Neate v Shellharbour City Council

[2007] NSWLEC 526

Land and Environment Court

of New South Wales

CITATION:

Neate v Shellharbour City Council [2007] NSWLEC 526

PARTIES:

APPLICANT
David Neate

RESPONDENT
Shellharbour City Council

FILE NUMBER(S):

10337 of 2006

CORAM:

Pain J

KEY ISSUES:

Appeal - Development Consent - Question of Law :- whether Development Control Plan given proper, genuine and real consideration - whether Development Control Plan properly applied - relationship between Development Control Plan made under the EP&A Act and NSW Government Floodplain Development Manual

LEGISLATION CITED:

Environmental Planning and Assessment Act 1979 s79C, s117
Land and Environment Court Act 1979, s56A
Local Government Act 1993 s733
Shellharbour City Council Floodplain Risk Development Control Plan 2006

CASES CITED:

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321;
Neate v Shellharbour City Council [2007] NSWLEC 234;
Zhang v Canterbury City Council (2001) 51 NSWLR 589

DATES OF HEARING:

9 August 2007

 
DATE OF JUDGMENT: 

21 August 2007

LEGAL REPRESENTATIVES:

APPLICANT
Mr M Staunton
SOLICITOR
Wilshire Webb Staunton Beattie

RESPONDENT
Mr T Howard
SOLICITOR
Kells The Lawyers

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

21 August 2007

10337 of 2006 Neate v Shellharbour City Council

JUDGMENT

1 Her Honour: This is an appeal pursuant to s 56A of the Land and Environment Court Act 1979 (the Court Act) by the Council in relation to a decision of Senior Commissioner Roseth in Neate v Shellharbour City Council [2007] NSWLEC 234. In his decision the Commissioner granted consent to the demolition of existing buildings and the construction of 49 dwellings for older people with a disability on lot 2 DP214438 and lot 3 DP 786602, 118 Koona Street, Albion Park Rail. Such appeals are confined to questions of law.

2 The three questions of law raised by the Council were:

(i) In deciding to uphold the appeal, the Senior Commissioner failed to give proper, genuine and real consideration to the Shellharbour City Council Floodplain Risk Development Control Plan (DCP).
(ii) In deciding to uphold the appeal, the Senior Commissioner misunderstood, and misdirected himself on, the application of the DCP to the proposed development.
(iii) The conclusion reached by the Court that the flood liability of the development site was not a reason for refusal was manifestly unreasonable.

3 Section 79C(1) of the Environmental Planning and Assessment Act 1979 (EP&A Act ) provides that:

In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application:
(a) the provisions of:
(iii) any development control plan. . .

4 The Amended Statement of Issues in the proceedings identified flooding as a significant issue and set out a number of issues.

5 The Senior Commissioner is his judgment considered flooding at [23] – [37] as follows:

23 It is common ground that two kinds of flood potentially affect the site. One is a flash flood from the creek. For this there is little warning time, so evacuation would not be possible. However, the duration of such floods is less than an hour. The second kind of flood is a lake flood. For this there is a warning system, the warning time is about 24 hours and the rate of rise of floodwaters is modest. The duration of peak flood is less than a day.

24 The council’s case was that the site was subject to flooding and therefore not suitable for the proposed use. The applicant’s case was that the floor levels were above the Probable Maximum Flood (PMF) and therefore residents would be able to wait out floods in their dwellings. Emergency evacuations could be achieved by vehicles that could pass through Koona Street, which itself would be flooded. It was common ground that, in a 1:100 event, ordinary sedans would not be able to pass through Koona Street.

25 The council’s hydraulic expert was Mr E Rigby, while the applicant’s was Mr P Nichols, both of them hydrologists. The two hydrologists were joined in concurrent evidence by Mr S Opper, the Director of Emergency Management, State Emergency Services. Mr Rigby and Mr Nichols agreed that, relying on the DCP’s terminology, approximately two thirds of the site is in the High Risk Precinct, while the remainder (near Koona Street) is in the Medium Risk Precinct.

26 It was common ground between Mr Rigby and Mr Nichols that the proposal did not meet all the requirements of council’s DCP. In Mr Nichols’ opinion, the State government’s FPDM should take precedence over the council’s DCP, where these two documents are inconsistent. Mr Rigby accepts this, though he does not agree that the two documents are inconsistent in intent. I find it difficult to make a judgment on this aspect of the dispute, because the terminology used to describe the level of risk in the two documents is different, so that comparison is difficult. It is true that, as Mr Nichols points out, the DCP is directed towards preventing development on flood-liable sites, while the FPDM tends towards balancing flood risk with the economic development of land.

27 Mr Nichols, who relied on the FPDM, considered the risk posed by the proposal acceptable for the following reasons:

· That part of the site that adjoins Koona Street was low true flood hazard. All habitable floors of the development were above the PMF level. Residents can stay in their dwellings during floods, which will last less than 24 hours. Flash floods from the creek, for which little warning can be provided, would last less than an hour.

· Mass evacuation of residents will not be required as the development will be a safe refuge even in the PMF event.

· For lake flooding, the flood warning system will provide adequate notice to enable evacuation of selected residents.

· The permanently assigned 10-seater bus can negotiate a water depth of 0.8m. This would enable access in the 1:100 event (though not in the PMF).

· 24-hour nursing care, resuscitation equipment and back-to-base communication to the aged-care operator are provided on the site.

· While there would be no access in floods greater than the 1:100 event, such an event would result also in the closure of most regional roads in the Illawarra. The probability of the PMF occurring is very low.

· The risk to people and property complies with the FPDM.

28 Mr Rigby took issue with Mr Nichols on the following grounds:

· The proposal breaches numerous provisions of the DCP, in essence those that militate against intensification of use on High Flood Risk Precincts.

· In particular the DCP warns against aged-care accommodation in areas that are considered appropriate for general housing (section G6.3). It also suggests that increasing the density of development on the floodplain will, without careful management of flood risk through appropriate land use planning, lead to increased flood damage exposure.

· The FPDM does not provide a basis for assessing development applications. Rather it requires the preparation of Floodplain Risk Assessment Plans against which such applications can be assessed. The DCP is an attempt to prepare such a plan.

29 Mr Opper strongly opposed the development. His reasons were:

· Mass evacuation in the 1:100 event would be difficult.

· Evacuation in the PMF by vehicle would not be possible.

· The site would become an isolated island unsuitable for old people who may need help urgently.

· Residents may panic in floods and try and leave the site in their cars, which cannot negotiate Koona Street in the 1:100 event. Alternatively, they may want to return home during floods.

30 In Mr Opper’s opinion, the site is unsuitable for any kind of development.

31 The task of assessing the above evidence (which I have quoted only in summary) is one of balancing the risk of developing a flood-liable site against the economic loss of sterilising it. I note that the site is zoned residential. While this fact does not excuse it from being assessed for flood risk, in an ideal world a council would not zone a site residential if it considers it unsuitable for development, which is Mr Opper’s opinion. The question for the Court is to assess the risk posed by this proposal and to consider it in the context of risks that society accepts in other aspects of human activity.

32 The council’s DCP contains numerous objectives and performance criteria that would suggest the site is unsuitable for medium density housing occupied by old people. Against this must be set the many safeguards that the applicant has incorporated in its proposal in order to reduce the risks to acceptable levels.

33 As mentioned above, two kinds of flood potentially affect the site. In a flash flood from the creek, evacuation would not be possible. However, the duration of such floods is short and the likelihood that someone would have to be evacuated within just the critical hour is very small. The residents would stay within the buildings on floor levels above the PMF level.

34 In a lake flood the warning time is adequate to evacuate anyone likely to need medical care. In the 1:100 year event evacuation by the bus assigned exclusively to this project would be possible, though ordinary cars will not be able to negotiate Koona Street. I note that ordinary cars cannot negotiate many other roads in the region in the 1:100 event.

35 In all events, including the PMF event, residents will be able to stay on the site. The length of isolation is less than 24 hours. Elementary medical equipment and nursing care is available on the site at all times. The only real risk seems to me a PMF event compounded by a resident needing to be evacuated just during such an event.

36 Various figures were quoted for the likelihood of the PMF event, ranging from one in a million years to one in 19,000 years. Even if all these estimates are wrong, and the chance of a PMF event is one in a thousand years, the risk remains very small. It is a level of risk that society accepts in all other aspects of human activity.

37 In my opinion, the flood liability of the site is not a reason for refusal.

6 In submissions I was also referred to the joint hydrological experts’ report, the transcript of evidence in the hearing, parts of the DCP and the Floodplain Development Manual (FPDM). These were referred to in the Senior Commissioner's judgment at [7] as follows:

The Floodplain Development Manual, 2005 (FPDM) is a State Government document. While it is not statutory, it is relied on generally throughout New South Wales for guidance on development on flood-liable land. The council has its own document for the same purpose, the Floodplain Risk Management Development Control Plan (the DCP).

7 The parties’ submissions included reference to the terms of the FPDM and the DCP. The FPDM states that:

1.1.1 The Policy Statement

The primary objective of the policy is to reduce the impact of flooding and flood liability on individual owners and occupiers of flood prone property, and to reduce private and public losses resulting from floods, utilising ecologically positive methods wherever possible. That is:

· a merit approach shall be adopted for all development decisions in the floodplain to take into account social, economic and ecological factors, as well as flooding considerations;

· both mainstream and overland flooding shall be addressed, using the merit approach, in preparation and implementation by councils of strategically generated floodplain risk management plans;

· the impact of flooding and flood liability on existing developed areas identified in floodplain risk management plans shall be reduced by flood mitigation works and measures, including on-going emergency management measures, the raising of houses where appropriate and by development controls; and

· the potential for flood losses in all areas proposed for development or redevelopment shall be contained by the application of ecologically sensitive planning and development controls.

…
The policy shall be implemented in the following manner:

· The management of flood prone land is, primarily, the responsibility of councils. In addition, the Department of Infrastructure Planning and Natural Resources (DIPNR) has a lead role in the development of regional strategies and plans under the Environmental Planning and Assessment Act (EP&A Act). Therefore, councils need to be cognisant of regional strategies and plans, when determining standards and implementation arrangements for flood prone land in their service areas.

…
1.2 Purpose of the Manual
The manual supports the NSW Government’s Flood Prone Land Policy in providing for the development of sustainable strategies for managing human occupation and use of the floodplain considering the risk management principles outlined in Appendix B. These are based upon a hierarchy of avoidance, minimisation (using planning controls) and mitigation works.
This manual provides councils with a framework for implementing the policy to achieve its primary objective. It considers the costs and benefits of floodplain occupation in full recognition that associated management decisions need to consider broader issues in an integrated approach.
…
1.3 Who is the Manual for?

The Manual is written principally for local government, including councillors, senior managers, engineers, planners, environmental officers, development assessors, reserve managers and others. However, the manual will also be of interest to other organisations and individuals involved in floodplain risk management such as government agencies, landholders, community groups and consultants.

Appendix G is headed “Flooplain Risk Management Study Preparation”. Appendix L is headed “Hydraulic and Hazard Categorisation”.

8 The DCP states that it was prepared under the umbrella of the FPDM. Its objectives include at cl 1.3(d) and cl 2.4.1:

1.3(d) Reduce the risk to human life and damage to property caused by flooding through controlling development on land affected by potential floods.
…
2.4.1 Objectives

(a) To ensure the proponents of development and the community in general are fully aware of the potential flood hazard and consequent risk associated with the use and development of land within the floodplain.

(b) To require developments with high sensitivity to flood risk (eg critical public utilities) be sited and designed such that they are subject to no or minimal risk from flooding and have reliable access.

(c) Allow development with a lower sensitivity to the flood hazard to be located within the floodplain, subject to appropriate design and siting controls, provided that the potential consequences that could still arise from flooding remain acceptable having regard to the State Government’s Flood Policy and the likely expectations of the community in general.

(d) To prevent any intensification of the use of High Flood Risk Precinct or floodways, and wherever appropriate and possible, allow for their conversion to natural waterway corridors.

(e) To ensure that design and siting controls required to address the flood hazard do not result in unreasonable impacts upon the amenity or ecology of an area.

(f) To minimise the risk to life by ensuring the provision of appropriate access from areas affected by flooding up to extreme events.

9 The DCP sets out three steps to determine the relevant criteria applying to a development application. Step one is identifying the land use category, here “critical utility” because the proposed development is a Senior’s Living SEPP development. Step two is determining which floodplain and part of the floodplain the land is located in by reference to flood risk mapping (2.3 DCP). Two thirds of the land is located in a high flood risk precinct and one third is in the medium/low flood risk precinct (see [25] of judgment). Step three requires the controls outlined in cl 2.4 of the DCP be applied. In this case the site is identified as unsuitable for the land use for which development consent is sought.

Grounds 1 and 2

10 Grounds 1 and 2 are closely related and should be considered together.

Council’s submissions

11 The Senior Commissioner committed an error of law because he failed to take into account a relevant consideration, namely, failing to give real and proper consideration to the DCP. This case fits squarely within Zhang v Canterbury City Council (2001) 51 NSWLR 589 at 602. It is clear that the Commissioner was aware of the DCP from the judgment at [25], [26] and [32]. His failure was that he did not regard it as a fundamental element of his decision making. Rather, having considered it, he adopted his own test at [31] as to how the flood risk issue should be determined by reference to his perception of the risk society was prepared to accept. In doing so he misdirected himself on the application of the DCP.

12 The DCP recognises that the implementation of safeguards could sufficiently address flooding risks so as to make land uses suitable in some locations but also recognises that certain land uses are not suitable in certain flood risk precincts and the implementation of safeguards will not render them suitable. The proposed land use is classified as unsuitable and, on a proper application of the DCP, the implementation of safeguards did not render suitable what was unsuitable land use in the high risk precinct. While the Senior Commissioner recognised that the provisions of the DCP suggest the site is unsuitable for the proposed use, he erred by approaching the matter as if operational safeguards proposed by the Applicant should be set against the unsuitability. His approach was that the DCP only made an assessment of flood hazard, leaving the balancing of risks and safeguards to be determined outside the DCP against the test of what degree of risk society accepts in other aspects of human activity.

Applicant’s submissions

13 In the Joint Report the experts acknowledged and agreed that:

(a) approximately two thirds of the development site is in a higher risk precinct as defined by the DCP and thus is inconsistent with the DCP to that extent (Joint report, Exhibit 9, particulars 3.1.2);

(b) the DCP is based on a provisional hydraulic hazard rather than the true hazard as promoted by the FPDM (Joint report, Exhibit 9, particulars 3.9); and

(c) Provisional hydraulic hazard is only a starting point in the assessment of the true hazard as described in the FPDM (Joint Report, Exhibit 9, particular 3.4).

(d) If there is an inconsistency between the DCP and the FPDM, the DCP gives way to the FPDM (Joint Report, Exhibit 9, particular 3.1.2).

In relation to the last agreed point I note that there is not agreement by the experts that there is inconsistency between the FPDM and the DCP.

14 There was extensive evidence from the flooding experts before the Senior Commissioner as is clear from parts of the transcript referred to in argument. Much of the hearing on the flooding issue centred on the Applicant’s argument that when the FPDM is applied and other factors are considered for this particular development, the hazard levels drop to a low true hazard. This debate is clearly reflected at [26] – [30] of the Senior Commissioner’s judgment and is consistent with the interplay between the DCP and the FPDM and the way in which the case was conducted.

15 Ground 1 takes a fine-tooth comb approach to the decision of the Senior Commissioner given that he clearly did refer to and consider the terms of the DCP. When the whole of the judgment is read on flooding it is clear that he was aware of the DCP and that its application meant that the development was prohibited (see [24], [26], [28] and [32]) notwithstanding the precautionary safeguards proposed by the development. The DCP is not binding in the sense that non-compliance does not require the Senior Commissioner to refuse the development. There was evidence before him that in the event of inconsistency between the DCP and the FPDM that the provisions of the FPDM prevailed.

16 It is plain from the Senior Commissioner’s reasoning that he was aware that the FPDM did not absolutely prohibit in all circumstances the development and that it sanctioned a consideration of the degree of risk involved together with safeguards to be incorporated, see [32]. This was in contrast to the prohibitory nature of the DCP, a distinction of which he was well aware.

17 The Senior Commissioner, as he was entitled to do, considered the risks and safeguards which were to be incorporated into the development and determined that the degree of risk was not such that consent should be refused, see [36] - [37], even though the DCP provided that the site was unsuitable for medium density housing occupied by older people, [32]. He correctly applied the DCP.

Finding on grounds 1 and 2

18 The grounds of appeal 1 and 2 require a close examination of what the Commissioner did in his judgment. The full text of the Senior Commissioner’s findings on flooding is set out above at par 4. This shows that he summarised the two flooding issues [23], the Council’s case [24] and the three experts’ respective evidence [25] – [30] before posing the question about balancing risk at [31], as reflected in his approach at [32]. At [33] – [36] he considered the risks of flooding impacts in relation to the two issues in light of the safeguards proposed by the Applicant and concluded these are acceptable in light of the risk that society accepts in all other aspects of human activity. The Commissioner concluded at [37] that flood liability is not a reason for refusal. It is clear from the judgment that the Senior Commissioner was aware of the DCP’s provisions in relation to the site. While not deciding whether there was an inconsistency between the DCP and the FPDM (the difficulty of doing so is referred to at [26]) he accepted the evidence of the expert Mr Nichols who applied the FPDM not the DCP. This suggests he considered he could apply the FPDM in the alternative to the DCP.

19 One issue raised in dealing with grounds 1 and 2 is the relationship between the FPDM and the DCP. It is clear from reading the objectives of both documents referred to in argument by the parties that they are intended to be complementary and not conflicting. I note that the experts did not agree that the documents were conflicting although they did agree that if there was conflict the FPDM should prevail. The FPDM is described in the judgment as having no statutory standing and if that is correct suggests that the conclusion of the experts may not be correct in the context of this case.

20 The statutory standing of the FPDM was not raised in written submissions and I had only brief oral submissions before me. It is not an environmental planning instrument made under the EP&A Act. There is a s 117 direction under the EP&A Act which states that draft local environmental plans (LEPs) shall be consistent with the FPDM as required in Direction No 15 – Flood Prone Land (30 September 2005, revised 31 January 2007). The application of this direction, if any, in this case was not addressed. For completeness I note that I was advised by the Applicant’s counsel the FPDM has statutory standing in the context of s 733 of the Local Government Act 1993 which concerns council liability. It is not submitted this provision has any role to play here. As already noted there was no agreement between the experts that there was inconsistency between the FPDM and the DCP. The documents are intended to perform different functions based on the extracts set above at par 7 - 8. In the absence of any clear indication that the FPDM must take precedence in a legal sense over the DCP in the assessment of a development application I doubt that they should be considered as simply alternative approaches.

21 It also appears that the approach of Mr Nichols summarised by the Commissioner at [27] in applying the FPDM may not be correct for another reason. The Applicant’s counsel referred in submissions to the hydraulic and hazardous categorisation Appendix L as applicable. While I was not referred in any detail to Mr Nichols’s evidence the inference I draw is that his conclusions summarised at [27] of the Senior Commissioner’s judgment were based in part on the application of that appendix in the context of assessing an individual development application. That does not appear to be the correct use of this appendix. The purpose of these hydraulic and hazard categories is stated in Appendix L to be:

1.2 Purpose of the Categories

At the outset, it should be realised that hydraulic and hazard categories are tools to assist in the preparation of an appropriate floodplain risk management plan (a strategic planning document). They are not to be used for the assessment of development proposals on an isolated or individual basis. Such ad hoc analysis cannot take into account the cumulative impact of gradual on-going development over time, a key issue to be addressed in a floodplain risk management plan. Rather, hydraulic and hazard categories are to be used for assessing the suitability of future types of land use and development in the formulation of floodplain risk management plans.

22 In these circumstances it does not appear to be correct to consider the FPDM and the DCP as two alternative approaches where one can be preferred to the other, as the Senior Commissioner has done. The Senior Commissioner was not assisted in undertaking the correct approach to his decision by the conclusions of the expert Mr Nichols which he adopted. The Senior Commissioner’s approach to the DCP has to be considered in light of Zhang in these circumstances.

23 In Zhang at [74] –[76] …

A development control plan is not an “environmental planning instrument”: see definition in s4. Accordingly, the requirement in s80(2) that a consent authority “must refuse” an application that would “result in a contravention of” such an instrument does not apply to a development control plan. Furthermore, the proscription, by s76B, of any development prohibited by an environmental planning instrument, does not extend to a prohibition in a development control plan. Nor can such a plan contain a “non-discretionary development standard” which, if complied with, would take away a consent authority’s discretion under s79C(2).

The consent authority has a wide ranging discretion - one of the matters required to be taken into account is ‘the public interest’ - but the discretion is not at large and is not unfettered. DCP 23 had to be considered as a “fundamental element” in or a “focal point” of the decision making process. A provision so directly pertinent to the application for consent before the Council as was cl 4.0 of DCP 23 was entitled to significant weight in the decision making process but was not, of course, determinative.

In my opinion, the Commissioner did not “take into consideration” the standard contained in cl 4.0 of DCP 23. Rather, he substituted for the statutory requirement a different approach. The Commissioner posed the “issue” for his determination to be: “The appropriateness of the location taking into account the proximity to the adjoining church, local schools and hotel”. He resolved this issue on the basis that adverse impact upon land affected by the presence of a brothel had to be demonstrated in the legal proceedings before him. This approach could only be supported if the discretion was entirely at large, i.e. that there were no “standards” of any character which the decision maker had to take into account. By adopting this approach, the Commissioner, in my opinion, proceeded on an impermissible basis.

24 There are substantial similarities between the facts in Zhang, as outlined in the passage above, and those before me given the question the Commissioner posed at [31] (second sentence). I agree with the Council’s submissions that the test identified by the Commissioner is his own subjective test and not that contained in the DCP. In the words of Zhang he “substituted for the statutory requirements a different approach”. The DCP, which I accept was clearly acknowledged in the judgment as to its effect, was not treated by the Senior Commissioner as a focal point of his decision. That incorrect approach is reflected in the question posed in [31] and the approach in [32] of the judgment. This is the issue raised by ground 1.

25 Further, for the reason outlined above at par 19 - 22, I consider the Senior Commissioner did misdirect himself on the application of the DCP to the proposed development (ground 2). I consider grounds 1 and 2 should be upheld. Any further consideration of the flooding issues when remitted to a commissioner should be in the context of a proper understanding by the parties and their experts of the legal framework for the management of flood prone land when assessing individual development applications. I do not consider this issue was fully canvassed in argument before me and, while I have held there was not a proper application of the DCP, it as a matter that requires clarification when this matter is reconsidered.

Ground 3
Council’s submissions

26 The Council submitted the Senior Commissioner erred because the measure of risk he applied at [31] of his judgment lacked any evidence by which to assess it. It was therefore an inference drawn on the basis of speculation. That is an error law, relying on Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 per Mason CJ at 355-356. The decision of the Senior Commissioner was said to be manifestly unreasonable because of this approach.

Applicant’s submissions

27 The Council’s argument on this ground fails to recognise that the Senior Commissioner was carrying out two tasks as part of his reasoning which led to his decision to approve the development application. He firstly took into account the DCP and separately, acting consistently with the agreement of the experts that the DCP was subordinate to the FPDM, assessed the proposed development on the basis of that document.

Finding on ground 3

28 I do not need to resolve this ground. I simply note that I do not agree with the Applicant’s counsel’s submissions summarised above at par 27 as to the correctness of the Senior Commissioner’s approach as is clear from my findings on grounds 1 and 2.

Conclusion

29 The appeal should be upheld. The Council’s counsel stated that if successful he would seek an order that the matter be remitted to a commissioner other than the Senior Commissioner. That matter was not canvassed at the hearing and I will allow the opportunity, if required, to make brief submissions on the matter before finalising the orders to remit the matter for re-hearing in accordance with this judgment.