Burwood Council v Ralan Burwood Pty Ltd & Ors

[2015] HCATrans 157

[2015] HCATrans 157

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S309 of 2014

B e t w e e n -

BURWOOD COUNCIL ABN 843 621 144 28

Applicant

and

RALAN BURWOOD PTY LTD

First Respondent

LYALL DIX

Second Respondent

JOHN MORGAN

Third Respondent

WILLIAM PETER O’DWYER

Fourth Respondent

THE OWNERS – STRATA PLAN NO. 88309

Fifth Respondent

Application for special leave to appeal

GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 JUNE 2015, AT 1.06 PM

Copyright in the High Court of Australia

____________________

MR T.S. HALE, SC:   If the Court pleases, I appear with my learned friend, MR S.B. NASH, for the applicant.  (instructed by Houston Dearn O’Connor Solicitors)

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friends, MR J.T. JOHNSON and MS E. BATHURST, for the first respondent.  (instructed by Storey & Gough Solicitors)

GAGELER J:   Yes, Mr Hale.

MR HALE:   Your Honours, in New South Wales the lawful erection of a building generally requires two things:  firstly, a development consent granted by a public authority such as a council or Minister or the Land and Environment Court, and, secondly, a construction certificate concerning the detail of the improved building which may be issued by a private certifier contracted by the developer. 

As your Honours will have seen, section 80(12) of the Environmental Planning and Assessment Act provides that the plans and specifications, the subject of the construction certificate, are taken to form part of that development consent.  The questions of public importance concern the relationship between the development consent on the one hand and the construction certificate when the construction certificate plans and specifications are inconsistent with the development consent. 

GAGELER J:   Your core question is about the validity of the construction certificate in circumstances where there is an objective inconsistency.

MR HALE:   There are, in fact, two because the two matters operate together.  If your Honours, for example, go to the provisions which are at – your Honour will see section 76A at page 225 of the application book.  Your Honours will see in 76A(1) the requirement that the development must be carried out “in accordance with the consent” - therefore, what is the consent – and subsection (12) deals with the construction certificate is “taken to form part”. 

Now, if the development consent is that which is issued then – and there is non‑compliance with that even though it might, to some degree, be authorised by the construction certificate, we would nonetheless submit that there has been a breach of section 76A.  Thus, one of the questions quite apart from the question of validity of the construction certificate is how those two operate together, going back to Project Blue Sky where the majority held that there was no invalidity but, nonetheless, a declaration of breach. 

In this particular circumstance we would contend that even if not invalid, nonetheless for the purposes of section 80(12) the development consent would nonetheless have to be complied with and we would also contend that, therefore, there needs to be – there would otherwise be a breach of 76A. 

The second question, the question of invalidity relates to that very same question because if the construction certificate is invalid, that is to say, it has been issued contrary to the prohibitions of must not, then we do not even get to the question of any inconsistency.  So, our first proposition is the application of section 80(12) if indeed there is an inconsistency and whether, as the Court of Appeal found, the construction certificate prevails over the development consent and thereby, in effect, modifies and the second question is whether a non‑compliance with the prohibition amounts to invalidity.

We make the point that if, on the first question, an inconsistent construction certificate can, in effect, modify then it means that there cannot – one cannot compel compliance with the original development consent.

GAGELER J:   This is the point.  You now put it first but it was dealt with second, I think, by the Court of Appeal.

MR HALE:   That is the way they dealt with it, yes.

GAGELER J:   Yes, as a matter of construction of section 80(12).

MR HALE:   Yes, both points having been raised and both ‑ ‑ ‑

GAGELER J:   No, I follow that.  So what is wrong with the reasoning of the Court of Appeal at page 200 on this point?

MR HALE:   The error is, we say, that the conclusion is the later - that is to say the construction certificate prevails over the development consent.  We say on a proper construction that would not arise because firstly we would contend that on a proper construction of section 80(12) it was not contemplated that there would be any inconsistency or conflict. 

That, one can gather, firstly, from the fact that it does not envisage in its terms any such conflict; secondly, section 109F(1), we contemplated that there would be restrictions on the issue of construction certificates under the section – “must not issue” - and that the regulations would regulate construction certificates so there would be harmony between the development consent such that there would be no conflict. 

That was the point that we contend of “must not” issue because we contend that it is highly unlikely that the legislative intention was that a certificate of a private certifier looking at the building and engineering design issues, the more confined issues relating to the specifications of the building and not looking at the broader town planning issues, the external impacts of the building, would prevail, that is to say, the private certifier would somehow prevail over the grant of development consent by the public body – here, the Land and Environment Court because - as we make the point in our summary of argument - of the very detailed provisions that are contained in the Act to deal with the grant of development consent - consultation with government, there needs to be public notification, there needs to be also a form of procedural fairness as a result of that, that is to say, notification to members of the public to make submissions that need to be taken into consideration and also a series of mandated matters under section 79C like the impact on the development in the locality, the design qualities and all of those matters which are ‑ ‑ ‑

KEANE J:   These considerations were not lost on the Court of Appeal.  They are all adverted to by Justice Sackville.  One appreciates the force of what you are saying because it does seem odd to suggest that the construction certificate could trump the decision of the consenting authority made after a consultative process but these considerations were all addressed.

MR HALE:   They were all addressed but again that is a matter of the court’s approach to construction.  But what the court did - and this comes back to one of the issues of the approach to Project Blue Sky - what his Honour did, amongst other things, is concentrating on a number of the principles that were advanced, at least determined in Project Blue Sky in a somewhat different statutory context where the emphasis was on the manner in which the functions of the body were carried out as distinct from what might be said matters going to questions of jurisdiction. 

Therefore, when one looks at Project Blue Sky looking at the – moving away from the old mandatory directory, obviously in those circumstances, very difficult, but the reference to, for example, the public inconvenience, the primary judge or at least Justice Sackville relied upon, but one questions the extent to which that has application or primary application in dealing with questions of jurisdiction. 

So what we say is it is too strong an adherence to those principles in Project Blue Sky in a different statutory context compared here where we would say the primary question had to be one of jurisdiction - must not the prohibition when one comes to determine the statutory – the legislative intention.  Those, we would say, would be regarded as words going to power rather than simply the exercise of – the manner of exercise of that power. 

So, ultimately, what we come to in our submission is the failure to look firstly - this is on the second point of invalidity, of whether or not there was power to issue the construction certificate because it must follow if there was not power, if the condition of exercise of power had not been fulfilled, it must follow as a matter of course that the grant of the construction certificates were invalid, which is perhaps the approach that the Chief Justice, Justice Brennan, concentrated upon in his judgment in Project Blue Sky.

But at the end of the day, it comes down to a matter of statutory construction and applying established principles in a way as which Justice Keane observed, it does seem very odd that a private certifier whose obligation is both to his client and also the exercise of public function can override the consent of the public body in circumstances where the certifier is not directing attention to those broader considerations under section 79C or the procedural fairness question, is just looking at a very narrow issue of the building to be constructed now that there has been a development consent.

GAGELER J:   Justice Sackville makes a couple of quite strong points at page 190 of the application book.  One is in paragraph 171 dealing with the existence of a legislative regime and, indeed, a very limited time period within that legislative regime for the challenging of a development consent in the absence of any similar constraint on challenging a construction certificate if it is invalid on the ground that you argue.  How do you respond to that?

MR HALE:   We respond to the matter in two ways, in particular.  The first is that the broader development consent, the planning permission, is the primary document and that will identify the general manner in planning senses, how the development will proceed.  That is the important one.  So far as the construction certificate goes, as I have already mentioned, it is a matter of more minor detail. 

Therefore, even if the construction certificate were invalid one still has all the rights and the development consent.  One just needs either to get a building certificate or one can lodge another construction certificate and so forth.  It emphasises the minor detail or the detail in the construction certificate as compared with the broad consent. 

The second is the quite strict requirements that Justice Sackville referred to which suggested to him perhaps the words did not mean what they say, we say were deliberate and are reflective of the fact that for the first time a private certifier is given the opportunity for efficiency to exercise a public function in circumstances where that certifier is engaged by the developer and, therefore, the legislature intends that the powers be exercised very strictly and there should not be the impediment upon challenge, particularly having regard to the circumstances.

There is an obvious potential conflict that a certifier has between, on the one hand, his exercise of the public function and the duty, and on the other hand, the obvious commercial desire to please the client and repeat business.  That is why such a tightly controlled approach is adopted under the legislation. 

But looking at more broadly - and your Honours have seen our emphasis on the very different roles of the development consent compared with the construction certificate - and that carries through, amongst other things, to modification because what is happening here is the certifier is, in effect, modifying the consent granted by, here, the court. 

Where you look, for example, at section 96 of the Environmental Planning and Assessment Act which deals with – which should be in the bundles, the bundle of legislation, I think it is quite separate - section 96 - your Honours will see the modification of consents.  Do your Honours have that?  I think it might have been separate.

GAGELER J:   We have it.  Do you have a page number?  There are page numbers at the bottom right‑hand corner.

MR HALE:   I am sorry, mine does not.  I think it might have been handed up separately, a separate of three pages. 

KEANE J:   This is all we have.

MR HALE:   We thought it was being added.  If I might summarise, there are very detailed provisions under section 96 as to how a development consent might be modified involving again public notification, involving consultation in particular circumstances and again requiring section 79C considerations to be taken into account.

KEANE J:   Does Justice Sackville refer to section 96?

MR HALE:   He does.  He refers to it in passing.  I will see if my learned junior can pick that ‑ ‑ ‑

KEANE J:   At page 179 – paragraph 179, I am sorry.

MR HALE:   Yes.  Now, your Honours, what we submit is – again, what I mentioned earlier about on the second question invalidity, questions  of power, if beyond power then that must of itself lead to invalidity.  We make the point in our submissions having - your Honours, I think, have seen the differences in the building between that approved and that which in fact has been built.

GAGELER J:   You mean pictorially?

MR HALE:   Pictorially, yes - quite dramatic as they are.  We submit that the issues of public importance are firstly as we identify a major industry, 50 to 60,000 construction certificates issued each year and an increasing proportion of private certifiers.  The existing system has operated for 17 years since 1998, minor differences, but it has been operated in accordance with the propositions that we have advanced and consistent with, we would say, Northern Residential, the Court of Appeal’s determination which was referred to in relation to subdivisions. 

We refer to the fact of the application of principles in Project Blue Sky to a different set of circumstances, here where there is a question of power.  We make the point that these proceedings do not just involve a private dispute.  The very public nature of the building and the impact, all of which were to be determined by the Land and Environment Court in order to resolve potential impact from those outside the building, and your Honours seeing the significant difference, the public impact of a non‑compliance importance of non‑compliance with the development consent granted by the Land and Environment Court after consideration.

Also the question arises, even though this is limited, these proceedings only address section 109F in terms of “must not” and clause 145.  We draw attention to the fact that there are many other

certificates under Part 4 of the Environmental Planning and Assessment Act where there are the same prohibitions - must not, the issued “must not” issue, for example, in relation to subdivision certificates and other compliance certificates. 

What is the present consequence in relation to those given the determination of the Court of Appeal - all of which, we would say, the intention of the legislation is geared towards the public interest and resolving matters of public importance rather than the particular private interests, if I might call it that, which seem to have paramountcy in the approach of the Court of Appeal.

GAGELER J:   Thank you, Mr Hale. 

MR HALE:   Your Honours, sorry to interrupt, page 73 of the application book is section 96.

GAGELER J:   Thank you. 

MR HALE:   It is only in part, sorry.

GAGELER J:   Thank you, Mr Hale.  Mr Walker.

MR WALKER:   May it please the Court.  Your Honours, first of all we submit there is not the slightest part of the Court of Appeal’s enunciation of the principles by which they regarded themselves as bound and which they set out to apply that my learned friend has identified as having been misstated.  Second, therefore, the case presents as one of applying to a particular statutory regime well‑understood principles.  Third, there are, to adopt the language of Justice Gageler, powerful reasons to be found in Justice Sackville’s exposition and, in particular, may I add by way of drawing attention to those which you will see touched on under the heading “Fourthly” on page 191, 192 in paragraphs 174 and following. 

GAGELER J:   This is the consequentialist argument?  I am not denigrating it any way.

MR WALKER:   In one sense it is consequentialist because it says if this is the kind of rule about this kind of activity which brings invalidity upon what I am going to call judicial disagreement with the original exercise then there are going to be lots of arguments about matters concerning which reasonable minds might differ.  I have in mind, in particular, the quote from Chief Justice Spigelman at the top of page 192, the “inherently contestable” judgments. 

Now, I do not mean that there cannot be clear cases that something is inconsistent.  It is therefore not “not inconsistent”, as the regulation requires a construction certificate to be as between the plans and specifications thus approved compared with those in relation to the development consent.  Of course, there will be clear cases.  But it is, par excellence, an area where, particularly with large scale, as his Honour points out at the top of page 192, there is room for argument. 

This relates to what I will call an unsuitable vehicle argument I have as well.  In this very case, notwithstanding the blandishment my friend extends to your Honours today to be struck by the photographic depictions, in this very case, as is recorded in the reasons of the Court of Appeal, notwithstanding all the time and detail that was there available and the even greater time and detail that had been expended at trial, it was accepted that it would have to be remitted.  It is not something the Court of Appeal could do and certainly not something that this Court could do. 

That, of course, leads to the obvious proposition then why is it here in relation to validity when the anterior question, is there a failure to comply with the statutory requirements for the issue of a construction certificate, your Honours will recall, as set out in the Court of Appeal, that this is what I will call argument on an assumed basis, demurrer style. 

GAGELER J:   We do that all the time.

MR WALKER:   I was going to suggest and that is a form of conduct which below this Court leads notoriously to difficulties for this Court.  In particular, in considering the grant of special leave, this Court would know in this case that whatever it said about the validity of the certificate would not determine the issue because the certificate may not be invalid.  It would have to – it would restore the judgment of the Court of Appeal – sorry, it would reverse the judgment of the Court of Appeal and the alternative adopted, indeed urged, by our learned friends below in the Court of Appeal was you will need to determine the inconsistency. 

Now, it suited us, frankly, given the outcome of the Court of Appeal, to proceed on an assumed basis, even assuming it was in breach.  There should be no relief.  It can be an end to the litigation by the finding in relation to Project Blue Sky.  That is why I am not criticising what happened below but I am pointing out that it makes it a most unlikely and unsuitable vehicle for special leave. 

In our submission, the collection of reasons that Justice Sackville has assembled for why, in a totally orthodox application of Project Blue Sky, there would not be the invalidity, can be summarised as including particular, the following cardinal points.  There were both disciplinary and possibly criminal sanctions for a certifier who went wrong.  The repeated reference to what might be called a “conflict point” or “private interest” ought to be exposed for what it is, that is an excess speculation. 

There is no more reason to construe this provision as if there is a kind of corrupt bias on the part of private certifiers than there is to suggest that a solicitor has a duty to his or her client favourably to certify the reasonable basis of proposed litigation.  It is a professional certifying governed by statute, disciplined if deflected from the proper path. 

The next point, of course, is that under section 80(12) the construction certificate becomes part of the publicly registered documents upon which the relevant world relies.  There is, to use the jargon, an in rem quality to a development consent of which a construction certificate becomes part.  It becomes part for all manner of provisions, including section 101, extremely tight limit on the time for challenging the validity of a development consent.  Why would that not that, it does, obviously extend also to construction certificate?

Couple that, of course, with another of the powerful points made by Justice Sackville, couple that with what one finds in section 109F(1A) to which attention has been drawn where there is specific parliamentary reference to a circumstance in which to quote - “a construction certificate has no effect” - in other words, dealing with the very question which Project Blue Sky tells us as to the manner to deal with it when Parliament has not been explicit but Parliament has been explicit and it is a timing question.

Now, that is quite evocative because that it suggests that if you have the certificate and then start building, which is the desired order, then for all the reasons that Justice Sackville has pointed out there becomes a mounting set of reasons why the idea of making that criminal conduct - building in contravention of a development consent is criminal, not simply exposing you to civil remedy, when it is, of course, in an area of inherently contestable judgment. 

That brings me to the final point I want to make which is a matter about the particular case and, therefore, vehicle.  No doubt by reason of that very kind of circumstance, your Honours will recall the following factors.  There was the procedural hiccup in the Court of Appeal in order properly to constitute the proceedings so that all the manifold affected parties could be joined.  That is the first thing.  They became more numerous with time as the building was completed, certified for occupation, commercially disposed of and occupied and used to this day. 

An argument recognised by Justice Sheahan at first instance, not dealt with by him because it was unnecessary given the way he had approached the case and of course not within the grasp of the issues before the Court of Appeal and nowhere near this Court, are two which are critical to whether, in the interests of justice, special leave is necessary. 

If there were invalidity, there was an argument at first instance that this was not a case where the, what might be called salutary effect of a declaration would be appropriate, if a declaration were the only relief in question, and so Justice Sheahan suggests.  Even more importantly, in terms of injunctive relief, which, as your Honours appreciate, would affect many, many people, not just the developer, his Honour made it clear that he was distinctly unimpressed, regarded it as a very weak answer indeed by the applicant for relief to the arguments that were presented and did not require finally to be determined at first instance to the effect that there had been delay, including dealings between the Council and the developer, of a kind which would disentitle by familiar equitable considerations the applicant to an injunction.

Now, in our submission, your Honours, that means that the point which is suggested for special leave, which is nothing other than – no more than a single instance of applying Project Blue Sky, is one which can be seen to be highly likely to be moot in any event and would not lead to the alteration of the legal relations between the parties, would not produce anything which, in our submission, calls for the further administration of justice in this case.  May it please the Court.

GAGELER J:   Mr Hale, we do not need to hear you on the suitability of this case as a vehicle.  Otherwise, if there is something you want to say on the merits of your application.

MR HALE:   Yes, if I could raise a number of matters.  Firstly, the contestable judgment to which my learned friend referred, as might often be the case when a jurisdictional fact is concerned, there needs to be a weighing of facts in order to determine whether, in fact, the jurisdiction is engaged.  Here, all we are dealing with, on the one hand, a broad set of plans, a bigger plan, and detail in an enduring plan.  It is just a matter of comparing one with the other and to say is one in conflict with the other.  Are they harmonious?  Is it possible to comply with both?  We would contend that there is nothing in the approach to construction which would suggest that that would lead otherwise than invalidity. 

So far as the end to litigation is concerned as a matter of public interest we, of course, again refer to the various other matters of public interest including the continued existence of the building in the form that it is contrary to that which has been approved.  Reference is made to

disciplinary proceedings.  True it is the certifier could be disciplined but firstly how does that sit with the overall public interest with the broader provisions of the Environmental Planning and Assessment Act and the need for proper planning. 

Also, it has to be remembered that, as we make reference to in our submissions, under the scheme the private certifier has to be insured.  To the extent that the particular developer might suffer loss as a result of the wrongful act, as it were, of the certifier there is that recompense which is an intrinsic aspect of the certification. 

So far as 109F(1A) is concerned, referred to at page 189 of the application book, Justice Sackville does refer to the fact that that provision came later in response to a particular problem but we would submit the lack of such an amendment to the balance of the section does not suggest “must not issue” means anything other than it is a condition of power.  In regard to the matter of the suitable vehicle, I do not know that I need to address ‑ ‑ ‑

GAGELER J:   We said we did not need to hear the suitability ‑ ‑ ‑

MR HALE:   No, I was not quite certain what came within that.  I was thinking the discretion argument, for example, it is quite clear that the primary judge made no relevant findings of fact.

GAGELER J:   Thank you, Mr Hale.

The decision of the Court of Appeal turned on the application of established principles of statutory construction to a complex statutory scheme unique to New South Wales.  Notwithstanding the arguments carefully advanced on behalf of the applicant by Mr Hale, we are not persuaded that the decision is attended by sufficient doubt to warrant the grant of special leave to appeal.  Special leave will, therefore, be refused with costs.

AT 1.42 PM THE MATTER WAS CONCLUDED