Homemakers Supacenta-Belrose Pty Limited v Warringah Council and Anor

[2008] NSWLEC 54

Land and Environment Court

of New South Wales

CITATION:	Homemakers Supacenta-Belrose Pty Limited v Warringah Council and Anor [2008] NSWLEC 54
PARTIES:	APPLICANT Homemakers Supacenta-Belrose Pty Limited FIRST RESPONDENT Warringah Council SECOND RESPONDENT Narabang Constructions Pty Limited
FILE NUMBER(S):	40745 of 2007
CORAM:	Pain J
KEY ISSUES:	Development Consent :- failure of Council to properly delegate decision under s80 of Environmental Planning and Assessment Act 1979 - whether development consent should be declared invalid - whether s25B order should be made
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 s20(2), s20(3), s79C, s80 Land and Environment Court Act 1979 s25A, s25B Warringah Local Environmental Plan 2000
CASES CITED:	ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 Belmore Residents' Action Group Inc v Canterbury City Council and Another [2006] 147 LGERA 226 Belmorgan Property Development Pty Limited v GPT Re Ltd (2007) 153 LGERA 450 Centro Properties Limited v Hurstville City Council (2004) 135 LGERA 257 F Hannan Pty Ltd v Electricity Commission (NSW) (No 3) (1985) 66 LGRA 306 GPT Re Ltd v Wollongong City Council (2006) 151 LGERA 116 GPT Re Ltd (No 2) v Wollongong City Council (2006) 151 LGERA 158 Kindimindi v Lane Cove Council (2007) 150 LGERA 333 Warringah v Sedevcic (1987)10 NSWLR 335
DATES OF HEARING:	13 February 2008
DATE OF JUDGMENT:	14 February 2008
LEGAL REPRESENTATIVES:	APPLICANT Mr A Galasso SC with Mr M Staunton SOLICITOR Landerer & Company FIRST RESPONDENT Mr I Hemmings SOLICITOR Wilshire Webb Staunton & Beattie SECOND RESPONDENT Mr R Lancaster SOLICITOR Curwoods Lawyers

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

14 February 2008

40745 of 2007 Homemakers Supacenta-Belrose Pty Limited v Warringah Council and Anor

JUDGMENT

1 Her Honour: The Applicant has commenced Class 4 proceedings challenging the grant of development consent by the Council to the Second Respondent.

2 At all material times the Second Respondent was the registered proprietor of the land identified as Lot 104 in Deposited Plan 852750 and known as and situated at 1 Narabang Way, Belrose (the land). The land is situated within the local government area of Warringah for which the First Respondent is the relevant consent authority for the purposes of the Environmental Planning and Assessment Act 1979 (the EP&A Act). The land is located in the C9 Austlink Business Park Locality pursuant to Warringah Local Environmental Plan 2000 (the WLEP).

3 On or about 11 November 2005 the Second Respondent lodged development application no 2005/1075 (the DA) with the First Respondent. The DA sought development consent for construction of two storey “bulky good shop” premises, with the provision of a cafe, signage with two levels of basement carparking, ancillary site works and bushland protection measures on the Land ( the development).

4 By resolution made on or about 26 September 2006 the First Respondent purported to grant delegation to the General Manager to grant consent to the DA (the Resolution). The details of the Resolution were:

A. That the application, assessment report, and draft conditions (including any additional from the RTA) be forwarded to the Department of Environment and Conservation (DEC NSW) with the advice that Council supports the granting of consent and is seeking concurrence from the Director General.

B. That subject to concurrence of the Director General (DEC) delegation be given to the General Manager, Warringah Council, to grant consent, including any condition changes made by the Director General (DEC) through the concurrence role, and any additional conditions from the Roads and Traffic Authority, for the construction of a bulky good shop premises at Lot 104 DP852750, No. 1 Narabang Way, Belrose subject to the draft conditions No. 1 –150 in the recommendation to IHAP dated 13 September 2006 with the following amendment to condition 150 as follows:”

5 There are six grounds of challenge identified in the Points of Claim dated 5 October 2007. Grounds 4 and 5 are not pressed and do not need to be considered.

Grounds of challenge
Ground 1 - Invalid delegation

6 The Resolution was invalid as a resolution purporting to delegate the powers of the First Respondent.

Particulars

(a) The Resolution was invalid because it purported to delegate authority to approve the DA but not refuse the DA.

(b) Alternatively the Resolution was invalid because it purported to delegate part only of the First Respondent’s functions in relation to the DA.

Ground 2 - Failure to take into account and finality

7 In the alternative, the Resolution constrained the delegate’s power to grant development consent. In constraining the power to grant development consent the Resolution constituted a failure to properly or finally take into consideration matters relevant to the DA.

Particulars

(a) Adoption without consideration of comments on the DA by the Roads and Traffic Authority of NSW (RTA);

(b) Adoption without consideration of concurrence to the DA by the Department of Conservation (DEC).

Ground 3 - Acting under dictation/Failure to take into account s 79C matters

8 Further or in the alternative, pursuant to s 79C(1) of the EP&A Act, in determining the DA, the First Respondent was required to take into consideration the matters specified in s 79C(1)(a)-(e). The First Respondent, by its delegate in breach of the requirements of s 79C(1)(b) of the EP&A Act, failed to take into consideration matters relevant to the DA.

9 Grounds 1, 2 and 3 are essentially the same issue. Grounds 1, 2 and 3 are admitted by both Respondents in light of the findings in GPT Re Ltd v Wollongong City Council (2006) 151 LGERA 116 (GPT). While the grounds were admitted the by Respondents, they argued that the consent was otherwise validly considered by the Council and a declaration of invalidity of the consent ought not be made. Alternatively orders under s 25B of the Land and Environment Court Act 1979 (the Court Act) ought be made suspending the consent and specifying steps which must be taken to enable its further consideration.

10 Ground 6 was pressed by the Applicant in relation to the issue of whether orders under s 25B of the Court Act ought be made. That ground is that in determining the DA the Council failed to take into account a relevant consideration, being the Species Impact Statement (SIS) prepared by Total Earth Care for DA 2005/1075 at 1 Narabang Way, Belrose submitted in February 2007.

Evidence

11 A bundle of documents identifying the relevant steps in the consideration of the application was tendered (exhibit A). Exhibit A consisted of four volumes of documents and included substantial reports filed in support of the application. The essential steps are also identified in the chronology handed up in Court by the Applicant as follows:

11/11/05 DA for Bulky goods facility lodged with First Respondent by Second Respondent
16/2/06 DEC advises Council of inadequacies in SIS
10/3/06 Supplement to SIS provided
4/9/06 Council (officers) determine to not undertake independent economic assessment
13/9/06 Council reports to Independent Hearing and Assessment Panel (IHAP)
13/9/06 IHAP meets to consider DA; and issues report
20/9/06 RTA provides comments on the DA
26/9/06 Report to Council to adopt recommendations
26/9/06 Council (Administrator) delegates power to grant consent to General Manager, subject to concurrence from DEC and additional conditions from RTA
28/9/06 Council seeks DEC concurrence
19/10/06 DEC requests additional information
24/10/06 Council provides information to DEC
27/10/06 Council sends to DEC a new SIS provided by the proponent after the assessment of the DA by Council (provided no earlier than 4 October 2006
21/11/06 DEC advises Council of inadequacy of SIS (and ? conditional concurrence position)
21/12/06 DEC advises Council of further deficiencies in new SIS
13/2/07 (Second) New SIS submitted by proponent
7/3/07 DEC grants concurrence
13/3/07 General Manager issues consent

Council report to IHAP

12 As part of the Council’s consideration of the development application it was referred to the Council’s IHAP meeting on 13 September 2006 together with a lengthy Council officer’s report. The Council officer’s report sent to IHAP recommended:

A. That the application, assessment report, and draft conditions (including any additional from the RTA) be forwarded to the Department of Environment and Conservation (DEC NSW) with the advice that Council supports the granting of consent and is seeking the concurrence from the Director-General.

…

IHAP recommendation

13 After considering the written material and oral presentations made to it, the IHAP recommended:

That consent be granted subject to the conditions proposed in the assessment report to IHAP and conditional on Council being satisfied as to the two matters on which the Panel assessment proceeded; namely, the adequacy of the SIS and identification of the exact location of the Inner Protection Area.

14 The Council (presently an administrator) adopted the recommendation in the Council officer’s report (par 12) that went to IHAP and that is the decision to delegate challenged in this appeal by the Applicant identified above in par 5.

15 The documents in exhibit A and the chronology identified the steps taken subsequently by the Council’s officers in communicating with DEC concerning the issue of concurrence, the assessment of further SIS documents filed by the Applicant and their report for the General manager that the SIS was satisfactory and that the DEC had granted concurrence.

16 The Council officer’s report of 12 March 2007 to the General Manager stated that:

It is considered that the application has been fully considered with regard to the provisions of the Environmental Planning and Assessment Act, 1979, other relevant legislation and associated regulations and the relevant gazetted and draft Environmental Planning Instruments and the relevant codes and policies of Council.

Issue 1 - whether development consent invalidly granted?

17 The admission of grounds 1, 2 and 3 means that in the absence of a contradictor I should consider whether the failure of delegation alleged gives rise to the invalid grant of the development consent in issue.

18 The Applicant asserts the resolution of the Council delegating power was invalid because it purported to delegate part only of the Council’s functions in relation to the DA. The resolution authorised the General Manager to grant consent to the DA but did not refuse the DA. The function of determining a DA under s 80(1) requires either an unconditional or conditional consent or a refusal of consent and such a function must be exercised in accordance with s 79C.

Finding

19 The terms of the Council’s delegation of 26 September 2006 purported to delegate the Council’s decision making power in a way that Biscoe J held in GPT was an invalid delegation of power. His Honour held at [24] – [67] that the requisite consideration under s 79C cannot be given if a delegate only has power to approve a DA and not refuse it. His findings were upheld in the Court of Appeal in Belmorgan Property Development Pty Limited v GPT Re Ltd (2007) 153 LGERA 450.

20 I consider that I should uphold the grounds of appeal specified in 1, 2 and 3 so that the grant of development consent for DA 2005/1075 is invalid.

Issue 2 - should I exercise my discretion whether to make a declaration of invalidity?

21 The Applicant seeks a declaration that the development consent for DA 2005/1075 is invalid and of no effect. The Court has a discretion whether to make a declaration of invalidity. Declarations do not issue as of right to a party whose grounds of challenge are accepted and relief may be refused; F Hannan Pty Ltd v Electricity Commission (NSW) (No 3) (1985) 66 LGRA 306, Warringah v Sedevcic (1987)10 NSWLR 335, Kirby P at 339C referring to the wide discretion of the Court under s 124(1) of the EP&A Act. In ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 Kirby P at [82] stated that discretion permits the refusal of relief if granting it would work an injustice disproportionate to securing enforcement of the legislation.

22 The Applicant argued that the making of the declaration of invalidity of the development consent sought in Prayer 1 of the Class 4 application was appropriate given the cause of the invalidity was the failure to delegate the important function of the Council’s decision-making under s 80 of the EP&A Act.

23 The Respondents argued that there were factors which suggested that the Court should exercise its discretion to refuse declaratory relief. The Respondents argued that the circumstances surrounding the assessment of the DA, including by the IHAP, up to the granting of the delegation and the subsequent actions of the Council means that the Court can be satisfied that the Council did carry out its functions under s 80 of the EP&A Act adequately as a practical matter. The resolution of the Council of 26 September 2006 was to the effect that the Council supported the grant of the development consent subject to two matters. The complaint of the Applicant is really a question of timing concerning the decision of the Council. No complaint other than the invalid delegation is made of the Council’s resolution on 26 September 2006 that it supported approval of the development application subject to two matters. There is no failure of consideration of the Council alleged in relation to the process of review of the development application up to that point.

Finding on issue 2

24 The factors the Court can consider in its decision whether to exercise its wide discretion have been referred to by Kirby P in Sedevcic at 339-341. These include whether the breach is procedural or technical, the importance of the enforcement of a public right by upholding the planning law and whether there is hardship caused. Other factors referred to by the parties in GPT Re Ltd (No 2) v Wollongong City Council (2006) 151 LGERA 158 (GPT No 2) were whether the error was made in bad faith (not alleged in any event), whether the litigation is brought by a commercial competitor and the conduct of the parties. As noted in GPT s 123 allows any person to take action to remedy or restrain a breach of the EP&A Act.

25 The failure to properly delegate the Council’s powers so that the delegate acted without power is a substantial failure to exercise the Council’s functions. The importance of the proper exercise of the Council’s powers is identified, inter alia, in GPT and GPT No 2. I do not consider the matters relied on by the Respondents, to the effect that as a practical matter the Council did carry out its functions under s 80 of the EP&A Act can overcome the circumstance that the improper delegation resulted in a decision being made by the General Manager who lacked power to make it. While hardship was raised from the bar table by the Second Respondent no evidence particular to that submission was filed. I accept that the Second Respondent has expended substantial sums on reports to support its development application and in progressing the matter through the Council. Weighing up these factors I consider that relief ought be granted.

Issue 3 - Exercise of discretion to make an order under s 25B

26 The Respondents submitted the Court should make orders under s 25B of the Court Act. I must consider the application of that section in any event in light of s 25E.

27 Section 25E of the Court Act provides:

It is the duty of the Court to consider making an order under this Division instead of declaring or determining that a development consent to which this Division applies is invalid, whether in whole or in part.

28 Division 3 of the Court Act is headed “Orders for conditional validity for certain development consents”. Section 25A(1)(b) of the Court Act provides:

a development consent granted, or purporting to be granted, under the Environmental Planning and Assessment Act 1979:
(i) by any other consent authority, and
(ii) in respect of a development application made on or after the commencement of this subsection.

29 Section 25A(2) provides:

This Division extends to invalidity arising from any steps preliminary to the granting of a development consent to which this Division applies, whether those steps were taken, or should have been taken, by the Minister or any other consent authority, or by any other person or body.

30 Section 25B provides:

(1) The Court may, instead of declaring or determining that a development consent to which this Division applies is invalid, whether in whole or in part, make an order:
(a) suspending the operation of the consent in whole or in part, and
(b) specifying terms compliance with which will validate the consent

(whether without alterations or on being regranted with alterations).

(2) Terms may include (without limitation):
(a) terms requiring the carrying out again of steps already carried out, or
(b) terms requiring the carrying out of steps not already commenced or carried out, or
(c) terms requiring acts, matters or things to be done or omitted that are different from acts, matters or things required to be done or omitted by or under this Act or any other Act.

31 The Applicant argued that it was not appropriate in this case given the reason for the invalidity of the development consent that orders be made under s 25B. The failure to delegate the power under s 80 of the EP&A Act was a fundamental matter that should not be the subject of orders under s 25B as a matter of discretion. This was confirmed by the decision in GPT No 2 not to make an order under s 25B because the absence of power to grant a development consent does not fall within the words in s 25A(2) “steps preliminary to the granting of a development consent”. The Applicant did not submit that a s 25B order could not be made because it could not apply as a matter of law to the circumstances in this case rather the issue was the exercise of the Court’s discretion.

32 The Respondents argued that s 25B should be applied in light of the Court of Appeal decision in Kindimindi Investments Pty Ltd v Lane Cove Council (2007) 150 LGERA 333 which was decided after GPT No 2. All three decisions of the Court emphasise the wide application of Div 3 of the Court Act. Apart from the challenge in relation to the invalid delegation there is no separate challenge to the consideration of the Council up to and including 26 September 2006. The challenge in relation to ground 6 concerning the failure to take into account a further SIS provided by the Second Respondent in February 2007 does not suggest there has been a material failure by the Council’s decision making. The Council had considered substantial material assessing the DA and received the review of the IHAP panel recommending approval subject to two matters of 13 September 2006 by 26 September 2006. It resolved on that day that approval ought be granted subject to two further matters, the DEC concurrence being one of them. The SIS lodged in relation to the application as required by the Council on 26 September 2006 was further assessed by officers of the Council and they recommended approval. The DEC also issued the concurrence requested by the Council. No issue is raised by the Applicant in relation to the other matter left for the General Manager under the delegation concerning conditions arising from the comments of the RTA.

Finding

33 Section 25E of the Court Act requires the Court to consider making an order under s 25B instead of declaring or determining that a development consent is invalid. None of the parties argued that the invalidity of a development consent based on the failure of the Council to properly delegate the power to issue a development consent was not a breach which could be the subject of an order under s 25B of the Court Act. The Court of Appeal decision in Kindimindi identified the wide scope of s 25B. The Applicant argued that as a matter of discretion however the order ought not be made given the reason for invalidity of the development consent.

34 A consideration of the three judgments delivered by the respective appellate judges emphasises the wide application of s 25B. In Kindimindi Hodgson JA held at [19] – [21]:

19 However, in my view the use of the word “extends” in subs.(2) is a strong indication that the subsection was not intended to be an exhaustive indication of the type or types of invalidity to which the Division applies. If the subsection had used the word “applies”, or “applies only”, then that may have been the intention disclosed.

20 There are other indications, in my opinion, of a legislative intention that the Division should not be limited to the particular kind of invalidity specified in subs.(2).

21 Firstly, there seems no logic in selecting that particular type of invalidity, rather than any type of invalidity that might affect a development consent or purported development consent. The general intention was that technical breaches should be capable of being rectified, and there can be technical breaches which are not matters arising from preliminary steps.

35 Tobias JA held at [31] – [32]:

31 Section 25B(2) sets out in a non-exclusive manner the type of terms which can be imposed for the purpose of validating the consent, and which include terms requiring the carrying out again of steps already carried out or the carrying out of steps not already carried out. But importantly, 25B(2) is not confined in any way to terms involving the carrying out of preliminary steps referred to in sub-paragraphs (a) and (b). It includes in sub-paragraph (c) terms requiring acts, matters or things to be done or omitted that are different to acts, matters or things required to be done or omitted by or under this Act or any other Act. Any other Act would include the Environmental Planning and Assessment Act .

32 It seems to me that s.25B(2)(c), for instance, would authorise the imposition of a term requiring a consent authority to reconsider if it has already considered the matter, or to consider for the first time if it has failed to consider the matter, any one or more of the matters required to be considered by, for instance, s.79C of the Environmental Planning and Assessment Act. That, of course, does not mean that in every case where a purported consent is invalid upon the basis that s.79C has not been complied with, that the court will exercise its discretion to suspend the consent and to require the consideration or reconsideration of a s.79C matter.

36 McColl JA held at [45] – [47]

45 In my view, the word “extends” in ss.25A(2) should be given its ordinary meaning. That is, that it is a word of expansion. Whether, as the presiding judge has said, for abundant caution or for other reasons, the Legislature has chosen to emphasise that s.25A(2) applies to all development consents or purported development consents and also to the sorts of invalidity referred to in subs.(2) and (3), neither of those subsections, in my view, detracts from the conclusion that the verb “extends” should be given that ordinary meaning.

46 This conclusion is also supported by the context in which s.25A appears.

47 Section 25E requires the court to consider making an order under Division 3 instead of declaring or determining that a development consent to which Division 3 applies is invalid, whether in whole or in part. That provision, in my view, emphasises the amplitude of the power conferred by Division 3. The Division creates a regime for suspending the operation of development consent pending the applicant for that consent being given an opportunity to remedy a breach which might otherwise render the development consent invalid. The duty which s.25E imposes on the court to consider making a Division 3 order emphasises the legislative concern that development consents not be frustrated by potential invalidities in respect of which the court may, as a matter of discretion, consider making a s.25B order.

37 These judgments confirm that s 25B can be applied to a wide range of steps taken up to the granting of development consent given the reference in s 25A(1) to the grant of a consent or a purported grant of consent. Whether an order should be made must be determined by the particular circumstances of a case in the exercise of judicial discretion. The Council’s counsel referred to examples of where the Court has declined to make a s 25B order, as in Belmore ResidentsAction Group Inc v Canterbury Council (2006) 147 LGERA 226 and Centro Properties Limited v Hurstville City Council (2004) 135 LGERA 257, because matters were identified which required consideration for the first time. I agree with the Council’s submissions that there is no new matter identified which will require a reconsideration of new matters by the Council if the matter is returned to it for consideration of particular matters concerning the SIS/DEC concurrence and the comments of the RTA. The circumstances are unlike those considered in GPT/Belmorgan. All of the Council’s officer’s reports and the IHAP report had resulted in a recommendation for approval. The Council officer’s reports concerning the new SIS received subsequent to the resolution of the Council to delegate the decision to approve to the General Manager also recommended in favour of the development application.

38 The matters referred to by the Respondents at par 23 in relation to why declaratory relief should not be made at all are also relevant to consider in determining whether an order under s 25B ought be made.

39 The Applicant’s counsel also submitted that as considerable time had elapsed since the grant of the purported development consent that there would be utility in the Council determining the matter afresh in light of any changes. One change referred to was that the Applicant had started trading on a nearby site. The passage of time alone and the possibility that changes have occurred in a particular locality do not support a refusal of a s 25B order.

40 While the failure to properly delegate functions under the EP&A Act is a significant matter I must consider that failure in the particular circumstances of this case. Orders under s 25B can be crafted which address the matters left outstanding at the time of the delegation to the General Manager on 26 September 2006 following the Council’s own extensive consideration of the DA up to that point. The sixth ground of challenge raised by the Applicant in relation to the receipt of a new SIS in March 2007 does not suggest that in this case there has been such a failure to undertake a s 80 EP&A Act consideration by the Council that a s 25B order should not be considered.

41 Subject to further discussion on the precise wording of the draft orders handed up by the Council during submissions I consider an order pursuant to s 25B ought be made.