JNH Group Pty Limited v Gosford City Council

[2004] NSWLEC 205

Reported Decision: 138LGERA 139

Land and Environment Court

of New South Wales

CITATION:	JNH Group Pty Limited v Gosford City Council [2004] NSWLEC 205
PARTIES:	APPLICANT: JNH Group Pty Limited RESPONDENT: Gosford City Council
FILE NUMBER(S):	11030 of 2003
CORAM:	Bignold J
KEY ISSUES:	Question of Law :- reference by Commissioner-whether proposed development a permissible purpose of development-effect of Senior Commissioner's interlocutory judgment.
LEGISLATION CITED:	Land and Environment Court Act 1979, s 36(5)
CASES CITED:	Chambers v Maclean Shire Council (2003) 126 LGERA 7; Currey v Sutherland Shire Council (2003) 129LGERA 223; Ervin Mahrer and Partners v Strathfield Council (No 2) (2001 115 LGERA 259; Lainson v Sutherland Shire Council (1998) 108 LGERA 1
DATES OF HEARING:	27/04/2004
DATE OF JUDGMENT:	05/04/2004
LEGAL REPRESENTATIVES:	APPLICANT: Mr P Clay, Barrister SOLICITORS John B Hajje and Associates RESPONDENT: Mr M Fraser, Barrister SOLICITORS P J Donnellan & Co.

JUDGMENT:

IN THE LAND AND Matter No

. 11030 of 2003

ENVIRONMENT COURT Coram

: Bignold J

OF NEW SOUTH WALES

4 May 2004

JNH GROUP PTY LIMITED

Applicant

v

THE COUNCIL OF THE CITY OF GOSFORD

Respondent

JUDGMENT

A. INTRODUCTION

1. In the course of the hearing of an appeal pursuant to the Environmental Planning and Assessment Act 1979, s 97 (the EP&A Act), the Senior Commissioner has referred, at the request of the Applicant questions of law for determination pursuant to Land and Environment Court Act 1979, s 36(5) (the LEC Act). The reference occurred at a time when the proceeding had been adjourned, part-hard, following the Senior Commissioner’s interlocutory judgment which had anticipated the conclusion of the hearing at a future date.

2. The circumstances of the reference were somewhat unusual and should be briefly noted.

3. The questions of law so referred had been formulated by the parties’ legal representatives when the proceeding was mentioned before the Senior Commissioner on 24 March 2004. On that day, the Respondent’s legal representative filed in Court a Notice of Motion seeking an order that the proceedings be dismissed upon the basis that the proceeding before the Court was not founded upon a valid development application.

4. It was apparently in response to that Motion, that the Senior Commissioner was requested by the Applicant to refer questions of law to the Chief Judge pursuant to the LEC Act, s 36(5).

5. On the hearing of the reference, the parties mutually agreed that the questions of law required some re-formulation so that they fully and properly raised the matters in dispute between them. It is the reformulated questions which, by consent, constitute the reference of the questions of law, which are as follows:

1. Whether, in the light of the Senior Commissioner’s interlocutory judgment delivered on 29 January 2004, the Applicant’s development application is a nullity and there is no power to grant development consent to the application in the amended form contemplated by the Senior Commissioner’s judgment.

2. Whether the development application is legally capable of being amended in the manner contemplated by the Senior Commissioner’s judgment.

3. If the answer to Question 1 is in the affirmative, whether the application ought be dismissed.

6. Before proceeding to determine the questions of law, it is necessary to summarise the course of the present proceedings up to the present time in order to contextualise the present reference of the questions of law and the Council’s Notice of Motion seeking an order for the dismissal of the proceedings. (The Council’s Notice of Motion is contingent upon the questions of law being determined in a manner that is favourable to the Council).
B. THE LITIGATION HISTORY

7. The proceedings were commenced on 29 August 2003 by way of appeal against the Council’s determination refusing development consent to the Applicant’s development application to erect a “road transport facility” on land known as No 168 Pacific Highway Mount White (being lot 12 in Deposited Plan 590280). In refusing development consent the Council notified 10 reasons or grounds for its determination, none of which asserted that the proposed development was for a prohibited purpose of development.

8. On 15 October 2003, at the Registrar’s callover, hearing dates were allocated (27, 28 and 29 January 2004) and directions for hearing were given including a direction that the Respondent file and serve its Statement of Issues by 15 October 2003. (In a subsequent callover, the Council was directed to file and serve its final Statement of Issues by 5 December 2003).

9. On 18 November 2003 the Council filed a draft Statement of Issues raising some 13 issues “in addition to the Council’s reasons for refusal”. It is to be noted that none of the issues raised asserted that the proposed development was for a prohibited purpose of development.

10. On 8 December 2003 the Council filed a Statement of Issues (having served a copy on 5 December 2003) raising 9 separate issues. Significantly, and for the first time, the following issue was raised:

1. The proposed development is prohibited pursuant to the provisions of Gosford City Council Interim Development Order No. 122 (IDO 122).
Particulars

a. The proposal purports to be for a road transport facility but it is fundamentally an application for tourist or temporary residential accommodation and a restaurant/tavern.

b. The proposal is for development of a restaurant/tavern, 23 accommodation units, a service station and shop, which uses are prohibited on the land, which is zoned 5(a) – Special Uses (Road Transport Facility), pursuant to clause 5 of IDO 122.

11. When the proceedings came on for hearing on the first of the allocated three days, the Senior Commissioner to whom the hearing had been delegated pursuant to the LEC Act, s 36(1) was informed by the parties that they were not ready to proceed with the hearing of the appeal on the merits and he was jointly requested by the parties “to determine the threshold issue, namely whether or not the proposal is permissible”: vide par 1 of his judgment delivered on 29 January 2004 (2004) NSWLEC 22.

12. Apparently, thereafter, the hearing was conducted over the next 2 or 3 days but confined to this preliminary issue culminating in the making of the following orders on 29 January 2004:

1. The applicant is to file and serve amended plans and additional information by 5pm 5 March 2004.

2. The matter shall be listed for mention before the Senior Commissioner at 9.30 am 24 March 2004.

3. The matter is referred to the call-over on 30 January 2004 at 9.00 am before the Registrar for the purpose of fixing a date for one day’s further hearing after 8 April 2004.

4. Liberty to restore to the Senior Commissioner’s list for a 9.30 am mention on two days’ notice.

13. Those orders were made in consequence of the expression in pars 23 and 24 of the following “conclusion”:—

23 I conclude that the application is not a permissible use in its current form. However, a number of relatively minor amendments could make it comply with the above definition of a road transport facility.

24 In response to this finding the applicant undertook to amend the application to comply with the above definition of a road transport facility. The parties agreed to the following orders:

14. That conclusion had followed the relevant passages in the Senior Commissioner’s judgment where he had answered the two questions which he had earlier posed for himself at par 7 (“It was common ground between the parties that, in seeking an answer to whether or not the proposal is permissible, I should ask myself two questions, ie •What is a road transport facility? •Is the proposed development a road transport facility?”). Those passages are as follows:—

What is a road transport facility?

17 In the absence of a statutory definition I have to rely on the ordinary meaning of the term, aided by the knowledge of what the council had once considered an appropriate definition and by the RTA’s guidelines for service centres.

18 A road transport facility is a place, building or complex of buildings adjoining or close to a road, highway, freeway or motorway, the purpose of which is to serve the needs of the users of the road, highway, freeway or motorway. The test, whether the facility as a whole constitutes a road transport facility is whether the primary purpose of the whole, or any element of it, is to serve people who travel along the road towards some other destination and for whom a stop at the facility is incidental to their journey. Thus a facility to which people travel as their principal destination, (ie to do their weekly shopping, stay for the weekend or have dinner) only to return to their point of origin, is not a road transport facility.

19 A road transport facility must contain

· Petrol and diesel facilities

· Toilets

· Adequate parking for cars, buses and trucks

20 It may contain

· Restaurant(s)

· Overnight accommodation for car and truck drivers and passengers

· Emergency maintenance and spare parts

· Shops of a size and kind that serve road users and do not compete with nearby shopping centres

· Any other uses catering to the needs of road users.

Is the proposed development a road transport facility?

21 In my opinion, the proposed development in its current form is not a road transport facility, for the following reasons:

· It does not provide toilets for road users;

· It provides too much parking for the accommodation units and inadequately for buses and trucks.

22 I accept that the accommodation units primarily serve road users. The acceptance is subject to the proviso that the parking is reduced to closer to one car per unit, that there is a limit of two nights’ stay in the units, and that the two nights limit is clearly displayed in the reception office and all advertising and promotion of the accommodation. I also accept that the two shops, by virtue of their small size and the provision of only 4 parking spaces for each, are intended to serve road users and not as an alternative shopping centre.

15. I think it is necessary to observe that the manner in which the hearing proceeded before the Senior Commissioner on 27, 28, 29 January 2004 involved a significant departure from the relevant requirements of the Rules of Court concerning the conduct of proceedings in Classes 1, 2 and 3 of the Court’s jurisdiction.

16. It is clear that the “threshold issue” that the parties requested the Senior Commissioner to determine in advance of any consideration of the planning merits of the case, raised a question of law, namely whether the proposed development was for a permissible (as opposed to prohibited) purpose of development in terms of the EP&A Act.

17. At the time that the hearing dates were allocated for the present proceedings, no such issue had been raised. It was raised for the first time on 8 December 2003 when the Council filed its final version of its Statement of Issues (via Issue 1 which has earlier been recited). However, in thereby raising the issue no request was made in terms of Paragraph 7 of the Court’s 1993 Practice Direction for the case (including any question of law) to be heard by a judge. Instead, as I have earlier noted, the issue was raised by the parties at the commencement of the hearing by the Senior Commissioner who acceded to the parties’ joint request that he determine as a preliminary issue the disputed question of the permissibility of the proposed development.

18. As earlier noted, the procedure adopted involved a significant departure from the requirements of the Rules of Court. In particular, the following Rules contained in Part 13 of the Rules of Court were not complied with in the hearing of the case conducted on 27, 28 and 29 January 2004—

16 Requirements for hearing

Where proceedings are not referred to mediation or conciliation or where the proceedings remain unresolved following mediation or conciliation, they will be fixed for hearing. Where proceedings have been fixed for hearing the following requirements apply:

………..

………..

..………

………..

………..

(f) unless a point of law is raised at the call-over referred to above, in accordance with rule 14 it can only be raised in the proceedings by leave by notice of motion,

(g) subject to the foregoing it shall not be open to a party to raise any question of law in proceedings before an Assessor and the determination by the Assessor shall be made:

(i) on the issues in dispute between the parties, and

(ii) on the merits of the case,

(h) despite paragraph (f) and (g) where in proceedings heard by an Assessor a dispute arises as to whether there is power in the Court to grant the application, the Assessor shall refer the question to the Chief Judge pursuant to section 36 (5) of the Act,

19. Rule 14 which is referred to in Rule 16(f) provides as follows—

14 Issues identified and settled

Issues, including questions of law, are to be identified with precision and settled at the first call-over before the Court. They cannot later be added to or expanded without leave.

20. However, on 24 March 2004 when the proceeding next came before the Senior Commissioner for mention, and the Council by Notice of Motion filed in Court that day applied for the dismissal of the proceedings upon the ground that there was no valid development application before the Court and the Applicant responded by requesting the Senior Commissioner to refer the questions of law pursuant to the LEC Act, s 36(5) the reference that was made on that occasion was in fact conformable to the requirements of Part 13 Rule 16(h).

21. Referring to the same requirements of Part 13 of the Rules of Court (together with the related Rule 8(f) concerning the Registrar’s powers at callover) I made the following observations in Lainson v Sutherland Shire Council (1998) 108 LGERA 1 at 10 which in the light of what has occurred in the present case, bear repetition—

The clear policy of the foregoing Rules is that (i) pre-hearing procedures identify any disputed questions of law so that the Registrar can give appropriate directions in cases where such questions are raised and (ii) hearing procedures enable adjudication by Assessors on the planning merits untroubled by questions of law.

These procedures do not effect an inflexible regime that all questions of law that are identified be determined by a Judge in advance of any merits hearing by an Assessor, but rather, that where appropriate such procedure can be adopted. This must necessarily be the case because experience in litigation has long demonstrated that not every question of law raised in proceedings requires an answer and that often times what at the outset of litigation looms as an important question of law simply disappears in the course of the litigation or does not feature in the reasons for judgment. But that said, it remains the principal task of the Registrar at callover to determine appropriate directions for the conduct of the proceedings as appear best adapted for the just, expeditious and economical disposal of the proceedings. Part 13 Rule 8(4)(c).

22. There can be no doubt that in the present case, the question of the permissibility of the proposed development raised a question of law that required adjudication. It was adjudicated upon, but not in a manner contemplated by the Rules of Court.

C. THE COMPETING ARGUMENTS ON THE REFERRED QUESTIONS OF LAW

23. The competing arguments were founded on fundamentally different perceptions of the legal effect of the Senior Commissioner’s interlocutory judgment delivered on 29 January 2004.

24. The Council’s argument fastened upon the Senior Commissioner’s conclusion expressed in paragraph 21 of his judgment that “the proposed development in its current form is not a road transport facility……” and his related conclusion expressed in the first sentence of par 23 “that the application is not a permissible use in its current form”. The Council argued that the legal consequence of these conclusions was that the development application was necessarily invalid because it proposed a prohibited development—see Chambers v Maclean Shire Council (2003) 126 LGERA 7—which was legally incapable of receiving the grant of development consent.

25. The Applicant’s competing argument reflected a very different perception, namely that the two conclusions relied upon by the Council were materially qualified by (i) the second sentence of par 23 (“However, a number of relatively minor amendments could make it comply with the above definition of a road transport facility”); and (ii) the orders that were made by the Senior Commissioner and the reasons for making the orders (as expressed in par 24).

26. It is obvious that in making the orders, with the agreement of both parties, the Senior Commissioner positively contemplated that the Applicant would file and serve amended plans (making the “minor amendments” to the proposed development so that it would thereby qualify as a “road transport facility”) that leave pursuant to Part 13 r 16(b1) would be granted for the Applicant to rely upon the amended plans and that the hearing on the planning merits of the amended development application would ensue and the proceeding would then be concluded.

27. The Council, in advancing its case for the dismissal of the proceedings upon the basis that there was no valid application before the Court for the carrying out of a permissible purpose of development, candidly conceded that it had originally agreed to the orders that were made by the Senior Commissioner in his judgment but had since repented of the decision once it had fully appreciated the legal consequences of the Senior Commissioner’s conclusion that “the application is not a permissible use in its current form” (par 23). No estoppel has been asserted against the Council in respect of this radical change in its conduct of the litigation.

28. In my opinion, it is tolerably clear that the Senior Commissioner’s judgment did not determine as a res judicata that the proposed development was a prohibited purpose of development for the following reasons:

(i) neither of the conclusions relied upon by the Council that I have earlier recited was translated into the only Orders that were made by the Senior Commissioner;

(ii) on the contrary, the Orders that were made, give effect not to those conclusions, but to the qualifying conclusion expressed in the second sentence of par 23 that with “relatively minor amendments” made to the proposed development, the proposal would comply with the meaning of a “road transport facility” that was adopted by the Senior Commissioner in pars 18 to 20 of his judgment;

(iii) the conclusions expressed in the Senior Commissioner’s judgment that are relied upon by the Council are clearly not final conclusions—rather, they are clearly qualified and provisional conclusions, and as such they do not create any res judicata or estoppel: see “The Doctrine of Res Judicata by Spencer, Bower, Turner and Handley (3rd ed) Chapter 5;

(iv) the effect of Part 13, r 16(f) (g), and (h) of the Rules of Court was to deny the Senior Commissioner the power to determine whether the Court had the power to grant development consent to the application; and

(v) moreover, the fact of the subsequent reference of the questions of law pursuant to the LEC Act, s 36(5) demonstrates that the Senior Commissioner had not already adjudicated upon those questions.

29. The Council argued that in expressing qualifications to the conclusions (relied upon by the Council for the purposes of its present argument) the Senior Commissioner had exceeded the function that he had set himself, namely “to determine the threshold issue, namely whether or not the proposal is permissible” (par 1 of his judgment) and that it was legitimate to ignore the qualifying expressions to his relevant conclusions on that threshold issue, because those conclusions, themselves constituted the determination of the threshold issue.

30. However, this submission constitutes an open attack on the very decision of the Senior Commissioner which provides the sole foundation for the Council’s present argument that the appeal should be dismissed because the proposed development is for a prohibited purpose of development. It is simply not open to the Council in the present context to advance this argument (which is an argument that might possibly be advanced in support of an appeal pursuant to the LEC Act, s 56A against the decision of the Senior Commissioner).

31. The present proceedings do not involve any such appeal. Rather, they involve a reference of questions of law and it appears to me to be inevitable that in this context, the Council’s reliance upon the judgment of the Senior Commissioner must embrace all that is relevant in the judgment and that relevant content most assuredly includes the Senior Commissioner’s qualifying conclusion that the proposed development could be readily amended so as to comply with the Senior Commissioner’s understanding of what is meant by the permissible purpose of a “road transport facility”.

32. It may be accepted that the more conventional outcome of an adjudication on a disputed question of the permissibility of a proposed development in the context of a development appeal is that the proposal either is, or is not, a permissible purpose of development. But be this as it may, it is not difficult to see how and why the Senior Commissioner adopted a different outcome, because of the obvious marginality of the degree of non-compliance of the proposed development with his understanding of the category of permissible development “road transport facility” and his finding of the obvious capacity for the proposal to be amended to eliminate that element of marginal non-compliance and thereby achieve a state of compliance with the permissible category of development.

33. The consequence of there being no relevant final and binding judicial determination that the proposed development is for a prohibited purpose of development means that there is simply no basis for the Council’s submission that the Applicant’s development application is “invalid” or a “nullity” or “not a (development) application in terms of the (EP&A) Act”—such as was held to be the case in Chambers at 14, 15 and 16 (per Ipp JA in giving the leading judgment in the Court of Appeal). But before a conclusion can be reached that a development application is an invalid or ineffective development application (or not a development application) because it is seeking consent to the carrying out of “prohibited development” within the meaning of the EP&A Act there must first be a judicial determination that the proposed development is relevantly “prohibited development’, at least in the context of litigation (including the hearing of a development appeal) where there is a genuine dispute as to whether a proposed development is permissible development. This is what occurred in Chambers, (a judicial review case) and it was only in consequence of the Court of Appeal’s decision that the proposed development was “prohibited development” that the Court could conclude that the development application to carry out that development was an invalid application and the council’s grant of development consent to that application was invalid.

34. In the present proceedings, for the reasons given, there has been no relevant binding and final judicial determination that the proposed development is relevantly “prohibited development” and properly understood, the Senior Commissioner’s judgment delivered on 29 January 2004 provides no such determination, for the reasons I have given.

35. Accordingly, it is simply premature and unsubstantiated for the Council to claim that the proposed development is relevantly a “prohibited development” and on that account, the Applicant’s development application is invalid or a nullity or not a development application in terms of the EP&A Act.

36. It further follows that the present case does not require any consideration whether (as the Applicant submits) the later Court of Appeal decision in Currey v Sutherland Shire Council (2003) 129LGERA 223 has relevantly qualified or undermined the authority of Chambers in holding that a development application made to a council for prohibited development is an invalid application or not a development application in terms of the EP&A Act.

37. Without needing to delve deeply into the two Court of Appeal cases, it appears to me to be tolerably clear that they are reconcilable decisions if attention be focussed on the state or condition of the relevant development application at the time of its determination. In Chambers, the Court held that the question whether development was for a permissible or prohibited purpose involved a jurisdictional fact with the consequence that if the Court’s determination of that question was that the development was a prohibited development, there was no power for development consent to be granted by a council and if such a consent had been granted its validity could be impugned in appropriate Court proceedings. In Currey, at the time that the development application was determined, there was no issue but that the proposed development was for a “permissible purpose”, because of a supervening change in the relevant planning law that occurred during the pendency of the development application, whereby the proposed development became a permissible purpose of development.

38. But the conclusions reached in Chambers that the development consent was invalid and the development application that generated that consent was invalid or not a development application in terms of the EP&A Act, both flowed retrospectively from the Court’s determination by way of a finding of jurisdictional fact that the proposed development was for a “prohibited development”, can have no application to the present case simply because there has been no final and binding judicial determination that the proposed development is for prohibited development.

39. It follows that once the sole source for the Council’s argument is shown to be lacking (as I have endeavoured to demonstrate) the answers to the referred questions of law become readily apparent. In the result, the orders made by the Senior Commissioner’s judgment will be shown to be appropriate.
D. DETERMINATION of THE REFERRED QUESTIONS OF LAW

40. Question 1 raises the question of the current validity of the development application, the subject matter of the part heard proceeding before the Senior Commissioner.

41. For the reasons earlier given, there is nothing in the Senior Commissioner’s judgment that justifies the legal conclusion that the development application is invalid or is a nullity or is not a development application in terms of the EP&A Act.

42. Accordingly, this question should be answered in the negative by holding that the development application is not invalid or a nullity.

43. Question 2 raises the question of the legal capacity for the current development application to be amended so as to bring the proposal into conformity with the meaning adopted by the Senior Commissioner of the permissible purpose of development “road transport facility”. The sole basis for the Council’s argument that the development application is not capable of being so amended, is the Council’s unsubstantiated claim that the Applicant’s development application is invalid or a nullity etc.

44. But for this argument, the Council does not deny the existence or availability of the sources of the relevant amendment power (namely cl 55 of the Environmental Planning and Assessment Regulation 2000 and Rule 13 Pt 16(b1) of the Rules of Court—see Ervin Mahrer and Partners v Strathfield Council(No 2) (2001) 115 LGERA 259.

45. Having rejected the Council’s principal argument, it follows that there is no case made out denying the legal capacity for the development application to be amended in the manner contemplated by the Senior Commissioner’s judgment, so that the proposed development complies with the permissible purpose of development “road transport terminal”.

46. Accordingly, the question should be answered in the affirmative.

47. Question 3 is predicated upon an affirmative answer to Question 1. Since I have answered that question in the negative, it follows that this question does not arise.
E. CONCLUSIONS AND ORDERS

48. For all the foregoing reasons, I make the following orders—

1. The referred questions of law be determined as follows—

Question 1: Whether, in the light of the Senior Commissioner’s interlocutory judgment delivered on 29 January 2004, the Applicant’s development application is a nullity and there is no power to grant development consent to the application in the amended form contemplated by the Senior Commissioner’s judgment.

Answer: No

Question 2: Whether the development application is legally capable of being amended in the manner contemplated by the Senior Commissioner’s judgment.

Answer: Yes

Question 3 If the answer to Question 1 is in the affirmative, whether the application ought be dismissed.

Answer: In view of the negative answer to Question 1, the question does not arise.

2. Remit to the Senior Commissioner for further hearing my determinations of the questions of law pursuant to the Land and Environment Court Act 1979, s 36(6)(b).

3. Reserve the question of costs.

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I HEREBY CERTIFY THAT THE PRECEDING 48 PARAGRAPHS ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT OF THE HONOURABLE JUSTICE N R BIGNOLD.

Associate