was thought by Council to have constituted, at the time the IOCs were issued, a hazard to the health or safety of the occupants.
The primary hearing
No interlocutory relief was sought by Council, but the substantive hearing was expedited, primarily because of financial and regulatory pressures on Ralan at the time.
At that time, Ralan was also obliged to register a Strata Plan by 2 October 2013, or risk losing the benefit of its extensive sales "off the plan", said (Tp549, LL28-9) to amount to $150M.
Ralan was also concerned that delay in completion and occupation of the project would aggravate its vandalism problem on the site (Tp398, LL45-6).
On the other side of the matter, Council supported expedition - it was concerned, at the time of the principal hearing, that, once the complex was physically completed, its early occupation would compound the difficulty involved in doing any rectification works, short of demolition, that might be ordered by the court.
Just prior to the first reservation of this judgment on 30 April 2013, following 12 days of hearing, much of the time occupied by evidence likely to be relevant to questions of discretion, senior counsel for the respondents addressed me (Tp877, LL40-47) on the "question of urgency", thanking the court for its "indulgence ... throughout the matter", and offering any assistance the respondents could provide to help the court expedite its judgment.
Some elements of that urgency, and possible complications with the need for rectification works, were addressed by events in the courtroom when the matter was brought back before the court on 14 May 2013, for determination of a Notice of Motion ('NOM') brought by the respondents, in light of events which occurred after the primary hearing concluded on 30 April 2013.
The matter returns to court twice after judgment initially reserved
On 30 April 2013, when judgment was first reserved, it seemed likely that, even if Council were largely successful, it might be difficult for the court to arrive at final orders (see Tp854, LL46-9 and T14.5.13, p32, LL34-7). However, a number of issues had fallen away as the primary hearing progressed, and then, while judgment was reserved, several others fell away, or were resolved extra-curially.
A NOM was listed before me on 14 May 2013, seeking, on the respondents' behalf, the following orders:
1. That leave be granted to the First and Third Respondents to be released from the Undertakings given to the Court on 26 March 2013.
2. That leave be granted to re-open the proceedings to enable fresh evidence to be tendered regarding the Strata Subdivision of the development.
3. Such further Orders as the Court deems fit.
The Council strenuously opposed the relief sought, but, over that opposition, I allowed the reopening, with the consequences that:
(a) the respondents' Points of Defence were amended;
(b) one more exhibit was tendered by the respondents (namely, the special conditions included in contracts of sale for units in the project - Exhibit R20);
(c) four additional affidavits were read; and
(d) an undertaking which had been given by Ralan and Morgan on 26 March (Exhibit R6 - see [170] below) was partially released by the court, in favour of the personal undertaking given by O'Dwyer (Exhibit R19), which is in the following terms:
I, William O'Dwyer, undertake to the Court that I will guarantee personally the carrying out of any work on the building at 1 Railway Parade, Burwood which the Court might order the First Respondent to carry out in these proceedings.
Judgment was again reserved on 14 May 2013. I will return later to the events of that day (see [183] - [191]), and what has followed since (see [192] - [197]), but I note here that, by the time I concluded my examination of all the material which was before the court by the end of that further hearing on 14 May, I had become even more acutely aware of the ever-shifting context of the dispute, and the need for real finality in the outcome of the case.
Accordingly, I brought the parties back before the court again on 13 August 2013.
It appeared to me on 13 August that there remained an obvious need for the Council to review the orders it had suggested to the court on 30 April 2013, and for both parties to inform the court of what amendments ought then be made to the pleadings, to the alternative short minutes of those suggested orders, and to the parties' respective written submissions, to take account of relevant events which occurred after 30 April, and especially after 14 May, 2013.
The parties agreed to take certain actions in that regard. I made orders accordingly, and the documentation they jointly filed on 28 August 2013 (see [195] ff) is now reflected in this judgment.
Introducing the project
The development site is considered to be a "key location ... in the heart of the [Burwood] town centre", and has "high visibility from the public domain" (Morrish affidavit, pars 6.7 and 6.9).
The project comprises three towers ('A', 'B', and 'C') on a retail/commercial podium, and includes 268 residential units, 62 retail and commercial suites, and associated underground parking; it has cost between $120M and $150M (par 55f of Amended Points of Defence c.f. Tp730, LL15-16); and it has generated some controversy.
The respondents allege (Tp395, LL5-7) that "Council actually sought to elicit complaints from the public", but they submit that the level of public complaint was "de minimis", resulting in "no proven concern in the community of any substance" (Tp428, LL47-8).
However, the project has generated much litigation over the years, and more detailed background to these present proceedings will be set out in Section "B" of this judgment (from [60] below).
Introducing the respondent Ralan
Ralan is one of a group of companies ("the Ralan Group") which is controlled by O'Dwyer, who usually incorporates a new, project-specific Ralan company for each of his group's ventures. All Ralan companies are controlled by O'Dwyer, who is sole director and secretary of the first respondent in this present matter (see ASIC searches at Exhibit C5, tab 4). He is, as he was described by Mr Tomasetti (T14.5.13, p34, LL16-17), "the human person behind the Ralan Group of Companies and particularly Ralan Burwood" (see also T14.5.13, p39, LL29-31).
O'Dwyer's oral evidence was quite vague on some matters of detail, but it is certainly clear that he personally stands behind his companies when they are under pressure. In the Management Accounts for the first respondent, as at 28 February 2013 (Exhibit C20), there is a "Financial Commitment" signed by him for the "next 12 months", and he told the court that he was aware that these proceedings were threatened at the time he signed that commitment (Tp632, LL29-35). The evidence indicates that he, rather than the project's principal funder, the Commonwealth Bank ("CBA"), has funded some of the "larger" contract variations on the Burwood project (Tp592, LL16-17). He made clear to the court that he sees himself as personally bound to do whatever the court might order Ralan to do, and to seek adequate funding for it (Tp630, LL19-44).
On appropriate conditions regarding confidentiality, O'Dwyer provided sworn and other evidence of his own financial position, and that of the Ralan group (Exhibit C22, and affidavit 3 April 2013), and, when this matter was brought back before the court on 14 May 2013, he gave me, and verbally affirmed to the court, a personal guarantee (Exhibit R19, and T14.5.13, p39, LL15-49) that any work the court might order Ralan to do, as a result of these proceedings, would be carried out.
Throughout the project, Ralan has been under "escalating" financial pressure also because the Burwood project is linked to other Ralan Group projects around Sydney, which have sourced their funding from a range of lenders, not just the CBA. At least one of those projects was said to be "reaching a very important stage" at the time of the principal hearing (25 March to 30 April 2013 - O'Dwyer affidavit 3 April 2013; Tp294, LL1-43; and Tp638, LL33-5). According to Ralan (Tp639, LL12-13), an unhappy result in these proceedings would have a "disastrous effect" on the confidence of all the group's funders.
Ralan's CBA facility in respect of the Burwood project (approximately $90M - Tp549, L41) was due for repayment by 31 March 2013, following various extensions of time, and interest and bank fees were said to be accruing at the rate of $16,000 per day (see O'Dwyer affidavit 13 March 2013, par 22, but Ralan's counsel said "$18,000", in both his written and oral closing submissions - par 112, and Tp737, L50, and p815, L35).
The relevant senior CBA relationship manager, Ian Manwaring, was called to give evidence before me. He deals regularly with Ralan companies, but is "on the sales side", not the "risk side", of the bank (Tpp539-541 - he liaises with Nicky Parsons in the credit risk section).
Manwaring and the CBA have taken a particularly close personal interest in these proceedings since some adverse publicity about the project in the Sydney Morning Herald on 23-24 March 2013 (Tpp541-2), but the CBA made no "threat" to Ralan over this matter (Tp549) - taking possession of the Burwood property would be a "last resort" (Tp556, LL43-45).
On the contrary, Manwaring testified (Tpp551-6) that the CBA would consider any application by Ralan for funding in respect of any remedial works ordered by the court.
Introducing the respondents Dix and Morgan
Dix had been appointed as the project's Principal Certifying Authority ("PCA"), on 21 August 2010, but was "struck off" by the Building Professionals Board ("BPB") on 22 November 2012 (Exhibit C5, tab 3). (It is not alleged that that disciplinary action concerned this project).
Morgan was "appointed" to "replace" Dix, and he was joined as the third respondent to these proceedings, at the same time as expedition was ordered, namely on 19 February 2013.
Council also challenged, in these proceedings as originally pleaded, the validity of the second purported appointment of Morgan, on 26 March 2013.
As already noted ([10] and [11] above), both gentlemen filed submitting appearances in these proceedings, and were represented by Ralan's legal team.
Expert witnesses
In order to support the relief it sought in the summons, on account of alleged breach(es) of the EPA Act committed in the execution of the project, Council produced expert evidence:
(1) as to how the (appearance of the) project, as built, differs from what Council says the approval contemplated, and also
(2) as to how it might be improved, instead of demolished.
The respondents relied on no independent experts, but relied heavily on the evidence of the architect engaged on the project.
The structure of this judgment
Having introduced the matter at such length, I will now set out the relevant history, both up until various proceedings (including the present) were commenced, and since then (Sections 'B', 'C', and 'D', commencing at [60], [92], and [108] respectively).
Section 'C' deals with the various proceedings in a little more detail, and Section 'D' with:
(a) the project's alleged departures from the consent, pursuant to the CCs;
(b) the evolution of Council's concerns regarding those departures;
(c) the dealings between the parties;
(d) events during the hearing and subsequently;
(e) the evolution of the issues contested; and
(f) the relief sought by the Council.
I will then list the witnesses and other evidence ( Section 'E', from [217]).
In Section 'F' (from [226]), I will set out all the statutory and other provisions to which reference has been made during the hearing(s).
I will then turn to a consideration of the competing submissions of the parties (Section 'G', from [243])
B: Background to the Project, leading up to these Proceedings
Approval to develop the site
The former railway-owned site, known as 1-3 Railway Parade, was originally bought, and its development approval obtained, by Progress and Securities Building Pty Ltd ("P&S"). The initial development plans were prepared by Dixon Rothschild ("Dixon").
The site and its development were the subject of a series of cases involving P&S, Burwood Council and "RailCorp" (see Progress and Securities Pty Ltd v Burwood Council [2006] NSWLEC 518; Progress and Securities Building Pty Ltd v Burwood Council [2006] NSWLEC 706; Progress & Securities Building Pty Ltd v Burwood Council (No 2) [2008] NSWLEC 135, (2008) 158 LGERA 102; and Progress & Properties Pty Ltd v Burwood Council [2008] NSWLEC 1178).
The effective (modified) DC for the project (DC 306/05) was issued by the court (per Roseth SC) to P&S on 15 May 2008 ([2008] NSWLEC 1178 - Exhibit C6, tab 2). Many documents (now contained in Exhibit C1) were incorporated into that consent by a specific condition in it (Condition 1 - see Exhibit C6, tab 2, p2), and the approved plans (Exhibit C7) are also before the court.
Conditions of consent, etc.
Several conditions of consent (e.g. Nos 25, 57, 65, 174, 175, 188 and 199) imposed specific obligations on, or defined specific tasks to be performed by, the PCA, and several failures in these matters appear to be admitted.
Many of the conditions imposed by the court were specifically required by RailCorp, because of the location of the project adjacent to the western train line, close to Burwood Station (see pp46ff of the consent, conditions 179B-220E). Ralan estimates that RailCorp's requirements have added $21,563,000 to the cost of the project (Tp401, L4).
The relevant rail-related conditions are headed by the following "Note":
NOTE: In any case where RailCorp gives an approval under any condition of this consent, it may do so unconditionally or subject to conditions. In the event that it does so subject to conditions, all such conditions must be complied with by the Applicant, its contractors and any other person acting on this consent.
I note here that the condition of consent most relevant to the remaining dispute in this case, namely the external finishes of the building complex, would appear to be Condition 220G (at p54 of Exhibit C6, tab 2), which provides as follows:
The finishes of the proposed development must be in accordance with the External Finishes Board, which was prepared by Dickson Rothschild which is plan COM-A-902 Revision F and was issued on 23 April 2008 referred to in condition 1. Any modification to the finishes described in the External Finishes Board, at any time in the future, must be approved by RailCorp before it is carried out.
The project was also the subject of:
(1) a Voluntary Planning Agreement, signed on 19 June 2008, and varied on 10 September 2009 (Exhibit C6, tabs 3 and 6);
(2) three further modifications between 22 September 2010 and 29 February 2012 (tab 9); and
(3) another consent/modification, approved on 7 May 2013, after this judgment was first reserved on 30 April 2013.
Council's attitude to the project
While Council became extremely critical of the project as it approached completion, it should be noted that in the two class 1 proceedings which led to its 2006 approval, and to the 2008 modification, Council's stand on it was collaborative.
In his approval judgment ([2006] NSWLEC 706), Roseth SC said (at [4]):
The parties have agreed on all merit matters except the conditions of consent. Unusually, however, the dispute is not between the applicant [P&S] and the two respondents, but between the applicant and the first respondent [Council] on the one hand, and the second respondent [RailCorp] on the other. While nine conditions are in dispute, the objection to eight of them is covered by a similar argument, namely that, in the council and the applicant's submission, RailCorp wants unreasonable control (one might call it a "right of veto") over the development, thereby adding another layer of bureaucracy to the principal certifying authority and the council. RailCorp, on the other hand, maintains that ultimate control over those parts of the development that affect the railway line is necessary in the interest of a safe and efficient railway system, which is of paramount importance. ...
In his modification judgment ([2008] NSWLEC 1178), he said (at [2]):
Despite minor differences between the council and the applicant on the first day of the hearing, by the end all three parties were in agreement. Although the orders are not by consent, they reflect the wishes of the parties. ...
In the face of that relevant history, the Mayor said, in his media release of 27 November 2012 (Exhibit R12), for the content of which he was, according to the evidence of Council officers, primarily responsible, that the Council had been "overturned", on both occasions, by this court.
Council's witnesses were quite defensive, but, clearly, some of the history of the project has been distorted in the public domain by Council's public campaign against it, as represented by media reports, items published on its website, and Council's own newsletter, "Burwood Update", which is distributed to some 14,000 households. (See, generally, Tpp425-8, and 519-529).
The Council's campaign sought to have citizens make telephone complaints to this court about the circumstances of the approval of the project, and Mr Tomasetti described that (at Tp739, L50-p740, L1) as "the most extraordinary conduct ... by a government body like a council".
Ralan takes the project over
Ralan contracted to buy the site from P&S on 25 September 2008. Sales of units "off the plan" commenced in October 2008, although Ralan expected at least a twelve-month delay before building would commence. O'Dwyer told the court (affidavit 13 May, par 10) that 60% of Ralan's purchasers were investors.
Ralan's purchase from P&S was completed on 15 December 2009, at a land cost said to be approximately $24M. (The P&S land transfer in Exhibit C6, tab 7, says $21,950,000, and the later related transfer of Council lands, at tab 8, pursuant to the Planning Agreement, at tab 6, suggests an "agreed value" of $1,097,000).
Ralan engages its usual builder
The Burwood project has been constructed on Ralan's behalf, under a fairly standard "design and construct" contract, concluded between the Principal and Contractor companies, and dated 8 April 2010 (Exhibit R10). The contractor is Steve Nolan Constructions Pty Ltd ("SNC"), of which licensed builder Stephen Michael Nolan is the principal. SNC has regularly built, and now (since 2008) exclusively builds, for Ralan companies, on a "design and construct" basis (Tp642), usually several projects at a time.
O'Dwyer had discussed the Burwood site with Nolan in 2008, but was (Tpp644-8) not involved in any internal SNC discussions of the estimated price. He accepted SNC's tender for the project (in the sum of $70,150,000, plus GST) by letter dated 31 July 2009 (Exhibit C6, tab 12). That became the "contract sum" agreed in the April 2010 contract. External or façade finishes are quoted and done on a per-metre basis (Tp681, LL34-5) and the internal components were fairly standard for Ralan projects (Tp656-7). The contract included a schedule of finishes, but that schedule was silent on colour.
Both O'Dwyer and Nolan gave affidavit and oral evidence in these proceedings.
Nolan defended the stability, over time, of his quoted price, on the very same plans (Tpp645-8) - (i) the market was "flat"; (ii) he put "a bit of fat in it ($25,000 per unit)"; (iii) he remained "comfortable" with his estimates; and (iv) O'Dwyer was "happy with that price".
From time to time both Ralan and SNC have been involved, separately or together, in matters before this court. In some, issues of certification, and compliance with CC drawings, have arisen (Tp628, LL40-4). Counsel for the Council in the present matter sought to rely upon some of those other matters as a basis upon which to assert negligence or recklessness on the part of the Ralan companies, and some untruthfulness on the part of O'Dwyer himself in these proceedings (Tp616, LL1-13), but those attempts were successfully countered by counsel for Ralan (Tp872).
O'Dwyer seeks to end any proceedings promptly (Tp626, L39), as his companies need, financially, to finish their projects in a timely way (Tp639, LL30-3). O'Dwyer and Nolan confer on their projects, "generally ... about once a week" (Tp591, L44, and p642, LL1-13), and O'Dwyer particularly relies on SNC to build to CC plans, which Nolan "always has" (Tp625, LL32-4).
The approved design is amended
For the Burwood project, SNC engaged Bowers as the project architect. Nolan had worked with him on an earlier non-Ralan project, dating back to 2005 (Tp277), but Bowers was not associated with O'Dwyer.
On 19 November 2009, Bowers (and/or "Sd" - [22]) proposed to SNC a series of amendments to the Dixon design. In a letter to SNC on that date (included in the "November 2009" bundle in Exhibit C24 - see [88] below), he listed fourteen "amendments to the design, consistent with the intent of the approval, which facilitate significant cost reductions". One item of significance to the dispute now before the court was No "4. no curtain walls, window wall to be used".
Bowers explained to the court why changes were made, and he denied any "inconsistency" with the DC. (See from [125] below). He and the respondents contend that the "outcome is acceptable" (Tp138).
Funding is approved
On 15 February 2010, the CBA approved funding for the project (see Annexure "C" to O'Dwyer affidavit 25 March 2013) in the gross amount of $93M, guaranteed by O'Dwyer and nominated Ralan companies, and appointed Quantity Surveyors ("QS") Mitchell Brandtman (NSW) Pty Ltd as "Project Superintendent". The QS was selected by Ralan from a bank panel, but was then paid by Ralan, as borrower (Tp607, LL46-9).
That QS company is also nominated in the Ralan/SNC building contract (Exhibit R10) as the "Superintendent" (cls 2, and 23, and Annexure Part A p56). The apparent "duality" of the QS's roles as a superintendent under the two contracts was canvassed with both the CBA witness, Manwaring (Tpp544-5), and the QS's senior partner, Gregory Brandtman (Tpp671-5), during their oral evidence.
The QS made regular inspections, and consulted with SNC staff, as needed, but provided "totally independent assessments" of borrowing amounts and claims for progress payments (Tp678, L45). The CBA remained continually interested in the QS's estimated current "costs to complete" (Tpp681-9).
Brandtman had been involved with Ralan and SNC in the past, not always via the CBA (Tp675, LL36-45 and p677, LL30-9), and three of his company's reports to the CBA regarding the Burwood project (dated 23 November 2009, 3 September 2010, and 8 March 2013), all "approved for issue" by Brandtman himself, are before the court (Exhibit C24). He considered $70,150,000 to be a "competitive" price for an "extremely difficult" project, which he costed at $78.5M.
A PCA is appointed, and work commences
SNC appears to have commenced work on the building of the Burwood project in about September 2010, with Dix engaged as PCA (see Exhibit C19), as recommended by Bowers (Tp649, LL33-47). Nolan did not know Dix, but knew he was "pretty senior" (Tp650, LL1-3). He accepted his fee proposal on 4 August 2009 (see Exhibit C19). O'Dwyer signed off on the appointment without canvassing it with Nolan (LL5-13). Dix produced to the court his professional indemnity insurance policy, dated from 30 November 2011 (also in Exhibit C19).
The project is pre-sold
As already noted ([25] above), there were extensive sales "off the plan", with perhaps 60% of the purchasers being "investors" (T14.5.13, p13, L26, and O'Dwyer affidavit 13 May 2013, par 10).
During the hearing on 14 May 2013, the respondents tendered the special conditions in the standard contract of sale for the lots in the project (Exhibit R20). I will now set out the most relevant of those conditions:
31. The Development
31.1.1 The vendor intends to construct on the land to be subdivided a mixed use development building complex (the "Development") including 268 dwellings in three towers, retail at ground level, commercial and retail suites on levels 1 and 2 and four levels of basement parking.
...
33. Purchaser's acknowledgments
...
33.4 The purchaser acknowledges and agrees that:
33.4.1 both before and after completion, the vendor or persons authorised by the vendor may:
● undertake construction and development activities on the land to be subdivided, or on or in parts of the building comprising the Development;
● conduct selling and leasing activities on the land to be subdivided, or on or in parts of the building comprising the Development or on or in the common property; and
● place and maintain in and about the land to be subdivided or on or in parts of the building comprising the Development or the common property (but not the property) signs related to and advertising those selling and leasing activities; ...
...
38. Registration of Strata Plan
38.1 Completion of this contract is conditional upon registration of the strata plan substantially in the form of the draft strata plan annexed to this contract.
38.2 The Vendor must:
38.2.1 do everything reasonable to have the strata plan and any document to be lodged with the plan registered within 5 years of the date of this contract (the "registration date");
38.2.2 serve a notice on the purchaser confirming the date of registration of the strata plan and the strata plan number; and
38.2.3 on registration of the strata plan, cause the owners corporation to effect all insurances required by the Strata Schemes Management Act.
38.3 The vendor may (at any time and as often as is necessary) extend the registration date by serving on the purchaser a notice stating that the registration date has been extended by reason of:
38.3.1 delays to construction of the building forming the subject of the strata plan including, but not limited to, delays arising from site or weather conditions, industrial disputes or problems with the supply of materials; or
38.3.2 delays associated with obtaining any approval from Burwood Council or any relevant authority relating to the strata plan, the Development, the building or the construction thereof; or
38.3.3 damage, howsoever caused to the land, the building, the property or the common property; or
38.3.4 delays associated with the vendor obtaining from any caveator the consent to the registration at LPI-NSW of any plan, dealing or other covenants or documents; or
38.3.5 a combination of these or any other causes or delays beyond the reasonable control of the vendor,
whereupon the registration date is changed to the date specified in the notice served on the purchase.
38.4 If the strata plan is not registered before the registration date then, subject to clause 38.3 either party may rescind this contract by serving a notice.
...
40. Completion
40.1 Completion of this contract must take place on the date ("the completion date") which is the later of:
40.1.1 42 days after the date of this contract; or
40.1.2 21 days after the date upon which the vendor serves notice on the purchaser of the registration of the strata plan; or
40.1.3 14 days after the date upon which the vendor serves on the purchaser an occupation certificate under the Environmental Planning & Assessment Act (being either an interim occupation certificate or a final occupation certificate) issued by the appropriate consent authority or by an accredited certifier.
40.2 If the purchaser does not complete this contract on the completion date for any reason (other than because the vendor cannot complete) then the purchaser must, on completion, pay interest to the vendor calculated at the rate of 10% pa on the balance of the purchase price from the completion date up to the date of actual completion, inclusive of both days.
40.3 Interest payable by the purchaser in accordance with this clause is an essential term of this contract.
40.4 Without prejudice to any other right or remedy of either party, if completion does not take place on the completion date, then either party (not then being in default) may at any time thereafter, serve a notice upon the other party, requiring the party served with such notice, to complete this contract within a period of not less than 14 days (counted from the day after the day on which the notice is served), and in respect of such notice time is of the essence.
40.5 The purchaser cannot make a claim or requisition, delay completion or rescind or terminate this contract if on completion the original of any document (excluding documents of title) are not available to the purchaser or any mortgagee of the purchaser.
C: Relevant Proceedings concerning this project
2009 to 2012
On 24 November 2009, SNC commenced both class 1 and class 3 proceedings (09/10883 and 09/30882) against RailCorp, joining Council as a respondent to the class 1 matter. After protracted negotiations both proceedings were discontinued on or shortly after 28 October 2010, with costs reserved.
During 2012 the Council also commenced proceedings in both this court and the Supreme Court, against SNC, concerning the project. The Supreme Court proceedings were transferred to this court, and the two matters (12/41039 and 12/41152) were resolved together, with consent orders made in each, by Pain J on 16 November 2012. Those orders were entered on 21 November 2012 (Exhibit C14), but contempt proceedings have since been commenced, and remain on foot, against SNC, regarding performance of them.
The present and related proceedings - 2013
The summons commencing these present proceedings was issued on 12 February 2013.
Council's most recent concerns with the project have been:
(1) the finish and appearance of the buildings, as they approached completion, were said to involve departures from the DC, and
(2) various encroachments, first raised as an issue in about 2010 (Tp434, L32).
While it was those twin concerns that prompted these proceedings, Ralan commenced Class 3 and Class 4 proceedings (2013/30165 and 2013/40199) against Council, regarding the alleged encroachments. Ralan also commenced class 1 proceedings (2013/10181) against Council on 13 March 2013, in relation to the Stratum Subdivision of the project.
Matthews Folbigg acted for the Council in those class 3 and class 4 proceedings, and they were resolved, pursuant to a resolution adopted by Council on 23 April 2013 (resolution 65/13 - Exhibit R18, and Tp661, L16), by consent orders made by me on 29 April 2013 (Exhibit R16), while the hearing of the present matter progressed (see Tp796, L29).
That settlement of those class 3 and 4 matters was then actioned by the parties after I first reserved judgment in this present matter on 30 April 2013, and the class 1 proceedings were also discontinued.
On 30 April 2013, in accordance with the terms of settlement, but after reservation of this judgment, Council approved a development application (DA - No. 30/2013) to Strata Subdivide the project into 330 lots. One condition required that the certificate of Strata Subdivision "not be issued or released until an Occupation Certificate is issued for the whole development".
On 7 May 2013, Council notified its approval of a modification to that condition, replacing it with the following:
The Strata Plan shall also include a public positive covenant pursuant to section 88E of the Conveyancing Act to be registered over the common property whereby the Owner's Corporation covenants to grant all necessary access to Ralan Burwood Pty Ltd (Ralan), its builder, contractor, servants and agents to the common property to enable Ralan to carry out all works required by any orders that may be made by the Land and Environment Court in proceedings number 2013/40091 (Burwood Council v Ralan Burwood Pty Ltd & Ors). Burwood Council shall be the prescribed authority that may enforce the obligations against the Owner's Corporation and shall be the only person who has the power to release, vary or modify the terms of the public positive convenant.
On 8 May 2013, in what Mr Clay later described (T14.5.13, p6, LL13-14) as a "quite generous approach", Council issued a Strata Certificate for the Strata Plan.
Council could do so, under the Strata Schemes (Freehold Development) Act 1973, only where a CC was issued in respect of the building subject of the Strata Scheme.
On 8 May 2013, Ralan also paid the compensation specified in the consent orders ($250,000), and Council agreed to transfer its interest in the land encroached by the building.
Also on 8 May 2013, Council first became aware of a rather extraordinary letter written by Morgan on 22 April 2013 (to which I will return - at [177] below).
On 9 May 2013, the Strata Plan, endorsed with the Strata Certificate, was lodged with the Land and Property Management Authority, and given a dealing number ("SP88309").
On 9 May 2013, the respondents also filed the NOM which came on for hearing on 14 May (see [31] above).
O'Dwyer (affidavit 13 May, par 6) expected at that time that the Strata Plan would be registered by 29 May 2013, and told the court that settlements of lot sales were due 21 days after the notification of such registration (see cl 40.1.2 of the standard contract, quoted in [91] above).
D: The changing concern of these proceedings
Alleged departures from consent - project changed by CCs
The encroachment issues/concerns having been resolved while the hearing of these proceedings progressed, Council's principal concern in them became that (Tp4, LL8-11 - emphasis mine) "...what appears now is not what was expected. ... There have been, on the council's case, numerous departures from the development consent and inconsistencies between the construction certificate and the development consent". (The concept of "inconsistency", as distinct from "change", or "variation", is crucial to the central argument in the case).
The variations embodied in the challenged CCs were sought on the developer's behalf by Bowers, and "satisfied" the first respondent certifier, Dix. Some were canvassed with Council officers and/or RailCorp, and others were not. Clearly, from the evidence, some of those variations resulted in fairly substantial savings in the costs of the project.
The changes made to the approved project were the subject of much evidence and dispute between Bowers and one of Council's expert witnesses, expert architect/planner/designer Terence Paul Byrnes, but they were generally admitted by the respondents and their counsel (see Tp200, LL41-5; p202, LL9-19; p203, LL22-24; p204, LL47-8; and p366, L22).
Council's written closing submissions inferred (par 1), in the absence of any evidence of the use elsewhere of such terms, that this is a "hideously ugly building", constituting (par 3) "a blight on the built landscape of Burwood, and, indeed, given its size, metropolitan Sydney". Council then went on to allege (par 4) "breaches of a development consent granted by [this] court".
Mr Clay had said, in his opening submissions (at Tp13, LL1-29), that four types of changes appeared to have been made to the project depicted in the DC plans:
(1) those occasioned by the specific terms of a condition;
(2) those necessitated by the various regulatory regimes (Building Code of Australia ("BCA"), State Environmental Planning Policy No 65 - Design Quality of Residential Flat Development ("SEPP 65"), etc);
(3) those occasioned by specific needs of RailCorp, and
(4) those which "seemed like a good idea at the time" (eg. to remove proposed external louvres to provide more light).
In his written closing submissions, (pars 60-62, which cover ten pages, i.e. pp18-27 of them), Mr Clay listed "the various admitted changes" made by the developer(s), and the explanations given for them by Bowers, namely that many of them were driven by the conditions of consent, BCA requirements, RailCorp and State Transit requirements, and some Council policies (such as on outdoor eating).
Those explanations, Mr Clay submitted, did not justify making the changes to the DC project without submitting a s 96 modification application, so as not to offend cl 145 of the Regulation. Even a PCA cannot usurp the functions of a consent authority.
Of those enumerated changes, some particular external features received the most attention during the hearing, and in Mr Clay's written submissions, namely:
(1) the omission from the project of what Mr Clay described as "a major and important design feature", namely the initially approved louvres (Item (n) in par 62), and
(2) the as-built finishes, including windows and frames, and their colours (Item (o)).
In addition to those two major items, Council complains of "deletion of three protrusions"; removal of street planter boxes (pending a landscape plan); elimination of the planned "upper storey cantilever in favour of street level columns"; and changes to carparking, drainage etc; fire stairs; kerb line; retail area configuration and replacement by a substation; the vehicular entrance; lobby areas; amenities and heritage atrium; spaces for commercial/rainwater reuse purposes; and the void area, fire hydrant tanks, and pump room.
Olsen, although technically "kept informed" during the various certification stages, complained that, as construction proceeded, he had access to only photocopied CC plans, which were "very average to say the least", and not to the level of detail of those placed before the court at the hearing of this matter (Tp481, LL26-35 and p484, LL46-47). As screened scaffolding was removed, the building presented primarily as "green" in colour (Tp496), rather than more "blue", or "cyan", as Olsen had expected from the modified DC plans. This indicated some issues about the window "framing", and the "glazing" finishes in general (see [114] above).
Throughout the construction/variation process, the changes, not only in this respect, but also in respect of the inclusion of "translucent" panels, and in respect of the deletion from the project of the originally approved addition to the façade of louvres/screening, all put to Dix by Bowers, were not of concern to either Ralan/SNC, or the CBA's QS, Brandtman (Tp692, LL47-p693, L2).
O'Dwyer testified that "images quite often vary from the finished product" (Tp621, L5), that the DC contained only "artist's impressions" (Tp638, LL1-5), and that he played no part in - nor did he query, when, in due course, he became aware of - the absence of louvres (see Tpp624-6). (See also Exhibits C23 and R14). He was not aware of the detail of the CC plans, and not involved in the technical discussions or decision-making regarding such details, and says that "it didn't enter [his] head" to seek to have SNC do the job more cheaply by deleting the louvres (Tp626, LL1-12).
Brandtman testified (at Tpp696ff) that he reflected the certified variations in his periodical reports to the CBA on progress payment applications, but did not discuss with Nolan either the changes made involving windows, or those deleting louvres. He was closely cross-examined on the movement in cost figures in his report (Exhibit C24), and he impressed the court as a frank witness.
Nolan says that he neither asked for, nor decided on, the deletion of louvres. He left to Bowers the finalisation of the CC drawings upon which SNC was to act, and any question of consistency or otherwise as between the CC drawings and the DC drawings. The finished façade cost less than Nolan had budgeted, but the saving "wasn't much" (Tpp655-7).
Once Council became concerned as the variations in the project became apparent, it retained an urban designer, Gabrielle Morrish, principal of G M Urban Design & Architecture Pty Ltd, to provide advice. When it mounted this court challenge to the alleged inconsistency between the DC and the CC drawings, it also engaged Byrnes to do a detailed comparison and analysis, and express his expert opinion on the "changes". In the hearing before me, Byrnes gave lengthy concurrent evidence with Bowers, and Council submits that Byrnes's evidence is clearly to be preferred.
Apart from giving details of his close comparison of the DC and CC plans, Byrnes deposed as follows, in respect of the "external finish of the building":
21. In addition to the changes to the floor plans, Construction Certificate 5 conspicuously varies from the approved Development Consent Plans in respect to the finishing elements making up the fenestration of the entire building and as referred to in Condition 220G of the Development Approval 306/05.
22. My conclusion is that as a final result the appearance of the building in no way even resembles the original intent of the approval and as depicted in the accompanying elevation drawings. The original component window module CW1 that predominated throughout the elevations has not been followed in their application to the building and the frameless CW2 widows (sic?) have been eliminated. Separate distinguishing, large scale, architectural features within the elevations have been deleted. Such that the entire character of the building appearance has been altered, compounded by the additional aid of a totally different range of colour choices and their application in detail.
...
54. The comparison to be drawn with the original approval from what has been built is the difference between a relatively dark colour palate of three articulated towers, segmenting an otherwise continuous podium. Each tower being further differentiated by two dissimilar forms of glazing within at least one of its facades. The proportion of opaque glazing being distinctly less than clear glazing.
55. The dominant pale blue and silver grey façade as constructed no longer retains an articulated appearance due to a coalescence and continuity within the previously three separate towers, differentiated only by the buildings' overall profile. But it is of totally different scales, to that of the approved drawings within the facades to the south and east in particular. Basically becoming more imposing and less interesting in the sum of its parts.
56. In contrast, as built, the total proportion of solid to clear glass within the fenestrations has been reversed and the pattern changed. The facades are articulated entirely differently and the colour now is unashamedly blue, not the variety of grey and black as originally intended by the approval.
Ralan admits that particularised changes were made, but seeks to excuse them, through Bowers, by asserting repeatedly, and demonstrating, "the contradictory nature of the [DC] documents", and seeking to "improve residential amenity", as mandated by SEPP 65 (see DC condition 2(a) - Tp249, LL23-25).
In this context, Bowers thought the louvres effectively diminished residential amenity, and obstructed access to some private open space. In addition, he complained that there was "no clear indication as to where they should actually be" (Tp250, LL46-7, and p836, LL9-16). As there was a PCA in place for the project, he did not discuss these issues with Council. Nor did he consult O'Dwyer or Nolan (see generally Tpp252-276).
Bowers also admitted, in his evidence, that the builder had made a few "mistakes", such as the external panelling error identified on the view, but such defects, omissions and "incompletions" would normally be rectified between "practical completion" and actual completion, pursuant to the contract. Some of those "faults" can be fixed from inside the building, but none of them impact on the performance by Bowers of his duty to provide a design verification statement - that task does not require his doing "quality inspections" (Tpp319-326).
Bowers acknowledged that the glazing was expected to "have a blue hue" (rather than grey, clear, or "neutral" - see, e.g. Tp335, LL29-35, and his answers to Mr Clay at T338, L38-p342, L13), and its framing to be more "charcoal" than "pearl" (see e.g. Tp30, L33 c.f. p31, L12; p51, LL21-27; p290, LL43-9; p299, LL34-6; and Tp837). He researched the colour and glazing process options (e.g. Exhibit C5, tab 2e, fols 78ff, and Exhibits R7 and C25), before settling on the sample (Exhibit R9) he showed the certifier in late 2011 (Tpp346, and 372-3), and included it in tender packages (Tpp356-369).
Bowers and Byrnes disagreed when asked (at Tpp369-70) about "the primacy given to a [DC] schedule of finishes by description or specification", over the "colouring in of a building on a plan" when determining "what colour is selected for the building". Byrnes would give primacy to the schedule, but Bowers said (Tp369, LL43-6):
I have to disagree with that because the schedule, in itself, represents something quite different to what's in the elevations and because of the large numbers of inconsistencies in the drawings, I did my best to develop the design such that it was not inconsistent with the consent.
Bowers later added (Tp370, L34-p371, L9) that the primacy of "the schedule" depends on consistency among the documents, because "the colouring in is done specifically to represent the colours".
Bowers gave a slightly different, and in some ways a more detailed, account of his conversations with Olsen, and later, also with Macdonnell, Council's Deputy General Manager (Tpp375-383).
Bowers says that, in terms of colours and glazing, he took Olsen through "the same process" as he had followed with Dix, with the sample and a "colour wheel", to explain how the "vertical elements have to fit within the framework of the glazing system", and that "there are inconsistencies with the plans and there are anomalies with the schedules of finishes". He was seeking "a holistic representation of the consent", and, at the time of his discussions with Council, "the building was incomplete and therefore had elements yet to be put in place that would improve its appearance, along with the cleaning of the façade at the end of the project".
Council expressed and explored its concerns before commencing these proceedings
Council became concerned about the external façades of the building as the scaffolding was being removed late in 2012, and its officers corresponded with, and met with, Bowers (rather than Ralan or SNC), during and after September 2012 (see especially Council's key letter to Bowers dated 12 September 2012, at Exhibit C6, tab 19).
Of particular concern at that time was the use of "translucent panels", which were said to (1) not be included in the court approved plans, (2) "look markedly different" from the approved materials, (3) "detract from the appearance of the building as a whole", (4) have an adverse impact on the building's visual amenity, and (5) set an "unsatisfactory precedent" for Burwood Town Centre.
Copies of the letter of 12 September 2012 were intended by Council to go to Dix, SNC, and Ralan, but do not appear to have reached them (see Tpp506-513). Council's usual practice appears to have failed on this occasion, despite the copy of that letter (at tab 19) carrying the endorsement "for your information".
Bowers responded to Council on 17 September 2012 (tab 20), indicating that he had identified "certain inconsistencies" in the approval documentation when he was "developing the court approved design". He particularised some "shortcomings" in the "illustrative materials and finishes elevation". Bowers informed Nolan of Council's concerns, and assured him that the Council staff understood the position he had taken (Tp653, L13-p655, L4).
Olsen is a qualified, but no longer accredited, building surveyor (Tp479, L35). It was with Olsen that Bowers had been dealing, and Olsen drafted and despatched Council's 12 September 2012 letter. He told the court he did not stamp "for your information" on the copies of it (see [134] above, and Tp513, LL4-6).
For completeness, I set out now the wording of that important letter:
I refer to the above development and to your recent conversation with Council's Manager Building & Development, Mr Brian Olsen regarding the external finishes to the above building. With the gradual removal of the scaffolding around the building that is under construction it has become apparent that translucent panels have been used in the external facades of the building.
The translucent panels were not included on the schedule of exterior finishes in the plans approved by the Land & Environment Court of NSW in its decision dated 15 May 2008. The translucent panels have a markedly different appearance to the materials as approved by the Land & Environment Court of NSW. As such, the translucent panels are considered to detract from the appearance of the building as a whole, adversely impacting upon the visual amenity of the area, as well as creating an unsatisfactory precedent for the Burwood Town Centre.
Your urgent attention to this matter is requested to ensure that the building is erected in accordance with the approval granted by the Land & Environment Court of NSW to save any further action by Council. Please contact Council's Manager Building & Development Mr Brian Olsen on 9911 9870 during business hours if you require further clarification on this matter.
Olsen went on leave from about 22 September to about 11 October 2012, and did not pass on to any other Council officer any responsibility for monitoring or assessing the "compliance" of the façades of the project (Tp442, LL17-47).
When he returned to duty, Olsen reported to the General Manager, in a Briefing Memorandum dated 23 October 2012 (affidavit 27 March 2013, Annexure "C", p1, par 7 - my emphasis):
Notwithstanding the concerns raised by the public and the Mayor, after discussion with the architect for the applicant and perusal of the documentation in Council's records it appears that the applicant is proceeding within the limits of the approval granted by the L & E Court. It was not envisioned at the time that the development was approved that it would be finished in this manner however the front façade treatment (Railway Parade) has still to be completed and it should improve with the vertical elements still to be provided.
Olsen reported again, in a further Briefing Memorandum dated 19 November 2012 ("C", p2, par 7 - my emphasis):
Council has met with the architects for the development and it appears that the building is not yet completed but it appears that the building is generally being completed in accordance with the approval granted by the Court.
The position Olsen took in October/November went no deeper than making observations which indicated that he could not be satisfied that the work was either within or outside the approval (Tp445, L43-p449, L50), but his two memorandums did not go even that far. He and Macdonnell agreed that they should simply wait to see if Bowers' assurances proved sound (Tp439, L20-p440, L20), even though completion was not far away, at which stage it may prove too late to question the finishes (Tp450, LL44-6).
When the time came to consider giving a s 121B order, Olsen and Macdonnell accepted Bowers' assurances (Tp504), and decided that there was "not enough evidence to ... sustain" one (Tp453, L43). It is unclear whether the Mayor was consulted.
The position Olsen took, and his apparent slowness to act, were seriously challenged in cross-examination (Tpp481-493). As Council was not the PCA for the project, no inspections were sought or conducted (Tp502-3).
Olsen's 19 November 2012 memorandum had three attachments, which were omitted from the affidavit as filed, but added to it, without objection, during the hearing (Tp408, LL20-1). They dealt with a representation made to the Mayor, by Mr and Mrs Comino of Croydon, dated 10 November 2012, which said that they had expected the subject site to "remain largely open space", and they complained that the project was a "monstrous eyesore", which "has the appearance of very cheap construction", and is "much too large for the site".
Another public complaint, emailed to Council by a person whose name was not disclosed to the court, but dated 20 November 2012 (Annexure "D" to Olsen's affidavit of 27 March 2013) said (at p3):
On the Railway Parade side, the building looks quite stunning, with developers (Ralan Property Services), currently selling/leasing dozens of modern apartments
...
However on the railway side, the lower section of the building is comprised of a single massive concrete block wall, which appears to be the outer wall of a retail centre or car park.
Olsen was assigned the task of preparing a response to the Cominos. A letter was signed by the Mayor, and despatched to them on 11 December 2012, enclosing a copy of a Mayoral Minute, dated 4 December 2012.
Council commissions an urban design assessment
Consideration of that Mayoral minute by the Council led to (1) Council's engagement of Morrish to give it a report on the building ([122] above), and (2) the commencement of a public "Who approved the Development?" campaign (Resolution 189/12, noted as being carried unanimously - see p3 of Annexure "C" to Olsen affidavit 27 March 2013).
Morrish reported to Council, on 14 and 20 December 2012 (Exhibit R4), that the materials used "should be deemed unacceptable", that the building had "significant discrepancies", and that it was "vastly different" from what was approved. Olsen conceded that it was only after Council received Morrish's reports that his views on the project hardened (Tp504).
It should be recorded here that Morrish swore a detailed affidavit on 22 March 2013, for use in these proceedings, criticising in great detail both the design work and the affidavit evidence of Bowers. The respondents objected to its admission into evidence, but I allowed it - courts must look for "proportionate" remedies, and she proposed measures to "save" a project from compulsory demolition and "improve" its appearance (see Tp145ff, and [194] (4) below).
Her criticisms should be considered by reference to comparisons between the artist's impressions used in the DA plans, and in later marketing by Ralan, and recent photographs of the actual building (compare sheets "COM-A-000" and "-001" of Exhibit C7; Exhibit C23; Exhibit R14; and p5 of Exhibit GM1 in Morrish's affidavit 22 March 2013, against photographs at pp 4, 6, 7 of Exhibit GM1 to that affidavit).
I will not quote the whole of Morrish's affidavit, upon which she was not cross-examined, but her key points follow:
Morrish considers it very important for the Burwood Town Centre to achieve "high quality design" on the subject site (par 6.10), and goes on to analyse (pars 7-12) why the Ralan project does not do so, and to assert (par 13) that it creates a poor precedent for development in the area. She annexes (par 14) a series of photographs taken by her on 5 March 2013 (pp 4, 6 and 7 of Exhibit GM1, cited above). Detailed criticisms of Bowers' affidavit of 18 March 2013 follow (par 15).
It is her opinion that the vertical louvre panels were planned as "the dominant visual element", and their omission results in a lack of "differentiation", which exacerbates the bulk and scale of three "bland" towers. The outcome is "aesthetically ... very poor", with "very little visual relief and no sculptural qualities". It looks more commercial than residential, is "monotonous and monolithic", appears "already dated" prior to completion, and does not satisfy the design principles in SEPP 65. (See [124] above, and [238] below).
I should note at this point that, in commencing his oral closing submissions, Mr Clay placed particular emphasis on the following comments by Morrish in her affidavit (sections 7.1, 7.2, 7.6, 10.3, 10.4 - Tp820):
... There is almost no articulation or visual interest in the three towers and the architectural language is repetitive to the point of creating a vast, continuous built form with little visual relief.
...
... the proposal presents as a continuous unrelieved built form with repeating vertical window treatments of domestic character ...
The architectural expression lacks any articulation or expression of strong vertical elements. The facades appear flat and continuous and this adds to the visual bulk and monotony of the three towers ...
...
The proposal appears out-dated before it is complete and does not achieve current standards for architectural expression for apartment buildings. It does not meet the design standard of what could reasonably be expected for one of the most prominent sites in Burwood Town Centre.
...
Viewing the actual building it does not contribute positively to the public domain. To the railway it is monotonous and monolithic. To Railway Pde the glass base provides some visual relief but above this the development is again monotonous and does not achieve the quality outcomes expected.
...
... an overall appearance that it is already dated even before the project is finished. The curtain wall expression is poor in quality and appearance.
Solicitors become involved
After receiving Morrish's December 2012 reports, Council corresponded further with Ralan and Bowers, and O'Connor began writing to Dix, SNC and Ralan, on 20 December 2012 (Exhibit C6, tabs 21ff), putting Council's position very plainly. O'Connor detailed in that correspondence the alleged "inconsistencies" and "discrepancies", and nominated five "general issues" of concern to Council, with a focus on the colours used in the façade. He suggested a meeting of the key "players", but also sought undertakings that building work would cease.
O'Dwyer testified (Tp620) that his receipt of that O'Connor letter marked his first knowledge of the problems with the Burwood project.
Gough contended, in reply to O'Connor (tab 25), that the works depicted in what he called the "fraudulent" DC plans simply could not be constructed, because of substantial differences among the plans and elevations.
Because the project was being built in accordance with the CC plans, as required by the Act, whereas Council persisted in relying on the DC plans to criticise the building, Gough said that work would continue, but he was happy to meet "to explain the rationale behind the CCs ..." (tab 31). However, no meeting occurred.
Ralan purported to appoint Morgan to "replace" Dix, "the current PCA", on 11 February 2013 (Annexure "C" to the affidavit of Council's Area Building Surveyor Nelson Silva, sworn 15 March 2013).
In the absence of any cessation of work, or the giving of any undertakings, Council threatened proceedings on 23 January 2013, and commenced these civil, rather than criminal, proceedings, by summons, on 12 February 2013.
As a result of correspondence between Gough and O'Connor at the end of February and in early March 2013, an understanding was reached that Council would not pursue interlocutory relief. (See also Tp505).
The relief sought in the final form of the summons
Several amendments were made to the summons, but in its final form (the Third Further Amended Summons - "TFAS") the following relief was sought (with emphasis and sub-headings added):
...
CC1
2. A declaration that no design verification from a qualified designer was provided prior to the issue of construction certificate No. 208/10 dated 31 August 2010 ("CC1") in respect of the building at 1 Railway Parade Burwood ("the subject premises"), in breach of Clause 143A(2) the Environmental Planning and Assessment Regulation 2000.
3. A declaration that Construction Certificate No. 208/10 dated 31 August 2010 ("CC1") issued by the Second Respondent with respect to the subject premises is void and of no effect.
...
CC2
5. A declaration that no design verification from a qualified designer was provided prior to the issue of construction certificate No. 472/10 dated 23 December 2010 ("CC2") in respect of the building at 1 Railway Parade Burwood ("the subject premises"), in breach of Clause 143A(2) the Environmental Planning and Assessment Regulation 2000.
6. A declaration that Construction Certificate No.472/10 dated 23 December 2010 ("CC2") issued by the Second Respondent with respect to the subject premises is void and of no effect.
CC3
7. A declaration that the design and construction of the building at the subject premises as depicted in the plans and specifications referred to in construction certificate No. 254/11 dated 21 October 2011 ("CC3") are inconsistent with development consent No 306/05 granted on 13 November 2006 as modified, in breach of clause 145 of the Environmental Planning and Assessment Regulation 2000.
8. A declaration that no design verification from a qualified designer was provided prior to the issue of construction certificate No. 254/11 dated 21 October 2011 ("CC3") in respect of the building at 1 Railway Parade Burwood ("the subject premises"), in breach of Clause 143A(2) the Environmental Planning and Assessment Regulation 2000.
9. A declaration that Construction Certificate No. 254/11 dated 21 October 2011 ("CC3") issued by the Second Respondent with respect to the subject premises is void and of no effect.
CC4
10. A declaration that the design and construction of the building at the subject premises as depicted in the plans and specifications referred to in construction certificate No. 044/12 dated 12 March 2012 ("CC4") are inconsistent with development consent No 306/05 granted on 13 November 2006 as modified, in breach of clause 145 of the Environmental Planning and Assessment Regulation 2000.
11. A declaration that no design verification from a qualified designer was provided prior to the issue of construction certificate No. 044/12 dated 12 March 2012 ("CC4") in respect of the building at 1 Railway Parade Burwood ("the subject premises"), in breach of Clause 143A(2) the Environmental Planning and Assessment Regulation 2000.
12. A declaration that Construction Certificate No. 044/12 dated 12 March 2012 ("CC4") issued by the Second Respondent with respect to the subject premises is void and of no effect.
CC5
13. A declaration that the design and construction of the building at the subject premises as depicted in the plans and specifications referred to in construction certificate No. 109/12 dated 17 May 2012 ("CC5") are inconsistent with development consent No 306/05 granted on 13 November 2006 as modified, in breach of clause 145 of the Environmental Planning and Assessment Regulation 2000.
14. A declaration that no design verification from a qualified designer was provided prior to the issue of construction certificate No. 109/12 dated 17 May 2012 ("CC5") in respect of the building at 1 Railway Parade Burwood ("the subject premises"), in breach of Clause 143A(2) the Environmental Planning and Assessment Regulation 2000.
15. A declaration that Construction Certificate No. 109/12 dated 17 May 2012 ("CC5") issued by the Second Respondent with respect to the subject premises is void and of no effect.
CC6
16. A declaration that the design and construction of the building at the subject premises as depicted in the plans and specifications referred to in construction certificate No. 185/12 dated 8 August 2012 ("CC6") are inconsistent with development consent No 306/05 granted on 13 November 2006 as modified, in breach of clause 145 of the Environmental Planning and Assessment Regulation 2000.
17. A declaration that no design verification from a qualified designer was provided prior to the issue of construction certificate No. 185/12 dated 8 August 2012 ("CC1") [sic] in respect of the building at 1 Railway Parade Burwood ("the subject premises"), in breach of Clause 143A(2) the Environmental Planning and Assessment Regulation 2000.
18. A declaration that Construction Certificate No. 185/12 dated 8 August 2012 ("CC6") issued by the Second Respondent with respect to the subject premises is void and of no effect.
Works done
19. A declaration that the First Respondent has carried out work at the subject premises otherwise than in accordance with Development Consent No 306/05 granted on 13 November 2006 as modified in breach of s76A Environmental Planning and Assessment Act.
20. Further, or in the alternative, a declaration that the First Respondent has carried out work at the subject premises otherwise than in accordance with CC1, CC2, CC3, CC4, CC5, and/or CC6 in breach of s76A Environmental Planning and Assessment Act.
21. A declaration that the First Respondent commenced the erection of the buildings at the subject premises without a construction certificate for the building work having been issued by an accredited certifier in breach of s81A(2)(a) Environmental Planning and Assessment Act.
Restraining Orders against the First and Third Respondents?
22. An order that the First Respondent be restrained from applying for an Occupation Certificate (being a certificate referred to in s109C(1)(c) of the Environmental Planning & Assessment Act) with respect to the subject premises.
23. An order that the Third Respondent be restrained from issuing an Occupation Certificate (being a certificate referred to in s109C(1)(c) of the Environmental Planning & Assessment Act) with respect to the subject premises.
24. An order that the First Respondent be forthwith restrained from carrying out any further work otherwise than in accordance with the Development Consent as modified from time to time.
Occupation Certificates
25. A declaration that the Occupation Certificate issued by the third respondent on 19 February 2013 with respect to the subject premises, is void and of no effect.
26. A declaration that the Occupation Certificate issued by the third respondent on 15 March 2013 with respect to the subject premises, is void and of no effect.
27. An order restraining the first respondent from occupying or using the subject premises unless and until an Occupation Certificate is issued in accordance with the provisions of Part 4A of the Environmental Planning and Assessment Act.
Third Respondent
28. A declaration that the purported appointment of the third respondent on 26 March 2013 as Principal Certifying Authority in respect of building work involved in the development the subject of development consent No 306/05 granted on 13 November 2006 as modified, under s 109E of the Environmental Planning and Assessment Act 1979, is void and of no effect.
Remedy?
29. An order that the First Respondent demolish or otherwise rectify any work carried out in breach of the Environmental Planning and Assessment Act.
30. Costs.
31. Such further or other orders as the case may require.
Council later modified its claims from those made in this TFAS. I will return shortly to point out ([201] - [202]) which of the above prayers for relief have not been pressed. I will also set out later ([230] - [235]) the relevant provisions of the EPA Act, and of the Environmental Planning and Assessment Regulation 2000 ("the Regulation"), to which the TFAS refers.
Morgan issues Interim Occupation Certificates after the Summons was filed
On 19 February 2013, Morgan issued an IOC for Tower A and associated car parking (IOC 015/13, Exhibit C11, fols 1-231).
On that date he was also joined in these proceedings. His appointment was challenged, and the proceedings were expedited.
On 15 March 2013, Morgan issued a second IOC, in respect of the residential component of Tower B (IOC 024/13, Exhibit C12, fols 1-73). In his affidavit (sworn 14 May 2013) he indicated some of his activities since issuing those two IOCs, he being now aware that the strata plan and encroachment issues have been resolved, but that other relevant issues remain before the court.
Silva expresses in his affidavit evidence his expert opinion that neither IOC should have been issued, as the building, at each relevant date, was "not suitable for occupation in terms of s 109H(4)(b)" of the EPA Act, "would constitute a hazard to the health or safety of the occupants..., and there was no proper access..." (affidavit 15 March 2013, pars 11-12, and affidavit 21 March 2013, pars 10-11). He listed on each occasion the grounds upon which he relies, and exhibited many photographs he took on 14 February, 26 February, 11 March and 18 March (folios 232-274 of Exhibit C11, and fols 74-91 of Exhibit C12).
Caution must be exercised in relying upon, or in disregarding, such dicta, and it would be extremely unwise for a trial judge in this court to dismiss, without careful consideration, any views expressed by so eminent a jurist as Hodgson JA.
As Pepper J noted in Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38; (2013) 195 LGERA 229 (at [279]):
It has long been the case that the weight accorded to obiter dicta will vary depending on the circumstances in which the remarks are made. Considered dicta of an appellate court, although not strictly binding on courts of a lower position within the judicial hierarchy, must be afforded considerable weight and should only be departed from with caution (Ying v Song [2009] NSWSC 1344 at [19]-[21] per Ward J).
Hodgson JA, in the relevant section of his judgment, quoted (at [50]) from Spigelman CJ's judgment in Smith v Wyong Shire Council("Smith") (2003) 132 LGERA 148, regarding "indicators of legislative intention that the breach of a provision ... should or should not result in invalidity".
The disciplinary regime administered by the BPB was seen by Hodgson JA as an appropriate response to a failure by the certifier, as distinct from a fault in the certificate. His Honour concluded ([54]) that it was not the legislative intention of Part 4A that a breach of s 109E would always or automatically result in invalidity of the certificate. Disciplinary consequences or a civil action for damages could result from, e.g., unauthorised delegation of functions, but the s 109E certificate in that case could stand.
Hodgson JA said (at [57], emphasis added):
In my opinion, a crucial consideration is the form of s 109J, as compared with that of s 109E(3). The former sets out a number of things that must happen before a subdivision certificate is issued. Since the 2007 amendment, these things must happen in fact, not merely to the satisfaction of the principal certifying authority. The fact that in 2007 the Legislature made that change to s 109J and not to s 109E(3) confirms, in my opinion, that the intention was that the requirements of s 109J be conditions of validity, whereas satisfaction of the principal certifying authority under s 109E(3) was not.
His Honour concluded this point (at [60]) thus:
Accordingly, had I considered s 109E(3)(d) to have been breached, I would not in any event have found invalidity.
Counsel have not demonstrated to this court that Hodgson JA was "plainly wrong", especially in [57], in the light of any binding or more persuasive authority, and Mr Clay observed (Tp829, L15-830, L12), that these were "considered dicta", and that Tobias JA, "a judge well experienced in planning matters agreed ... without qualification". Pain J appeared to accept Hodgson JA's analysis, and I too am very comfortable to do so on the certificate question.
Although the question of discretion also did not arise in Smith, Hodgson JA expressed his views on it ([62]-[71]), finding that Lloyd J's inadequate reasoning indicated that he may not have taken into account some highly relevant matters of cost and safety risk.
In Friends of Turramurra Inc v Minister for Planning ("Turramurra") [2011] NSWLEC 128, Craig J, in declaring that a particular LEP was made contrary to Division 4 of Part 3 of the EPA Act, and was of no legal force or effect, made the following remarks ([58] - emphasis added):
58 It is now settled legal principle that not every act of an administrative decision maker, when breaching an empowering statutory provision, will visit invalidity upon that act. As has been acknowledged (Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 148 per Spigelman CJ at [6]), the principle is settled by the majority judgment of the High Court in Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 as articulated at [91]:
"An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue."
Craig J concluded ([66]) that, on the proper construction of Div 4 of Pt 3, and in reliance on the principles in Smith v Wyong and Project Blue Sky, it was not a legislative purpose to invalidate a local environmental plan where no valid s 65 certificate had been issued, but the plan had been made conformably with the provisions of that Division.
His Honour continued (in [69]-[71] - emphasis added):
69 In arriving at the conclusion that he did in Smith v Wyong , Spigelman CJ applied the observations of McHugh JA (as his Honour then was) in Woods v Bates (1986) 7 NSWLR 560. The reasoning in the latter case was approved by the High Court in Project Blue Sky. In Woods v Bates, McHugh JA said (at 567):
"In recent times the courts have shown great reluctance to invalidate an act done pursuant to a statutory provision because of the failure to comply with an antecedent condition: [citation of authority omitted]. Speaking generally, I think that, at the present time, the proper approach is to regard a statutory requirement, expressed in positive language, as directory unless the purpose of the provision can only be achieved by invalidating the result of any departure from it, irrespective of the circumstances or resulting injustice: cf Hatton v Beaumont [1977] 2 NSWLR 211 at 226 per Mahoney JA."
70 Applying the observations made in Woods v Bates , it is appropriate to ask, "can the purpose of s 65 only be achieved by invalidating the result of the departure from it?" In my opinion, the answer is "no".
71 It is for these reasons I discern no legislative purpose in the EPA Act to invalidate a local environmental plan, otherwise lawfully made, by reason of failure on the part of the Director-General (or his or her delegate) to have issued a certificate under s 65. As the consequences (if any) of the failure to issue the certificate must necessarily be addressed as part of the statutory process of which s 65 is an earlier component, it cannot have been the intention of Parliament that such breach would have all the adverse and potentially serious consequences sounding in a determination that the local environmental plan is invalid (cf Smith v Wyong at [26] - [29]).
The challenge to any Part 4A certificate must confront the provisions in s 109P, which creates an entitlement to assume its validity, such that one does not "go behind" the certificate, which, in the case of a CC, must predate the commencement of work if it is to have effect (ss 109E and 109F, amended to overturn the effect of Marvan Properties v Randwick City Council [2005] NSWLEC 9). Without a CC, a proponent cannot obtain an OC, occupy the project, or obtain and register a strata certificate.
All three of those steps were, at the time of the hearing, not, but have since been, completed in the present case (see [101]-[107] above).
The certificate challenged in Cessnock City Council v Laila("Laila") [2012] NSWLEC 206 was an OC, and the respondent PCA filed a submitting appearance, so there was no contradictor to resist a declaration of invalidity involving s 109H. Pain J noted that there was no case where this court had to consider declaring an OC invalid. She also noted the different terminology in Part 4A, but applied the principles stated by Hodgson JA in Northern Residential. As distinct from the Court of Appeal's decision in that case that there was no breach of either s 109E or s 109J, and despite the absence of a contradictor in Laila, Pain J noted an undertaking given, and made the declaration sought that the OC was invalid, but she saw no utility in making an order restraining occupation.
Dix was the PCA in the case of Kogarah City Council v Armstrong Alliance Pty Ltd (No 2) ("Armstrong") [2013] NSWLEC 32. All parties agreed on the making of both a declaration of invalidity of a CC, and costs orders against both respondents, including Dix, so there was no fulsome argument of the relevant question which is now squarely raised in the present case.
Pepper J introduced her judgment in Armstrong with the following comments:
1. Once again before the Court is an application for declaratory relief sought by a council occasioned by the unlawful certification by an accredited certifier of a development that is markedly different to the approval granted by that council. Regrettably this is becoming an all too common occurrence in this Court. It must not be tolerated. It brings the certification system into disrepute and undermines the planning regime in this State.
2. Indeed, the unlawful conduct by the certifier in the present case is so egregious that the application has been able to be resolved by consent between the parties. This includes the certifier agreeing to a costs order against him notwithstanding that he has filed a submitting appearance.
Her Honour accepted evidence that showed "significant inconsistencies" in that case, as between what was certified and constructed, and what had been approved. They included construction of an additional unit, storey, outdoor terrace and elevator shaft. Breaches of the EPA Act were admitted, and Her Honour found that Regulation 145(1)(a) "was flagrantly transgressed by Dix". She found utility in, and a "very real necessity" for, her declaring the CC invalid, by consent. Again there was an undertaking to cease construction work pending a new CC and a building certificate.
The 2009 DC at the heart of Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5)("Foxman") [2013] NSWLEC 68, which was a class 4 civil enforcement proceeding regarding landfill and earthworks, included the usual condition that work not commence "prior to the issue of" a CC by the PCA, and other conditions precedent to either the CC or works.
Before any CC was issued in Foxman, Council forwarded two Notices of Intention to Serve an Order for restoration of land to its pre-works state. The PCA later issued a CC "after the event", clearly contrary to s 109F(1A), and Pepper J found it (at [63]) to be void and of no effect, and (at [288](b)) of "scant reassurance" to the parties.
Council sought no orders against the PCA in Foxman, and the PCA played no active role in those proceedings, but there was evidence before Her Honour of roads/fire trails being relocated by the CC plans, agreed (see [263](g)) to constitute a breach of s 76A(1)(a) of the EPA Act. Her Honour set aside the CC.
Turning to the present case, clearly cl 145 of the Regulation plays a key role in determining the validity of the CCs.
In its original form, cl 145 provided that a PCA must not issue a CC unless satisfied of various matters, but, after the Court of Appeal's decision in Lesnewski v Mosman Municipal Council [2005] NSWCA 99;(2005) 138 LGERA 207, it was amended to remove its subjective element (see the terms of the amended clause, as quoted in [233] above).
It has since relevantly provided that the PCA must not issue a CC unless (cl 145(1)(a) - emphasis added):
the design and construction of the building (as depicted in the plans and specifications and as described in any other information furnished to the certifying authority under clause 140) are not inconsistent with the development consent
I set out the relevant principles of construction in my first-instance judgment in Abret Pty Limited v Wingecarribee Shire Council [2009] NSWLEC 132, at [24]-[32], and that summary was not disturbed on appeal ([2011] NSWCA 107; 180 LGERA 343). Essentially, courts must construe instruments, with commonsense, to avoid irrationality, absurdity, and injustice, and to give practical effect to the clear intent of the draftsperson.
Mr Clay argued in the present case, but failed to satisfy the court, that there were faults in the furnishing of documents to the PCA. Even if that were so, and it has not been established, I would likely consider such a "breach" to be "technical" in nature, in the overall circumstances of this case, and not sufficient to warrant a finding of invalidity.
Relying, by way of analogy, on Hodgson JA's dictum in Northern Residential ([57]), and also on views expressed in departmental circular PS07-009 (Exhibit C26), Mr Clay also submitted (pars 27-34) that (1) the question of "not inconsistent" makes cl 145 "now unequivocally jurisdictional", such that (par 37) a finding of inconsistency leads to invalidity, and (2) this court should follow Armstrong and Laila, and find and declare invalidity.
In Laila, the grounds for invalidity of the OC were failure to satisfy some essential and mandatory conditions of the DC. In Armstrong, the relief was based on a number of "inconsistencies", which, on any test, were major, and included the certification of an additional unit, storey and terrace. In Foxman, the parties agreed that some changes made by the CC amounted to "inconsistency". In the present case, the principal changes to which objection has been taken were to elements of finish.
Relief is sought on the grounds that some, if not all, of those changes/variations which were
(1) admittedly made, by or on behalf of Ralan, to the project as it was defined by the DC; and
(2) certified by Dix, on the application of Bowers on behalf of SNC and Ralan,
amount to "inconsistencies" which breach cl 145, and lead to a breach of s 76A.
On any measure, this has been a huge development on a confined site, in difficult circumstances. A certain amount of adjustment or reconfiguration was inevitable, and the court, while respecting Byrnes's analysis of the changes made, accepts the explanations provided by Bowers, and also his assurance that he at no stage deliberately ignored the question of whether his changes might, in some cases, warrant the making of a modification application.
Some adequately explained adjustment in the colour of some glazing, and the decision to abandon the proposed louvres, which Council now says (Tp835, L17) were "a major and important design feature", resulted in changes in final presentation which proved unacceptable to Council, and to its design expert, Morrish.
As I have already noted, reasonable minds differ on such merits issues, and I certainly express no view on them.
However, I do echo the concern expressed by Pepper J in Armstrong ([312] above): Private certifiers play a vital role in ensuring appropriate (including "consistent") development takes place, and the certification system must not fall into disrepute and so undermine the planning regime in this State. What might be seen as unacceptable by some, including regulators and expert commentators, as here, may not represent a breach of the certifier's duty, and/or any infringement of the planning regime.
What matters to the court is that all the fundamentals of the project, as defined in the DC ([14] and [38] above), remained in place after certification.
I have concluded that they clearly do, and that the challenged CCs are valid.
Those engaged by and on behalf of Ralan to complete the project were entitled to rely on them, and there is absolutely no evidence that they strayed beyond them. The evidence suggests, on the contrary (Tp780), that the building works were performed to a satisfactory standard.
In those circumstances, I conclude that (1) none of the nine declarations finally sought, in respect of the CCs, and (2) neither of the declarations, and none of the orders finally sought, against Ralan, ought be made.
Conclusions, including on discretion and utility
Council was an appropriate applicant for the relief sought. Its principal remaining concern in the case was the appearance of the finished project, and it wanted the court to order remedial works, likely to cost about $12M.
Ralan has put in place arrangements which mean that such works could be completed, despite some likely interference with the occupants of the finished project. Ralan's "controlling mind" has personally guaranteed that any orders made requiring such works will be complied with.
Declarations and orders of the types sought cannot be made in the absence of proven breach(es) of the planning law, which can be sheeted home to Ralan, no matter what the court might think of the aesthetics of the final building. Ralan denies any wrong-doing in the execution of the development.
As becomes clear from all I have written, I find no breach of the law. The changes made by the CCs, to the project as originally approved, do not make it inconsistent with the approval, so the CCs are not invalid, or void and of no effect.
Accordingly, Ralan and its delegates were not only entitled to abide by those CCs; they were obliged to do so.
No orders are sought against the certifier Dix, and, while any breach of statutory duty by him in carrying out his task as PCA for the project may be a matter for the disciplinary body, or some civil action, it does not amount to a breach of the planning and development regime governing the construction of Ralan's project.
Having decided that Council has failed to establish its entitlement to any of the relief it sought, there has been no need for the court to further consider the fourth question arising, namely the question of the utility of making the declarations sought, but I would have applied the Chief Judge's analysis and decision in the 2007 case of Lani, to which I have earlier referred (see [205] and [260] above), which reinforces the principle that ([17]) "declarations should be made for both procedural and substantive reasons", where ([18]) "a public pronouncement" of breach is called for. (See also [21]-[25] of His Honour's judgment).
Given all that has transpired since the main submissions were made, I am not convinced there would have been, on His Honour's principles, any utility in making the declarations sought regarding the CCs, had I found them invalid.
Much of the evidence I heard over the many days of hearing was relevant to consideration of questions of discretion, but that issue now also does not arise.
There was a fair amount of criticism, in particular, of Council's delay in bringing these proceedings (see APOD par 55(v), quoted in [214] above), but also of (1) its late campaign against the almost-finished project, (2) the alleged inequity of its bringing the case when Ralan was at its most vulnerable, after Bowers had regularly consulted Council and, at least temporarily, allayed its emerging concerns, and (3) the fact that the victims of Council's success in the case would, primarily, be innocent parties, especially Ralan's purchasers.
Council's response to the respondents' evidence and submissions on discretion was relatively weak, and I believe that, had it been necessary to decide it, I would have exercised my discretion against granting relief.
Costs
The Council failed in its ever-shifting case against Ralan, and essentially abandoned its pursuit - at least in these proceedings - of Dix and Morgan.
In those circumstances, it should normally be expected to follow that Council be ordered to pay the costs of all three respondents. I will, however, allow some time for all parties to consider their positions on costs.
H: Orders
The orders of the court will be:
(1) Council's Third Further Amended Summons is dismissed.
(2) All exhibits are returned.
(3) The Council is ordered to pay the costs of all three respondents on a party-party basis, as agreed or assessed, unless within 21 days any one or more of the parties file(s) motion(s) seeking different costs orders.
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Decision last updated: 16 October 2013
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