Macquarie International Health Clinic Pty Ltd v Sydney Local Health District; Sydney Local Health District v Macquarie Health Corporation Ltd; Macquarie International Health Clinic Pty Ltd v City of Sydney Council (No 9)

[2016] NSWSC 155

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Macquarie International Health Clinic Pty Ltd v Sydney Local Health District; Sydney Local Health District v Macquarie Health Corporation Ltd; Macquarie International Health Clinic Pty Ltd v City of Sydney Council (No 9) [2016] NSWSC 155

Hearing dates:

23 February 2016

Date of orders:

01 March 2016

Decision date:

01 March 2016

Jurisdiction:

Equity

Before:

Kunc J

Decision:

Declaration that development consent has not lapsed

Catchwords:

ENVIRONMENT LAW – Town planning – Whether development consent lapsed – “physically commenced” – Environmental Planning and Assessment Act 1979, s 95(4)

Legislation Cited:

Environmental Planning and Assessment Act 1979 (NSW)
Environmental Planning and Assessment Amendment Act 1997 (NSW)
Environmental Planning and Assessment (Savings and Transitional) Regulation 1998 (NSW)

Cases Cited:

Boral Resources (NSW) Pty Limited v Wingecarribee Shire Council [2003] NSWLEC 39; (2003) 124 LGERA 90
Day v Pinglen Pty Ltd (1981) 148 CLR 289; (1981) 45 LGRA 168
Green v Kogarah Municipal Council [2001] NSWCA 123; (2001) 115 LGERA 231
Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council [2005] NSWCA 169; (2005) 63 NSWLR 124; (2005) 140 LGERA 201
Iron Gates Developments Pty Ltd v Richmond-Evans Environmental Society Inc (1992) 81 LGERA 132
Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Services (No. 2) [2009] NSWSC 629
Macquarie International Health Clinic Pty Ltd v Sydney Local Health District; Sydney Local Health District v Macquarie Health Corporation Ltd (No 7) [2015] NSWSC 1733
North Sydney Municipal Council v Middle Harbour Investments Pty Ltd [1964] NSWR 934
O’Grady v Northern Queensland Co Ltd (1989-1990) 169 CLR 356
Over Our Dead Body Society Inc v Byron Bay Community Association Inc [2001] NSWLEC 125; (2001) 116 LGERA 158
Reysson Pty Ltd v Roads and Maritime Services [2012] NSWLEC 17; (2012) 188 LGERA 252
Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1960-1961) 105 CLR 602

Category:

Principal judgment

Parties:

Proceedings 2000/34949
Macquarie International Health Clinic Pty Ltd (Plaintiff)
Sydney Local Health District (Defendant)

 

Proceedings 2010/90340
Sydney Local Health District (Plaintiff)
Macquarie Health Corporation Ltd (Defendant)

  Proceedings 2015/348137
Macquarie International Health Clinic Pty Limited v City of Sydney Council

Representation:

Counsel:

R. Dubler SC, S. Kanagaratnam (Plaintiff)
G.K. Burton SC (Defendant)

  Solicitors:
S Moran & Co (Plaintiff 2000/34949, Defendant 2010/90340, Plaintiff 2015/348137)
Bolzan & Dimitri (Plaintiff 2010/90340, Defendant 2000/34949)
Kirsten Morrin, Council of the City of Sydney (Defendant 2015/348137))
Clayton Utz (Second Defendant 2015/348137)

File Number(s):

2000/34949 and 2010/90340 and 2015/348137

Publication restriction:

No

Judgment

Summary

1. This judgment deals with one issue: whether or not development consent D1997/154 granted by the Land and Environment Court of New South Wales on 19 June 1997 (the “Consent”) for a private hospital and other works at 35-43 Carillon Avenue, Camperdown (the “Private Hospital Site”) has lapsed.

2. Macquarie International Health Clinic Pty Ltd (“Macquarie”), the plaintiff in long running proceedings before me, contends that the Consent has not lapsed. Sydney Local Health District (the “District”), the defendant in those proceedings, submits to the contrary. City of Sydney Council, which is now the relevant local government authority, has filed a submitting appearance save as to costs. The long running proceedings to which I have referred relate to the construction of a private hospital (which was not built) and a car park (which was built) adjacent to the site of Royal Prince Alfred Hospital (the “RPAH Site”) at Camperdown in Sydney.

3. The Court has concluded that Relevant Works (as defined in paragraph [56] below) were “physically commenced” within the meaning of and period specified by s 95(4) of the Environmental Planning and Assessment Act 1979 (NSW) (the “Act”) on land to which the Consent applies with the result that the Consent has not lapsed. In these reasons references to the Act (unless expressly stated otherwise) are to the legislation as it was after the commencement on 1 July 1998 of the Environmental Planning and Assessment Amendment Act 1997 (NSW) (the “Amendment Act”).

Procedural history

4. The procedural background which has given rise to this judgment is set out in Macquarie International Health Clinic Pty Ltd v Sydney Local Health District; Sydney Local Health District v Macquarie Health Corporation Ltd (No 7) [2015] NSWSC 1733. These reasons should be read in conjunction with that judgment.

5. By summons filed in the Land and Environment Court of New South Wales (the “LEC Proceedings”) on 22 October 2015, Macquarie sought this declaration:

A declaration that development consent D1997/154 granted by the Land and Environment Court on 19 June 1997 for a private hospital at 35-43 Carillon Avenue, Camperdown has not lapsed.

6. By order of Justice Pain made on 20 November 2015 the LEC Proceedings were transferred to this Court and became proceedings 2015/348137.

7. With the consent of the parties, the transferred LEC Proceedings were, in effect, joined to the two sets of proceedings in this Court which had been heard before me for in excess of 100 days and in which judgment is currently reserved (the “Main Proceedings”). The Consent and the facts in relation to it had already been the subject of extensive submissions in the Main Proceedings. The relief sought in the LEC Proceedings was then made the subject of a separate determination from the Main Proceedings. These matters were effected by orders which I made on 2 February 2016 which included:

1.   The evidence in Supreme Court proceedings 2000/34939 and proceedings 2010/90340 (the “Proceedings”) be evidence in proceedings 2015/348137.

2.   Order, nunc pro tunc, that the Proceedings and proceedings 2015/348137 be heard together and be deemed to have been heard together.

3. To the extent that it is required, order, pursuant to UCPR Part 28, r 28.2 that all of the questions and issued raised by the Summons in proceedings 2015/348137 be determined separately from and before all other questions and issues in the Proceedings.

4.   Note that the determination of the questions and issues in proceedings 2015/348137 referred to in Order 3 above, does not determine any other question or issue in the Proceedings.

…

6.   Fix the further hearing of the Summons in proceedings 2015/348137 on 23 February 2016 at 10.00am.

8. The parties agreed upon the facts by reference to which the Court would determine whether or not the Consent had lapsed (the “Agreed Facts”). Those facts, to which I have added the relevant parts of the Consent, are set out in paragraphs [11] to [50] below.

9. On 23 February 2016 the Court heard further argument devoted solely to the LEC Proceedings. That argument was conducted by reference to the evidence and the submissions which had already been tendered and made in the course of the Main Proceedings, the Agreed Facts and further submissions directed specifically to the issue raised by the LEC Proceedings.

10. Two other procedural matters should also be recorded. First, the parties agreed that the Agreed Facts, to the extent they are otherwise relevant, are agreed for the Main Proceedings. Second, notwithstanding the note in paragraph 4 of the Court’s orders set out in paragraph [7] above, it was common ground that the Court’s determination of the status of the Consent would be applicable to one aspect of the relief sought by Macquarie in the Main Proceedings.

The facts

11. On 19 June 1997 Macquarie, through its agent PACE Property Management Services, obtained the Consent to demolish two buildings and erect a 7-9 storey private hospital and medical centre including ancillary facilities and a New Hospital Road (in association with an adjoining commercial car park (the “Car Park Site”) for which development approval was given on the same day by the Land and Environment Court) at the Private Hospital Site.

12. The relevant parts of the Consent are:

That development consent be granted to the application submitted by PACE Property Management Services, with the authority of the Central Sydney Area Health Service, for permission to demolish two buildings and erect a 7-9 storey private hospital and medical centre, including ancillary facilities and a New Hospital Road (in association with an adjoining commercial car park), at 35-43 Carillon Avenue, Camperdown (lot 12 DP 809663), subject to the following conditions, namely:

1.   That the development shall be generally in accordance with plans DA97.01B-24B, dated February, 1997.

2.   That, prior to issuing a Certificate of Classification by Council, and therefore operation of hospital, the adjoining commercial car park shall be fully operational (with 960 car spaces).

…

7.   That separate “entry only” access to the port-cochere area shall be deleted with access only from the New Hospital Road, and the entrance in to the port-cochere area shall be designed so as to ensure queuing of vehicles does not create traffic congestion.

8.   That attention shall be given to the design of the port-cochere area, following deletion of the “entry only” access of Carillon Avenue, including queuing back to Carillon Avenue and necessary turning circles for vehicles using that area.

…

15.   That the installation of traffic lights and pedestrian facilities at the intersection with Carillon Avenue, and the full construction of new Link Road between Carillon Avenue and the far end of the new car park shall be completed prior to commencement of construction or excavation of the car park, be at the applicant’s expense and to the satisfaction of the Director of Public Works and Services, unless adequate temporary construction traffic arrangements are agreed in writing with the Director of Public Works and Services. All temporary and permanent facilities are to be rectified to the required final standard to the satisfaction of the Director of Public Works and Services before operation of the car park commences. All plans and details of temporary and permanent works are to be to the satisfaction of the Director of Public Works and Services, prepared at the applicant’s expense and lodged with the building application.

…

18.   That the developer shall incur all costs associated with the design and construction of the widened roadway in Church Street to the extent necessary, including kerb, gutter, pavement, drainage and alteration to any public utility services, such work to be carried out by Council’s workforce and the costs to exclude the 45% surcharge.

…

21.   That prior to the commencement of any excavation of the site, a Road Opening Permit shall be obtained from the Director of Public Works and Services and details of shoring required to support the public way shall be submitted for the approval of the Director of Public Works and Services (that requirement for such shorting being at the Director’s discretion).

22.   That all construction traffic shall use routes involving Missenden Road, Salisbury Road, Carillon Avenue and the New Hospital Road unless otherwise specifically approved by the Director of Public Works and Services and a management plan of construction activities be submitted with the building application for approval.

…

64.LDA376   That building/demolition work in connection with the proposed development shall only be carried out between the hours of 7.00am and 5.00pm on Mondays to Fridays inclusive, and 7.00am and 3.00pm on Saturdays and no works shall be carried out on Sundays or public holidays – where applicable, these restrictions do not apply to the maintenance of site cranes nor to the use of mobile cranes which stand and operate from a public road, provided that a permit has been obtained from the Director of Public Works and Services Department for the use of a mobile crane.

65.LDA377   That the building/demolition work shall comply with Australian Standard 2436-1981 “Guide to Noise Control on Construction, Maintenance and Demolition Sites”.

…

67.LDA392   That during demolition/building work the public way shall not be obstructed by building materials or in any way whatsoever.

13. At the time the Consent was granted to Macquarie, the Private Hospital Site had existing buildings on it.

14. An aerial photograph taken on 4 October 1994 depicts the buildings existing on the Private Hospital Site at the time that the Consent was granted.

15. The buildings existing on the Private Hospital Site in June 1997 consisted of two store buildings forming part of the RPAH’s goods reception system.

16. The two existing buildings straddled the Private Hospital Site and the RPAH Site.

17. By 31 July 1997 PACE Property Management Services on behalf of Macquarie lodged Building Development and Building Application Q97-00689 with South Sydney City Council (the “Council”).

18. Building Development and Building Application Q97-00689 attached:

1. Drawing No 96035 AWD 08, being the Prince Alfred Private Hospital Stage 1 Demolition Plan (the “Demolition Plan”); and

2. Drawing No 96035 AWD 09, being the Prince Alfred Private Hospital Stage 1 Bulk Excavation Plan (the “Bulk Excavation Plan”).

19. On 14 January 1998 the Council granted approval for the works detailed in the Demolition Plan and the Bulk Excavation Plan.

20. Macquarie caused the two existing buildings on the Private Hospital Site, the subject of the Demolition Plan, to be demolished and removed between February or April and November 1998.

21. Aerial photographs taken on 29 September 1998 and 4 May 1999 show that the part of the two buildings existing on the Private Hospital Site in June 1997 had been demolished by 29 September 1998.

22. During the period February or April to November 1998 Macquarie undertook bulk excavation and earth works on the Private Hospital Site and the Car Park Site the subject of the Bulk Excavation Plan.

23. The bulk excavation involved:

1. clearing of the Private Hospital Site and the Car Park Site; and

2. earth works.

24. The clearing and earth works was to level the Private Hospital Site and the Car Park Site in preparation for laying footings.

25. Aerial photographs taken on 29 September 1998, 4 May 1999 and 16 March 2002 show the bulk excavation and earth works as having been undertaken.

26. The bulk excavation performed on the Private Hospital Site included the construction of storm water detention basins on the Private Hospital Site.

27. Aerial photographs taken on 29 September 1998, 4 May 1999 and 16 March 2002 show the storm water detention basins on the Private Hospital Site.

28. During the performance of bulk excavation and earth works, Macquarie uncovered several buried and full oil tanks.

29. The buried oil tanks were on the Private Hospital and Car Park Sites.

30. By 2 September 1998 Macquarie had caused the oil tanks buried on the Private Hospital and Car Park Sites to be extracted and removed from those sites.

31. The area above the location of the buried oil tanks was contaminated.

32. The cost of extracting and removing the buried oil tanks and remediating the associated contamination was $71,407.

33. By 2 September 1998 Macquarie had caused to be remediated an area contaminated by paint and lead near Church Street on the Private Hospital Site.

34. Remediating the area contaminated by paint and lead involved the removal and disposal of contaminated soil.

35. On 2 September 1998 the Environment Protection Authority confirmed that the buried oil tanks had been removed and advised that the site was suitable for the proposed private hospital.

36. At the time that the Consent was granted to Macquarie a major underground Sydney to Melbourne Telecom trunk line crossed the Private Hospital Site.

37. Macquarie excavated, removed and relocated that Telecom trunk line.

38. At the time the Consent was granted to Macquarie local Telecom cabling crossed the Private Hospital Site.

39. Macquarie terminated, removed and relocated that local Telecom cabling.

40. At the time the Consent was granted to Macquarie the existing buildings on the Private Hospital Site had underground electricity mains and overhead lines connected to them.

41. Macquarie terminated, removed and relocated the underground electricity mains and overhead line connected to the existing buildings on the Private Hospital Site.

42. At the time the Consent was granted to Macquarie the existing buildings on the Private Hospital Site had:

1. sewerage;

2. water (including storm water);

3. gas; and

4. electricity

5. lines connected to them.

43. Macquarie terminated, relocated and installed new sewerage, water, gas and electricity services located on the Private Hospital Site.

44. By approximately June 1999 Macquarie had performed earth works and construction work on New Hospital Road alongside the Private Hospital Site between Carillon Avenue and the Car Park Site which was the subject of consent conditions in both the car park development consent and the Consent (respectively, DA U97-00153 and DA U97-00154). The following remained to be done and were undertaken by contractor Simmons Civil Contracting engaged by the District’s predecessor: geotechnical and engineering tests of the road base; compaction testing of re-compacted sub-base materials; penetrometer testing, laying of asphaltic concrete, temporary shotcrete retaining wall repairs, the laying of a concrete median strip in Carillon Avenue, various line markings, required pram ramps, entry/exit signage and street signage in order to obtain an Interim Occupation Certificate [IOC] for operation of the car park in conjunction with other compliance work required for that purpose, including the work in paragraph [46] below.

45. The aerial photograph taken on 4 May 1999 depicts work performed on New Hospital Road alongside the Private Hospital Site between Carillon Avenue and the Car Park Site which was the subject of consent conditions in both the Car Park development consent and the Consent as at 4 May 1999.

46. By approximately June 1999 Macquarie had constructed but had not completed the connection of power, connection to Telecom, cutting in of sensors and commissioning/turning on of the traffic lights at the corner of New Hospital Road and Carillon Avenue.

47. Macquarie paid at least $6,307,877 towards the costs incurred in performing the works set out in paragraphs [17], [20], [22], [23], [26], [33], [37], [39], [41]. [43] and [46] above and the earth works and construction work in the introductory lines to paragraph [44] above.

48. By 23 May 2000:

1. the construction and commissioning of the traffic lights at the corner of New Hospital Road and Carillon Avenue had been completed: Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Services (No. 2) [2009] NSWSC 629 per Nicholas J (“Macquarie (No 2) [2009]”) at [61] to [69]; and

2. the cost of such works was $21,260: Macquarie (No 2) [2009] at [69].

49. By November 2000:

1. completion of the sub-surface and surface of New Hospital Road alongside the Private Hospital Site between Carillon Avenue and the Car Park which was the subject of consent conditions in both the Car Park development consent and the Consent had occurred: Macquarie (No 2) [2009] at [77] to [84];

2. the cost of such works was $53,573: Macquarie (No 2) [2009] at [85].

50. On 17 September 1998 Macquarie obtained conditional Building Approval for the private hospital.

The Act

51. It was common ground that the status of the Consent is to be determined by reference to s 95(4) of the Act. However, to understand other parts of these reasons (see paragraph [73] below) it is helpful to explain why that consensus is correct. As at the date the Consent was granted, the lapsing provision was contained in s 99 of the Act as it then was (the “unamended Act”). The lapsing provision became s 95 by operation of the Amendment Act, which commenced on 1 July 1998. Regulation 20 of the Environmental Planning and Assessment (Savings and Transitional) Regulation 1998 (NSW) provided that “Subject to Division 1, a development consent granted and in force under the unamended EP&A Act 1979 (including a development consent arising under Division 1) is taken to be a development consent granted and in force under the amended EP&A Act 1979”. Therefore, the question of lapsing of the Consent is governed by the Act.

51. Section 95 was in these terms:

95   Lapsing of consent

(1)  A development consent lapses 5 years after the date from which it operates.

(2)  However, a consent authority may reduce that period of 5 years in granting development consent. This subsection does not apply to development consent granted to a staged development application under Division 2A for development that requires a subsequent development application and consent.

(3)  Such a reduction may not be made so as to cause:

(a)  a development consent to erect or demolish a building or to subdivide land to lapse within 2 years after the date from which the consent operates, or

(b)  a development consent of a kind prescribed by the regulations to lapse within the period prescribed by the regulations in relation to the consent.

(4)  Development consent for:

(a)  the erection of a building, or

(b)  the subdivision of land, or

(c)  the carrying out of a work,

does not lapse if building, engineering or construction work relating to the building, subdivision or work is physically commenced on the land to which the consent applies before the date on which the consent would otherwise lapse under this section.

(5)  Development consent for development other than that referred to in subsection (4) does not lapse if the use of any land, building or work the subject of that consent is actually commenced before the date on which the consent would otherwise lapse.

(6)  Despite any other provision of this section, a development consent that is subject to a deferred commencement condition under section 80 (3) lapses if the applicant fails to satisfy the consent authority as to the matter specified in the condition within 5 years from the grant of the consent or, if a shorter period is specified by the consent authority, within the period so specified.

53. Section 4 of the Act included these definitions:

building includes part of a building and any structure or part of a structure, but does not include:

(a)  a manufactured home, a moveable dwelling or associated structure or part of a manufactured home, a moveable dwelling or associated structure, or

(b)  a temporary structure within the meaning of the Local Government Act 1993.

building work means any physical activity involved in the erection of a building.

development means:

(a)  the use of land, and

(b)  the subdivision of land, and

(c)  the erection of a building, and

(d)  the carrying out of a work, and

(e)  the demolition of a building or work, and

(f)  any other act, matter or thing referred to in section 26 that is controlled by an environmental planning instrument,

but does not include any development of a class or description prescribed by the regulations for the purposes of this definition.

development application means an application for consent under Part 4 to carry out development but does not include an application for a complying development certificate.

development consent means consent under Part 4 to carry out development and includes, unless expressly excluded, a complying development certificate.

land includes:

(a)  the sea or an arm of the sea,

(b)  a bay, inlet, lagoon, lake or body of water, whether inland or not and whether tidal or non-tidal, and

(c)  a river, stream or watercourse, whether tidal or non-tidal.

54. Section 4(2) of the Act provided:

(2)  A reference in this Act to:

(a)  the use of land includes a reference to a change of building use, and

(b)  the erection of a building includes a reference to:

(i)  the rebuilding of, the making of structural alterations to, or the enlargement or extension of, a building, or

(ii)  the placing or relocating of a building on land, or

(iii)  enclosing a public place in connection with the construction of a building, or

(iv)  erecting an advertising structure over a public road, or

(v)  extending a balcony, awning, sunshade or similar structure or an essential service pipe beyond the alignment of a public road, and

(c)  the carrying out of a work includes a reference to:

(i)  the rebuilding of, the making of alterations to, or the enlargement or extension of, a work, or

(ii)  enclosing a public place in connection with the carrying out of a work, and

(d)  a work includes a reference to any physical activity in relation to land that is specified by a regulation to be a work for the purposes of this Act but does not include a reference to any activity that is specified by a regulation not to be a work for the purposes of this Act, and

(e)  the demolition of a building or work includes a reference to enclosing a public place in connection with the demolition of a building or work, and

(f)  the carrying out of development includes a reference to the use of land or a building, the subdivision of land, the erection of a building, the carrying out of a work, the demolition of a building or work or the doing of any other act, matter or thing referred to in section 26 that is controlled by an environmental planning instrument.

Macquarie’s submissions

55. Macquarie submitted that because the Consent had been given on 19 June 1997 the effect of s 95(1) of the Act was that the Consent would lapse on 19 June 2002 unless s 95(4) of the Act applied. Macquarie submitted that section was to be construed by reference to the judgment of Tobias JA (with whom Santow JA and Stein A-JA agreed) in Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council [2005] NSWCA 169; (2005) 63 NSWLR 124; (2005) 140 LGERA 201 (“Hunter Development”).

56. Macquarie relied on the following works performed before 19 June 2002 (the “Relevant Works”) as constituting building, engineering or construction work for the purposes of s 95(4):

1. causing the existing two buildings on the Private Hospital Site, the subject of the Demolition Plan, to be demolished and removed;

2. undertaking bulk excavation and earth works (including clearing) on the Private Hospital Site the subject of the Bulk Excavation Plans);

3. causing oil tanks buried on the Private Hospital Site to be extracted and removed from the Private Hospital Site;

4. remediating areas on the Private Hospital Site which were contaminated by oil and paint;

5. the termination and diversion of services on the Private Hospital Site;

6. construction of stormwater detention basins on the Private Hospital Site;

7. performance of earth works and construction work on New Hospital Road; and

8. construction of the traffic lights at the corner of New Hospital Road and Carillon Avenue.

57. There was no dispute that the Relevant Works had been carried out lawfully. There was therefore no issue that they could not qualify as works that could avoid statutory lapsing: Iron Gates Developments Pty Ltd v Richmond-Evans Environmental Society Inc (1992) 81 LGERA 132.

58. It was submitted that, jointly and severally, the Relevant Works related to the subject matter of the Consent. The Relevant Works had been “physically commenced” because, applying Hunter Developments at [86] (see paragraph [82] below), they involved physical activity on the land to which the Consent applied that involved an appearance of reality and were not merely a sham.

The District’s submissions

59. The District’s argument directed attention to what it described as the “focus” or “core matter” or “core activity” of the Consent, being the building of the private hospital. That characterisation was fundamental to the District’s submissions.

60. Referring to the decision of the High Court in Day v Pinglen Pty Ltd (1981) 148 CLR 289; (1981) 45 LGRA 168 (“Day”), the District submitted that the Relevant Works did not objectively demonstrate a genuine commitment to proceed to build the private hospital. This would only be demonstrated by a sufficient connection or nexus or referability of the Relevant Works to the particular project that had been approved, in this case the private hospital (with the adjacent car park). Later in the District’s submissions this was described as an objective test which showed the genuineness of Macquarie’s intent to proceed, a commitment to a physical start on the approved structure that would demonstrate an irrevocable commitment to the project.

61. It was therefore submitted that the Relevant Works were in the nature of a sham or failed to demonstrate a genuine commitment to building the private hospital as the focus or core of the Consent. Irrespective of the characterisation of the Relevant Works, whether as preparatory, demolition, excavation or even building something, they had to be referable to the private hospital as the particular structure for which the Consent had been given. The Relevant Works were not specific to that building.

62. The District gave two examples. First, it was said that the demolition of the buildings on the Private Hospital Site was of a generic character and not for the purpose of building a private hospital. Second, the bulk excavation also did not demonstrate an intention to build a private hospital as opposed to anything else. Those two matters could only have qualified as the requisite physical commencement if Macquarie had gone on to undertake further excavation that was specifically referable to the design of the approved private hospital, for example in order to provide for specific footings and the slab.

63. This alleged failure to undertake work specifically referable to the private hospital was also called in aid to demonstrate what was said to be Macquarie’s absence of genuineness. That lack of genuineness, so it was submitted, was apparent from Macquarie’s failure to go on to do work such as the excavation for and laying of footings and the slab specifically referable to the private hospital design.

64. Paragraphs [59] to [63] above set out the District’s principal argument. Two other specific matters were also relied on.

65. First, in relation to the building of New Hospital Road, the District submitted that work done in building the road was not to be taken into account because it was not on land to which the Consent applied for the purposes of s 95(4) of the Act. The Consent referred to Lot 12, DP 809663. The land upon which New Hospital Road was supposed to be built did not form part of that deposited plan.

66. Further and alternatively, it was submitted that the obligation to build New Hospital Road was not referable to the private hospital but, rather, primarily serviced the Car Park Site. As such, any work done on New Hospital Road could not be taken into account in applying s 95(4) of the Act to the Consent.

67. Second, the bulk excavation could not constitute physical commencement because other work that had been required to be done before the excavation had not been completed. This argument relied on condition 15 of the Consent (see paragraph [12] above) to the effect that, among other things, the full construction of New Hospital Road (which the parties accepted was part of what that condition referred to as “New Link Road between Carillon Avenue and the far end of the new car park”) had to be completed before the commencement of the excavation of the Car Park Site. That had not been done before the bulk excavation was undertaken on the Private Hospital Site and the Car Park Site. The failure to observe that requirement was not put as a question of illegality, but rather as a failure to follow the order of activities specified in the Consent. Reduced to its essentials, this submission was that Macquarie could not be taken to have “physically commenced” something when matters anterior to the things relied upon for physical commencement had not been done.

Resolution – general conclusion

68. The Court is satisfied that the Relevant Works satisfy s 95(4) of the Act generally for the reasons advanced by Macquarie. The Court’s conclusion is based on three matters:

1. the application of the plain language of the Act to the facts, unassisted by authority;

2. by way of further support for the Court’s conclusion, the application of authority; and

3. the consequential rejection of the District’s submissions.

Resolution – plain language and authority

69. Section 95(4) contains six elements which must be satisfied for the Consent not to lapse. Those elements may be identified by parsing the section as follows:

(4)[A]  Development consent for:

(a)  the erection of a building, or

(b)  the subdivision of land, or

(c)  the carrying out of a work,

does not lapse if [B] building, engineering or construction work [C] relating to the building, subdivision or work is [D] physically commenced [E] on the land to which the consent applies [F] before the date on which the consent would otherwise lapse under this section.

70. I will consider each of these elements in turn.

71. [A] There can be no dispute that the Consent is a development consent for the erection of a building (the private hospital) and the carrying out of a work (the demolition of the existing buildings and the construction of New Hospital Road).

72. “A work” is not defined in the Act and no regulations were made to specify particular works under s 4(2)(d) of the Act (see paragraph [54] above). While I consider that demolition falls within that term as matter of plain English (in this context meaning the result of the application of physical labour), my conclusion is fortified by reference to the terms of both the unamended Act and the Act.

73. Section 99(3)(a) of the unamended Act (substantially re-enacted in s 95(3)(a) of the Act) refers to “a development consent to erect or demolish a building”. The definition of “development” in s 4 of the unamended Act did not refer to demolition, but did refer to “the carrying out of a work in, on, over or under that land”. Taken together those two matters suggest a legislative intention that demolition was “a work”. That process of reasoning has even greater force under the terms of the Act (see paragraph [53] above), in which the definition of “development” was expanded to refer expressly to “the demolition of a building or work”.

74. Turning to authority, in Over Our Dead Body Society Inc v Byron Bay Community Association Inc [2001] NSWLEC 125; (2001) 116 LGERA 158, Bignold J held that demolition work constituted the commencement of the erection of a building for the purposes of the Act. In Green v Kogarah Municipal Council [2001] NSWCA 123; (2001) 115 LGERA 231, Giles JA, (with whom Mason P and Ipp AJA agreed) said of the meaning of “a work” under the Act:

72 If this be incorrect, in my opinion the activities constituted carrying out of a work when considering the need for development consent. The definition of "development" in the Act (1995) included the carrying out of a work in, on, over or under the land and the definition in the Act (1999) included the carrying out of a work. As I have indicated, the concept of work, a work or the carrying out of a work is not greatly elucidated in other definitions. "Work" refers to something done to the land itself, the physical result of labour done on land (Parramatta City Council v Brickworks Ltd [1972] HCA 21, (1972) 128 CLR 1 at 24-5), but again attention must be focussed on the act or process. It is a question of fact and degree: in Parramatta City Council v Shell Company of Australia Ltd (1972) 26 LGRA 25, speaking of depositing filling on land, Street J said (at 31):

“As was pointed out during the course of argument, the depositing of filling on land may or may not be of such significance as to be regarded as ‘work', and thus a ‘development', within the relevant legislation. The building-up of a large sports ground or oval could readily and properly be regarded as a ‘work'. At the other end of the scale, the construction in a private garden of a small earth pocket in which to plant a shrub would not seem to be of such significance as to justify description as a ‘work'. In selecting where, between these two extremes, the present case falls, I am of the view that both the quantity of the filling as well as its significance in relation to the site is of importance.”

73 In my opinion the activities, whether or not they be categorised as only engineering work or construction work, were of such significance and for such a purpose that they constituted the carrying out of a work within the definition of "development" in either the Act (1995) or the Act (1999). Because condition 10 was not complied with, again they were prohibited and illegal, and the appellant's development consent lapsed notwithstanding the activities.

75. In my respectful opinion, demolition meets Giles JA’s exposition of “a work”.

76. [B] The Relevant Works are clearly “building, engineering or construction work”. While I do not think this conclusion can be seriously open to doubt, authority supports a broad interpretation of this phrase. Considering the expression “engineering work” in Hunter Development, Tobias JA said:

83 In my opinion, the expression "engineering work" in its context of forming part of the composite phrase "building, engineering or construction work", should be given a broad meaning to include all those activities associated with, and forming a necessary part of, the discipline of engineering applicable to the subdivision of land. There can be no doubt that engineering as such can involve many different elements: relevantly with respect to a subdivision, it involves civil engineering work such as the design and (possibly) the construction of roads, sewerage systems, drainage and the like.

77. [C] As a matter of plain English the Relevant Works related to the “building, subdivision or work” which was the subject of the Consent. That work was not confined to building the private hospital but included, in terms, demolition of the existing buildings and the construction of New Hospital Road. Insofar as the demolition of the existing buildings was concerned, the work which Macquarie undertook not only related to that demolition but was that demolition.

78. In Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1960-1961) 105 CLR 602 at 620, Taylor J said:

There could be no doubt that the expression “relating to” is extremely wide but it is also vague and indefinite. Clearly enough it predicates the existence of some kind of relationship but it leaves unspecified the plane upon which the relationship is to be sought and identified. That being so all that a court can do is to endeavour to seek some precision in the context in which the expression is used.

79. The context of s 95(4) offers two clues as to the interpretation of “relating to”. First, it is a provision intended to prevent the loss of a valuable right. That favours a wide or generous interpretation. Second, the use of the word “commenced” suggests that the “building, engineering or construction work” must in some way be anterior to the activity which is the subject of the development consent. A wide interpretation necessitates the inclusion of both the commencing of the activity which is itself the subject of the development consent or the commencement of earlier activity which is necessary for the undertaking of the activity which is the subject of the development consent.

80. This conclusion of principle is reflected in the proposition established by Hunter Development, binding upon me, that there is no independent category of work described as “preparatory work” which, as such, is excluded from consideration in the application of s 95(4):

104 I accept that the ambit of the expression "relating to" depends upon the context in which it appears: Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549, (2001) 114 FCR 472 at 487-8[68] and [69]. It involves, at the very least some real relationship or connection between the work and the subdivision in respect of which the consent has been granted. In my opinion, the required connection or relationship is satisfied if the relevant work is a necessary step in, or part of, the process required for, or involved in, the erection of the building, the subdivision of the land or the carrying out of the work (as the case may be) which is authorised by the consent.

…

106 As Tovedale also submits, work may be preparatory in a number of different senses. Normally one would regard work as "preparatory" if, chronologically speaking, it was work required to be performed prior to some other work being performed. But if the former is building, engineering or construction work and if it is a necessary step in the process which either expressly or by implication is authorised by the consent, then that is the end of the enquiry. No warrant exists for introducing into the expression "building, engineering or construction work relating to the building, subdivision or work is physically commenced on the land to which the consent applies", an exception in the case of work which is regarded as preparatory in the above sense where it otherwise meets the elements of the statutory formula. In my opinion, there is no warrant for the imposition of such a gloss upon what are relatively unambiguous words.

…

111 It follows from the foregoing that in my opinion there is no room in ss 99(2) and 95(4) for the concept of work which is "merely preparatory". The primary judge erred in perpetuating that concept, which has its origin in cases relating to the now abandoned statutory requirement of "substantial commencement". To seek to ascertain whether the relevant work is preparatory diverts the court from the only relevant questions, namely,

(a) was the work relied on building, engineering or construction work; if so,

(b) did it relate to the approved development; if so,

(c) was it physically commenced on the land to which the consent applied prior to the relevant lapsing date?

…

117 So in the present cases, I accept that the survey work and the geotechnical investigation work were preparatory to, but necessary for, the commencement of the actual road and sewerage works. They were also carried out for the purpose of facilitating the further detailed engineering design work. The latter purpose did not, on the approach I have adopted, disqualify the work from being carried out for a purpose which bore a real relationship to the approved subdivision works. The primary judge's decision to the contrary was, with respect, in error.

81. However, the statutory conferral of a valuable right carries with it a public interest that it should be acted upon. That public interest will be served by an interpretation that requires there to be some substance or reality in the relationship between the work which is physically commenced and the activity which is the subject of the development consent to which it must relate. In O’Grady v Northern Queensland Co Ltd (1989-1990) 169 CLR 356 at 365, Brennan J said of the similar expression “in relation to” (emphasis added):

If a cause of action has its origin in the carrying on of a mining activity … or if the relief sought is intended or likely to affect the carrying on of a mining activity in a manner that is not remote and merely incidental, the proceeding can fairly be described as a proceeding “in relation to” mining. There may well be a sufficient connexion between proceedings or a matter on one hand and mining on the other, albeit the connexion is indirect, where there is a significant degree of connexion. Provided the connexion is not so exiguous as to be insignificant, or to be remote and merely incidental, the connexion is a "real" one, and jurisdiction to entertain the proceeding or to hear and determine the matter is vested exclusively in the Wardens Court. The phrase "in relation to" is wide in its connotation and cannot be limited by a priori formulae designed to exhaust its meaning.

82. It is precisely this consideration which informs the conclusion in Hunter Development as to the outer limits of the relationship between the work which has been physically commenced and the subject matter of the development consent (emphasis added; citations omitted):

86 That is not to say that any survey work, albeit of a physical nature, would so qualify. Simply entering land in respect of which a subdivision has been approved and knocking in one or two pegs would not, in my view, necessarily qualify. There is an element of fact and degree in each case. Although in Besmaw Talbot J (at 436 [112]) observed that once Parliament had decided to delete the requirement of substantiality, there was little room for an argument that the works must not be de minimis, and that it was therefore reasonable to exclude any test of the degree and extent of the work under the present statutory regime, nonetheless the requirement that the relevant work relate to the approved subdivision requires a real nexus between them. In particular, the concept that the work must be "physically commenced", requires physical activity which involves an appearance of reality and which is not merely a sham. In other words, the relevant work must be more than merely notional or equivocal in that it must truly be work relating in a real sense to that which has been approved.

83. Applying Hunter Development, I am fortified in the conclusion which I have reached by reference to the ordinary and natural meaning of “relating to” that the Relevant Works had the requisite nature and degree of relationship to the building and work which was the subject of the Consent.

84. [D] The “building, engineering or construction work relating to the building, sub-division or work” was undoubtedly physically commenced. At the risk of repetition, insofar as demolition is concerned, the work was not only commenced but also completed.

85. [E] The work was also undertaken “on the land to which the [Consent] applies”. That is unarguably the case in relation to most of the work which comprises the Relevant Works. However, it also extends, as a matter of plain language, to the land on which the work in relation to New Hospital Road was done. Insofar as the Consent expressly included the building of New Hospital Road, it follows that the land on which that was to be done was land to which the Consent applied.

86. Insofar as recourse to authority is required, I respectfully adopt the conclusion of Lloyd J in Boral Resources (NSW) Pty Limited v Wingecarribee Shire Council [2003] NSWLEC 39; (2003) 124 LGERA 90 at [26] that the ““land to which the consent applies” is all land upon which works required by and authorised by the consent are to be carried out”. In that case the development consent concerned a quarry but also required an access road to be upgraded. His Honour had no difficulty in concluding that the road was part of the land to which the consent applied. The decision of Biscoe J in Reysson Pty Ltd v Roads and Maritime Services [2012] NSWLEC 17; (2012) 188 LGERA 252 is to the same effect.

87. [F] There was no dispute between the parties that the Relevant Works had been undertaken prior to the date on which the Consent would otherwise have lapsed.

Resolution – the District’s arguments are incorrect

88. There are two fundamental difficulties with what I have described as the District’s principal argument set out in paragraphs [59] to [63] above.

89. First, the argument sought to avoid the significance of the change in the relevant test from “substantially commenced” to “physically commenced”. It was common ground that the latter test was less demanding than the former. When Hunter Development (see paragraphs [80] and [82] above) is applied to the facts of this case, it cannot be said that the Relevant Works were insufficient or a sham so as not to engage s 95(4) of the Act.

90. Second, the District’s principal argument could only succeed if the various activities which were the subject of the Consent were able to be treated as freestanding items. That approach is not permitted by the Act.

91. Each of these matters will be developed in turn.

92. First, and with no disrespect intended, the District’s principal argument was a valiant attempt to force the square peg of the former “substantially commenced” jurisprudence into the round hole of the Act’s “physically commenced” test as interpreted by Hunter Development. Day, on which the District placed such heavy emphasis, was a case which was concerned with “substantial commencement”. So much is clear from one of the key passages of the Court’s judgment (at p 299):

We come then to this question of substantial commencement. As has been said, it isn’t a question of degree. The facts must be such as to the lead naturally to the conclusion that the commencement is not merely evident, but is substantial, that is, of considerable amount. The statutory purpose must be borne in mind. As substantial commencement involves a commitment of resources such proportions relative to the approved project has to carry the assurance that the work has really commenced.

93. That analysis is not directed to and does not assist in interpreting “physically commenced”.

94. The District’s attempt to translate the older jurisprudence to the Act is apparent by the similarity of the District’s argument to one of the classic statements of the “substantially commenced” test, being that of Hardie J in North Sydney Municipal Council v Middle Harbour Investments Pty Ltd [1964] NSWR 934 at 937:

The word “substantially” in the context in which it is used in the relevant provisions creates a real difficulty, and was the subject of interesting submissions from counsel. The use of the adverb “substantially” in the context, in my view, emphasizes two points, or perhaps two different approaches to the one point. One is that the commencement must be some positive unequivocal step indicating that the building for which consent or approval has been obtained has actually been commenced; in other words, that some work has been done on the site which is referable to and only referable to the particular building or structure that has been approved; in that sense, it emphasizes that the commencement must be a real or actual one as distinct from preparatory work and as distinct from a notional or equivocal or sham commencement. On this aspect of the case I am quite satisfied that there was a real, as distinct from a sham, and an unequivocal, as distinct from an ambiguous, commencement of the building work. The other point emphasized or brought out by the use of the word “substantially” is that indicated by Stirling L.J. in the Bournemouth Case where he stated that the corresponding phrase in the section then under consideration meant that “some substantial portion of the works … must have been physically commenced”. It will be seen that he construed the phrase as referring to the actual commencement of an important or substantial part of the work in question. On this approach to the problem in hand I am satisfied that the work was substantially commenced before the critical date. The laying of the foundation was a most important and substantial part of the work; it was fundamental to and the first essential step in the building process, and it was undoubtedly commenced before the expiry date.

95. In short, despite the urgings of the District, the Court cannot accept as correct an interpretation of “physically commenced” which, in reality, equates it with the more demanding test of “substantially commenced”. The two expressions mean different things.

96. Similarly, the District’s contention that Relevant Works was some sort of sham or insufficient commencement does not accord with the contemporary law as set out in Hunter Development (see paragraph [82] above). To adapt the language of that case, the Court has no difficulty in concluding that the Relevant Works were physical activity which involved far more than an appearance of reality and which were not merely a sham; they were more than merely notional or equivocal in that they were, objectively viewed, truly work relating in a real sense to what was approved by the Consent. The description of the Relevant Works, when added to what is visible from the aerial photographs, demonstrates that a considerable amount of work was done over a large area. The fact that, for example, the bulk excavation left the Private Hospital Site in a condition where it might also have been used for some other development if authorised by a further consent is irrelevant. What had been physically commenced clearly related to what had been approved by the Consent. The District’s submission that Macquarie should have gone on to excavate footings specific to the private hospital design is rejected as going beyond what is required to satisfy s 95(4).

97. The second difficulty with the District’s principal argument is that it depended upon dissecting the various activities authorised by the Consent. This required the Consent to be interpreted so as to identify its focus or core activity and understanding the other activities in that light. This approach introduces an impermissible gloss on the statute by suggesting that the “building, engineering or construction work” that is physically commenced must relate to the focus or core activity of “the building, subdivision or work” which is the subject of the consent. Such an approach does not accord with the language of the statute and would introduce an inconvenient element of uncertainty in the application of the statutory test because, for example, where multiple acts are expressly authorised, together constituting the approved development, it may not always be obvious what the focus or core activity is intended to be.

98. On its proper construction, the Act requires the development which is the subject of the relevant consent to be treated as an undifferentiated whole. So much follows from the definition of “development consent” in s 4 of the Act (see paragraph [53] above) as “consent under Part 4 to carry out development” where “development” can comprise one or more types of activity. This means that a development consent must be interpreted by reference to the activities which it in terms permits. Where it permits several activities, if work in relation to one of those activities is physically commenced then it is the whole of the consent that is saved from lapsing. The language of the statute does not contemplate or permit the possibility that only some part of the consent would not lapse, being referable to that activity in relation to which some work had been physically commenced. Applied to the facts of this case, the physical commencement of work in relation to the demolition of the buildings on the Private Hospital Site, the other works on that site and the construction of New Hospital Road means that the Consent (as a whole) did not lapse.

99. In relation to the demolition work I should also record for completeness my acceptance of Macquarie’s submission that under the applicable planning instrument – the City of Sydney Planning Scheme Ordinance 1971 – the Private Hospital Site’s zoning as “5(a) – Special Uses” meant that even the demolition work alone could not have proceeded in the absence of a development consent. However, I would have come to the same conclusion in relation to “physically commenced” in this case whether or not consent had been required for the demolition work and whether or not it had been expressly referred to in the Consent because, to quote Tobias JA in Hunter Development at [104] (see paragraph [80] above), the demolition work was “a necessary step in, or part of the process required for, or involved in, the erection of the building…which is authorised by” the Consent.

100. I will now consider the other two specific matters relied on by the District.

101. First, it was submitted that in relation to the building of New Hospital Road, that work was not done on land to which the Consent applied (see paragraphs [65] and [66] above). For the reasons set out in paragraphs [85] and [86] above that argument is rejected.

102. Furthermore, even accepting for the sake of argument that New Hospital Road primarily serves the Car Park Site (see paragraph [66] above), the construction of New Hospital Road was still relevant to the Private Hospital Site. So much is apparent, for example, from conditions 7, 8, 15, 21 and 22 of the Consent (see paragraph [12] above). New Hospital Road was required both for the construction of the private hospital and its ultimate operation. Therefore, work done in relation to New Hospital Road related to the Consent insofar as it authorised construction of the private hospital, quite apart from the specific authorisation of New Hospital Road in the Consent itself.

103. The District’s second subsidiary argument (see paragraph [67] above) was that the bulk excavation could not constitute physical commencement because other work had been required to be done before the excavation had not been completed. There are at least two answers to this argument.

104. First, even if it is correct, the other parts of the Relevant Works undertaken by Macquarie are sufficient to satisfy s 95(4).

105. Second, while condition 15 of the Consent suggests that the full construction of New Hospital Road was a prerequisite to commencement of the excavation of the Car Park Site, it said nothing about it being a prerequisite to the commencement of the excavation of the Private Hospital Site. In any event, where a development consent appears to contemplate a particular order in which works would be undertaken, the doing of some of those works (or works in relation to those works) out of order will still be sufficient to satisfy the statutory test provided the work was not illegal. The parties (correctly) accepted that there was no question of illegality in this case. The District’s second subsidiary argument therefore also fails.

Conclusion

106. Macquarie is entitled to a declaration that the Consent has not lapsed. I will hear the parties as to costs.

Amendments

01 March 2016 - In paragraphs [74] and [75] "Gyles" changed to "Giles".

Decision last updated: 01 March 2016