Neate v Shellharbour City Council (No 2)

[2007] NSWLEC 654

Land and Environment Court

of New South Wales

CITATION:	Neate v Shellharbour City Council (No 2) [2007] NSWLEC 654
PARTIES:	Applicant: David Neate Respondent: Shellharbour City Council
FILE NUMBER(S):	10337 of 2006
CORAM:	Roseth SC
KEY ISSUES:	Development Application - Development Control Plan - Question of Law :- error of law; DCP as fundamental element
LEGISLATION CITED:	Zhang v Canterbury City Council (2001) 51NSWLR 586 Ai v Newcastle City Council (2003) 126 LGERA 194 Terrace Tower Holdings v Sutherland Shire Council (2003) 129 LGERA 195 Stadurn v Blacktown City Counsil (2004) 134 LGERA 157
DATES OF HEARING:	28/09/2007
DATE OF JUDGMENT:	9 October 2007
LEGAL REPRESENTATIVES:	Applicant: Mr C McEwen, SC and Mr M Staunton, barrister Respondent: Mr A Pickles, barrister

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Roseth SC

9 October 2007

10337 of 2006 Neate v Shellharbour City Council

JUDGMENT

1 Senior Commissioner: This is a Class 1 appeal, which I heard on 27 March 2007 (the first merit hearing) and determined on 1 May 2007 by granting consent. Shellharbour City Council (the council) successfully appealed my decision under s56A of the Land and Environment Court Act 1979. Pain J delivered a judgment on 24 August 2007, having found two errors of law in my decision. In a further judgment on 28 August 2007 her Honour remitted the matter to me for hearing in accordance with her judgment of 24 August 2007.

2 Paragraph 12 of her Honour’s judgment of 28 August 2007 sums up her findings.

I have held that the Senior Commissioner has made two errors of law. The errors concern the application of instruments under which the risk of flood impact is assessed. The errors I have found include applying the wrong test to the issue of assessment of flooding risk. That issue is a significant issue in the proceedings and a matter about which the Senior Commissioner had to form a view on the merits of the case in order to carry out his task. I held that the application of his own subjective test was not legally correct. While that is an expression of his own view about the approach to the assessment of risk that is part of the legal error I have found in the s56A appeal.

3 The above paragraph, when read together with her Honour’s judgment of 24 August 2007, suggests that one error was to consider the council’s Flood Risk Management Development Control Plan and the (then) Department of Infrastructure, Planning and Natural Resources document Floodplain Development Manual as alternative controls that may be applied to the assessment of development applications. The second error was the failure to make the DCP the fundamental element in the assessment of the application.

Relevant planning instruments and policies

4 The application was lodged under the then State Environmental Planning Policy No 5 – Housing for Older People or People with a Disability (SEPP 5). SEPP 5 applies to the application by virtue of a savings clause in its replacement, State Environmental Planning Policy Seniors Living. It applies to the land by virtue of its zoning as Residential 2(a) in the Shellharbour Local Environmental Plan 2000 (LEP 2000).

5 The Floodplain Development Manual, 2005 (the Manual) is a State Government document. A s117 Direction issued in 2006 and revised in 2007 requires draft local environmental plans to be consistent with the Manual. The council has produced a development control plan for the assessment of proposals on flood prone land, the Floodplain Risk Management Development Control Plan (the DCP). The DCP makes mention of the Manual.

The hearing on the remittal

6 On 28 September 2007 I heard submission on how I should deal with the remittal (the second merit hearing).

Mr A Pickles’ submission on behalf of the council
The DCP should the focal point for the consideration of the risk from the flood prone nature of the site. Clause 2.2 of the DCP provides that eight major land use categories have been adopted. Those are listed in Appendix 2. The development the subject of the application appears in Appendix 2 in the second column under the heading “Critical utilities and uses”. That is, housing for older people or people with a disability (Seniors Living SEPP). Accordingly, in accordance with the DCP the land use category for the proposal is a “critical utility and use”.
In undertaking the second task under the DCP to determine the flood plain or which part of the flood plain the land is located in, cl 2.3 requires either identification of land within a flood risk map or, where no such flood risk management plan exists, an undertaking of provisional hazard. The Judgment of Pain J requires the Council’s Development Control Plan to become the focal point of the consideration of this issue.
The DCP sets out criteria for determining development applications within the area to which the plan applies. It provides on page 11 in cl 2.1 the general criteria and procedure for determining which controls apply. These are:

§ first, to identify the land use category of the development from appendix 2;

§ second, to determine which flood plain and which part of the flood plain the land is located in; and

§ finally, apply the controls outlined under cl 2.4.

Clause 2.4.1 identifies the objectives of the development controls including, relevantly:
(d) To prevent any intensification of the use of the High Flood Risk Precinct or floodways, and wherever appropriate and possible, allow their conversion to natural waterway corridors.”
It is submitted that this objective is not satisfied by the proposal because the proposal will intensify the use of land, which is identified in the DCP (as well as upon proper application of the FPDM) as having a high flood risk. The DCP should not be viewed as prohibiting lawful development of the land for residential purposes. Rather, the DCP seeks to limit the intensity of residential development in an area where such development is permissible.
It was agreed between the experts that most of the site was affected by a high provisional flood hazard. Clause 2.4.3 of the DCP then identifies the controls for the particular categories of development, depending upon the provisional flood hazard. Schedule 1 shows that for high flood risk locations, “critical utilities and uses” are an unsuitable land use. Schedule 1 is intended to apply in all circumstances where a flood plain risk management study and plan has not been undertaken. No flood plain risk management study and plan has yet been undertaken for the Horsley Creek flood plain. Accordingly, schedule 1 applies.
The effect of the DCP, which, it is submitted should be given significant weight, is that the proposed use of the land is unsuitable due to the site being located within a high flood risk precinct. After consideration of all relevant matters, including the DCP, the Court should conclude that the site is unsuitable for such intensification of development.
The role of the Flood Plain Development Manual
The Respondent does not suggest that the FPDM is an irrelevant consideration. Moreover, the DCP contemplates that in the case of a site that is in a flood plain that has not been the subject of a detailed flood study, a specific flood study or flood risk report may be required Clause 2.4 . It would be expected that such flood study or flood risk report would be prepared in accordance with the FPDM.
However, the FPDM is concerned with the assessment of flood risk on a site to determine the suitability of the site, not whether a particular development proposal is acceptable. This is made clear by the express purpose of the Manual:
It provides for evaluation of strategies and formulation of plans that achieve effective floodplain risk management outcomes accounting for social, economic, ecological and cultural factors, together with community aspirations for the use of flood prone land. This provides for sustainable use and development of the floodplain in a wise and rational manner on a flexible merit basis.
If the answer given by proper analysis in accordance with the FPDM is that the site is a high-risk site, it will be inappropriate for the type of development proposed regardless of whether the floor levels of the development are designed to be above the PMF. The “flexible merit basis” is not intended to contradict the other clear and unambiguous references in the FPDM that state that the FPDM is not to be used to determine the appropriateness of particular development applications.
It was agreed by the experts that in the event of an inconsistency, the DCP gives way to the FPDM. This conclusion is, in a sense, intended to reflect although arguably not accurately, the decision of McClellan CJ in Stockland Development Pty Limited v Manly Council (2004) 136 LGERA 254 at 272 [87] where he said:
“A development control plan which can be demonstrated, either inherently or perhaps by the passing of time, to bring about an inappropriate planning solution, especially an outcome which conflicts with other policy outcomes adopted at a State, regional or local level, will be given less weight than a development control plan which provides a sensible planning outcome consistent with other policies.”
However, the evidence of Mr Nichols is potentially misleading so far as it diverts attention to an argument about whether there is an inconsistency between the DCP and the FPDM. Whilst an inherent inconsistency or where the result would be an inappropriate planning solution might be relevant, that is not the case here.
There is no demonstrated conflict between the DCP and the FPDM. Mr Nichols, the Applicant’s expert maintains that the inconsistency between the DCP and the FPDM arises from “the prescriptive nature of the DCP” Exhibit 9, page 2 column 3, particular 3.1.2 . However, there is nothing in the FPDM that prevents a prescriptive outcome based on the application to the strategic planning process. In fact the FPDM contemplates such outcomes.
Importantly, the FPDM is principally a strategic planning tool for Councils to implement their policies and a framework for assessing flood hazard on land rather than a tool for the assessment of individual development applications Joint Statement Ex 9, p8 Particular 3.7.2 per E Rigby; Statement of E Rigby p4, [2] (Ex 7); Flood Plain Development Manual p3 [1.2], Appendix L [L2], (Ex A); Transcript 29/03/07 p31 XX P Nichols [31]-[47] . This is made clear by Pain J in her Judgment at [21], including the citation of parts of Appendix L. In summary, the principal purpose of hydraulic and hazard categorisation in Appendix L is geared towards determining appropriate forms of development in the floodplain. Accordingly, the FPDM contemplates that categorisation of flood risk will be used to determine the suitability of future types of development in the flood plain.
The flexibility to which Mr Nichols refers in the joint report relates, not to the application of the FPDM to particular developments, but in the preparation of the strategic planning instruments and policies. In other words, the flexibility is achieved through implementation of the policy in the strategic planning context, not by applying the manual to particular development applications.
None of this means that the FPDM is an irrelevant consideration. However, the FPDM should be properly considered and applied in the determination of the suitability of the site for intensification of development, not in determining whether the particular development application reduces the risk to the occupants to acceptable levels.
When the FPDM is properly applied, for the purpose for which it was designed, the evidence is as follows:

§ In relation to flooding from Horsley Creek the preliminary draft Horsley Creek Flood Study shows the majority of the site has a high provisional hazard except for the Koona Street entrance, which has a low hazard Joint Flooding Experts Report Ex 9 Particular 3.1.1.

§ The site would be a high “true hazard” from Horsley Creek per Mr Rigby.

§ All experts agreed that approximately two thirds of the site is subject to a high true hazard based on the Lake Illawarra Floodplain Risk Management Study.

§ Taking into account the matters in Appendix L6 of the FPDM, and applying them to the provisional hazard rating under the Lake Illawarra Floodplain Risk Management Study, the whole site is subject to a high true hazard for most of the area of the site according to Mr Rigby.

The considerations in Appendix L of the FPDM, which must be taken into account in determining the “true hazard” of the site include aspects of the evidence given by Mr Opper, such as the ability to safely evacuate the premises in the event of a flood. Mr Opper gave evidence that evacuation from the site was impossible. He made clear when cross examined that the type of “evacuation” which the Applicant contemplates is not true evacuation as intended by the FPDM, but rescue. This consideration supports the conclusion of Mr Rigby that the land is simply unsuitable for the development proposed.
In the face of unsuitability of the site in accordance with the FPDM, the unsuitability is not capable of being “designed out” in the way the Applicant seeks to do by building to achieve floor levels over the PMF level. This approach is contrary to the FPDM.
Appendix G, clauses G6.2 and 6.3, of the FPDM give a clear indication that in some areas certain types of development may reasonably be excluded. This is the same conclusion as the Council’s DCP.
Conclusion
Consideration of the FPDM and the DCP provisions has the same result. The subject site is classified in accordance with both the FPDM and the DCP as high flood hazard. The consequence is that the site is not suitable for increased density of development for the purposes of a senior’s living development.
Mr C McEwen’s submission on behalf of the applicant
Pain J upheld the Respondent's appeal on two grounds:
(a) That the Senior Commissioner applied his own subjective test which was speculative in nature (whether the level of risk to human life in the event of a PMF was one which "society accepts in all other aspects of human activity") on the issue of the acceptability of the proposed development, rather than the standards contained in the DCP (no increased risk to human life or minimised risk to life), with the result that the DCP was not treated as a focal point of his decision.
b) That the Senior Commissioner misdirected himself on the application of the DCP to the proposed development because he accepted that he could apply the FPDM in the alternative to the DCP in the event of inconsistency between them.
THE PROPER APPLICATION OF THE FINDINGS UPON REMITTER
The obligation of the Senior Commissioner is now to apply the findings of Pain J.
Her Honour's findings do not compel the refusal of the development application simply because consent would result in a contravention of the DCP. Such an approach would be erroneous and directly contrary to the reasoning of the Court of Appeal in Zhang v Canterbury City Council (2001) 51 NSWLR 589 and the decision of Pain J in AI v The Council of the City of Newcastle (2003) 126 LGERA 194, both of which are referred to in detail below.
Rather, being conscious of the contravention (step 1), the proposal must be examined on its individual merits (step 2). This includes assessment of the flooding risk with particular reference to the underlying objectives of the DCP (step 3). If, at the end of that analysis it is concluded that the proposal meets those objectives or that the DCP controls are unreasonable by reference to other legitimate indicia, then development consent may lawfully be granted, notwithstanding non-compliance with the DCP.
The obligation to examine the merits is mandated by s.79C which requires the consent authority to take into consideration relevant matters which include:

§ any development control plan;

§ the likely impacts of that development;

§ the suitability of the site for the development;

§ the public interest.

The correctness and the requirement for a merits based approach was confirmed by her Honour in the second judgment at [12]:
"That issue [assessment of flooding risk] is a significant issue in the proceedings and a matter about which the Senior Commissioner had to form a view on the merits of the case in order to carry out his task."
THE CORRECT APPROACH TO CONSIDERATION ON THE MERITS
Section 79C requires a consideration of the individual development application on its merits. This involves the exercise of judicial discretion. Where a prohibition is contained in a DCP there is no requirement that an application that would result in a contravention of such an instrument must be refused. Indeed, to so conclude would involve an error of law. The primary authority in Zhang v Canterbury City Council:
"A development control plan is not an "environmental planning instrument"; see definition in s.4. 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 s.76B, 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 to be taken into account is "the public interest" - but the discretion is not as 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 clause 4.0 of DCP 23 was entitled to significant weight in the decision making process but was not, of course, determinative." [74]-[75]
As is made clear by Zhang, the discretion, which is enlivened by s.79C has been held to be wide-ranging. One of the matters required to be taken into account is "the public interest" - another is "the suitability of the site for the development". This would plainly include incorporated features of the development designed to render the site suitable.
In AI v The Council of the City of Newcastle (2003) 126 LGERA 194 Pain J upheld a s.56A appeal in circumstances where she found that the Commissioner failed to consider whether additional circumstances, such as factors reducing the likely amenity impacts of the proposal, required a relaxation of a locational standard in a DCP with respect to brothels:
"It is clear from the paragraphs of the Commissioner's judgment that I have referred to that the Commissioner clearly thought that, as the proposal did not meet the locational requirements in DCP 46, refusal was warranted without consideration of the further factors raised by the parties which were required to be considered under s.79C(1) of the EPA Act. The Commissioner erred in taking this approach .
My conclusion is supported by paras 74-77 of Zhang, particularly at paras 74-75... Thus, unlike an LEP, where a proposal contravenes a DCP or prohibition or "standard" in a DCP, the result is not automatic refusal. The discretion of the consent authority remains . Furthermore, the Court of Appeal in Zhang recognised that the consideration of the DCP in that case was a "fundamental element" or "focal point" in the decision making process and was entitled to be given "significant weight" "but was not of course determinative". In the present case the same may be said, namely that the Commissioner was to have regard to the provisions of DCP 46 and was entitled to consider them as a fundamental element in the decision making process. However, failure to comply with the provisions of the DCP was not determinative of the matter and did not automatically lead to the refusal of development consent. The Commissioner was required to take into account other relevant considerations, including other relevant factors in s.79C(1) of the EPA Act in assessing the merits of the matter and determining whether development consent should be granted. As I have already noted, the Commissioner failed to do so and thereby committed an error of law which is sufficient to vitiate his decision ... The facts of this case are the converse to those in Zhang in that here the DCP has been applied exclusively and rigorously as the sole basis for the Commissioner's decision to refuse the development in question ... But Zhang makes it clear that while a DCP standard should be a fundamental element or focal point in the decision making process, it should not be the only basis for a decision in circumstances where other factors under s.79C(1) are objectively relevant ." [62]-[64] (emphasis added)

Consistent with Zhang and AI v Newcastle, the merits analysis should therefore be approached by giving genuine, realistic and specific attention to the ‘disqualifying' provision of the DCP in the context of the particular circumstances. If this is done, then the relevant provision will have been treated as a focal point. That is all that is required. In an appropriate case, the task could be validly approached by ascertaining the underlying objectives of the DCP provisions. Then one could examine the circumstances of the case at hand and ask whether there are special features of the land or the development itself which would justify a departure from the DCP.
An approach modelled on SEPP 1 could not be criticised and is one which is familiar to the Court. If non-compliance with an LEP development standard may be overcome where a finding is made that compliance is, in the circumstances of the case, unreasonable or unnecessary, then such an approach must be at least equally valid for a DCP provision which cannot introduce a prohibition which precludes the grant of consent absent the favourable application of SEPP 1.
It follows logically that distinguishing features of an application are the ‘key' to unlock an otherwise restraining or disentitling provision.
It may even be appropriate to acknowledge that an applicant bears the onus of persuading the Court that the DCP control should not bring about refusal when it is directly pertinent and contravened. Such an approach is not inconsistent with an obligation to give significant weight to the DCP, particularly when undertaking a quasi SEPP 1 analysis.
CONSIDERATION OF THE MERITS IN THE CONTEXT OF THE DCP
The Respondent relies upon the Floodplain Risk Management Development Control Plan (DCP). It is plain by reference to Schedule 2 (page 22) that housing for older people or people with a disability (seniors living SEPP) is classified as ‘critical utilities and uses'. Further, Schedule 1 (page 23) states that critical utilities are unsuitable land uses in a medium and high flood risk precinct.
The aims and objectives of the plan are set out in paragraph 1.3 (pages 6 and 7). The plan (so far as is relevant) aims to:
"(d) Reduce the risk to human life and damage to property caused by flooding through controlling development on land affected by potential floods.
(e) Provide detailed controls for the assessment of applications lodged in accordance with the EPA Act 1979 on land affected by potential floods.
(f) Provide guidelines for the use and development of land subject to all potential floods in the floodplain, which reflect the probability of the flood occurring and the potential hazard within different areas.
(g) Apply a "merit based approach" to all development decisions which take account of social, economic and ecological as well as flooding considerations." (emphasis added)
Both "merit based approach" and "risk" are defined (page 10).
In paragraph 2.1 there is an explanation of the role of the objectives, the performance criteria and the controls:

§ The objectives represent the outcomes that the Council wishes to achieve from each control.

§ The performance criteria represent a means of assessing whether the desired outcomes will be achieved.

§ The controls are preferred ways of achieving the outcome. Whilst adherence to the prescriptive controls may be important, it is paramount that the objectives and performance criteria are clearly satisfied." (emphasis added)

The relevant objectives and performance criteria are set out in paragraphs 2.4.1 and 2.4.2 (page 13):
(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.
(d) To prevent any intensification of the use of high flood risk precinct ...
(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 an appropriate access from areas affected by flooding up to extreme events."
The relevant performance criteria are:
(a) The proposed development should not result in any increased risk to human life.
(c) The proposal should only be permitted where effective warning time and reliable access is available for the evacuation of an area potentially affected by floods..."
Paragraph 2.4.3 sets controls by reference to Schedule 1 pursuant to which (having regard only to provisional hydraulic hazard) the proposal would not be permitted.
The Applicant submits that the evidence of the clear ability to evacuate by bus in the 1in 100 year event, the ability to provide refuge on all habitable levels above the PMF event and the built in safeguards peculiar to this development would satisfy the Court that this proposal satisfies the objectives and performance criteria set out above and that, accordingly, it is not necessary to take the prescriptive approach adopted by the DCP which is to ban an aged persons facility regardless of the individual merits of the case. Put simply, the locational prohibition is unduly restrictive and is contrary to aim 1.3(g) set out above.
THE MERITS OF THIS CASE
It is accepted that if individual features are to be relied upon as a basis for supporting an outcome contrary to the letter of the DCP, then they must:
(i) not be common to all such applications;
(ii) not be safeguards already contemplated by the prohibition;
(iii) in combination, permit the conclusion that the proposal meets the underlying object or intent of the control so that it is not undermined.

In summary, it is the Applicant's submission that the disadvantages of the location are overcome by the safeguards included in the design with the result that the intent as expressed by the underlying objectives of the DCP is observed.
The relevant objectives and performance criteria have been referred to. It is submitted that the primary underlying objective is to prevent or minimise increased risk to life by only permitting more vulnerable types of development (such as SEPP SL) to be established where it has been demonstrated that the occupants will be safe from the effects of flooding. Whilst the DCP implements this objective by prohibiting SEPP SL development in all medium and high flood hazard areas, the Applicant submits that this is an overly restrictive approach. A prohibition based on location determined by general flood characteristics alone is overly restrictive because it necessarily dismisses specific individual safeguards that may be capable of countermanding the general characteristics which underlie a locationally based prohibition. In short, the DCP is overly simplistic and thereby ignores individual circumstances. It is this finer or more detailed analysis which is entirely permissible given the requirements of s.79C to judge each application on its merits.
In the present case (as detailed at pages 9 and 10 of the joint flooding report):
(a) Habitable floor levels are set above the PMF.
(b) Evacuation is feasible by a permanent on-site bus in the 1 in 100 year event and the basement car park floor is set above that level. In the PMF event the basement car park is protected from flooding and cannot be opened.
(c) There is adequate warning of approximately 24 hours of flooding from Lake Illawarra such as to enable complete evacuation.
(d) The flooding duration for a flash PMF flood from Horsley Creek is extremely short (maximum 1 hour) and in that event the development will provide a safe haven and will be equipped with medical staff and facilities including resuscitation equipment. The building is flood proof in a PMF event and is constructed to withstand the forces of a flood in a PMF event plus 0.7 metre.
(e) There is back to base communication by mobile and radio.
(f) The site offers refuge in an extreme event to other Koona Street residents whose properties would then be inundated.
(g) The frontage of the site including access from the basement to the public street is agreed by all experts to be low provisional hazard, which is conducive to safe evacuation.
(h) The risk of a PMF is not less than 1 in 10,000 years.
None of the safeguards are given any consideration within the DCP. It is submitted that they negative the disadvantages of the location of the building on flood-affected land. Acceptance of the safeguards and features of the site provides a rational and principled basis upon which to conclude that the underlying (and stated) objectives of the DCP are adequately addressed such that it is unnecessary to adopt the control of prohibiting the development as a "preferred way of achieving the outcome" (paragraph 2.1, page 11 DCP).

Adopting an approach similar to SEPP 1, the evidence enables the Court to be satisfied that compliance with the "standard" is unreasonable or unnecessary in the circumstances of the case.
THE ROLE OF THE FLOODPLAIN DEVELOPMENT MANUAL
In the course of her judgment, Pain J questioned the role of the FPDM and, in particular, whether the FPDM was capable of providing an alternative approach. Her Honour did not make any determination on this point but did say:
"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." [19]
Her Honour further stated:
"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." [25]
These questions were not explored during the first hearing before the Senior Commissioner because the flooding experts agreed that the FPDM should override the Council DCP in the event of disagreement between the two documents. It is noted that the witnesses for the Respondent did not believe that the DCP was inconsistent with the intent of the FPDM.
A careful reading of the Senior Commissioner's decision makes it clear that, to the extent there was any inconsistency between the two documents, this did not provide the basis for the approval. Rather, the Senior Commissioner was satisfied that the level of risk was appropriate to permit consent. Nevertheless, it is unnecessary to focus upon the question of whether either document should take precedence. It is sufficient to note that it is perfectly permissible to have regard to the FPDM in the consideration of the merits of the application. It is a government policy, which advocates a merit-based approach for all development decisions in the floodplain (1.1.1). Its purpose is to provide councils with a framework for implementing the policy to achieve its primary objective, which is to avoid sterilisation of land and assessment according to rigid and prescriptive criteria (1.2 and 1.1). It is the subject of a s117-direction issued on 31 January 2007. Draft LEPs are required to be consistent with such directions. The specific direction is Direction 15 - flood prone land. The direction applies when a council prepares a draft LEP that creates ... a provision that affects flood prone land. An objective of the direction is:
"To ensure that development of flood prone land is consistent with the NSW government's flood prone land policy and the principles of the Floodplain Development Manual 2005." (Direction 15)
The DCP refers extensively to the FPDM and asserts consistency with it. In such circumstances, it is entirely permissible to have regard to whether the DCP is in fact consistent with the FPDM as part of an overall consideration of the merits.
Whilst the FPDM is not specifically referred to in s.79C, it may be taken into account as a matter relevant to the "public interest". The correctness of this approach was confirmed by the Court of Appeal in Terrace Tower Holdings v Sutherland Shire Council (2003) 129 LGERA 195 when the Court approved reliance by the trial judge on policy documents published by Planning NSW:
"In any event, matters relevant to the public interest touching a particular application are not confined to those appearing in published environmental planning instruments, draft or final. Obviously such instruments carry great and at times determinative weight, but they are not the only source of information concerning the public interest in planning matters ... Nothing in the Environmental Planning and Assessment Act stipulates that environmental planning instruments are the only means of discerning the planning policies or the "public interest". For one thing, the government is not the only source of wisdom in this area. A consent authority may range widely in search for material as to the public interest." [81]-[82]
In Stadurn Pty Ltd v Blacktown City Council (2004) 134 LGERA 157 Pain J relied extensively on policy documents as part of her consideration of an appropriate location for a bulky goods centre. Her Honour refused the application because she regarded it as inconsistent with government policy:
"Section 79C(1)(e) of the EPA Act requires consideration to be given to "the public interest". In addressing the public interest the Court may take into consideration the documents within the integrated land use and transport policy package as referred to in draft SEPP 66 if it considers these to be relevant. This applies even if draft SEPP 66 is not yet in force." [37]
The authorities referred to above establish a clear entitlement to take the FDPM into account. The weight to be accorded to it is a matter for the Senior Commissioner. Whilst it is the Applicant's submission that the DCP is inconsistent with the FDPM, it is ultimately unnecessary to resolve this dispute because the application is otherwise appropriate on its merits for the reasons outlined above.
CONCLUSION
Contravention of the DCP does not dictate that the application must be refused, nor do the findings of Pain J compel that result. This Court is obliged to consider the application on its merits having regard to the underlying objectives of the DCP In that context, assessment of the magnitude of the risk is entirely appropriate. If it is concluded that the disadvantages of the location are overcome by the particular features and safeguards of the application, then there is no bar to the grant of development consent, notwithstanding contravention of the DCP. Pain J recognised that the issue of assessment of flooding risk was a significant issue in the proceedings (second judgment, paragraph 12). It is entirely appropriate to assess that risk by reference to its probability and its consequences having regard to the features of this site. Indeed, it is difficult to understand how else the Court could form a view on the merits of the case in order to carry out his task (second judgment, paragraph 12). Whilst the ultimate conclusion will necessarily involve a subjective view, the test will be based on objective features (which is permissible) rather than upon a personal subjective test (which is not permissible).

Evidence on flooding at the first merit hearing

7 The council’s hydraulic expert was Mr E Rigby, while the applicant’s was Mr P Nichols, both of them hydrologists. Mr S Opper, the Director of Emergency Management, State Emergency Services joined the two hydrologists in concurrent evidence. 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.

8 It was common ground between Mr Rigby and Mr Nichols that the proposal did not meet all the control of council’s DCP, since that control, in Schedule 1 of the DCP, identified seniors living as an unsuitable land use in the High Risk Precinct. Mr Nichols 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% AEP 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% AEP 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.

9 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.

10 Mr Opper, who thought that the site was unsuitable for any kind of development, strongly opposed the proposal. 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.

11 In light of her Honour’s judgment, I have not included in the above summary evidence given at the first merit hearing that relied on the Manual.

The DCP as the fundamental element

12 Three important matters are common ground between the parties. First, I am required to make the DCP the fundamental element or focal point of my assessment of the risk from flooding. Second, the fact that the DCP’s control identifies seniors living as an unsuitable land use for the site should be given significant, though not determinative weight. Third, the DCP’s control does not, of and by itself, lead to the refusal of the application. Mr McEwen drew my attention to a judgment by Pain J (Ai v The Council of the City of Newcastle (2003) 126 LGERA 194) where her Honour found precisely the reverse error to mine, setting a Commissioner’s decision aside because he refused an application solely on the grounds that it was inconsistent with a DCP.

13 As stated above, Schedule 1 of the DCP identifies seniors living as an unsuitable land use in High Risk Precincts, a categorisation in the DCP that applies to two-thirds of the site. (I note that the Schedule also identifies subdivision and residential development as unsuitable, despite the fact that the site is zoned residential.) If the only criterion for the assessment of the application were Schedule 1 of the DCP, the application would have to fail. This would also be the case for subdivision or low-density housing.

14 However, the DCP contains more than the control in Schedule 1. Clause 2.1 of the DCP defines objectives, performance criteria and controls. I quote from page 11 of the DCP:

§ The objectives represent the outcomes that the council wishes to achieve from each control.

§ The performance criteria represent a means of assessing whether the desired outcomes will be achieved.

§ The controls are preferred ways of achieving the outcome. While adherence to the prescriptive controls may be important, it is paramount that the objectives and the performance criteria are clearly satisfied.

15 The above leaves it unclear whether the DCP requires both compliance with the controls and achievement of the performance criteria, or whether achievement of the performance criteria is an alternative to compliance with the controls. I read the DCP as saying that compliance with the controls usually meets the objectives and performance criteria; however a proposal may be considered to satisfy the DCP if it meets the objectives and performance criteria without complying with the controls. This is the sense in which planning documents containing performance criteria are intended to be used, otherwise there would be little point in including performance criteria in addition to controls. However, my conclusions do not depend on this interpretation.

16 Clause 2.3 refers to high flood risk precincts. It states: “only in exceptional circumstance will development be permitted in this precinct”. This suggests that development is not precluded under all circumstances. In my opinion, the numerous safeguards that this proposal incorporates meet the requirement of exceptional circumstances. The proposal is therefore consistent with cl 2.3.

17 Clause 2.4.1 of the DCP lists the objectives of the controls. The relevant objectives are (b), (d), (e), and (f). Objective (b) is

to require development with high sensitivity to flood risk (eg critical public utilities) to be sited and designed such that they are subject to no or minimal risk from flooding and have reliable access.
The proposal meets the objective. Its safeguards minimise risk. I discuss access under objective (f) below.

18 Objective (d) is

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.
The proposal does not meet the objective since it involves the intensification of the use of a high flood risk precinct. I note, however, that the site is zoned residential, so conversion to natural waterway corridors is unlikely.

19 Objective (e) is

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.
The proposal meets this objective.

20 Objective (f) is

to minimise the risk to life by ensuring the provision of appropriate access from areas affected by flooding up to extreme events.
It was common ground between the experts that, for the 1% AEP flood event, a low provisional hydraulic route is available from the main access-point to the development. Mr Nicholls pointed out that, even in the extreme event of the PMF, the site does not lose effective access for more than 24 hours. In his opinion, this provides appropriate access. I note that Mr Rigby did not agree, since he considered that the possibility of losing access for 24 hours in an extreme event (ie once in about 20,000 years) was unacceptable. I find Mr Nicholls’ view more persuasive. In my opinion, the proposal meets objective (f). I am reinforced in this conclusion by the fact that the development will have a bus permanently kept on the site. The bus can negotiate Koona Street in the 1% AEP flood event.

21 The proposal thus meets three of the four relevant objectives of the controls. Is this adequate? While there are numerous judgments dealing with consistency with the objectives of a zone as well as with the objectives of a development standard, I am not aware of any legal authority dealing with the objectives of a control in a development control plan. Since the control of a development control plan is not mandatory (in the sense that a zoning prohibition in a local environmental plan is), it seems to me that satisfaction of three out of four objectives is a factor that goes some way towards justifying the non-application of the control. I note that the objective that is not satisfied, objective (d) is expressed in the language of a prescriptive control.

22 I turn to the performance criteria under cl 2.4.2 of the DCP. Performance criterion (a) appears to me to be the most important, ie:

The proposed development should not result in any increased risk to human life.
This is expressed in such a categorical form that no proposal could meet it. For example, a building that requires scaffolding will increase risk to human life because workers sometimes fall off scaffolding. If the statement is understood to say that there should be no measurable, perceptible, or noticeable increased risk to human life, then the proposal, given its numerous safeguards, meets it.

23 Performance criterion (b) requires that

the additional economic and social costs which may arise from damage to property from flooding should not be greater than that which can reasonably be managed by the property owner and general community.
The experts did not deal with this criterion; however, there was no suggestion that the proposal does not meet it.

24 Performance criterion (c) requires that

the proposal should only be permitted where effective warning time and reliable access is available for the evacuation of an area potentially affected by floods. Evacuation should be consistent with any relevant emergency management plan or flood evacuation strategy where in existence.
The proposal is designed to eliminate (or at least reduce to a minimum) the need to evacuate, even in the extreme event of a PMF. However, evacuation by car in the 1% AEP flood event is possible during the 24- hour warning period. During the event itself, evacuation is possible by bus, which must be kept on the site at all times. I note that there is no public flood evacuation strategy in place for the precinct. The proposal meets the criterion.

25 Performance criterion (d) requires that

Development should not detrimentally increase the potential flood affectation on other development or properties either individually or in combination with the cumulative impact of development that is likely to occur in the same floodplain. This must be shown for storm events up to and including the PMF in the absence of a floodplain risk management plan.
It was common ground that the proposal does not affect the potential danger from flood to other sites. It therefore meets the criterion.

26 Performance criterion (e) requires that

Development should not result in significant impacts upon the amenity of an area by way of unacceptable overshadowing of adjoining properties, privacy impacts (eg by unsympathetic house raising) or by being incompatible with the streetscape or character of the locality.
The experts did not deal with this criterion; however there was no suggestion that the proposal did not meet it.

27 Performance criterion (f) requires that

The proposed development must consistent with ESD principles.
The experts did not deal with this criterion; however there was no suggestion that the proposal did not meet it.

28 In summary, the proposal

§ does not comply with the control of the DCP, which identifies seniors living as an unsuitable land use on the site;

§ meets three of the four relevant objectives of the control; and

§ meets all six performance criteria which “represent a means of assessing whether the desired outcomes will be achieved”.

29 On one view, therefore, the proposal may be considered consistent with the DCP despite the fact that it fails to comply with the DCP’s control. If that view is wrong, then the question arises whether the proposal should be approved notwithstanding its inconsistency with the DCP. This requires that I assess the risk to the proposal and its future occupants from flooding. If that risk is found acceptable, then there is justification for not applying the DCP’s prescriptive control.

30 In my original judgment I had concluded that the risk from flooding to the proposal is acceptable because it is so minor that “society accepts it in all other aspects of human activity”. While I intended this to explain what I meant by the concept of “acceptable”, Pain J found that I had applied the wrong test, because it was my subjective view of the world (and would therefore presumably not be applied by another decision maker).

31 It seems to me that the best way to make good the error of law I committed is to apply the aims and objectives of the DCP as the test of acceptability of flooding risk. The DCP contains eleven aims and objectives, of which (a), (d) and (g) are relevant to this task.

32 Aim and objective (a) is to

Minimise the potential impact of development and other activity upon waterway corridors.
It was common ground that the development did not impact on waterway corridors.

33 Aim and objective (d) is to

Reduce the risk to human life and damage to property caused by flooding through controlling development on land affected by potential floods.
It was common ground that the safeguards built into this proposal (principally its floor level 300mm above the PMF) reduced the risk to human life and damage to property. Mr Rigby considered that the reduction was not adequate for the risk to be at an acceptable level. I have accepted Mr Nicholls’ evidence that the safeguards reduced the risk to an acceptable level.

34 Aim and objective (g) is to

Apply a “merit-based” approach to all development decisions, which take account of social, economic and ecological as well as flooding considerations.

The proposal fully meets this objective. Moreover, the objective is inconsistent with the rejection of the proposal solely on the grounds of a prescriptive control. The objective requires proposals to be assessed for the true risk that they pose and that assessment must take into account the safeguards included in the application.

The role of the Manual

35 During the original hearing, Mr Nicholls and Mr Rigby agreed that, in case of inconsistency, the Manual took precedence over the DCP. Mr Nicholls believed that the DCP was inconsistent with the Manual because it was less flexible and used different terms. Mr Rigby did not think that the two documents were inconsistent. Pain J found that the Manual could not be used in the assessment of a development application.

36 The matter was not explored during the first merit hearing. Since both experts considered that, in the case of inconsistency, the Manual should take precedence over the DCP, the hearing proceeded under the implicit assumption that the two documents could be considered alternatives. This was not surprising as it is usual in cases concerned with flooding risk to put the Manual into evidence. The question then arises: what is the role of the Manual in the proceedings?

37 It was common ground in the second merit hearing that the Court could have regard to the Manual as government policy under public interest (s79C(1)(e) of the EPA Act). As mentioned above, in 2005 the Minister issued a s117 Direction (revised in 2007) that requires draft local environmental plans to be consistent with the Manual. Since development control plans must be consistent with local environmental plans (or, more precisely, those provisions of development control plans that are inconsistent with local environmental instruments have no effect), there could be a reasonable expectation that development control plans would also be consistent with the Manual.

38 During the first merit hearing, the two hydraulic experts disagreed whether or not the DCP was consistent with the Manual. In my first judgment I could not decide which of the experts was correct. On further reading of the two documents, it appears to me that the tenor (ie the underlying thought or purpose) of the Manual is different from that of the DCP. On the very first page the Manual recognises two important facts, namely that:

§ Flood prone land is a valuable resource that should not be sterilised by unnecessarily precluding its development; and

§ If all development applications and proposals for rezoning of flood prone land are assessed according to rigid and prescriptive criteria, some appropriate proposals may be unreasonably disallowed or restricted, and equally quite inappropriate proposals may be approved.

39 The DCP contains no such sentiment. I do not think that this fact allows the conclusion to be drawn that the DCP is inconsistent with the Manual. However, the Manual’s emphasis on flood prone land as a valuable resource and its rejection of rigid and prescriptive criteria strengthen me in my decision, reached independently of the Manual, not to apply those parts of the DCP that are rigid and prescriptive, but rather to assess the true risks associated with the proposal, including the fact that it provides a safe refuge in the extreme flood event when most development around will be submerged.

Conclusions

40 This matter has been remitted to me for consideration in accordance with Pain J’s judgment. Her Honour found that I made two errors of law. The first error concerns the application of the Manual to the assessment of a development application. In this second judgment I have not relied on the Manual, other than to take it into consideration as an expression of government policy.

41 The second error was that I did not make the DCP the fundamental element of my decision. In this second judgment I have considered the DCP in detail, applied its objectives and performance criteria and found that the proposal was consistent with them. I did not apply the prescriptive control in the DCP because I found that the risks from flooding were acceptable and met the most relevant criterion in the DCP, namely not increasing the risk to human life.

Orders

1. The appeal is upheld.

2. Development application to demolish the existing buildings and construct housing for older people and people with a disability containing 49 dwellings on lot 2 DP 213438 and lot 3 DP 786602, known as 118-120 Koona Street, Albion Park Rail is determined by the grant of consent subject to the conditions in Annexure A.

3. The exhibits are returned.

______________________
Dr John Roseth
Senior Commissioner