Northern Residential Pty Ltd v Newcastle City Council - [2009] NSWCA 141

No judgment structure available for this case.

Reported Decision: 75 NSWLR 192166 LGERA 352

New South Wales

Court of Appeal

CITATION: Northern Residential Pty Limited v Newcastle City Council [2009] NSWCA 141
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 26 May 2009

JUDGMENT DATE:
5 June 2009

JUDGMENT OF: Hodgson JA at 1; Tobias JA at 73; Simpson J at 74

DECISION: (1) Appeal allowed.
(2) Orders below set aside, and in lieu therefore proceedings dismissed with costs.
(3) The Council to pay the appellants’ costs of the appeal.

CATCHWORDS: LOCAL GOVERNMENT – Development consent for subdivision of land – Subdivision works to be carried out – Requirements for inspections of stages of subdivision works – Whether inspections required by principal certifying authority – Inspections carried out by person other than a certifying authority – Subdivision certificates issued – Whether s 109E(3) of the Environmental Planning and Assessment Act 1979 breached – Whether subdivision certificate invalid – Exercise of discretion.

LEGISLATION CITED: Building Professionals Act 2005
Building Professionals Regulation 2007
Conveyancing Act 1919 s 195C, s 195F
Environmental Planning and Assessment Act 1979 Pt 3A, s 75S, 81A, s 109C(1)(d), s 109D(1)(d), (1A) and (3), s 109E(1) and (3), s 109J(1)(c), (2) and (3), and s 109P
Environmental Planning and Assessment Amendment (Quality of Construction) Act 2003
Environmental Planning and Assessment Regulation 2000, cl 162A cl 162B, cl 163

CATEGORY: Principal judgment

CASES CITED: ACR Trading Pty Limited v Fat-Sel Pty Limited (1987) 11 NSWLR 67
Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Leichhardt Municipal Council v Montgomery [2007] HCA 6; (2007) 81 ALJR 686
Mifsud v Campbell (1991) 21 NSWLR 725
Noonan v Australian Newsprint Mills Limited (New South Wales Court of Appeal, 23 August 1995, unreported)
Scott v Davis [2000] HCA 52; (2000) 204 CLR 333
Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 145
Sweeney v Boylan Nominees [2006] HCA 19; (2006) 226 CLR 161
Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335

PARTIES: NORTHERN RESIDENTIAL PTY LIMITED (First Appellant)
Terry G GIBSON (Second Appellant)
TG GIBSON PTY LIMITED (Third Appellant)
NEWCASTLE CITY COUNCIL (First Respondent)
REGISTRAR GENERAL OF NEW SOUTH WALES (Second Respondent)

FILE NUMBER(S): CA 40122/09

COUNSEL: A C SCOTTING (First Appellant)
J A AYLING SC/ A M PICKLES (Second & Third Appellant)
T F ROBERTSON SC/ M HALL (First Respondent)
No appearance (Second Respondent)

SOLICITORS: Hickson Lawyers (First Appellant)
McCabe Terrill (Second & Third Appellant)
Sparke Helmore (First Respondent)
Registrar General of NSW (Second Respondent)

LOWER COURT JURISDICTION: Land & Environment Court

LOWER COURT FILE NUMBER(S): LEC40792/08; LEC41128/08

LOWER COURT JUDICIAL OFFICER: Lloyd J

LOWER COURT DATE OF DECISION: 12 February 2009

LOWER COURT MEDIUM NEUTRAL CITATION: Newcastle City council v Northern Residential Pty Limited & (3) Others [2009] NSWLEC 10

CA 40122/09
LEC 40792/08 and 41128/08

HODGSON JA
TOBIAS JA
SIMPSON J
5 JUNE 2009

NORTHERN RESIDENTIAL PTY LIMITED and 2 Others v NEWCASTLE CITY COUNCIL and 1 Other

Judgment

1 HODGSON JA: On 12 February 2009 Lloyd J, in the Land and Environment Court, made orders disposing of two sets of proceedings brought by the first respondent (the Council) against the first appellant (Northern Residential) and others.

2 In proceedings brought in the Land and Environment Court by the Council against Northern Residential, the second appellant (Mr Gibson), the third appellant (TGG) and the second respondent (the Registrar General), the primary judge declared that four subdivision certificates were invalid and of no effect.

3 In proceedings brought, originally in the Equity Division of the Supreme Court and transferred to the Land and Environment Court, by the Council against Northern Residential and the Registrar General, the primary judge ordered that the Registrar General be restrained from registering four deposited plans and associated instruments; and also from registering any plan of subdivision to which any of the four subdivision certificates had been attached, or registrable documents associated with those certificates.

4 Northern Residential, Mr Gibson and TGG have appealed against those orders.

Statutory provisions

5 The appeal raises questions as to the effect of various provisions of the Environmental Planning and Assessment Act 1979 (EPA Act).

6 First, there are definitions of “accredited certifier”, “certifying authority”, “critical stage inspections”, “principal certifying authority” and “subdivision work” in s 4(1):

4 Definitions

accredited certifier

Building Professionals Act

certifying authority

critical stage inspections

principal certifying authority

subdivision work

7 The subdivision in this case was an approved project under Pt 3A of the EPA Act. In relation to such proposals, s 75S provides:

75S Erection and occupation of buildings and subdivision of land

8 The commencement of subdivision work is regulated by s 81A(3) and (4):

81A Effects of development consents and commencement of development

(1) ……
(2) ……

Subdivision of land

Note

Conveyancing Act

9 Plans of subdivision cannot be registered under the Conveyancing Act 1919 unless there is a subdivision certificate under the EPA Act: see ss 195C(1)(e) and 195F of the Conveyancing Act. Relevant provisions of the EPA Act concerning subdivision certificates are s 109C(1)(d), s 109D(1)(d), (1A) and (3), s 109E(1) and (3), s 109J(1)(c), (2) and (3), and s 109P:

109C Part 4A certificates

Conveyancing Act

109D Certifying authorities

(1A) For the purposes of subsection (1) (d) (iv), an environmental planning instrument that identifies subdivision in respect of which a subdivision certificate may be issued by an accredited certifier may place restrictions on the issue of such certificates by accredited certifiers.
……
(3) A subdivision certificate must not be issued for a subdivision involving subdivision work except by the principal certifying authority appointed for the carrying out of the subdivision work.

109E Principal certifying authorities

Home Building Act

109J Restriction on issue of subdivision certificates

(c) in the case of subdivision for which a development consent has been granted, the applicant has complied with all conditions of the consent that, by its terms, are required to be complied with before a subdivision certificate may be issued in relation to the plan of subdivision, and

(3) Subsection (2) does not prohibit the issue of a subdivision certificate for part only of land that may be subdivided in accordance with development consent as long as the requirements of that subsection have been complied with in relation to that part.

109P Satisfaction as to compliance with conditions precedent to the issue of certificates

10 The relevant Parts of s 81A and s 109E of the EPA Act were introduced at the same time by the Environmental Planning and Assessment Amendment (Quality of Construction)Act 2003. That Act also made amendments to the Environmental Planning and Assessment Regulation 2000, introducing into that regulation clauses 162A and 162B, and also inserting a new clause 163:

162A Critical stage inspections required by section 109E (3) (d)

Note

Swimming Pools

Act

(8) This clause does not prescribe any occasion on which a manufactured home or dwelling built off the site in sections and transported to the site for assembly is required to be inspected.

162B Record of inspections conducted under section 109E (3)

Note

163 Notice to allow inspections

11 Subsequently to the 2003 amendments to the EPA Act, the subject matter of accredited certifiers came to be dealt with by the Building Professionals Act 2005 (BP Act), which commenced in 2007. The Building Professionals Regulation 2007 contains detailed provisions as to categories of accreditation, and as to the authorities conferred by the different categories.

Circumstances

12 Northern Residential owns a large area of land at Minmi.

13 On or about 29 September 2006, the Minister for Planning granted a concept plan approval and a project approval for subdivision of the land under Pt 3A of the EPA Act. The project approval was revised from time to time thereafter.

14 The project approval included conditions imposed by the Minister, and also a Statement of Commitments by the proponent Northern Residential. It was accepted by the parties to these proceedings that the contents of the Statement of Commitments were to be taken as conditions of the consent within the meaning of provisions such as s 109J(1)(c) of the EPA Act. This would seem to be correct (see condition A2 of the approval: Blue 21), and I will proceed on that basis.

15 One condition of the project approval at material times was condition B4, which included the following:

B4. Road, Drainage and Pavement Works

Subdivision work for each stage, in accordance with this approval, must not be commenced until a Construction Certificate for the relevant work has been issued by Council or an accredited certifier.

16 Another condition of the project approval, which was however subsequently changed, was condition B7:

B7. Dedication of Roads

17 The Statement of Commitments, at all material times, included clauses A.1.4, A.3.11 and A.5.7:

A.1.4 Prior to the endorsement of a Subdivision Certificate for a particular stage, all general commitments, and all specific commitments relating to the Subdivision Certificate for the particular stage will be complied with.

……

Construction Specification

……

18 On 14 August 2007, Mr Gibson was appointed principal certifying authority for the subdivision project.

19 On 19 August 2007, Mr Gibson gave notice in accordance with s 81A(4)(b1)(ii) of the EPA Act by a letter in the following terms:

20 Mr Gibson appointed Mr Lynn Gray to carry out most of the required inspections. Mr Gray was not an accredited certifier, although he was an experienced engineer.

21 The subdivision works, including road and drainage works, proceeded from August 2007.

22 On 29 February 2008, pursuant to an application for modification lodged with the Department on 11 September 2007, condition B7 was deleted and replaced by the following:

B7. Dedication of Roads

23 The subdivision works for stages 1, 2 and 3 of the subdivision, comprising 117 residential lots, was completed by July 2008, and Mr Gibson on 9 July 2008 reported that the works had been satisfactorily completed. Mr Gray, who made most of the required inspections, had reported in writing to Mr Gibson on the results of these inspections.

24 Subdivision Certificates dated 21 July 2008 were issued by Mr Gibson in relation to four plans of subdivision, which were lodged for registration with the Registrar General.

25 On 12 August 2008, the Council commenced proceedings in the Land and Environment Court seeking declarations that these certificates were invalid and of no effect; and on 12 November 2008, it commenced proceedings in the Equity Division of the Supreme Court seeking an order restraining the Registrar General from registering the relevant plans.

Decision of primary judge

26 The primary judge held that the subdivision certificates were invalid, giving the following reasons:

Environmental Planning and Assessment Regulation

The Building Professionals Act

Building Professionals Act

27 The primary judge then considered and rejected submissions advanced on behalf Mr Gibson and Northern Residential, to the effect that the Minister’s approval of the subdivision had the effect of modifying s 109E(3) so that it had no work to do; and that the principal certifying authority had not required inspections within s 81A(4)(b1).

28 The primary judge then referred to Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 and other authorities, and gave the following reasons for concluding that a declaration of invalidity should be made:

Building Professionals Act

29 The primary judge then considered and rejected submissions that the Council, knowing that Mr Gray was doing the inspections, never raised any objection to this; and submissions that there would be no utility in granting relief.

Issues on appeal

30 The Notice of Appeal sets out the following grounds of appeal:

A Whether the subdivision certificates were issued in conformity with the Act:

1 His Honour erred in concluding that inspections required to be carried out pursuant to conditions of development consent and Statement of Commitment A5.7 referred to therein, were inspections to which s 109E(3) of the Environmental Planning and Assessment Act 1979 ( EPA Act ) applies.
2 His Honour erred in concluding that clauses 162A and 162B of the Environmental Planning and Assessment Regulation 2000 applied to the inspections to be carried out pursuant to the development consent or the Statement of Commitments.
3 His Honour erred in his construction of a letter from the second appellant to the first appellant pursuant to s81A of the EPA Act .

B Invalidity of the subdivision certificates:

4 His Honour erred in concluding that the legislative purpose of the statutory scheme of private certification could only be achieved by invalidating the subdivision certificates.
5 His Honour erred in concluding that the protection afforded by the Building Professionals Act 2005 would be lost if the subdivision certificates were not invalidated.

C. Discretionary considerations:

31 I will consider in turn the following issues:

(2) If so, did that invalidate the subdivision certificates?

(3) If so, did the primary judge err in the exercise of discretion?

32 In relation to issue (3), I note that there was an application by the appellants to lead further evidence on the appeal; and to the extent necessary, I will consider that application in relation to this third issue.

Non-compliance with s 109E?

33 It is common ground that the Regulations did not prescribe any occasions for inspection for subdivision works, within s 109E(3)(d); and thus that there were no critical stage inspections for those works. The question was whether there were “other occasions … required by the principal certifying authority” within that paragraph.

34 Mr Ayling SC for Mr Gibson and TGG submitted that the only evidence that there were such other occasions was the letter of 19 August 2007; and that letter merely advised the person having the benefit of the development consent of inspections that were in fact to be carried out, in order to fulfil that person’s own commitments and not as any requirement by Mr Gibson himself; and certainly not as a requirement under s 109E(3)(d) of inspections assimilated to critical stage inspections which were to be carried out by the principal certifying authority himself or by another certifying authority.

35 Mr Ayling submitted that Mr Gibson’s affidavit (on which he was not cross-examined) showed that he had no actual intention to make any requirement under s 109E, which was what s 109E(3)(d) meant by “required”; and that in any event, if the requirement was to be determined objectively, no intention to make any such requirement was manifested.

36 Mr Ayling also submitted that s 109E(3)(d) did not require inspections by a certifying authority personally; and also that Mr Gibson was satisfied that there were no occasions required by him for inspection by himself or another certifying authority (and in fact was reasonably so satisfied), and that alone was enough for compliance with s 109E(3)(d).

37 Those submissions were adopted by Mr Scotting for Northern Residential.

38 Mr Robertson SC for the Council submitted that the relevant parts of s 81A and s 109E were introduced by the same amendment to the EPA Act, namely the Environmental Planning and Assessment Amendment (Quality of Construction) Act 2003, which was introduced in order to tighten control over private certifiers. That there should be such tighter control was particularly important in the case of this category of subdivisions, which is the only category where there can be private certifiers (s 109D(1)(d)); and in relation to subdivisions generally, where for historical reasons there have not been critical stage inspections specified.

39 Accordingly, he submitted, it was clear that the legislative intention was that inspections that “are to be carried out” within s 81A(4)(b1)(ii) are the same as those “other occasions as required by the principal certifying authority” within s 109E(3)(d).

40 Otherwise, he submitted, there could be no assurance that inspections were carried out by suitably qualified persons, which was particularly important in the case of this type of subdivision, where the Council has to accept responsibility for ongoing maintenance of roads and drainage works. It was also important, he submitted, that the inspections be by someone with appropriate statutory insurance, as required for certifying authorities by the Building Professionals Act 2005 and the Building Professionals Regulation 2007 (continuing the general effect of requirements previously contained in the EPA Act itself).

41 Mr Robertson submitted that, by notifying under s 81A(4)(b1)(ii) inspections that were to be carried out, Mr Gibson ipso facto required them within s 109E(3)(d); and it was not to the point that they were inspections to which Northern Residential had committed itself under the terms of the development; and it did not matter what Mr Gibson’s subjective intention or understanding was. Further, he submitted, since as a matter of law these were inspections required by him within the meaning of s 109E(3)(d), he could not have been satisfied that those inspections were carried out. To the extent that the different wording of s 109J (referring to the fact, not to the satisfaction of the principal certifying authority) might suggest that the subjective satisfaction of the principal certifying authority was sufficient to satisfy s 109E(3)(d), Mr Robertson submitted that until 2007, s 109J also referred to the satisfaction of the principal certifying authority, and that the amendment of s 109J could not have been intended to change the meaning of s 109E(3)(d).

42 In my opinion, while there is force in Mr Robertson’s submission that the relevant parts of s 81A and s 109E were introduced at the same time by an amendment intended to tighten controls over private certifiers, the fact remains that the wording does vary between these provisions. The reference in s 81A(4)(b1)(ii) to inspections “that are to be carried out” is apt to include all inspections that are in fact to be carried out, for whatever reason, whether they are required by conditions of the consent or required by the principal certifying authority or intended for any other reason. It can be said that one purpose of the notification is to engage Regulation 163 (which, since it was introduced by the same amending statute, can in my opinion be considered when interpreting s 81A(4)(b1)(ii)); and that it would be odd if notification under that section left the contractor or owner in doubt as to which of the inspections that were to be carried out required notice to be given under Regulation 163.

43 There is some force also in Mr Robertson’s submission about insurance. If inspections can be carried out by an independent contractor who is not a certifying authority, and if those inspections are carried out negligently, it is not clear that a principal certifying authority would be liable so as to engage the statutory policy: cf Scott v Davis [2000] HCA 52; (2000) 204 CLR 333, Sweeney v Boylan Nominees [2006] HCA 19; (2006) 226 CLR 161. Of course, the principal certifying authority would be liable for negligence in selecting the person to carry out the inspection; and it is quite likely that a professional reasonably selected by a principal certifying authority would have some kind of professional indemnity insurance, albeit not the insurance required for certifying authorities.

44 However, in my opinion, if it had been the intention of the legislature that notification of “other inspections” under s 81A(4)(b1)(ii) was ipso facto to be a requirement by the principal certifying authority of other occasions for inspection by the principal certifying authority or another certifying authority, within s 109E(3)(d), one would have expected the language of requirement to have been used in the former provision. That is, one would have expected that the former provision would have referred to “other inspections that the principal certifying authority requires to be carried out” rather than simply “other inspections that are to be carried out”. The language actually used does point to a wider meaning.

45 In my opinion, the mere fact of notification of other inspections under s 81A(4)(b1)(ii) does not automatically as a matter of law engage s 109E(3)(d). Rather, it is a question of fact (or mixed fact and law) whether in this case what Mr Gibson did was to specify other occasions as being required by him within s 109E(3)(d). In my opinion this question is to be determined having regard to the intention manifested by Mr Gibson’s conduct, and not Mr Gibson’s subjective intention or understanding. The letter of 19 August 2007 was a notification to the person having the benefit of the development consent, and that person had previously made a commitment to the Minister that there be inspections by the principal certifying authority or a suitably qualified person at various times, including the times notified in the letter; and in my opinion, as between Mr Gibson and the person to whom the letter was directed, the advice that inspections were to occur at those times did not manifest an intention that it was a requirement of Mr Gibson, within the meaning of s 109E(3)(d), that this happen. On that basis, in my opinion, there was no breach of s 109E.

46 If I had taken a different view on the construction of the legislation, or on the effect of the letter of 19 August 2007, there would still have been a question whether a breach of s 109E was shown.

47 It was submitted for the appellants that there was nothing in the legislation preventing delegation; but in my opinion, the reference in s 109E to the principal certifying authority or other certifying authority is such as not to permit inspections by mere delegates of those persons.

48 The remaining question would have been whether nevertheless Mr Gibson was satisfied that the requirements of s 109E(3)(d) were met. It is clear from his affidavit that he took the view that he had not required inspections which were, under s 109E(3)(d), to be carried out by himself or another certifying authority; and it could be said that accordingly, in that sense, he was satisfied there were no such inspections. However, I think the better view would be that, if the true position had been that there were inspections required by the principal certifying authority, and they had not been carried out by the principal certifying authority or another certifying authority, Mr Gibson could not have been satisfied within s 109E(3) unless he had turned his mind to the question and reached a state of satisfaction in relation to it; and the evidence suggests that he did not do this.

Invalidity of subdivision certificates?

49 In view of my decision on the first issue, this issue does not arise. However, I will express my views on it.

50 Mr Ayling referred to Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 145, and in particular to the discussion by Spigelman CJ (with whom Sheller JA agreed) of indicators of legislative intention that the breach of a provision of an Act should or should not result in invalidity. Spigelman CJ referred to Project Blue Sky, and various aspects of the legislative provision under consideration, and continued:

[40] The final relevant consideration is to determine whether invalidity of non-complying conduct is necessary or desirable to ensure compliance.

Woods v Bate

Project Blue Sky

Hatton v Beaumont

Howard v Bodington

[43] A failure to comply with a Direction that a council should prepare local environmental plans in a particular way may cover a wide range of defaults. Such failures may be major or minor, deliberate or inadvertent, fundamental or marginal. Indeed, in the present case, the failure appears to have arisen from an error of interpretation as to whether “any land” involved each parcel of land, a matter on which reasonable minds may differ. Furthermore, the failure meant that certain specific areas of land were down-zoned, contrary to the policy reflected in the Direction, in a context where the Amendment, considered as a whole, implemented the policy behind the Direction by increasing the permitted densities in the LEP area to a substantial degree.

[44] Invalidity, however, applies, to use McHugh JA’s formulation in Woods v Bate “irrespective of the circumstances” or, to use Mahoney JA’s formulation in Hatton v Beaumont , “regardless of the merits of the individual case”.

Woods v Bate

51 Mr Ayling submitted that it was s 109J that indicated necessary requirements for the issue of subdivision certificates; and that s 109E(3) was directed to the principal certifying authority and to requirements to be observed by the principal certifying authority. He submitted that the remedy for breach of s 109E(3) was against the principal certifying authority, by way of disciplinary action or an action for damages.

52 Mr Robertson adopted the reasons of the primary judge; and he submitted that the Court of Appeal should not interfere with the primary judge’s conduct of the exercise of the balancing factors.

53 Mr Robertson also submitted that, if it was s 109J alone that could invalidate subdivision certificates, there was in this case a breach of s 109J(1)(c). A condition of the development consent was that inspections be by a suitably qualified person; and Mr Robertson submitted that, in circumstances where it is the intention of the EPA Act was that all inspections be by a certifying authority, it was only a certifying authority that could be a suitably qualified person.

54 In my opinion, on balance the factors of the kind referred to in Project Blue Sky and in Smith favour the view that it was not the legislative intention that a breach of s 109E(3)(d) would result in invalidity.

55 There is force in the consideration that, in cases such as the present, the failure of a private principal certifying authority to comply with s 109E(3)(d) could result in roads and drainage works being completed to an unsatisfactory standard, and that would be detrimental to the public and particularly detrimental to a council that has to take over responsibility for maintenance of those works.

56 However, the requirements of s 109E(3)(d) apply to all subdivisions and all principal certifying authorities, whether they be the consent authorities themselves or private principal certifying authorities; and breaches of s 109E(3)(d) could vary enormously in their gravity. Further, in my opinion there would be a remedy against the principal certifying authority, not merely be way of disciplinary proceedings but also by civil action for damages. On the assumption now being made, that all inspections are to be by the principal certifying authority or another certifying authority, if it be the case that the principal certifying authority has not ensured that the inspections be carried out by the principal certifying authority or another certifying authority, then in my opinion there will be fault in the principal certifying authority and the statutory insurance will apply. Although the High Court of Australia has limited the categories of non-delegable duties (see for example Leichhardt Municipal Council v Montgomery [2007] HCA 6; (2007) 81 ALJR 686), where there is a statutory provision such as s 109E(3)(d) which imposes a duty on a person to do something and requires it to be done by that person or by another category of person at the selection of the first person, the latter cannot in my opinion delegate the performance to another outside that category; and if the person does this, and damage is caused by the negligence of the delegate, the person making this unauthorised delegation will be liable for breach of a non-delegable duty.

57 In my opinion, a crucial consideration is the form of s 109J, as compared with that of s 109E(3). The former sets out a number of things that must happen before a subdivision certificate is issued. Since the 2007 amendment, these things must happen in fact, not merely to the satisfaction of the principal certifying authority. The fact that in 2007 the Legislature made that change to s 109J and not to s 109E(3) confirms, in my opinion, that the intention was that the requirements of s 109J be conditions of validity, whereas satisfaction of the principal certifying authority under s 109E(3) was not.

58 The other submission of Mr Robertson based on s 109J(1)(c) has some force, on the construction of the relevant part of s 81A and s 109E now being assumed (against the view I took on the previous issue). If it be the case that all inspections notified under s 81A(4)(b1)(ii) are ipso facto inspections required by the principal certifying authority under s 109E(3)(d), it can be argued that the only “suitably qualified person” under commitment A5.7 is a principal certifying authority or another certifying authority.

59 It is not entirely clear that the carrying out of inspections required by commitment A5.7 is a condition which, by the terms of the consent, is required to be complied with before a subdivision certificate may be issued, within s 109J(1)(c): but I think the better view is that this is indeed the combined effect of condition B4 and commitments A1.4, A3.11 and A5.7. However, commitment A5.7 is a commitment of the person with the benefit of the consent, and it is a commitment that operates quite independently of whether such inspections are notified by the principal certifying authority under s 81A(4)(b1)(ii); so in my opinion, “suitably qualified” is apt to refer to qualifications as a matter of expertise to make inspections, rather than qualifications as a certifier under the EPA Act and/or the BP Act.

60 Accordingly, had I considered s 109E(3)(d) to have been breached, I would not in any event have found invalidity.

Discretion

61 On the view I have reached on the other two issues, the question of discretion does not arise. However I will briefly express my views on it.

62 On the question of whether additional evidence should be admitted, I note that the proposed evidence goes essentially to two matters: first, to money spent on the development to date, and liability accruing for interest on the finance for the project, and also other financial aspects flowing from inability to have the plan of subdivision registered; and second, to attempts to overcome the effects of the primary judge’s judgment by obtaining further subdivision certificates or further development consents.

63 In my opinion, the evidence should not be admitted on the question whether this Court should intervene on the question of discretion. The evidence on the first matter could have been led below, but was not; and the evidence on the second matter is only as to the working out of matters that were foreseeable at the time of the hearing below. The interests of finality of litigation mean, in my opinion, that insufficient grounds have been shown to admit the evidence on that question: cf Noonan v Australian Newsprint Mills Limited (New South Wales Court of Appeal, 23 August 1995, unreported). However, if the Court did decide to intervene on the question of discretion, I would admit this evidence to assist this Court in making its own decision as to what is the appropriate course that should now be taken.

64 The question of the existence of a discretion and the principles on which such a discretion is to be exercised are discussed in Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339-342, and in ACR Trading Pty Limited v Fat-Sel Pty Limited (1987) 11 NSWLR 67 at 82. In the latter case, Kirby P (with whom Samuels JA and Hunt AJA agreed) said this:

Warringah Shire Council v Sedevcic

65 In reciting the submissions for the appellants below, the primary judge said this:

[36] Mr Pickles also submits that there would be no utility in granting the relief sought by the council: although not an accredited certifier, Mr Gray is an engineer and, as disclosed by his inspection reports, in carrying out the inspections he issued site instructions to the contractor from time to time requiring compliance with relevant standards of construction. There is no suggestion that any of the roads or drainage have not been constructed in accordance with consent or are otherwise inadequate or substandard.

66 However, he did not refer to the following submissions made by counsel for the appellants below:

… If the council be right that as a matter of strict construction of the Act these inspections despite the development consent granted by the minister were required to be carried out personally by the PCA, what happens to all of these roads? What it means is that the subdivision certificate is invalid or could be declared invalid. The plans can't be registered and the roads would sit there forever without a certificate. What becomes of them then? Council doesn't proffer a practical outcome to all of this, doesn't suggest that there's a practical solution, because the inspections can't be carried out again. The work has been done. The roads have been built, the drainage has been built, the earthwork has been done to form the earth around the roads and around the lots. Is the council really suggesting that as a consequence of all this the roads are just going to sit there in aspic for ever, unable to be registered, because the applicant for consent, the proponent, can't then get a subdivision certificate.

67 Neither did he refer to the following submissions made in response to a comment by the primary judge that another subdivision certificate could be obtained if all the work was done again:

PICKLES: It couldn’t be done again unless it was all reconstructed again and that would be obviously an entire waste of resources in circumstances where the council doesn’t say the roads are inadequate and they might fall apart. It doesn’t say we’re concerned that the drainage doesn’t meet out specifications or doesn’t meet specifications of required standards. They don’t say that.

68 When he came to give his reasons for exercising the discretion as he did, the primary judge relevantly said this:

[41] I do not accept the submission that the granting of the relief sought by the council would be of no utility. There has been a clear breach of s 109E(3)(d) of the EP&A Act. The utility to be served by granting the relief sought would be the enforcement of the Act. To do otherwise would mean that in this and in other cases of a like nature the Act would not be enforced. Mr Gray may well be a duly qualified engineer, but unless he is the holder of a certificate of accreditation issued by the Building Professionals Board under the Building Professionals Act , he is not qualified to perform the tasks that he did.

69 In my opinion, the considerations that what was plainly a large amount of money had been spent in creating roads and drainage for a 117 lot subdivision, that the developer would be unable to sell any of the lots unless and until it could obtain registration, and that it was reasonable to expect that there would be difficulties and delay in obtaining further subdivision certificates, and that the developer was not itself at fault, were matters highly relevant to the exercise of discretion; and in my opinion, in accordance with the approach stated in Mifsud v Campbell (1991) 21 NSWLR 725 at 728, they should have been adverted to in the primary judge’s reasons for exercise of discretion. In my opinion, the inadequacy of the reasons in this respect, suggesting that highly relevant matters had not been taken into account, is sufficient to vitiate the exercise of discretion and justify the intervention of this Court.

70 On that basis, I would then have admitted the additional evidence.

71 Had it been necessary for the Court to then take a course in relation to the exercise of discretion, I would have been prepared exercise the discretion myself. The exercise of discretion that I would have favoured would not have been to grant an injunction or to dismiss the proceedings, but rather to remit the matter for consideration of the issue whether there was any appreciable risk that the subdivision works were not performed to a satisfactory standard. There was of course evidence before the Court below that the works were performed to a satisfactory standard, and no evidence to the contrary; but the issue I have in mind is not whether, on the balance of probabilities, the works were performed to a satisfactory standard, but rather an issue that has not been addressed, namely whether, having regard to all the evidence concerning the standard of performance of the works, the absence of inspections required by the EPA Act (on the assumptions I am making here) justified a conclusion that there was an appreciable risk that the Council would be left with work not performed to a satisfactory standard. Unless it appeared there was an appreciable risk of that kind, in my opinion relief should then be refused. If it did appear that there was an appreciable risk, then there would be a basis on which relief might be granted.

Conclusion

72 However, as appears from my reasons above, the question of discretion does not in fact arise. On the basis of the first of the three issues I considered, I would propose the following orders in each case:

(2) Orders below set aside, and in lieu therefore proceedings dismissed with costs.

(3) The Council to pay the appellants’ costs of the appeal.

73 TOBIAS JA: I agree with Hodgson JA.

I agree with Hodgson JA.

**********

13/11/2009 - correct the section number in para 41 from s 109E(1)(d) to s 109E(3)(d). - Paragraph(s) 41

Actions

Download as PDF Download as Word Document

Citations

Northern Residential Pty Ltd v Newcastle City Council [2009] NSWCA 141

Most Recent Citation

Cessnock City Council v Laila Investments Pty Ltd [2012] NSWLEC 206

Cases Citing This Decision

11

Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404

Western Districts Developments Pty Ltd v Baulkham Hills Shire Council [2009] NSWCA 283

O'Brien v Building Professionals Board (No 2) [2010] NSWADT 250

Cases Cited

11

Statutory Material Cited

6

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28

Amalgamated Society of Engineers v Adelaide Steamship Co Ltd [1920] HCA 54

Scott v Davis [2000] HCA 52

CITATION:	Northern Residential Pty Limited v Newcastle City Council [2009] NSWCA 141 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	26 May 2009
JUDGMENT DATE:	5 June 2009
JUDGMENT OF:	Hodgson JA at 1; Tobias JA at 73; Simpson J at 74
DECISION:	(1) Appeal allowed. (2) Orders below set aside, and in lieu therefore proceedings dismissed with costs. (3) The Council to pay the appellants’ costs of the appeal.
CATCHWORDS:	LOCAL GOVERNMENT – Development consent for subdivision of land – Subdivision works to be carried out – Requirements for inspections of stages of subdivision works – Whether inspections required by principal certifying authority – Inspections carried out by person other than a certifying authority – Subdivision certificates issued – Whether s 109E(3) of the Environmental Planning and Assessment Act 1979 breached – Whether subdivision certificate invalid – Exercise of discretion.
LEGISLATION CITED:	Building Professionals Act 2005 Building Professionals Regulation 2007 Conveyancing Act 1919 s 195C, s 195F Environmental Planning and Assessment Act 1979 Pt 3A, s 75S, 81A, s 109C(1)(d), s 109D(1)(d), (1A) and (3), s 109E(1) and (3), s 109J(1)(c), (2) and (3), and s 109P Environmental Planning and Assessment Amendment (Quality of Construction) Act 2003 Environmental Planning and Assessment Regulation 2000, cl 162A cl 162B, cl 163
CATEGORY:	Principal judgment
CASES CITED:	ACR Trading Pty Limited v Fat-Sel Pty Limited (1987) 11 NSWLR 67 Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 Leichhardt Municipal Council v Montgomery [2007] HCA 6; (2007) 81 ALJR 686 Mifsud v Campbell (1991) 21 NSWLR 725 Noonan v Australian Newsprint Mills Limited (New South Wales Court of Appeal, 23 August 1995, unreported) Scott v Davis [2000] HCA 52; (2000) 204 CLR 333 Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 145 Sweeney v Boylan Nominees [2006] HCA 19; (2006) 226 CLR 161 Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335
PARTIES:	NORTHERN RESIDENTIAL PTY LIMITED (First Appellant) Terry G GIBSON (Second Appellant) TG GIBSON PTY LIMITED (Third Appellant) NEWCASTLE CITY COUNCIL (First Respondent) REGISTRAR GENERAL OF NEW SOUTH WALES (Second Respondent)
FILE NUMBER(S):	CA 40122/09
COUNSEL:	A C SCOTTING (First Appellant) J A AYLING SC/ A M PICKLES (Second & Third Appellant) T F ROBERTSON SC/ M HALL (First Respondent) No appearance (Second Respondent)
SOLICITORS:	Hickson Lawyers (First Appellant) McCabe Terrill (Second & Third Appellant) Sparke Helmore (First Respondent) Registrar General of NSW (Second Respondent)
LOWER COURT JURISDICTION:	Land & Environment Court
LOWER COURT FILE NUMBER(S):	LEC40792/08; LEC41128/08
LOWER COURT JUDICIAL OFFICER:	Lloyd J
LOWER COURT DATE OF DECISION:	12 February 2009
LOWER COURT MEDIUM NEUTRAL CITATION:	Newcastle City council v Northern Residential Pty Limited & (3) Others [2009] NSWLEC 10