Drummoyne Municipal Council v Lebnan

[1974] HCA 34

HIGH COURT OF AUSTRALIA

Barwick C.J., Menzies, Gibbs, Stephen and Mason JJ.

DRUMMOYNE MUNICIPAL COUNCIL v. LEBNAN

(1974) 131 CLR 350

25 September 1974

Town Planning (N.S.W.)

Town Planning (N.S.W.)—Building regulation—Planning scheme ordinance—Approval and consent to erection of building—Application to council for approval deemed by statute to be application for consent of responsible authority in case where consent required—Effect—Whether reference to class or kind of work or to obtaining of consent in particular case—Whether grant of approval operates as consent—Approval and consent void if work not substantially commenced—within twelve months of date of approval and consent—Date of approval—Whether date of determination of responsible authority or date of communication to applicant—Substantial commencement- Whether performance of a substantial part of work or substantial completion—Local Government Act, 1919 (N.S.W.). s. 315.

Decisions

Sept. 25.
The following written judgments were delivered:-
BARWICK C.J. In this matter I have had the advantage of reading the reasons for judgment prepared by my brother Gibbs. I agree entirely with what he has written. I agree that the appeal should be dismissed. (at p352)

MENZIES J. In a judgment which I have had the advantage of reading Gibbs J. sets out, in a manner to which I do not wish to add anything, the circumstances giving rise to this litigation, the matters in issue to be decided in it and the course it has taken. Moreover I am in agreement with his resolution of all the matters now in issue except one, that is, the date of the Council's approval of the respondents' application of 23rd September 1971. (at p352)

2. In my opinion approval was given to that application on 5th October 1971. The minute book of the Council recording its proceedings on 5th October 1971 was not in evidence. However, in conformity with its statutory duty the Council did on 18th October 1971 inform the applicant that it had on 5th October 1971 approved the application subject to stated conditions. This was a notice given by the Council itself (s. 314 (2)). It was signed for the Council by the Town Clerk and s. 620 of the Local Government Act, 1919 (N.S.W.), as amended, applies to it. That letter has been rightly accepted as evidence of the Council's decision on the application. The letter makes it clear that the application was considered by the Council on 5th October 1971 and, in my opinion, was then approved subject to conditions. (at p352)

3. Although I do not doubt that there may be cases where there would be no effective approval of an application without notification to a person making it and there are no doubt many cases where no effective consent would be given for what has been requested without notification, it does seem to me that s. 314 (1) of the Act provides for something to be done by the Council which would be complete upon its decision being formally taken. I consider that s. 314 itself expressly differentiates between the decision of the Council under sub-s. (1) and the notification of that decision under sub-ss. (2) and (3). (at p353)

4. Section 314 (1) requires a council to which application has been made to consider it and to "approve, or approve subject to conditions, or disapprove thereof". There follow provisions which in the main forbid approval being given under the sub-section in stated circumstances. When a decision has been taken under sub-s. (1) the time arrives for the operation of sub-ss. (2) and (3). They are as follows:

"(2) The council shall give notice to the applicant of its approval, or approval subject to conditions, or disapproval within forty days after service of the application.

(3) In the case of an approval subject to conditions or of a disapproval the reasons therefor shall be indicated in the notice." (at p353)

5. It is to be observed that what sub-s. (3) requires is in addition to a notification of the council's decision an indication of the reasons which led to a conditional approval or a disapproval under sub-s. (1). In other words, the applicant has to be told of the reasons for the council having decided as it did. Perhaps the simplest way of tracing the procedure which the section establishes is to consider a disapproval under sub-s. (1) and let it be supposed a disapproval because s. 314 (1) (c) forbids the council to give approval. Surely the decision of the council is complete when it formally disapproves the application. When the procedure moves to notification of the council's decision the applicant must be told of this and why it has been reached. The applicant could then appeal against the decision of the council; or, with the approval of the council, modify his plan; or merely accept the council's decision. It would, I think, be inappropriate to treat the notification as part of the disapproval of the application; it is rather a consequence of that disapproval. (at p353)

6. My decision that the application in question was approved subject to conditions on 5th October 1971 requires me to decide that the approval became void under s. 315 before there was any commencement of the work. (at p353)

7. It is, of course, a matter for regret that inquiries made as to the duration of the approval were, according to my view, answered incorrectly by servants of the Council. But I cannot regard that circumstance as affording any adequate ground for refusing to make the declaration sought. When the respondents commenced the building work they already knew that the Council had taken the stand that its earlier approval had by the passage of time become void. In undertaking the work which they did they were taking a calculated risk. In my view, therefore, the declarations made by Helsham J. were correct and in the circumstances I do not think that his Honour was in error in exercising his discretion as he did to grant an injunction. (at p354)

8. Accordingly I would allow the appeal and restore the decree made by Helsham J. (at p354)

GIBBS J. The appellant, the Council of the Municipality of Drummoyne, on 9th November 1972 commenced proceedings in the Equity Division of the Supreme Court of New South Wales against the respondent Caroline Page and two other persons (Antoine Lebnan and Wadih Ayoub) who are not parties to this appeal, with the object of restraining the defendants from proceeding with the construction of a block of home units on a property known as Nos 96 and 98 Hampden Road, Five Dock. The appellant succeeded in obtaining a decree but an appeal by Caroline Page to the Court of Appeal was allowed and the declarations and order made by the learned primary judge were set aside (1973) 2 NSWLR 566 . From the decision of the Court of Appeal the appellant now appeals to this Court by special leave. (at p354)

2. The land in question was situated in the Municipality of Drummoyne and was zoned as Residential "B" under the Drummoyne Planning Scheme Ordinance ("the Ordinance") proclaimed on 10th December 1969. This meant that it was unlawful for any person to erect or use a building on the land for the purpose of home units except with the consent of the responsible authority, which for this purpose was the appellant: cll. 6, 23 of the Ordinance. Moreover, it is provided in s. 311 of the Local Government Act, 1919 (N.S.W.), as amended ("the Act"), which by Pt XI contains a scheme for the regulation of building, that a building shall not be erected or altered unless the approval of the council of the area concerned is obtained therefor beforehand. In the present case, therefore, the proposed block of home units could not lawfully have been built unless the appellant had given its consent for the purposes of the Ordinance (a development consent) and its approval for the purposes of Pt XI of the Act (a building approval). The substantial question for decision in this suit was whether at the date when the proceedings were instituted there were subsisting a valid development consent and a valid building approval under which a block of home units might lawfully be erected on the subject land. It was not in contest that during the year 1971 the appellant had given the requisite development consent and the requisite building approval. However, a development consent will lapse and become void "if the development to which it refers is not substantially commenced within twelve months after the date of the consent" - cl. 38 (2) of the Ordinance - and a building approval will similarly be void "if the building work to which it refers is not substantially commenced within twelve months after the date of approval" - s. 315 of the Act. The case for the appellant was that both the development consent and the building approval given in the present case had lapsed. Under the relevant statutory provisions the appellant has power to extend or renew a development consent or a building approval but the appellant refused to grant any extension or renewal in the present case because the codes governing the erection of residential flat buildings and car parking had been altered and the appellant wished to insist upon the requirements of the new codes in relation to the construction of any building on the subject land. (at p355)

3. An application to permit the construction of a block of units on the subject land was first made to the appellant early in February 1971 by a company then interested in developing the land. The appellant by a letter dated 24th March 1971 notified that the appellant approved of the proposal contained in the application, subject to certain conditions. It is clear that the development consent given by the appellant on 24th March 1971 has since lapsed, for the development to which it referred was not commenced within twelve months of that date. (at p355)

4. On 23rd September 1971 application was made for the approval of the appellant to the erection of a block of units on the land. The application was accompanied by a plan. The application was dealt with by the appellant at its meeting on 5th October 1971. The nature of the resolution then passed by the appellant does not appear from the evidence. However, on 18th October 1971 the Town Clerk sent to the agent of the company on whose behalf the application had been made a letter in the following terms:

"Further to the abovementioned application I have to advise that Council considered the proposal at its meeting held on 5th October, 1971 and approved of the application subject to the following conditions:- 1. Compliance with the provisions of Council's Code and requirements governing the erection of Residential Flat Buildings. 2. External paved access for vehicles being provided with material which will provide some contrast to the finish of other pavements, to the satisfaction of Council's Principal Building Inspector. 3. Provision being made to Council's satisfaction for the disposal of roof and surface waters arising from the site. The approved plans and specifications will be available in due course on the payment of certain fees and deposits and you will be advised of the amounts of these fees and when the plans are available for collection at a later date."

There is no direct evidence as to when the plans were in fact collected from the appellant. However, when collected the plans bore a number of indorsements which, according to the rather scanty evidence on the subject, the appellant had caused to be added to them. One of the indorsements was dated 2nd November 1971. That indorsement had a heading which referred to the building application (No. 347/71) and read as follows:

"APPROVED BY COUNCIL SUBJECT TO ATTACHED CONDITION SHEET AND ANY CONDITIONS ENDORSED ON PLANS AND SPECIFICATIONS."

It purported to be signed on behalf of the Town Clerk. Another indorsement, which was headed with the words

"BUILDING APPLICATION NO. 347/71. APPROVED SUBJECT TO THE FOLLOWING:"

set out the terms of seventy-nine conditions, of which the first fifty-one were standard conditions imposed on approvals for the erection of residential flat buildings and the others were particular conditions relating to the development in question. (at p356)

5. The respondent Caroline Page entered into a contract to buy the subject property on 6th June 1972. On 12th September 1972 she entered into a contract to sell the subject property to Lebnan and Ayoub. In each case, before the contract was signed, inquiries were made on behalf of the prospective purchasers to officers of the appellant as to the situation regarding the building approval and in response to these inquiries it was stated that the approval was current until early in November 1972. Subsequently, however, on 20th September 1972 the appellant informed Lebnan and Ayoub that the only relevant development consent had expired in March 1972. In an endeavour to protect their interests Mrs Page, Lebnan and Ayoub agreed to join together for the purpose of commencing the work on the subject land and work on the site was finally begun on about 23rd October 1972. By 31st October the existing houses on the land had been demolished and excavations had been dug for the footings; with a few exceptions of a minor nature the excavations were in accordance with the building plan. The appellant was requested to make an inspection so that concrete could be poured but would not do so. The expenses incurred in carrying out this work included costs of demolition ($2,330), costs of encasing sewer line and concrete ($1.155) and the cost of preparation of the footings ($3,650). (at p356)

6. The first question that arises is whether by reason of the provisions of cl. 31 (3) of the Ordinance the grant of the building approval by the appellant amounted in law to the grant of a development consent also. Clause 31(3) reads as follows:

"Where, in pursuance of the Act (except Part XIIA thereof) or of an Ordinance made under the Act (except the said Part), an application is made to the Council for its approval to erect a building or work or to open a new road, such application shall, if the matter to which it relates requires the consent of the responsible authority under this Ordinance, be deemed to be an application for such consent, unless the application does not contain the information and particulars required by sub-clause (1) of this clause and the responsible authority so informs the applicant on or before giving its decision in respect of such application."

The building application made on 23rd September 1971 was, of course, an application of a kind to which cl. 31(3) refers and it was conceded that it contained the information and particulars required by cl. 31(1). However, on behalf of the appellant it was submitted that the matter to which the application related did not require the consent of the responsible authority under the Ordinance and that for that reason the provisions of cl. 31(3) had no application. It was not doubted that before a building could have been erected on the subject land the consent of the responsible authority under the Ordinance (a development consent) was required but it was said that because a development consent, current for one year, had been given on 24th March 1971, the consent of the responsible authority was not required at the date of the building application. This submission was in accordance with the decision in Progress and Securities Pty. Ltd. v. Randwick Municipal Council (1971) 22 LGRA 52 , where Hardie J., speaking of a provision in all material respects identical with cl. 31(3), said (1971) 22 LGRA, at p 54 :

"It was contended on behalf of the defendant council that the critical date for determining whether the consent of the responsible authority under the Ordinance was required was the date at which the building application was dealt with and determined by the council. I accept that submission. At that date there was a subsisting development consent and accordingly the building proposed did not require the consent of the responsible authority under the County Ordinance. It follows that it is not deemed to be a building application . . ."

A different view of the effect of a clause of this kind was taken by Hutley J.A. Sitting as a single judge in Liverpool City Council v. Home Units Australia Pty. Ltd. (1973) 2 NSWLR 61 , he said (1973) 2 NSWLR, at p 70 :

"The words 'the matter to which it relates requires the consent of the responsible authority' in my opinion are a description of the class of application, not a description of the present needs of the applicant."

This conflict of opinion has not been resolved in the Court of Appeal, but in Holroyd Municipal Council v. Mangano (1972) 2 NSWLR 438, at p 443 , the Court, while distinguishing Progress and Securities Pty. Ltd. v. Randwick Municipal Council (1971) 22 LGRA 52 , left open the correctness of that decision. In my opinion the construction placed on the clause in Progress and Securities Pty. Ltd. v. Randwick Municipal Council was erroneous. The material words of the Ordinance - "if the matter to which it relates requires the consent of the responsible authority under this Ordinance" - raise the question whether the consent of the responsible authority is required and not whether the consent has in fact been given. The fact that there is a subsisting consent does not mean that the proposed building does not require a consent - it merely means that the requirement, if it exists, is satisfied. Clause 31(3) was apparently intended to deal with those cases where, to speak only of buildings, the erection of a building requires the consent of the responsible authority under the Ordinance as well as the grant of a building approval under Pt XI of the Act. It no doubt appears convenient that it should be possible in such cases to obtain the two requisite consents upon one application only. In some such cases the landowner concerned may consider it prudent to obtain a development consent before proceeding to prepare the building plans necessary to support an application under Pt XI, but having regard to the time necessary to prepare building plans it is by no means unlikely that, as happened in the present case, the existing development consent will be due to expire soon after the building approval takes effect. In such a situation it would again appear convenient, speaking generally, that a development consent and a building approval should be in force for the same period of time. Whether or not considerations of this kind provided the reason for the enactment of the clause, its meaning seems to me to be clear; it applies when the erection of the building to which the building application relates requires, as a matter of law, the consent of the responsible authority under the Ordinance, whether or not, as a matter of fact, a consent of that kind has actually been given. In the present case, therefore, by virtue of the operation of cl. 31(3) the building application made on 23rd September 1971 was deemed to be an application for a development consent. (at p358)

7. It was then submitted on behalf of the appellant that assuming the building application to be deemed to be a development application also, the clause does not have the effect that the grant of approval to the building application operates as a consent to the development application. This submission is supported by the opinion expressed by Helsham J. in Warringah Shire Council v. Arthur H. Gillott Pty. Ltd. (1971) 1 NSWLR 525, at p 543 , but with the greatest respect, I cannot accept it. The effect of cl. 31(3) was that the building application had a twofold operation - it was deemed to be an application for a development consent as well as an application for a building approval. In my opinion it follows that an unqualified approval to the building application would amount to an approval to everything which it was deemed to embrace and in other words amount to a development consent as well as to a building approval. No doubt a responsible authority has the power (subject to any right of appeal) to limit the effect of its approval, and to refuse a development consent while granting a building approval. However, in the present case the appellant approved of the application without any relevant qualification. Since the application was deemed to be, inter alia, an application for the consent of the responsible authority under the Ordinance, the approval took effect in part as an approval of that deemed application. On the proper construction of cl. 31(3) and in the circumstances of the case the appellant as the responsible authority under the Ordinance gave its consent for the purposes of the Ordinance when it approved of the erection of the building under Pt XI of the Act. (at p359)

8. The question that then arises is what was "the date of the approval" within the meaning of s. 315, for unless that date was after 31st October 1971 - or at least after some day in the last week of October 1971 - it is clear that the work referred to in the approval was not substantially commenced within twelve months after the date of the approval and that the approval has lapsed; the same will be true of the consent: cl. 38(2). (at p359)

9. In this regard the primary submission of the appellant was that the date of the approval and of the consent was the date on which the appellant passed its resolution that approval be granted - that is presumably 5th October 1971. This submission is in my opinion untenable. The very notion of giving approval or consent involves a communication between two minds, and an approval or consent cannot be complete and efficacious until it has been communicated to the person intended to act on it. The natural meaning of the words "the date of the approval", in s. 315, and "the date of the consent", in cl. 38(2), is the date on which the approval or consent is communicated, but if the expressions are ambiguous, and capable of referring also to the date on which the council resolves to approve or consent, the ambiguity should in my opinion be resolved in favour of the former meaning; the fact that an approval or consent lapses if work is not substantially commenced within twelve months after its date supports that view. The object of s. 314(2) - which requires the council to give notice to the applicant of its approval, or approval subject to conditions, or disapproval within forty days after service of the application - is to obviate delays in decision, and the provisions of that sub-section do not in my opinion require a different meaning to be given to s. 315. (at p360)

10. The appellant then submits that communication of its approval occurred when the letter of 18th October 1971 was received by the agent of the person who had made the application. This submission is at first sight attractive. However, communication of an approval does not occur until all its terms and conditions have been communicated. In the present case it is apparent that the letter of 18th October 1971 did not set forth all the conditions subject to which the approval was granted. Those conditions were finally set out on the plans which were later delivered to the applicant; if it matters, many of those conditions were not formal or stereotyped but had been formulated in relation to the circumstances of the particular case. So far as the evidence shows, communication of these conditions did not occur until 2nd November 1971; that then was the date of the approval. The appellant, the plaintiff in the proceedings, bore the onus of establishing the facts necessary to show that the construction which it sought to restrain was not covered by the approval which it had given, or, in other words, the onus of proving that the approval had lapsed. It failed to discharge the onus of proving that the date of the approval was 18th October 1971; on the contrary, the statements subsequently made by officers of the appellant were consistent with the view suggested by the indorsements on the plan, that the date of the approval was 2nd November 1971. That therefore was the date of the development consent also. (at p360)

11. The final question for decision is whether the work the subject of the approval and consent was substantially commenced within twelve months after 2nd November 1971. Clearly the work and development which s. 315 of the Act and cl. 38(2) of the Ordinance require should have been substantially commenced is that to which the approval or consent itself refers, and it would seem to follow that work or development is not commenced when nothing more has been done than acts preparatory to the work or development which is the subject of the approval or consent. It may therefore be assumed, although it is not necessary to decide, that the demolition of the existing houses should not be regarded as a commencement of the work in the present case. The question whether the work or development has been substantially commenced is an objective one depending on what in fact has been done rather than on the intention with which it was done (see United Dominions Corporation Ltd. v. Woollahra Municipal Council (1973) 1 NSWLR 616, at pp 618-619 ), and the circumstance that the work in October was done for the purpose of keeping the approval alive is not inconsistent with the conclusion that the work was substantially commenced. The expression "substantially commenced" is not altogether clear and precise. Sometimes the use of the word "substantially" has the effect of requiring a comparison to be made between a part and the whole, and this may well be so, for example, when the phrase "substantially completed" is used. However, to say that work has been "substantially commenced" does not, in the natural meaning of those words, suggest that what has been done forms a large proportion of the whole work; something can be substantially commenced although it has not been substantially completed. For example, if, in the case of a large city building, work had been done that was in itself very extensive and costly, it would accord with ordinary usage to say that work had been substantially commenced, although what had been done formed only a small proportion of the whole work. The test to be applied for the purposes of s. 315 and cl. 38 (2) is whether the work or development the subject of the approval or consent has been begun by the performance of some substantial part of that work or development. In my opinion this test is satisfied in the present case. The work of excavation was a substantial part or the work referred to in the approval. In my opinion it was right to conclude that the relevant development and work were substantially commenced during the last week of October 1972. The approval and consent which on the evidence should be held to have taken effect on 2nd November 1971 therefore did not become void under the provisions of s. 315 or cl. 38 (2). (at p361)

12. For these reasons the development consent and building approval granted by the appellant have not lapsed, and the appellant made out no ground for restraining the defendants from proceedings with the construction. (at p361)

13. The appeal should be dismissed. (at p361)

STEPHEN J. I would dismiss this appeal for the reasons set out in the judgment of Gibbs J., with which I am in complete agreement. (at p361)

MASON J. I am in agreement with the reasons for judgment which have been prepared by Gibbs J. For the reasons there stated I would dismiss the appeal. (at p361)

Orders

Appeal dismissed with costs