Schroders Australia Property Management Ltd v Shoalhaven City Council - [2001] NSWCA 74

NEW SOUTH WALES COURT OF APPEAL

CITATION: Schroders Australia Property Management Ltd v Shoalhaven City Council & Anor [2001] NSWCA 74

FILE NUMBER(S):
40994/99

HEARING DATE(S): 29/03/01

JUDGMENT DATE: 20/04/2001

PARTIES:
Schroders Australia Property Management Ltd v Shoalhaven City Council and Fabcot Pty Ltd

JUDGMENT OF: Spigelman CJ Sheller JA Ipp AJA

LOWER COURT JURISDICTION: Land & Environment Court

LOWER COURT FILE NUMBER(S): LEC 40010/99

LOWER COURT JUDICIAL OFFICER: Pearlman CJ

COUNSEL:
T Hale SC/T M Thawley (Appellant)
J Webster (1st Respondent)
B J Preston SC/ I R Pike (2nd Respondent)

SOLICITORS:
Middleton Moore & Bevins (Appellant)
Morton & Harris (1st Respondent)
Mallesons Stephen Jaques (2nd Respondent)

CATCHWORDS:
BUILDING CONTROL AND TOWN PLANNING - development application - planning and zoning requirements - clause 9(3) Local Environment Plan - meaning of "consistency" - whether council properly formed the clause 9(3) opinion - Environmental Planning & Assessment Act 1979 s 90(1)(d) - unreasonableness - failure to seek external advice - decision not unreasonable. D

LEGISLATION CITED:
Environmental Planning and Assessment Act 1979

DECISION:
Appeal dismissed and appellant to pay the first and second respondents' costs.

JUDGMENT:

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40994/99
LEC 40010/99

SPIGELMAN CJ
SHELLER JA
IPP AJA
Friday 20 April 2001

SCHRODERS AUSTRALIA PROPERTY MANAGEMENT LTD v SHOALHAVEN CITY COUNCIL & FABCOT PTY LTD

FACTS:
The second respondent made a development application to the first respondent for construction of a shopping centre in Nowra. Conditional consent was given for the development, however the appellant applied to the Land and Environment Court for a declaration that the consent was invalid. This declaration was refused and the appellant appeals that decision.

The proposed development was to occur on land partially zoned 3(g) under the relevant Local Environment Plan (LEP) which did not allow for retail uses that would compete with the local retail centre Further, under cl.9(3) of that LEP the first respondent was required to be of “the opinion that the carrying out of the development [was] consistent with the objectives of the zone.”

The appellant argued that the first respondent had failed to properly form this requisite opinion and that they had failed to consider the social and economic effects of the development as required by s.90(1)(d) Environmental Planning & Assessment Act 1979.

HELD:

The first and second grounds of appeal
(per Ipp AJA, Spigelman CJ and Sheller JA agreeing)

There was ample evidence that the first respondent had formed the requisite opinion under cl.9(3) LEP and there was sufficient material to justify the opinion formed.

Per curiam
(a)The first respondent relied upon reports from independent consultants and legal advice in relation to the consistency of the development with the zoning objectives. While there was no evidence that each councillor had read these materials individually an inference can be drawn that material in the possession of the first respondent is to be treated as also in the possession of the individual councillors. (Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 31 per Gibbs CJ referred to).

(b)The failure to ask questions of a witness during examination in chief would not in this case attract a Jones v Dunkel inference as there was a presumption that the councillor’s had read the materials and it was for the appellant to rebut this. (Commercial Union Assurance Company of Australia Limited v Ferrcom Pty Limited (1991) 22 NSWLR 389 referred to and distinguished)

The third and fourth grounds of appeal
(per Ipp AJA, Spigelman CJ and Sheller JA)

There was nothing inherently unreasonable in the decision to grant deferred commencement consent for the development.

Per curiam
(a)The appellant’s argument as to the unreasonableness of the decision was distinguishable from the cases upon which they sough to rely. The present case involved an alleged omission to make inquiries through a particular organisation which the first respondent chose not to utilise. The case was not one involving a failure to use existing available information. Further the information that may have resulted from the inquiries was not centrally relevant or materially significant. (Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155; Luu v Renevier (1989) 91 ALR 39; Videto v Minister for Immigration and Ethnic Affairs (1985) 69 ALR 342 referred to an distinguished)

Legislation Cited:
Environmental Planning & Assessment Act 1979
Cases Cited:

Franklins Limited v Penrith City Council [1999] NSWCA 134
Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24
Commercial Union Assurance Company of Australia Limited v Ferrcom Pty Limited (1991) 22 NSWLR 389
Jones v Dunkel (1959 ) 101 CLR 298
Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155
Luu v Renevier (1989) 91 ALR 39
Videto v Minister fir Immigration and Ethnic Affairs (1985) 69 ALR 342
King v Great Lakes Shire Council (1986) 58 LGRA 366
Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223
Weal v Bathurst City Council (2000) 111 LGERA 181

ORDERS

Appeal dismissed and appellant to pay the first and second respondents’ costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40994/99
LEC 40010/99

SPIGELMAN CJ
SHELLER JA
IPP AJA
Friday 20 April 2001

SCHRODERS AUSTRALIA PROPERTY MANAGEMENT LTD v SHOALHAVEN CITY COUNCIL & FABCOT PTY LTD

JUDGMENT

SPIGELMAN CJ: I agree with Ipp AJA.
SHELLER JA: I agree with Ipp AJA.
IPP AJA:
The appeal against the development application
The second respondent (“Fabcot”) is a company associated with the Woolworths organisation. On 16 January 1998 it made a development application to the first respondent (“the Council”) for the construction of a new shopping centre in Nowra. The shopping centre, to be known as the Nowra Marketplace, was to comprise a supermarket, a discount department store, speciality shops, a community centre and associated car parking.
On 15 October 1998 the Council granted a conditional consent to Fabcot’s development application. The appellant (“Schroders”) applied to the Land and Environment Court for a declaration that the consent was invalid. Pearlman CJ dismissed Schroders’ application. Schroders now appeals against her Honour’s decision.
The first two grounds of appeal are based on clause 9(3) of the Council’s Local Environment Plan 1985 (“the LEP”). This clause provides:
“9(3). Except as otherwise provided by this plan, the Council shall not grant consent to the carrying out of development on or of land to which this plan applies unless the Council is of the opinion that the carrying out of the development is consistent with the objectives of the zone within which the development is proposed to be carried out”.
Part of the site of the development was zoned 3(g) under the LEP. Hence, it was a condition precedent to a valid grant of consent that the Council form an opinion that the development was consistent with the objectives of the 3(g) zone. A failure to form such an opinion would result in the grant being invalid: Franklins Limited v Penrith City Council [1999] NSWCA 134.
According to the LEP, the objectives of the 3(g) zone were:
“to provide a strategic development area providing both for a variety of uses and for varying combinations of such uses including higher density residential, commercial and tourist combinations but not including ordinary retail uses that would compete with the local retail centre …”
Schroders contends that the Council failed properly to form an opinion under clause 9(3) to the effect that the development was consistent with the objectives of zone 3(g). This argument is the basis of the first two grounds of appeal.
The third and fourth grounds of appeal are based substantially on s 90(1)(d) of the Environmental Planning and Assessment Act 1979. This section required the Council, in determining the development application, to take into consideration the social and economic effect of the development in the locality. Schroders contends that the Council did not properly undertake the requisite process of evaluation to enable it adequately to understand the social and economic implications of the development. Hence, according to Schroders, the Council’s decision in this respect is invalid and, consequentially, so is its decision to consent to the development.
The history of the application for development approval
On 16 January 1998, Fabcot lodged its development application accompanied by a statement of environment effects, a traffic report, a heritage impact assessment and an economic impact assessment.
On 20 January 1998, the Council’s Policy and Planning Committee noted the objectives of the 3(g) zone and their relevance to the development application. The Committee recommended that a draft Local Environmental Plan be prepared for the relevant area “with the objective of re-zoning the land to zone No 3(a) (Business “A” (Retail) Zone) where necessary to allow for a major retail development”. On 27 January 1998, the Council resolved to defer consideration of the proposed re-zoning “pending further information regarding legal issues”.
In February, the Council retained, as its consultant, Gary Shiels and Associates Pty Limited (“GSA”). GSA provided a preliminary assessment of the development to the Council.
On 3 February 1998, Ms Chapman, the research planner of the Council, wrote to Fabcot drawing attention to the fact that the land was zoned part 3(b) and part 3(g) and enclosing copies of the zone objectives. On 13 February 1998 Giles and Associates Pty Limited replied to the Council on Fabcot’s behalf asserting that the proposed use was consistent with the 3(g) zone and giving reasons for this proposition.
On 27 February 1998, Jebb Holland Dimasi, economists and property advisors, submitted a report on behalf of Fabcot dealing with the economic impact assessment of the development. They expressed the conclusion that:
“By the year 2000 there would be ample market scope for [Nowra Marketplace] to trade successfully, without any significant impact on the current trading performances of existing retailers…”
This conclusion was based on inferences drawn from “the rapid growth in resident population”, the increased “retention of retail expenditure … which is current escaping from the City of Shoalhaven”, and growth in expenditure from tourists and visitors.
Also in February 1998, the Council’s Planning Services Division commented generally on the application, including its economic impact and, thereafter, the Council requested further information, generally, from Fabcot.
In March 1998, BBC Consulting Planners (“BBC”), on behalf of Schroders, submitted a report to the Council encompassing an objection to the development. The report contained a full discussion as to the implications of the zone 3(g) land. It asserted that the proposed development would have a significantly adverse impact on retailers in the existing retail core. The opinion was expressed that the Nowra Marketplace would “result in the closure of stores and others will relocate …”. The report concluded with the assertion that the Council could not be satisfied that the development was consistent with the objectives of the zone and that Council was obliged, therefore, to refuse development consent.
In March 1998, an information forum was held at the Council for members of the public. Questions were asked and answers provided in regard to the proposed development. Part of the discussion concerned the effect of the development on retailers in the vicinity, and the economic impact, generally. Several objections, both oral and written, were received. Amongst these were detailed written objections advanced on behalf of Schroders.
An independent report was provided to Council by Intergrowth Property Group which commented generally on the economic effects of the development and on the reports submitted on behalf of Fabcot and Schroders. The Intergrowth report addressed the economic benefits and risks involved and the impact on retailers in the vicinity.
Council staff proceeded to consider the issues that had been raised. Meetings were held between representatives of Fabcot, the Council and GSA.
On 8 April 1998, a Council meeting was held specifically to discuss the Fabcot development application. The meeting discussed the potentially adverse economic impact of the Nowra Marketplace and how this could be avoided.
On 27 April 1998, Mr E Royston, the planning services manager of the Council, made the following file note concerning the objectives of the 3(g) zone:
“Development of major retail development in 3(g) areas in many cases could be seen to compete with the local retail centre where these are in the same locality”.
In May and June, further reports were received from Intergrowth Property Group and GSA relating to the application. On 2 June 1998, Fabcot lodged amended plans that were intended to accommodate some of the concerns that had been raised. On 10 June 1998, the Council wrote to Fabcot asking it to respond to certain matters concerning largely the provision of the public parking area and design issues.
Further submissions from interested parties continued to be received. Typical of these was a letter dated 12 June 1998 from a body known as the "Friends of Nowra” that expressed concerns as to the impact of the development on the retailers in Nowra.
On 19 June 1998, GSA wrote to an officer of the Council and referred to the submission from BBC. The letter concluded:
“In the light of this submission, and in particular, the submissions in relation to … the objectives of the 3(g) zone, we are of the opinion that the BBC submission should be referred to Council’s solicitors for consideration…”
Advice was duly taken and on 24 June 1998 an opinion was received from Mr Webster, of counsel.
In June 1998 the Council received a report from GSA which contained a comprehensive discussion about the issues raised by the development application. The report observed that the Fabcot proposal “is the largest retail development in Shoalhaven for 15 years and would have a substantial impact on the Nowra Town centre”. The report referred to Mr Webster’s advice. It referred to the “considerable difference between the findings of the various economic consultants”. It expressed the view that there would be a negative impact on existing retailers in the order of 20 to 25% over 5 to 7 years and suggested ways in which many of the adverse effects on existing retail outlets could be ameliorated. It concluded:
“We do not believe that Council should approve the subject application in its present form. In our view, the applicant should be specifically requested to address and resolve the design aspect outlined. In concert, [sic] we suggest that Council urgently revise its Development Strategy which is at odds with the Woolworths proposal.”
In its June 1998 report, GSA made four main recommendations. Recommendation 1 was that Council defer Fabcot’s development application. Recommendation 2 was “to advise the applicant that Council is not prepared to approve the subject application in its present form and the following matters need to be resolved …” Six “matters” needing resolution were then set out. These related principally to design issues. Recommendation 3 was that “Council undertake an urgent review of the existing Nowra Central Business District Traffic and Parking Strategy”. The fourth recommendation was that Council “reconsider the subject application at the conclusion of the actions recommended in 2 and 3 above”.
At a public meeting on 30 June 1998, the Special Policy and Planning Committee of the Council considered the questions raised by the GSA report. Presentations were made by several persons who opposed the application and by persons on behalf of Fabcot.
After deliberation, the Policy and Planning Committee resolved to make four recommendations that followed or adapted the four recommendations made by GSA.
The first recommendation was to defer the Fabcot application.
The second recommendation was “to advise the applicant that while Council still supports the concept of the application, Council is not prepared to approve the subject application in its present form and the following matters need to be resolved”. The words “still supports the concept of the application” were an addition to the equivalent GSA recommendation. The six matters referred to in the second GSA recommendation were adopted but a seventh was added. These seven matters were to be resolved by Fabcot.
There was also a change to the third recommendation. The third GSA recommendation proposed a review as to “whether” the Nowra Central Business District Traffic and Parking Strategy should be varied to incorporate the Woolworths development in its proposed location. The Committee’s third recommendation was for a review as to “how” that Strategy should be varied. The Committee accepted, therefore, that a variation, inevitably, was required. As with the GSA recommendation, the Committee recommended that the Council should, itself, be responsible for the review.
The fourth recommendation was changed to the following:
“The general manager [of the Council] independently implement parts (b) and (c) of the recommendation so that the determination of the application is not dependent upon the completion of the review of the strategy which may take some time”.
In other words, the Committee recommended that the determination of the application should not await the resolution of the seven matters referred to in the second recommendation or the review of the Strategy referred to in the third recommendation.
Presumably, the general manager was to implement the second recommendation by requesting Fabcot to address and resolve the seven matters listed. This, in fact, is what occurred.
On 7 July 1998, the Council adopted the four recommendations of the Committee. The second recommendation (which so became a resolution of the Council) is of particular importance to the third and fourth grounds of appeal, and I shall continue to refer to it as “the second recommendation”.
The Council staff proceeded to have discussions with Fabcot in relation to the seven matters listed in the second recommendation.
On 17 July 1998, Mr A Bishop wrote to the Mayor and councillors, challenging the legal advice that had been given concerning consistency and asserting that the proposed development was inconsistent with the 3(g) zone objectives.
On 21 July 1998, the general manager sought directions from the Council “on what additional role, if any, [GSA] should play in the finalisation of the Woolworths development application”. He drew attention to the fact that the second recommendation listed a number of matters which had to be resolved, and said:
“In this respect, initial discussions have been held with the applicants and further discussions between architects and consultant engineers representing the applicant are due to take place in the near future. Depending on the outcome and timing of these discussions, the application is likely to be placed before Council in August for final determination”.
The general manager commented, as regards GSA’s further involvement, that there were three possible options. These were:
“(a)        Supplementary report: Under this option GSA would be commissioned to provide a further assessment report on the applicant’s response The main advantage with this approach is that Council staff would have no direct involvement in the assessment reporting, however this is likely to be the most costly and timely approach given the firm’s commitments with other projects.
(b)          Further Comment: A second option would be for staff to finalise the reporting but to also seek further comment from GSA on the applicant’s response to ensure that there is continuity within the process and that the benefit of GSA expertise [sic - is] fully utilised. This option would be more time and cost effective.
(c)          No Further Involvement: The final option is that GSA have no further role in the DA assessment process. Staff would then report back on the applicant’s response. While this is the most efficient option it could lead to concerns over the probity of finalising the process”.

He observed that in view of GSA’s involvement with the project and the expertise it had gained:
“It would be appropriate that they provide further comment on the applicant’s response to the resolution adopted by Council.
However, in view of the circumstances, it is not considered necessary to engage them to undertake a supplementary report. Discussions have been held with the GSA who are amenable to providing extra comment and could do this within a short term around time. They have indicated a likely additional cost of $500 - $1000”.
The general manager, accordingly, recommended:
“That Council seek further comment from [GSA] on the applicant’s for the Woolworths Marketplace proposal response to Council’s adopted resolution of July 7, 1998 …”
On 30 July 1998, Woolworths, on behalf of Fabcot, wrote to the Council setting out its proposals in regard to a number of the Council’s concerns relating to the matters listed in the second recommendation.
On 30 July 1998 Mr Royston sent the general manager a copy of Mr Webster’s advice. Mr Royston referred to the fact that the Fabcot proposal was contrary to the Council’s current Traffic and Parking Strategy and stated:
“This is a consideration which Council must take into account in considering the development application. A 3(g) policy statement prepared for the site in 1985 is also attached”.
On 4 August 1998, Fabcot lodged further amended plans.
On 4 August 1998, the Gray family wrote to the general manager asserting that the Fabcot application was inconsistent with the objectives of the 3(g) zone.
On 6 August 1998, the general manager reported to the Policy and Planning Committee on Fabcot’s new proposals concerning the matters listed in the second recommendation. He stated:
“The applicant has made a significant attempt to address Council’s concerns”.
And concluded, under the heading “Preferred Approach”:
“Taking into account that:
(a)         Council has previously indicated its support for this development;
(b)          The applicant has made a significant attempt to address Council’s concern; and
(c)          Those matters which have not finally resolved can be addressed via the Deferred Commencement Consent process and appropriate conditions of development consent;
the staff would recommend Option (b) as the preferred approach”.
That is to say, the general manager recommended that the Council staff should complete the review of the second recommendation matters not finally resolved, and should also seek further comment from GSA on Fabcot’s response to the Council’s concerns. The recommendation as to the further involvement of GSA was not accepted.
On 6 August 1998, the Policy and Planning Committee resolved to recommend to the Council that:
“In view of the applicant’s satisfactory response to the outstanding issues identified by Council’s consultant, a ‘Deferred Commencement Consent’ be prepared with the deferred matters being the closure of Collins Way and the re-design of the car park … “.
On 6 August 1998, the Minister for Urban Affairs and Planning wrote to the general manager, requesting that the Council defer a decision on the Fabcot proposal until it had undertaken a review of the Strategic Plan for the Nowra town centre.
On 7 August 1998, Mr H Jones wrote to the Mayor and general manager and submitted that the application was inconsistent with the 3(g) zoning.
On 11 August 1998, the Council resolved to defer the consideration of the development application until a submission and presentation was made on its behalf to the Minister.
On 11 August 1998, the Mayor replied to Mr Jones about his concerns “regarding the permissibility of the proposed Woolworths development within the subject 3(g) zone”. The Mayor referred to the advice from Mr Webster and stated that, following this advice:
“The consultants drew the conclusion that the development was permissible in the zone”.
He said:
“Council has confidence in the advice from our Barrister and the ability of the consultants to assess this aspect of the development properly”.
On 26 August 1998, the Mayor wrote to the Minister asking for his agreement to the Council proceeding with the determination of the application. In support of this request the Mayor sent a lengthy submission to the Minister that contained the Council’s explanation of its position. The submission referred to zone 3(g) and stated:
“A 3(g) Planning Statement for the area adopted by Council in 1985 [when the LEP was gazetted] has as an objective ‘to allow for major retail and ancillary business expansion of the CBD’”.
The submission concluded:
“The proposal is consistent with Shoalhaven LEP 1985 and Council’s 3(g) Planning Statement for the area …”.
The “area” concerned was the area the subject of the Fabcot development. The Planning Statement incorporated the 3(g) zone objectives for that particular area.
The Mayor’s submission to the Minister addressed the economic impact of the development. The Mayor referred to the report of Jebb Holland Dimasi and observed that Council’s independent consultant, GSA, had used Intergrowth Property Group to “critique” the report. He noted that BBC had also made submissions on economic aspects. According to the Mayor, “[W]hile there were considerable differences in the predicted impacts of the developments there were also significant areas of common agreement. The economic consultants provided verbal presentations as well as written reports and this issue was extremely well covered within the assessment process”. The Mayor went on to advance several reasons in support of the conclusion that “there is sound justification for dealing with the development application prior to finalisation of the CBD strategy”.
On 6 October 1998, the Minister wrote to the Mayor advising that he was now satisfied that Council should proceed to determine the development application.
On 15 October 1998, the Council granted “Deferred Commencement Consent” to the development subject to three matters being resolved and to various conditions. The three matters concerned the partial closure of a particular road, the re-design of a car park and a road safety audit.
The first and second grounds of appeal
Schroders’ primary argument was that the Council had assumed that the advice of Mr Webster was correct and therefore, did not itself, independently, apply its collegiate mind to the question of consistency when forming the requisite opinion under clause 9(3).
This submission rested solely on two passages in the GSA report. The first was under the heading “Planning Controls”, where the following was said:
“The proposed development is permissible with development consent in both the 3 (b) and 3 (g) zones on the subject site, including that part of Collins Way to be developed. The issues relating to the consistency with the objectives of the 3(b) and 3(g) zones have been considered by Council’s solicitors and, as Nowra is a regional centre, the proposal is not inconsistent with these objectives.”
The second was the following:
“In relation to the consistency of the proposed development with the objectives of the 3(g) “Business “G” (Development Area) Zone), advice has been received from Counsel. The advice is that as Nowra is a regional centre, the proposal is not inconsistent with the objectives”.
Schroders submitted that, by these two statements, GSA, in effect, informed the Council that it was not necessary for it to consider the consistency issue as it had already been resolved by the opinion of Mr Webster.
Schroders submitted further that the Council accepted the advice given in the terms submitted and did not, independently, apply its mind to the issue. There was no direct evidence that bore on this issue, but Mr Hale SC, senior counsel for Schroders, relied on an inference that he said arose from the clear terms of the GSA report and the fact that the report, in hard copy, was received “a day or two before” the meeting of 7 July 1998 and in electronic form “a few days before”. He submitted that, from the shortness of time between the Council’s receipt of the GSA report and its decision of 7 July 1998 to support the development, it should be inferred that the Council did not consider the issue of consistency, but assumed that Mr Webster’s advice in this regard (as reported by GSA) was correct and nothing more needed to be investigated or deliberated upon in regard thereto.
In my opinion, however, neither of the propositions so advanced withstands scrutiny. I shall deal firstly with the argument that the GSA report advised the Council, in effect, that the decision as to consistency with the zone 3(g) objectives need not be made by it as the issue had been resolved by legal advice.
Regard must be had to the context in which councillors would have read the GSA report. At the outset, there can be no doubt that councillors would have recognised the consistency issue as an important question. Pearlman CJ correctly observed in this regard:
“Clause 9(3) of the LEP is a conventional type of clause. It has appeared in the LEP since the LEP’s adoption in 1985 (although it was amended in a minor way by Amendment No 70 in 1993). It applies to all development in all zones under the LEP. The inference must be drawn that clause 9(3) had been applied by the Council regularly and frequently”.
Moreover, the consistency issue had been very much alive from the time the application was first lodged. It had been raised by Council officers at the outset and was frequently thereafter discussed by them. Various members of the public made submissions in regard to the consistency issue, both orally, at public meetings, and in writing. It is sufficient to refer to what was said at the meeting of 19 March 1998 (to which I have referred above) and in the written submissions from Mr Cox, Mr Bishop, the Gray family and Mr Jones. The Council had responded in detail to the questions and the submissions. The consistency issue formed an important part of the detailed submissions of Fabcot and Schroders and their respective consultants. Objections based on absence of consistency formed part of annexure 4 to the GSA report.
Consistency was regarded by GSA as an issue of such complexity that it was desirable for the Council to obtain legal advice in regard thereto. The Council agreed, hence the obtaining of Mr Webster’s opinion.
Against this background, there is a powerful inference that councillors would have read the GSA report with the consistency issue very much in their minds and with a full understanding of the importance of the opinion required under cl 9(3).
According to the plain meaning of the statements on which Schroders relied, as well as the context of the report, the reader is told merely that certain legal advice had been received. Nothing in the statements asserted that the Council need not apply its mind independently to the consistency issue. The surrounding circumstances, as I have indicated, support the inference that councillors would have well appreciated that the Council needed itself to form the opinion under cl 9(3).
In my view, seen as a whole, the GSA report merely raised the issue of consistency and informed the Council that it had received legal advice to the effect that the proposed development was not inconsistent with the 3(g) zone objectives. The GSA report did not, in effect, seek to withdraw the decision as to consistency from the Council, as submitted by Schroders.
There are other matters that reinforce the conclusion that the Council in fact applied its own mind to the consistency issue.
The terms of Mr Webster’s advice made it crystal clear that the decision was for the Council itself. There is no direct evidence that the councillors, individually, had read Mr Webster’s advice. Nevertheless, material in the possession of the Council will, generally, be treated as being in the possession of the councillors: Minister for Aboriginal Affairs vPeko-Wallsend Limited (1986) 162 CLR 24 at 31 per Gibbs CJ.
Schroders submitted, however, that the inference should be drawn that the individual councillors had not read Mr Webster’s advice. This submission was based on the fact that, when Ms Chapman, the planning officer of the Council, testified, she was not asked whether individual councillors had read the material in the Council files.
Mr Hale pointed out that Ms Chapman had said that she was the “custodian” of the files, yet she had not been asked whether the files had been inspected by the councillors. Reliance was placed on Commercial Union Assurance Company of Australia Limited vFerrcom Pty Limited (1991) 22 NSWLR 389 at 418 to 419 where Handley JA extended the principles of Jones v Dunkel (1959) 101 CLR 298 to a case where a party fails to ask questions of a witness in chief. It was submitted that it should be inferred that the councillors had not inspected the files and, therefore, had not read Mr Webster’s opinion.
For my part, I question, with respect, whether the probative force of an omission to call an available witness can be equated with the omission to ask questions of a witness who has been called to testify in circumstances where the opposing party can cross-examine that witness on the relevant issue.
In any event, there are two reasons why the principles of Jones v Dunkel do not apply in this case.
Firstly, as Windeyer J noted in Jones v Dunkel (at 322) no adverse inference can be drawn from a party’s silence until facts are proved requiring that party to provide an answer. In the present case, the prima facie presumption was that the councillors had read the opinion (which was in the Council’s files) and it was for Schroders to rebut that. No evidence was led establishing that the councillors had not read the opinion. There was therefore no need for the Council to lead any affirmative evidence concerning the inspection of the files by individual councillors. Accordingly, no adverse inference arises from the Council’s omission to ask Ms Chapman questions on this topic.
Secondly, although Ms Chapman was the custodian of the files, it did not follow that she knew when a councillor would obtain access to the files and read the material in them. Until it was proved that information of this kind was in her possession, no inference could arise from any omission to ask Ms Chapman whether any particular councillors had inspected the files. At the trial, the extent of Ms Chapman’s knowledge, if any, as to the extent to which individual councillors inspected the files was not established.
In the circumstances, Schroders’ argument based on Commercial Union Assurance Company of Australia Limited v Ferrcom Pty Limited fails.
The statements contained in the GSA report must be read together with the terms of Mr Webster’s advice. On this basis, it is abundantly clear that the councillors would have believed that it was necessary for them to decide, independently, whether the Fabcot development was consistent with the objectives of zone 3(g).
Additionally, there is affirmative evidence that the Council applied its collegiate mind to the consistency issue and decided it. This evidence is contained in the submission made by the Mayor to the Minister on 27 August 1999.
In that submission, the Mayor, writing, in effect, on behalf of the Council, informed the Minister of the Council’s position: that being that the Fabcot application was not inconsistent with the Council’s 3(g) planning statement for the area in question. The Mayor, on behalf of the Council, thereby implicitly stated that the Council had formed the opinion that the Fabcot development was not inconsistent with the zone 3(g) objectives.
In my opinion, the Mayor’s submission of 27 August 1988, together with the other matters to which I have referred, establishes conclusively, firstly, that the Council did not regard the issue of consistency as being unnecessary for resolution by it, and, secondly, that the Council considered the issue and made a decision as set out in that submission.
Schroders next argued that the Council had answered the consistency question on the basis of a false assumption. The assumption said to have been false was that no inconsistency arose because Nowra was a regional centre and not a local retail centre. Schroders submitted that the GSA report told the Council that this was the effect of the legal advice received from Mr Webster, and the inference should be drawn that the Council acted on that advice. According to Schroders, that advice was wrong.
This argument does not assert that the Council misdirected itself on a question of law, namely, the meaning of “the local retail centre”. Rather, it is an argument that the Council asked the wrong question by reason of the fact that it accepted the advice that Nowra was not a local retail centre. This argument was not raised in the pleadings, nor was it addressed by Pearlman CJ in her reasons. It is open to serious question whether it can now be raised.
In any event, there is simply no evidence that tends to establish that the Council made its decision by assuming that Nowra was a regional centre and not a local retail centre. Schroders, in effect, relied solely on the terms of the GSA report in this regard.
It is true that GSA reported that the legal advice it had received was to the effect that Nowra was a regional centre and not a local retail centre (and hence no question of inconsistency arose), and stated that it agreed with that advice. But there is nothing to prove that the Council adopted that advice.
Mr Webster, in his opinion, said that it was open to the Council to come to the conclusion that Nowra was not the local retail centre. But he went on to say that if that categorisation of Nowra centre were to be wrong and were it in fact to be the local retail centre, the question for the Council was whether the proposed development was inconsistent with the zone 3(g) objectives. Mr Webster, in effect, left the issue for the Council to decide. I have pointed out that Mr Webster’s advice is to be regarded as being before the Council at the relevant time.
In the circumstances, the absence of evidence tending to establish that the Council formed its opinion under cl 9(3) on the assumption that Nowra was a regional centre and not the local retail centre is fatal to Schroders’ argument based on this proposition.
Schroders submitted, further, that no reasonable Council could have formed the opinion that the Fabcot development was consistent with the zone 3(g) objectives. Schroders contended:
“It was not reasonably open to suggest that the development would not compete with the local retail centre having regard to the facts contained in the GSA report about the damage which could be done to the Nowra Shopping Centre in the event that the development were to proceed without proper controls”.
Clause 9(3) provides that the Council shall not grant consent to a development unless it is of the opinion “that the carrying out of the development is consistent with the objectives of the zone [in question]”.
The objectives of the 3(g) zone are to provide a strategic development area providing for a variety of uses but not including ordinary retail uses that would compete with the local retail centre. Clause 9(3) does not prohibit, absolutely, a development in a zone 3(g) area that provides for ordinary retail uses that would compete with the local retail centre. It requires only that the development be consistent with the zone 3(g) objectives.
The meaning of “consistent” in this context was not fully explored in argument, but it imports a concept less stringent than prohibited use. The issue of consistency involves questions of fact and degree.
Where the carrying out of a development involves uses that significantly promote the vast majority of the objectives of a particular zone, but also involves other uses that are not objectives, the carrying out of the development may nevertheless still be consistent with the objectives of the zone concerned. The extent and degree to which the objectives, on the one hand, are promoted and, on the other, are not, have to be compared and weighed. A value judgment is required.

When the decision before the Council is seen in this light, the proposition that that no reasonable Council could have formed the opinion that the development was consistent with the zone 3(g) objectives becomes unarguable.
In the report of Jebb Holland and Dimasi, reasons were given for the view that the development would be to the ultimate benefit of retailers in the relevant vicinity. Additionally, Mr H M Sanders, a town planner, testified that the development would “enhance and complement the local retail centre, not compete with it.” There were several submissions that supported the development and asserted, in effect, that existing retail businesses would not be significantly prejudiced. Mr Webster, in his advice, informed the Council that even if Nowra was not to be regarded as a regional centre, there was evidence on which the Council could find that the development was consistent with the zone 3(g) objective.
Therefore, there was ample material on which the Council was entitled to rely for its decision and which justified it.
Finally, in regard to the first and second grounds, Schroders contended that the Council made the decision to consent so speedily that it did not afford itself a reasonable opportunity to understand the significance of the decision it made. This argument was put in perfunctory terms by Mr Hale and the evidentiary material does not support it. It is true that the decision of 7 July 1998 to support the development was made shortly after the Council received the GSA report, but several months had elapsed when the Council made its final decision on 15 October 1998 and, overall, there is no tangible evidence to warrant the inference that Schroders sought to draw.
I would not uphold the argument based on unreasonableness.
The third and fourth grounds of appeal
The main point made by Schroders in respect of these grounds is that “to proceed to a decision without making any attempt to obtain centrally relevant information, where it is obvious that the material is readily available, may properly be described as an exercise of the decision making power in a manner so unreasonable that no reasonable person would have exercised it”.
This proposition is directed principally at the omission on the part of the Council to follow the advice of the general manager contained in his reports of 21 July 1998 and 6 August 1998, when he recommended that Council seek further comment from GSA on Fabcot’s response to the matters listed in the second recommendation.
According to Schroders, the Council’s decision not to seek external expert advice as to the appropriateness of Fabcot’s response was so unreasonable as to invalidate its grant of consent to the development.
Schroders relied on Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 where (at 170) Wilcox J said:
“[I]n a case where it is obvious that material is readily available which is centrally relevant to the decision to be made, it seems to me to proceed to a decision without making any attempt to obtain that information may properly be described as an exercise of the decision making power in a manner so unreasonable that no reasonable person would have so exercised it”.
Schroders also referred to Luu v Renevier (1989) 91 ALR 39, where the Minister’s delegate made a decision denying the respondent permanent residence on medical material described by the Full Court of the Federal Court as “quite inadequate for the purpose of that decision”. The point was that “no attempt was made even to obtain a report from the psychiatrist known to be attending [the respondent], still less to obtain the obtain the opinion of a specialist endrocrinologist”.
The other cases relied on by Schroders (such as Videto vMinister for Immigration & Ethnic Affairs (1985) 69 ALR 342)) are of the same ilk.
Critical to the result in Prasad and the other cases relied on by Schroders was the presence of highly significant (“centrally relevant”) information that was in existence and available but not considered by the decision-maker concerned. Schroders contended that, by omitting to obtain further comments from GSA, the Council was ignoring available and centrally relevant information.
In my opinion, however, the present circumstances are entirely distinguishable from Prasad, Luu v Renevier and Videto. Schroders did not (and could not) assert that there was existing information that was available to the Council but which the Council did not consider. Rather, it was said, the Council should have used GSA instead of its own officers to report on whether its concerns had been alleviated. That is a fundamentally different argument that bears no comparison whatever with the argument upheld in Prasad and the other cases to which reference was made. The present case is one of omission to make inquiries through an agency different to that in fact employed. It is not a case of failure to use existing available information. Additionally, I would not categorise the information that would have resulted from the inquiries as centrally relevant, or being of material significance. The matters on which it was suggested GSA should report were of relatively minor importance. The work required was merely to assess whether Fabcot had complied with the Council’s listed and detailed concerns. This is reflected by GSA’s proposed charge of the relatively small amount of $500 to $1,000.
Local authorities are not normally obliged to consult with independent town planners, or to solicit independent planning opinions about the appropriateness of the grant or refusal of consent: King v Great Lakes Shire Council (1986) 58 LGRA 366 (at 371). Of course, there may be circumstances where there is a compelling need to make further inquiries, or inquiries through an independent agency, and where failure to do so may be so unreasonable as to render the decision invalid. But no such finding can be made in this case.
Schroders led some evidence on this question. Mr Brindle of BBC testified that:
“[It was] the usual practice, almost without exception, that when a council comes to consider a development application with potential town planing implications it will require and will have before it a town planning report to assist it in assessing the town planning implications of the development”.
Mr Brindle said further, however:
“In the case of smaller developments that report will usually be prepared by an expert town planner on the council’s staff. In the case of a large development a consultant town planner is often engaged as well”.
The reference to “often” leaves the question open for decision by the council concerned.
Another expert witness, Mr Sanders, testified:
“[The Council] was clearly in a position to fully inform itself of the effect of the proposed development on patterns of expenditure within the rest of the Nowra Town Centre by reference to the Development Assessment Report prepared by [GSA] and the various documents referred to therein ….”
Plainly, in my view, on the evidence and as a matter of commonsense it was open to the Council to rely on its own officers to do the work of assessing whether Fabcot had satisfactorily addressed the Council’s remaining concerns. The Council had, after all, been told by its general manager that this was the most efficient and speedy way of proceeding. As Pearlman CJ said:
“The position had been reached where the council, in the conventional manner, was required to assess the responses to its concerns provided by Fabcot, and to determine whether the risk of unacceptable social and economic impact had been mitigated. It was entitled to seek planning advice on that issue, and it was not unreasonable for the Council to seek that advice from its own officer rather than from its consultants”.
These observations cannot be faulted: see Prasad at 170.
Moreover, there is nothing in the material that suggests that the task was not within the competency of the Council staff. As I have mentioned, the work that Schroders said should have been carried out by GSA was not of particular substance or complexity.
Schroders submitted that the failure to obtain a report from GSA was evidence that supported an inference that the Council had closed its mind to the perceived problems, or was afraid of the response which might be received because it might be inconsistent with its pre-determined objective of approving the development. I would reject these submissions, which were based on conjecture. We were not referred to evidence to the effect that the Council employees who dealt with the matter were biased or prejudiced or other than careful and competent persons having the requisite professional knowledge as to the material they were required to deal with, and I have not been able to find such evidence. While the Council had, on 7 July 1998, expressed its support for the development, it did not follow that the approval of the development was its “pre-determined objective”, or that it did not continue to approach the question before it in a proper manner.
Schroders pointed to the fact that the Council granted Deferred Commencement Consent to the development and thereby deferred consideration of certain matters. Schroders contended that this was a further manifestation of a failure by the Council to discharge its obligation under s 90(1)(d).
I am unable to agree with this submission. There was nothing inherently unreasonable in the decision to grant Deferred Commencement Consent and nothing was advanced to support the proposition that in the particular circumstances Wednesbury unreasonableness (Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223) was established. Understandably, this is another argument that was put relatively briefly.
It is not entirely clear to me whether Schroders persisted in the contention that the Council’s decision as to the social and economic impact of the development was so unreasonable that no reasonable council could have come to the same conclusion. If so, I would adopt the following remarks of Pearlman CJ:
“The Council sought independent advice on the information furnished to it about the social and economic effect of the proposed development. It followed that advice in seeking resolution of issues concerning integration with the Nowra Town Centre. It relied upon its general manager’s assessment of Fabcot’s response to its requirement. I am unable to conclude that its decision in these circumstances was manifestly unreasonable”.
It is undoubtedly correct, as Schroders submitted, “there has to be an understanding of the matters and the significance of the decision to be made about them, and a process of evaluation sufficient to warrant the description of the matters being taken into consideration: Weal v Bathurst City Council (2000) 111 LGERA 181.” Nevertheless, there is nothing in the argument advanced on Schroders’ behalf that leads me to conclude that the Council did not understand the issues before it and the significance of the decision it had to make.
In essence, underlying all Schroders’ arguments on the third and fourth grounds, is a fundamental objection to the merits of the decision itself. That is not a legitimate ground of overturning the Council’s decision: Minister for Aboriginal Affairs v Peko-Wallsend at 40.
Conclusion
I would dismiss the appeal and order that Schroders pay the costs of appeal of the Council and Fabcot.

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LAST UPDATED: 24/04/2001