Legal & General Life of Australia Limited v North Sydney Municipal Council

[1990] HCATrans 104

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S35 of 1990

B e t w e e n -

L2GAL & GENERAL LIFE OF AUSTRALIA

LIMITED

Applicant

and

NORTH SYDNEY MUNICIPAL COUNCIL

First Respondent

and

MINTEYVILLE NORTH SYDNEY PTY LIMITED

Second Responde~t

Application for special leave to

Legal

appeal

MASON CJ
BRENNAN J

DEANE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 MAY 1990, AT 12.01 PM

Copyright in the High Court of Australia

Sl T 8/1/RB 1 11/5/90

SIR M. BYERS, QC: If the Court pleases, I appear with my

learned friend, MR D. LLOYD, for the applicant,

the respondent in the Court of Appeal. (instructed

by Moore & Bevins)

MR M. TOBIAS, QC: If the Court pleases, I appear with my

learned friend, MR M.I. GORRICK, for the first
respondent, (instructed by Mallesons Stephen Jaques)

and with my learned friend, MR B. PRESTON, for the

second respondent, (instructed by Blackshaw Lindsay

& Bugden) who were the respondents in the court below.

MASON CJ: Yes, Sir Maurice.

SIR MAURICE:  Your Honours, the appeal concerns the interpretation

of State Environmental Planning Policy No 1 which is

an instrument which governs the relation between the

various environmental planning instruments under the

ENVIRONMENTAL PLANNING AND ASSESSMENT ACT and is,

except for limited restrictions, applicable throughout

New South Wales.

I do not know whether Your Honours have a copy

of this State Invironmental Planning Policy. We

have prepared folders, Your Honours, which contain
that and other relevant documents. Perhaps they

might be handed to Your Honours.

Your Honours, what we wish to say is that the

Court of Appeal, with respect, accorded to this instrument a width of operation which was inconsistent

both with its terms and with the Act itself.

MASON CJ:	What is the status of this instrument?
SIR MAURICE:	It has the status of a policy under section 37 of the ENVIRONMENTAL PLANNING AND ASSESSMENT ACT. If
Your Honours go to the back of the folder Your Honours will find some sections of the
ENVIRONMENTAL PLANNING AND ASSESSMENT ACT
reproduced, photocopied perhaps I should say, and
if Your Honours go to page 24 of those photocopies
Your Honours will see, perhaps, Division 2 at the
bottom of the page which says:

The Director may, after consultation with

such public authorities as he determines,

prepare a draft State environmental planning
policy with respect to such matters as are,
in the opinion of the Director, of
significance for environmental planning for

the State, and may submit it to the Minister.

Then 38 I do not think matters, Your Honours, and

39 provides for the making of the State environmental

planning policy. They are - the section at the

moment eludes me, but by the Act they are given an

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operation throughout the State, subject to any
contrary provision - it is 39(5), if Your Honours

please.

A State environmental planning policy shall

apply to the State or such part of the State
as is described -

Now there are elisions from the planning policy of areas in certain parishes, I think, around

Queanbeyan and so on, but apart from that, it is

of universal application. Now may I, whilst

Your Honours have a copy of the Act, just remind or draw Your Honours' attention to the fact that the

other types of environmental planning instruments
are regional environmental plans which Your Honours
will see are referred to at section 40, page 25 of

the text, and section 40(1) empowers the Director to -

prepare a draft regional environmental plan in
respect of a region or part of a region and
with respect to such matters as are, in the

opinion of the Director, of significance for

environmental planning for the region to

which, or to part of which, that plan is

intended to apply.

There are then provisions which require that there should be a public exhibition of the draft regional

environmental plan in section 47, which is at

page 27; there should be a consideration of those

submissions, section 49. Then, Your Honours, the
next genus, if I may call it such, of planning

instruments are local environmental plans which

Your Honours will see first referred to at page 30,

section 54 (1) :

A council may decide to prepare a draft

local environmental plan in respect of

the whole or any part of the land within

its area.

Then there are provisions empowering the minister

to direct a laggard council. Then there are
provisions such as section 57 for environmental

studies and then "Public exhibition of the draft

local environmental plan'~ which is section 66;

"Consideration of submissions" from the public; the

power to make a submission is section 67; considerations
of them at section 68; reports on them and at

section 70 there is a provision for the "Making of

local environmental plan".

Then, Your Honours, there is also provision for their amendment which is at section 74(2)(b).

So that one has the hierarchy, if I may use that,

of planning. So one starts of with the State

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environmental planning instrument, then one can

have a regional, then one has a local, and what

was concerned here was the relationship between

the State policy and the local.

There is a rather muddy section which is

section 36 which seems to say that you can make
provision whereby the State plan may override other
plans. That is section 36 at page 24, but I do not
think anything turns on it in this case. There was,

in this case, a local plan and that was a local plan

made prior to the Act coming into force but picked

up by the definition of "deemed environmental

planning instrument" and the definition of "environmental
planning instrument" which, unfortunately, Your Honours

do not have, I regret to say.

BRENNAN J:	What statutory force does this IDO 60 have?
SIR MAURICE:	This interim development ordinance has effect as

a local environmental plan in accordance with

which development must proceed under section 76(2)

of the Act, again which, Your Honours, we have not

reproduced, but section 76 says you cannot embark

upon development except in accordance - really

section 76(2) which says:

Subject to this Act, where an environmental planning instrument provides that

developments specified therein may not be

carried out except with consent being

obtained, a person shall not carry out the

development except on the land to which the

provision applies unless consent has been

obtained -

and so on.

MASON CJ:	How does this SEPP No 1 come to override that
statutory provision?
SIR MAURICE: Well, Your Honour, it comes to override it only

because it says it overrides it and perhaps because

of section 36 - that is what I referred to as the

muddy section, Your Honour, but section 36, which

perhaps owes its genesis in a way to-certainly some

of the language suggests some reference to

section 39 but Your Honours see it does not say

positively what it means, but it says:

In the event of an inconsistency between

environmental planning instruments -

then it goes on -

then, to the extent of the inconsistency -

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well, that is meaningless here, because they then

go on and say -

(a) there is no general presumption -

so obviously that is meaningless.	So one goes on
and sees:

unless otherwise provided -

(a) there is no general presumption that -

(i) a State environmental planning policy

prevails over a regional environmental plan

or a local environmental plan;

so the theory of that must be that if you have it

otherwise provided you can make a State planning

instrument prevail over a local. That seems to be

the notion.

BRENNAN J: At all events, the provision which contained the

dispensing power in question here was never

challenged as being untra vires?

SIR MAURICE:  I regret to say no, Your Honour. Any rate, that

seems to be - - -

DEANE J:  The effect of that would be that the latter prevails,

would it not, unless there is express provision?

SIR MAURICE:  Yes. If one then goes back to the beginning of

this draftand looks to the State environmental

planning policy, one sees that it starts off, apart

from definitions, apart from naming itself, that is

1 and 2, it says, "Aims, Objectives etc" and

then it says - - -

DEANE J: What are we looking at?

SIR MAURICE:  The State Environmental Planning Policy No 1

which is at the beginning of the folder. Clause 3

says: 

This policy provides flexibility in the application of planning controls operating

by virtue of development standards in

circumstances where strict compliance with

those standards would, in any particular

case, be unreasonable or unnecessary or

tend to hinder the attainment of the objects

specified in section S(a)(i) and (ii) of the

Act.

I do not need to worry Your Honours with the object.

Then it says it applies to the whole of the State

except for the various parishes which are in the

schc :le, which are in Gunning and so on. Then it says:

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5         This policy prevails over any

inconsistency between it and any other

environmental planning instrument,

whenever made.

So it is a strange way to do it- - -

BRENNAN J:	And notwithstanding section 76(2).
SIR MAURICE:	Your Honour, it is a very difficult notion to understand, I must confess, but that is what they
are saying and they seem to be saying to development
standards - operated by virtue of development
standards in circumstances and so on. One of the
development standards, of course, is height and
another is density, because the relevant applicable plan said there should be no more than five storeys
and the density should be no greater than 3.5:1.

Now, what the Council did was to say, well, yes,

you can have a 17 storey building there with seven

between what the Council consented to and what the relevant planning instrument provided.

storeys under the ground and a density of 15:1.

MASON CJ:	I suppose it would be unkind to point out to you,
to remind you of the fact that your client proudly possesses a 15 storey building.

SIR MAURICE:  That is right, Your Honour. I thought Your Honour

might ask me that - - -

MASON CJ:	I am not asking you; I am reminding you.
SIR MAURICE:	The reason is that its building went there before- - -
MASON CJ:	I realize that.
SIR MAURICE:	And Your Honours will see that the reason - there

is under tab 4 a copy of a letter to the Council

from a planner who, in fact, was concerned with the

drawing of this interim development ordinance. If

Your Honours go to the bottom, under the heading

"Controls" they say, the second sentence of the

penultimate paragraph:

In the North Sydney Planning Scheme, prescribed

in 1963, the area aong Alfred Streed, Milsons

Point, was zoned Special Business. The Scheme

contained few controls on development but it

did specify (in clause 47) that the maximum

floor space ratio -

should be, and he sets it out -

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However, it was not until the late 1960s

that Milsons Point attracted the interest of

developers of large scale buildings .....

The response to a surge of development

throughout the Municipality about that time

(which included Legal & General House) the

Council had consultants prepare a development

control plan for the whole area. Under it,

more restrictive controls on height and

floorspace were introduced in Milsons Point.

Then he goes on:

The Council and then Planning and Environment

Commission realised that these "informal"

controls were inadequate to control development

around the Harbour foreshores. As a result,

Interim Development Order No. 60 was introduced in 1975. It was designed, in part, to halt

what was seen as the excessive development

occurring on Milsons Point and to protect the

amenity of the existing, but new, major

buildings in the area. One site in particular

was singled out for specific control - Lots 1,

2, 3, 4 and 5, D.P. 25296 and Lot 6, D.P. 211727 -

the site of this development application .....

That site had a 5 storey height limit imposed

on it which was coupled with a maximum floorspace

ratio of 3.5:1 and a limit of 2:1 on the

commercial floorspace -

And that is the relevant plan. So, in fact, we

had put that in to Your Honours in this book- - -

BRENNAN J: But, Sir Maurice, the basic question is, assuming

that this SEPP No 1 has the effect which one presumes

clause 5 intended it to have, section 6 or clause 6

of it has the scope which the Court of Appeal

attributed to it.

SIR MAURICE:  That is so, Your Honour. We say it does not.

And we say that perhaps - it contains an object or

aims clause which has statutory effect to be given to

it under section 25(3) of the Act which says, at

page 19 in the photocopy of the Act that we have put

in this book, and Your Honours will see at

subsection (3) it says:

Where a provision of an environmental

planning instrument is genuinely capable of

different interpretations, that interpretation

which best meets the aims, objectives, policies

and strategies stated in that instrument shall

be preferred.

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So it takes the object as a given. Now, what the

Court of Appeal did was to interpret the objects clause and say it did not mean what it said, rather

as if you were to take the second reading speech

and say the minister did not say that. That is a

sort of analogy and I will take Your Honours to

that in a moment.

So that, Your Honours, one starts off and says:

This policy provides flexibility in the

application of planning controls operating - I think I have read that to Your Honours -

where strict compliance with those standards

would, in any particular case, be

unreasonable.

Then I suppose if one were to take out the word

"strict" one would still say:

where compliance with those standards would

..... be unreasonable -

So you still are faced with the fact that you have

to say that compliance with the standard would be

unreasonable, and the word "strict" goes in obviously

as a means of limiting the application of the consent.

That is borne out by clause 7 on the next page. If

Your Honours go to clause 7 Your Honours will see it

says:

Where the consent authority is satisfied that

the objection -

which is provided for -

is well founded and is also of the opinion

that granting of consent to that development

with the concurrence of the Director, grant	application is consistent with the aims of this Policy as set out in clause 3, it may,	consent to that development application
notwithstanding the development standard the subject of the objection referred to in clause 6.

And clause 6, as Your Honours perhaps have already

observed, says that:

Where development could, but for any development standard, be carried out under

the Act ..... the person intending to carry

out that development may make a development

application in respect of that development,

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supported by a written objection that compliance

with that development standard is unreasonable

or unnecessary in the circumstances of the
case, and specifying the grounds of that

objection.

So what one has, therefore, is the development

applying by reason of section 76 to control the

erection of buildings in the area and their use in

the area. Then one has this policy, designed

consistently with the provisions for amendment of

the local planning scheme and the like, to allow a

certain leeway and it is an ad hoc provision

because it says it only applies"in any particular

case"and "where strict compliance with those standards

would", in that case, "be unreasonable".

So, Your Honours, it sets its own limit. It

obviously does not allow amendment to the existing

development plan and to give the interpretation which

the Court of Appeal did to it would really be to

abolish that distinction. Now, might I just, before

I take Your Honours to the passage in the Court of

Appeal judgments, take Your Honours to the matter

under tab 1, that is a photocopy. Your Honours see,

towards the bottom, Alfred Street running along;

then on the corner of Alfred Street and Dind Street

Your Honours will see about six blocks. That is the

present plan and that is the subject of clause 14(4)

of the local planning scheme which I will take

Your Honours to in a moment. The next block up to

the left is the subject of clause 14(2) and the

block bounded by - it is really described as west

of Cliff Street, I think, is referred to by

clause 14(3).

So we have three storeys in the lower one, five

storeys in these five blocks and five storeys on the

other one. Now, Your Honours, the way they did it

was, first of all, in their local planning scheme which applies, under 12(4), in paragraph (e), say that:

The floor space ratio of a building -

now that,as I understand it, is the ratio of the

habitable floor space to the land on which the

building is erected -

shall not exceed -

(e) 3.5:1-

MASON CJ: What is it now, 15 or - - -

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SIR MAURICE: 15:1. And then Your Honours go down to

clause 14(4) - 14 begins at the bottom of the page -

and then 14(2) starts off five storeys on the

particular block, Northcliff, Paul Street, Alfred

Street and so on; then "land west of Cliff Street"

it says three storeys, and:

(b) where the site on which the building

is erected does not front either street,

be more han 3 storeys above the level -

and then (4), which applies here, Your Honours:

A building erected on lot 1, 2, 3, 4 or 5,

Deposited Plan No. 25296, or on lot 6,

Deposited Plan 211727, ..... shall not be

more than 5 storeys high.

Then they go on to other building, no more than six,

and others no more than eight. Now, what the

Council did, they said, very well, we will apply

the environmental policy to set aside the
restrictions contained in 12(3) and 14 to allow a

17 storey high block, seven storeys under the ground,

15:1 floor space ratio and thus rule out of the local
planning ordinance clause 14(4) altogether.and to rule

out of the local planning ordinance clause 12(3)(e)

altogether. So it has abrogated the local planning

instrument and we respectfully submit that that is

not what the aim of the Act is when one has

provisions for the alteration, which I reminded

Your Honours of in section 74 - the alteration of a

planning instrument requires public exhibition,

public submissions and	consideration of public
submissions.	Now, Your Honours- - -

MASON CJ:	I can understand the emphasis you place on clause 3 of SEPP No 1 in terms of support of the argument that
you are presenting, but when one has a look at
section 5 of the ENVIRONMENTAL PLANNING AND
ASSESSMENT ACT and looks at the objects that are
mentioned,in particular 5(a)(2), it does seem that
perhaps a paramount purpose that lay behind the
introduction of State Environmental Planning Policy
No 1 was to promote or make, as it were, more
possible the promotion of the economic use and
development of land.
SIR MAURICE:	Your Honour, that is one of the purposes,

obviously, but if that were so, then one is then
left with the question: why is it that there is a

special procedure laid down for the amendment of

local planning schemes which involve public

participation? So that in other words, if one read

this without the context, perhaps one could say that.

But when one reads it in that context, it is designed

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to operate in a context where there are these
hierarchy of environmental planning instruments
and where there are statutory provision to amend

or alter them in this particular, and in no other, and there is an obligation to abide by their terms

under section 76(2). So that is the context. So

we do submit, Your Honours, that the language of

3, coupled with the language of 7 of the State planning policy, indicates that aa a matter of

power, the Council must itself be satisfied that

granting consent to that development is consistent

with the aims of the policy as set out in clause 3.

Then one goes back to clause 3 and one sees

that it says:

in the application of planning controls
operating by virtue of development standards
in circumstances where strict compliance with

those standards would, in any particular case -

so it assumes the application of planning controls

either, one could say, in point of substance but

perhaps alleviated only in the circumstances where

strict compliance would give rise, in any particular

case, to the circumstances. And in that way the procedures for the amendment of the local plans,

T$	the amendment of the various plans, would be satisfied.
Now, Your Honours, what the Court of Appeal did - I do not know if Your Honours have read the
judgments - - -

MASON CJ: Yes, we have read the judgments.

SIR MAURICE: Well, Your Honour, page 14, what Their Honours do

is to read out of clause 3 the word "strict". Of course, with great respect to Their Honours, they

cannot do that because section 25(3) says you have

to have a look to what the aims and objectives are.

It does not enable you to, as it were, take them

out of the Act; one must apply the aims and

objects in the interpretation of the operative provisions. You do not, as it were, apply the operative provisions in the interpretation of the aims

and objects. You have just turned the whole notion

on its head. That is the first thing.

The second thing, Your Honours, that even if

you take the word "strict" out, you must still

find compliance and Their Honours seem to pay
little or no attention to that because one must
still find compliance with the standards and there
can be no suggestion that there is compliance albeit
not strict with a requirement of a building having

five storeys and the other floor space ratio with

one that has 17 storeys.

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BRENNAN J: That is not the proposition that the word

"strict" is directed to, Sir Maurice, is it? Is

not "strict" related to the reasonability or the

necessity of compliance with the standard prescribed?

SIR MAURICE:  No, Your Honour, with respect.

BRENNAN J: Is that not what it says, "strict compliance with"-

SIR MAURICE:  Where it says "where strict compliance", "strict

compliance" would mean nothing but "exact".

BRENNAN J:  Exactly. Now once you have got a case where

strict compliance is unreasonable or unnecessary,

the power conferred by clause 7 is enlivened and

that power, so far as the wording of clause 7 is

concerned, is unrestrained.

SIR MAURICE:  Oh no, Your Honour, with great respect. One must

still say - if one takes the word "strict" out, you

still have to say there is compliance, because in

the"circumstances where compliance with those

standards would, in any particular case". In our

submission, Your Honours, why "strict" is there is

to emphasize the restriction of the power. In other

words, you can only have a departure where exact

literal compliance with the standards, not substantial

compliance. In other words it is designed, in our

respectful submission, to contain the power consistently with the hierarchy of object.

Now what we submit, Your Honours, is that if

this decision of the Court of Appeal is right, then

it follows that all the planning provisions relating

to height in this area, for example, Milsons Point,

have been abrogated because the Council may, by

similar decision, abrogate them all. What does that

mean? That means that the plan has been used - this

environmental planning policy has been used to
abrogate, amend, alter the existing plan, and not

by recourse to public participation but by recourse

to the administering authority. True it is there has to be concurrence by the

director, but the director in this case, I think,

would be head planning officer of the Council.

BRENNAN J:  That night say something about the power to have

enacted SEPP No 1 but we are not concerned with that

proposition.

SIR MAURICE: Well, Your Honour, perhaps that is correct. I am

not saying Your Honour is concerned with the power,

but what I am respectfully submitting is Your Honour

must - or Their Honours must have construed the

power in the circumstances of the case. Now, we say

it is wrong for the reasons I have mentioned, but we

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say it is of general public importance because

this means that the procedures for amendment of the

local planning can be circumvented and that means

throughout New South Wales and we would submit

that that is far from the intention of the

legislature and far from the intention of the

State Planning Policy No 1.

Your Honours, I think that is all I can say, with respect. Seeing that the - yes, I think I

have already said the plan has State wide operation,

therefore it operates throughout this hierarchical
event and therefore if this is its proper interpretation,

then the hierarchy has planned to set aside.

MASON CJ: Yes. Sir Maurice, there is perhaps another point.

Granted for the purpose of argument that you have an

arguable case that the Court of Appeal was wrong

in the interpretation it placed on the provisions,

none the less is this a case in which this Court

should grant special leave to appeal? First of all,

it is a town planning case. The Court generally

views town planning cases with some degree of

aloofness, to adopt a neutral term, and it is an

area in which, after all, the courts with specialist

knowledge have advantages that are denied to mere

mortal judges, particularly when it comes to matters
of interpretation. After all, interpretation of

planning instruments take place on the part of

specialist tribunals who have specialist and expert

knowledge that they can bring to bear. These mysteries

are denied to us. And that is one of the reasons,

the substantial reason why the Court views cases of

this kind with some degree of remoteness.

SIR MAURICE: There is no question here, Your Honour, of any

planning principle; it is a question of language,

and this Court, of course, I would not say has any

trepidation about language, far from it, being the

custodian of the CONSTITUTION and so on.

MASON CJ:	I think the CONSTITUTION is rather better drawn
than the document you have drawn to our attention.
SIR MAURICE:	Your Honour, that is true, but that perhaps

requires that there should be a close eye directed

to it. In other words, what I am saying, Your Honour,

is that this does not involve any planning principles-

MASON CJ: Or any principle at all.

SIR MAURICE:  Any principle at all - well, it involves the

principle that words should be read-according to

their meaning and that the injunctions of the Act

in section 25(3)-

MASON CJ:  But that is not a matter of principle when you look

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at the arguments that you are expounding by way

of criticism of the interpretation adopted by the

Court of Appeal. There is no matter of principle

that you have referred to.

SIR MAURICE: Well, I suppose in a sense that is right. The

matter of principle is the proper interpretation

of the Act, Your Honour. In other words, one just

cannot throw the ~~AL PLANNING AND

ASSESSMENT ACT to the wolves and say, well, we will
not be concerned with that, because it is written and must be interpreted according to its language.

And there is, in our respectful submission, many

of the cases that Your Honours are concerned with
are cases which involve statutory interpretation in

which errors are corrected. Indeed, the learned

Chief Justice in the court below referred to this

as an important and, indeed, as	a novel question,
in his judgment.

We would submit that His Honour was right.

This was the first time, His Honour said, this question had arisen. His Honour then advanced a

reason of polity, which may or may not be correct,
with great respect to His Honour, but His Honour

did say that, at page 26 of the appeal book, that

it is "an interesting and important question"

involved, so certainly so far as the supreme court

was concerned, it was an important question.	He
said this was the first time this question had
arisen.

So what will happen, if Your Honours leave

errors, with great respect, uncorrected, what will

happen will be the structure of the Act will be

defeated. The purpose of giving to people

participation in the amendment of planning schemes

will be set to one side, because that is the result

of this decision, in our respectful submission. In

points of result, that is what happens.

DEANE J: But am I right, Sir Maurice, that if the minister

and the director do not like the decision of the

Court of Appeal, or if it came here and there was

a different decision and they did not like that

decision, could they not simply get what they liked

by changing SEPP Nol?

SIR MAURICE:  They could amend, yes. They could amend it.

They would have to amend it within the structure of the Act.

DEANE J: Yes, but that is simply the director says to the

minister, and the minister says to the governor.

SIR MAURICE:  Yes, Your Honour, but there are other factors.

There are rights involved.

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DEANE J:  But it seems to me to take it a little bit below

the level of the statute.

SIR MAURICE:  Yes, I see what Your Honour says, but what I

am - - -

DEANE J:  I have a feeling I am not fitting it in to its proper

place somehow.

SIR MAURICE:  I would agree with that, Your Honour, but I find

it difficult to answer what Your Honour says to me.

I think - you see, there would be a question of how

far environmental policies under section 37 could

go and that, no doubt, perhaps is a question for

another day but, Your Honour& I think I have said

everything that I can say in support of the application.

MASON CJ:	Thank you, Sir Maurice.	The Court need not trouble
you, Mr Tobias.

This application for special leave relates to

the interpretation of State Environmental Planning

Policy No 1, an instrument made under section 39

of the ENVIRONMENTAL PLANNING AND ASSESSMENT ACT, 1979,

of New South Wales. The instrument has an

extensive operation in the State and has an

important impact on the exercise of powers by

planning authorities.

However, the application raises no question

of principle in the field of interpretation. The

instrument is a subordinate planning instrument and

the interpretation of it now challenged is one

which was accepted by the specialist court, the Land

and Environment Court, and approved unanimously by

the Court of Appeal.

The application is therefore one not appropriate

to the grant of special leave. Accordingly the

application is therefore refused.

MR TOBIAS:	I seek costs, Your Honours.
MASON CJ:	You do not resist that, Sir Maurice?
SIR MAURICE:	No, Your Honour.
MASON CJ:	The application is refused with costs.

AT 12.47 PM THE MATTER WAS ADJOURNED SINE DIE

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