Svedas v Council of the City of Sydney
[2011] NSWLEC 215
•24 November 2011
Land and Environment Court
New South Wales
Medium Neutral Citation: Svedas v Council of the City of Sydney [2011] NSWLEC 215 Hearing dates: 14 April 2011 Decision date: 24 November 2011 Jurisdiction: Class 1 Before: Pepper J Decision: The appeal is allowed and the matter is remitted to the Commissioner for redetermination
Catchwords: APPEAL: s 56A appeal - whether the Commissioner failed to take into account a mandatory relevant consideration - whether the Commissioner failed to determine principally contested issues at the hearing - whether the Commissioner made findings of fact based on no evidence - whether the Commissioner failed to give reasons - whether there was a denial of procedural fairness - whether the Commissioner ought to have separately approved development consent for the demolition of the existing buildings Legislation Cited: City of Sydney Heritage Development, Control Plan 2006, cl 1.13
Civil Procedure Act 2005, s 56
Environmental Planning and Assessment Act 1979, ss 80(4), 97(1)(b)
Land and Environment Court Act 1979, s 56A
South Sydney Local Environment Plan 1998, cls 10, 22, 23A, 24Cases Cited: Aldi Stores v Newcastle City Council [2010] NSWLEC 227
Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321
Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139
Bankstown City Council v Mohamad El Dana [2009] NSWLEC 68
Baulkham Hills Shire Council v Basemount Pty Ltd [2003] NSWCA 189; (2003) 126 LGERA 339
Botany Bay City Council v Premier Customs Services Pty Ltd [2009] NSWCA 226; (2009) 172 LGERA 338
Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGRA 367
British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2; (2011) 242 CLR 283
Bruce v Cole (1998) 45 NSWLR 163
Carstens v Pittwater Council [1999] NSWLEC 249; (1999) 111 LGERA 1
Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 239
Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65; (2010) 173 LGERA 456
Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233
Helou v Strathfield Municipal Council [2006] NSWLEC 66; (2006) 144 LGERA 322
Hurstville City Council v Goreski [2011] NSWLEC 188
Kostas v HIA Insurance Services Pty Limited [2010] HCA 32; (2010) 241 CLR 390
Manly Council v BDSI Pty Limited [2010] NSWLEC 31
Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259
Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611
North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435
Randwick City Council v Scarf [2011] NSWLEC 167
Sasterawan v Morris [2008] NSWCA 70
Segal v Waverly Council [2005] NSWCA 310; (2005) 64 NSWLR 177
Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Sydney Water Corporation v Caruso [2009] NSWCA 391; (2009) 170 LGERA 298
Svedas v Sydney City Council [2010] NSWLEC 1323
SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152
The Village McEvoy Pty Ltd v Council of the City of Sydney (No 2) [2010] NSWLEC 17; (2010) 176 LGERA 119
Tuite v Wingecarribee Shire Council (No 2) [2008] NSWLEC 321
Wainohu v State of New South Wales [2011] HCA 24; (2011) 278 ALR 1Category: Principal judgment Parties: Sanda Svedas (Appellant)
Council of the City of Sydney (Respondent)Representation: Mr C W McEwen SC with Mr M A Staunton (Appellant)
Ms S A Duggan SC with Ms A Pearman (Respondent)
Gadens Lawyers (Appellant)
Council of the City of Sydney (Respondent)
File Number(s): 11036 of 2010
JUDGMENT
The Decision of a Commissioner Refusing to Grant Development Consent to Demolish and Construct is Appealed
This is an appeal pursuant to s 56A of the Land and Environment Court Act 1979 ("the LECA") against the decision of Morris C delivered on 24 November 2010 (Svedas v Sydney City Council [2010] NSWLEC 1323) concerning, in turn, an appeal pursuant to s 97(1)(b) of the Environmental Planning and Assessment Act 1979 ("the EPAA") against a deemed refusal by the Sydney City Council ("the council") of development application No D/2010/540 ("the DA").
The DA was for the demolition of buildings comprising two existing dwellings internally connected and located on one allotment of land approximately 388.5 m and the construction of a nine-storey mixed use development, comprising a basement car park, a ground floor retail/commercial area and 30 residential units.
The subject land is located at 533-535 Elizabeth St, Surry Hills. The existing two dwellings are erected upon the land and are contributory items within the Cleveland Gardens Heritage Conservation Area ("the HCA") under the provisions of the South Sydney Local Environmental Plan 1998 ("the LEP"). The dwellings are contiguous and physically internally connected.
The dwellings have been approved for business use since 1968.
The proceedings before the Commissioner required the determination of two central issues:
(a) first, whether consent should be granted for the demolition of the existing buildings; and
(b) second, if so, whether consent should be granted for the proposed replacement buildings. That is to say, if the Commissioner found that the demolition was appropriate, whether the proposed buildings were suitable for the site.
In relation to the issue of demolition, the appellant contended before the Commissioner that although it was possible to retain the existing buildings, it was not reasonable to do so having regard to the cost of works required to put the buildings into a habitable condition when weighed against the improvement in value that undertaking such works would bring. It was agreed that there was evidence before the Commissioner that it would cost in the order of about $900,000 to put the existing buildings into a habitable form and that this expenditure would lead to an increase in value of the property of only $150,000. There was also evidence before the Court that although the dwellings were structurally safe, the Council had issued an emergency evacuation order in respect of the buildings on fire safety grounds.
Thus, the appellant had submitted before the Commissioner that irrespective of the Court's findings as to the acceptability of the replacement building, in the particular circumstances of this case the Court ought, at the very least, to grant approval for the demolition of the existing buildings pursuant to s 80(4) of the EPAA.
The Commissioner dismissed the appeal and refused to grant development consent because, first, she did not find it appropriate to allow the demolition of the two buildings, and second, she found that the proposed mixed use replacement building was inappropriate for the site in its context (at [80]).
The Planning Controls
The relevant planning controls were not in dispute. The site is zoned 10-Mixed Uses pursuant to the provisions of the LEP. The proposed development is permissible with consent in the Mixed Uses zone, but cl 10 of the LEP requires that the development must be consistent with the objectives of the zone for consent to be granted.
The site is located within the HCA. Neither of the buildings, however, are listed as a heritage item under the provisions of the LEP.
The site is also located within the Elizabeth Street Heritage Streetscape area ("the HSA").
Specific heritage provisions are contained within the LEP and require consent for the demolition of any building within the HCA or HSA. The LEP lists matters that must be considered in the assessment of any application for works in these areas.
These include cls 22 and 23A which state that:
22 Heritage aims
The consent authority must not grant consent to the carrying out of development on the site of a heritage item, or within a heritage conservation area or heritage streetscape area, unless it is of the opinion that the proposal is consistent with the following aims and objectives:
(a) to conserve the environmental heritage of the land to which this plan applies, and
(b) to integrate heritage conservation into the planning and development control processes, and
(c) to investigate and record sites which have archaeological potential, and
(d) to provide for public involvement in matters relating to the conservation of environmental heritage, and
(e) to ensure that any development is undertaken in a manner that is sympathetic to, and does not detract from, the heritage significance of heritage items, of heritage conservation areas and their setting, and of streetscapes within heritage streetscape areas and their setting, and
(f) to ensure that any development is undertaken in a manner that is sympathetic to, and does not detract from, the heritage significance of distinctive streetscapes, landscapes and architectural styles which define the character of heritage conservation areas or streetscapes within heritage streetscape areas, and
(g) to enable the adaptation of existing non-residential buildings or works of heritage significance in a manner which is compatible and sympathetic with the fabric and character of the building or works and the use and fabric of neighbouring land and buildings, and
(h) to encourage the restoration or reconstruction of buildings or works which are heritage items or buildings and works that contribute to the character of heritage conservation areas or streetscapes within heritage streetscape areas, and
(i) to require, when considered necessary, the consideration of a statement of heritage impact or a conservation management plan before consent is granted for development relating to a heritage item, or development within a heritage conservation area or a heritage streetscape area, or development relating to a building older than fifty years, and
(j) to ensure the sympathetic use of sites containing buildings or facades of historic or streetscape importance which contribute to the character of the locality.
23A Protection of heritage conservation areas and heritage streetscapes
(1) A person must not:
(a) demolish or alter a building or work within a heritage conservation area or heritage streetscape area, or
(b) damage a relic within any such area, or
(c) excavate land for the purpose of discovering, exposing or moving a relic within any such area, or
(d) damage or despoil a place within any such area, or
(e) erect a building or subdivide (otherwise than by a strata plan) within any such area, or
(f) damage any tree or land within any such area, or
(g) make structural changes to the interior of a building or
work within any such area,
except with the consent of the consent authority.
(2) The consent authority must not grant consent to a development application required by subclause (1), being an application to erect a new building or to alter an existing building, unless it has made an assessment of:
(a) the pitch and form of the roof, and
(b) the style, size, proportion and position of the openings for windows and doors, and
(c) whether the colour, texture, style, size and type of finish of materials to be used on the exterior of the building are compatible with the materials used in the existing buildings in the heritage conservation area or heritage streetscape area in which the building is situated, and
(d) the impact on the landscape.
(3) The consent authority may decline to grant a development application required by this clause until it has considered a statement of heritage impact or a conservation management plan, so as to enable it to fully consider the heritage significance of the heritage conservation area or streetscape within the heritage streetscape area and the impact of the proposed development on the significance of the heritage conservation area or streetscape.
By reason of the site's proximity to the Belvoir St Baptist Church, a listed heritage item under the LEP, cl 24 of the LEP applies. It provides as follows:
24 Development in the vicinity of heritage items , heritage conservation areas, heritage streetscape areas, archaeological sites or potential archaeological sites
The consent authority must not grant consent to development on land in the vicinity of a heritage item, a heritage conservation area, a heritage streetscape area, an archaeological site or a potential archaeological site unless it has considered an assessment of the impact the proposed development will have on the heritage significance, curtilage and setting of the heritage item, on the heritage significance of buildings within the heritage conservation area, or on the heritage significance of the streetscape within the heritage streetscape area or of the actual or potential archaeological site, as well as the impact of the development on any significant views to or from the heritage item, heritage conservation area or streetscape.
The South Sydney Development Control Plan 1997 ("the DCP") applies to the site and contains development controls that relate to the DA including urban design principles, social planning and environmental design criteria, heritage provisions and specific development controls.
Also applicable is the City of Sydney Heritage Development Control Plan 2006 ("the HDCP"). Critically, cl 1.13 states:
1.13 Demolition and Demolition Reports
The demolition of heritage items and contributory buildings or building elements within heritage conservation areas or heritage streetscapes is not supported. The onus is on the applicant to demonstrate why the building cannot be retained, taking into consideration:
· The heritage significance of the item or contribution of the building or building elements to the heritage significance of the heritage conservation area or heritage streetscape; and
· A Demolition Report.
A Demolition Report is a document which should include consideration of:
· The heritage significance of the building and area and the contribution of the building or building element to that significance;
· The structural stability of the building in the form of a structural engineer's report; and/or
· A pest inspection report
If the application proposes demolition of a structure of heritage significance, the applicant must:
· Submit a Demolition Report demonstrating that the structure is not reasonably capable of retention;
· Submit a factual statement as to why the structure needs to be demolished, including a statement from an appropriately qualified structural engineer; and
· If demolition is recommended primarily on economic grounds, submit a statement from a quantity surveyor comparing the cost of demolition and cost of retention.
The above requirements may be waived in the event of an emergency or danger to the public.
Submitting the necessary reports or justifications in no way implies that the consent authority will agree to the proposed demolition. The City may obtain independent structural engineering advice. Where possible and reasonable, built heritage should be retained.
Where demolition is allowed, a photographic record of the building must be submitted to Council prior to the commencement of the demolition works.
Grounds of Appeal
The appellant contended that the Commissioner made the following six errors of law:
(a) first, the Commissioner failed to take into consideration the HDCP. In particular, the Commissioner made no reference to, and did not take into account, cl 1.13 of the DCP but instead the Commissioner gave determinative weight to the planning principle enunciated in Helou v Strathfield Municipal Council [2006] NSWLEC 66; (2006) 144 LGERA 322;
(b) second, the Commissioner failed to determine principally contested issues at the hearing. Specifically:
(i) the conflict between the planning principle in Helou and the heritage provisions in the HDCP; and
(ii) the economic feasibility of the retention of the existing buildings;
(c) third, the Commissioner made findings of fact in respect of which there was no evidence. In particular, the Commissioner found that the value of the two properties, if subdivided, would make the upgrading of the two dwellings economically viable;
(d) fourth, the Commissioner failed to give reasons for concluding that the subdivision of the property would make the upgrading of the two dwellings economically viable and also for holding that she was satisfied that the retention of the existing building was economically feasible;
(e) fifth, the Commissioner failed to accord procedural fairness to the parties in taking into account and placing significant weight upon the value of the two properties, if subdivided, and the consequence of subdivision for the economic viability of upgrading the two dwellings, particularly in circumstances where no contention was raised by the council to this effect; where the parties were not advised of her intention to do so; and where she relied upon valuation evidence for this purpose without giving the appellant an opportunity to call evidence in response and to be heard; and
(f) sixth, the Commissioner failed to separately determine pursuant to s 80(4) of the EPAA whether consent should be granted to demolish the buildings.
It is convenient at this point to set out the planning principle for demolition of contributory items in conservation areas as articulated in Helou (at [43]-[46]):
Planning Principle
43 Most Local Environmental Plans include a heritage provision that requires a proposal's impact on the heritage significance of an item or conservation area to be assessed. This planning principle applies only to contributory items in a conservation area, not to listed heritage items.
44 A contributory item in a conservation area is a building that is not individually listed as a heritage item, but by virtue of age, scale, materials, details, design style or intactness is consistent with the conservation area, and therefore reinforces its heritage significance.
45 The demolition of a building which contributes to a conservation area will impact on the area's heritage significance even if its replacement building "fits" into the conservation area. Although the replacement building may be a satisfactory streetscape or urban design outcome, this does not address heritage impacts as the original heritage element has been removed. Despite this, it is open to the consent authority still to permit the demolition of a contributory element, for example, if the replacement has other planning benefits that the original does not.
46 The following questions should be addressed in assessing whether the demolition should be permitted:
1. What is the heritage significance of the conservation area?
2. What contribution does the individual building make to the significance of the conservation area?
The starting point for these questions is the Statement of Significance of the conservation area. This may be in the relevant LEP or in the heritage study that led to its designation. If the contributory value of the building is not evident from these sources, expert opinion should be sought.
3. Is the building structurally unsafe?
Although lack of structural safety will give weight to permitting demolition, there is still a need to consider the extent of the contribution the building makes to the heritage significance of the conservation area.
4. If the building is or can be rendered structurally safe, is there any scope for extending or altering it to achieve the development aspirations of the applicant in a way that would have a lesser effect on the integrity of the conservation area than demolition?
If the answer is yes, the cost of the necessary remediation/rectification works should be considered.
5. Are these costs so high that they impose an unacceptable burden on the owner of the building? Is the cost of altering or extending or incorporating the contributory building into a development of the site (that is within the reasonable expectations for the use of the site under the applicable statutes and controls) so unreasonable that demolition should be permitted?
If these costs are reasonable, then remediation/rectification (whether accompanied by alteration and/or extension or not) should be preferred to demolition and rebuilding.
6. Is the replacement of such quality that it will fit into the conservation area?
If the replacement does not fit, the building should be retained until a proposal of suitable quality is approved.
Disposition of the Appeal
The appeal must be upheld if for no other reason than the failure by the Commissioner to consider, as she was obliged to do, cl 1.13 of the HDCP and the matter must be remitted to the Commissioner for redetermination in accordance with these reasons.
The Legal Principles to be Applied in the Determining the Appeal
The legal principles to be applied in determining a s 56A appeal are well known and are not repeated here, suffice it to say that:
(a) first, the appeal is limited to a question of law ( Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 at 155-156, The Village McEvoy Pty Ltd v Council of the City of Sydney (No 2) [2010] NSWLEC 17; (2010) 176 LGERA 119 at [25] and Randwick City Council v Scarf [2011] NSWLEC 167 at [24]);
(b) second, a "fine toothcomb" approach should be eschewed when considering the reasons of the Commissioner in any endeavour to discover error ( Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGRA 367 at 368, Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 271, Botany Bay City Council v Premier Customs Services Pty Ltd [2009] NSWCA 226; (2009) 172 LGERA 338 at [31] and Scarf at [25]);
(c) third, which is closely allied to the second principle, on appeal the Court is not to take an overly critical or pernickety approach in examining the Commissioner's decision ( Carstens v Pittwater Council [1999] NSWLEC 249; (1999) 111 LGERA 1 at [76]); and
(d) fourth, not only must the appellant identify an error of law, the error must be of a sufficiently material character that it vitiates the entirety of the Commissioner's decision ( Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233 at [34] and Sydney Water Corporation v Caruso [2009] NSWCA 391; (2009) 170 LGERA 298 at [133]-[136]).
The Proceedings Before the Commissioner and the Commissioner's Reasons
The proceedings before the Commissioner took place over three days, during which she heard evidence from expert planners (Mr Timonthy Wise, Mr Anthony Betros and Mr Nicholas Dickson), engineers (Mr Bill Moidis and Mr Steven Waters), a builder (Mr Albert Chahda), heritage consultants (Mr Hui Wang and Mr Robert Staas) and quantity surveyors (Mr David Madden and Mr Simon Baum).
It is appropriate at this juncture to consider both the form and substance of the Commissioner's decision in light of the errors asserted.
After describing the site and the locality, the Commissioner went on to summarise the proposed development, noting that it involved the demolition of the two terrace houses and the construction of a nine-storey building setback approximately 6.5m from Elizabeth St, with eight floors of residential units proposed above a mixed-use ground floor area and a basement carpark. The proposed dwelling mix, the Commissioner recorded, was for 27 one bedroom units and three two bedroom units.
The Commissioner then proceeded to outline the planning controls applicable to the site, including the LEP (with specific reference to the objectives of the zone and cl 24), the DCP (but not the HDCP), the HSA and the HCA (at [14]-[19]).
The Commissioner listed "the issues in the case" as (at [20]):
20 The issues in the case are:
Whether consent should be granted to demolish the dwellings;
Impact of the proposed development on the HCA, HSA and adjacent heritage item;
Bulk, scale and floor space ratio (FSR) of the proposal;
Apartment mix;
Floor to ceiling height/building height;
Amenity; and
Privacy/overlooking
In relation to demolition, the Commissioner observed that the two dwellings proposed to be demolished were nominated as contributory items within the HCA, and therefore, an assessment of the impact of their demolition on the HCA was required.
The Commissioner referred to Helou and proceeded to address, by reference to the evidence, including the expert evidence, the six issues for determination raised by the planning principle enunciated in that decision (at [25]). These were:
(a) first, what was the heritage significance of the area (at [26]-[29]);
(b) second, what contribution did the buildings make to the heritage significance of the conservation area (at [30]-[31]);
(c) third, were the buildings structurally safe (at [32]);
(d) fourth, was there any scope for extending or altering the building to achieve the development aspirations of the proponent in a way that would minimise the effect on the integrity of the HCA in comparison to the impact of demolition (at [33]-[39]);
(e) fifth, if development can occur is the cost so high that it imposes an unacceptable burden on the owner of the building and is the cost of altering, extending or incorporating the contributory building into a development on the site so unreasonable (within reasonable expectations for the use of the site under the applicable planning controls) that demolition should be permitted (at [40]-[52]); and
(f) sixth, if the cost of these works is prohibitive and demolition is appropriate, is the replacement building of such quality that it will fit into the conservation area (at [53]).
This in turn gave rise to a consideration of the merits of the proposed development which included an examination of: the impact of the proposed development on the HCA, on the HSA and the adjacent heritage items, namely, the Building Information Centre ("BIC") and the Belvoir St Baptist Church (at [54]-[60]); the bulk, scale and floor space ratio of the proposal (at [61]); the apartment mix (at [62]-[63]); the amenity (at [64]); and the privacy of adjoining residents (at [65]).
The Commissioner proceeded to assess the proposed development against the six criteria in Helou and made the following findings:
(a) that the HCA had a medium to high level of significance but extensive redevelopment in the latter half of the twentieth century had diminished the integrity of the streetscape (at [66]);
(b) that the historical significance of the area had not been lost due to a number of detracting buildings within the HCA (at [67]);
(c) that the basic form and detail of the original terraces remained and the evidence established that the buildings were structurally safe (at [68]);
(d) that insufficient consideration had been given to the question of the extent to which the proposed development could be modified to achieve the development aspirations of the proponent that would nevertheless preserve the integrity of the HCA, as an alternative to demolition (the third criterion in Helou ) (at [69]). That subdivision could occur and that the geography of the site and the condition of the additions suggested that modifications could be made that would suit residential or commercial use including the provision of onsite parking for each dwelling. Such a development would have a less profound impact on the integrity of the conservation area than demolition (at [69]);
(e) that based on sales evidence provided by Mr Jason Fields, the appellant's valuer, the Commissioner did not accept that the value of the two properties, if subdivided, would make the upgrading of the two dwellings economically unviable. The Commissioner did "not have any evidence to the contrary" (at [70]);
(f) that although the zoning of the land and the planning controls allowed for a larger development, because the site was within both a HCA and a HSA, its development potential had to be considered with regard to the importance of its location within those areas (at [71]);
(g) that the BIC building should not form the basis upon which the redevelopment of the site was designed, particularly with respect to height because it was a detracting building within the HCA and was out of character with the HSA (at [73]);
(h) that the proposed building was "too big" and would have an unsatisfactory impact on the HCA and the HSA, and therefore, did not meet the sixth criterion in Helou (at [74]);
(i) that the contributory buildings provided an important link to the past and to the development at the northern end of the block (at [74]);
(j) that it was inappropriate in the HCA to "borrow" floor space by extending the building into the road reserve nearby in the manner proposed given the narrow width of the road and the height of the building. Furthermore, this aspect of the building was not in conformity with the character of the HCA (at [75]);
(k) that the height and bulk of the development would have an adverse impact on the Belvoir St Baptist Church (at [76]); and
(l) that while the need to provide a mix of housing types was important in the redevelopment of the area, the Commissioner was not satisfied that the controls in the DCP were appropriate in the circumstances (at [77]). The Commissioner could also not accept the contention of the expert urban designer for the appellant, Mr Dickson, that a high concentration of one bedroom units was appropriate. In the Commissioner's view, a "better test" was an assessment of housing mix to ascertain the constituency of the residents in the area (at [77]).
Thus given the significance of the HCA and the importance of the remaining contributory buildings to the site, to the adjacent site and to nearby sites, the Commissioner concluded that the two dwellings made an important contribution to the HCA (at [78]).
In addition, the Commissioner held that she had not been provided with sufficient evidence that there were no alternative options available for the redevelopment and expansion of the site that justified permitting the demolition of the two dwellings (at [79]).
Accordingly, having found both the demolition and the proposed construction inappropriate, the Commissioner dismissed the appeal (at [80]).
Was There a Failure to Consider Clause 1.13 of the DCP?
Three matters relevant to the determination of this ground of appeal were not in dispute. First, that cl 1.13 of the HDCP was a mandatory relevant consideration. This is undeniably correct when regard is had to s 79C(1)(a)(iii) of the EPAA and the subject matter of the development application involving, as it did, the demolition of contributory buildings in a heritage area. Second, there can also be no doubt when regard is had to the transcript of the proceedings before the Commissioner that the parties called evidence and addressed the Commissioner in relation to cl 1.13 of the HDCP. And third, there is no express reference whatsoever in the Commissioner's reasons to cl 1.13 of the HDCP.
The appellant submitted that the Commissioner had erred in ignoring the mandatory consideration of cl 1.13 of the HDCP and substituting in its place the consideration of the appropriateness of the demolition of the existing contributory buildings pursuant to the planning principle in Helou . The error was compounded by the appellant having submitted to the Commissioner that the principles in Helou were not coincident with that clause, and were either irrelevant or, at the very least, less relevant than cl 1.13 of the HDCP.
This submission was made notwithstanding that much of the conduct of the hearing before the Commissioner was directed to Helou and much of the evidence put before the Commissioner addressed the planning principle established by that case.
The respondent, by contrast, asserted that when regard is had to the conduct of the proceedings before the Commissioner, including the emphasis given to the planning principle articulated in Helou , it is apparent that she took into account the substance of the relevant matters required by cl 1.13 of the HDCP, and having done so, she formed the necessary mental state mandated by that provision.
While it is correct that the Commissioner did not specifically refer to the HDCP, she did refer to the relevant heritage provisions of the LEP, namely, the heritage aims contained in cl 22, the protection of the HCA and heritage streetscape contained in cl 23A and cl 24 concerning development within the vicinity of heritage items (at [14]-[18] and [54]). These clauses, the respondent submitted, demonstrate that she took into account the substance of the subject matter of c1.13 of the HDCP.
But the fact that the Commissioner was specifically directed to the HDCP in contention 2 of the Amended Statement of Facts and Contentions, in oral submissions by both parties and in the respondent's written submissions cannot be ignored.
The complete absence of reference to a matter that a decision-maker is obliged to take into consideration will give rise, absent sufficient evidence to the contrary, to an inference that it was not considered ( Bankstown City Council v Mohamad El Dana [2009] NSWLEC 68 at [10]-[11] and [27]).
The question therefore arises as to whether there is sufficient evidence to repel the inference that the Commissioner did not consider cl 1.13 of the HDCP.
The respondent submitted that upon a proper analysis of the Commissioner's findings it is evident that she formed the requisite state of mind contemplated by that clause inasmuch as she was not satisfied that the appellant had discharged its onus of demonstrating why the buildings "cannot be retained, taking into consideration" "the heritage significance of the item or contribution of the building or building elements to the heritage significance of the heritage conservation area or heritage streetscape" (cl 1.13 of the HDCP).
As described above, the Commissioner held that insufficient consideration had been given by Mr Dickson to the option of extending or altering the development in a way that lessened any adverse effect on the integrity of the area as an alternative to demolition (at [69]). Further, having found that the two dwellings were important contributory items (at [78]) and that the evidence did not satisfy her that there were no other options available for the redevelopment and expansion of the site incorporating the existing buildings to justify demolition (at [79]), the Commissioner concluded that, first, demolition of the two dwellings was inappropriate, and second, that the proposed building was inappropriate (at [80]). In arriving at this conclusion, the Commissioner considered that although the zoning of the land permitted a greater development potential to that proposed, this needed to be balanced against the importance of the location of the development within a HCA and HSA (at [71]). The Commissioner also rejected the contention that demolition was to be preferred on economic grounds (at [70]).
When these findings, albeit cast in the language of the planning principle in Helou , are contrasted against the content of cl 1.13 of the HDCP, it is, at first blush, difficult to see what matter of substance contained in cl 1.13 of the HDCP the Commissioner failed to take into account given that, first, the onus was on the appellant to demonstrate why the buildings could not be retained. Second, the heritage significance of the dwellings was plainly considered by the Commissioner. Third, the Commissioner had regard to the evidence of the parties with respect to the proposed demolition of the dwellings, including evidence that was squarely directed at "why the structure needs to be demolished" and "a statement from a quantity surveyor comparing the cost of demolition and the cost of retention". And fourth, having regard to the emphasis in cl 1.13 that "where possible and reasonable, built heritage should be retained".
However, the appellant contends that the test for demolition in cl 1.13 of the HDCP was not coincident with the test in Helou insofar as, pursuant to the HDCP demolition was to be justified on the basis of a demolition report, a component of which concerned relevantly for present purposes, the heritage significance of the buildings to be demolished and which required demonstration that: first, the structure was not reasonably capable of retention; second, the buildings needed to be demolished; and third, "if demolition is recommended primarily on economic grounds" a statement from a quality surveyor "comparing the cost of demolition and cost of retention". The HDCP did not, by contrast, require a consideration of costings or of extension or alteration to achieve development aspirations or an analysis of the quality of any replacement building.
The appellant further submitted that not only was this lack of coincidence expressly argued before the Commissioner, it was acknowledged by the respondent, and moreover, that Mr Wang and Mr Staas, the parties' respective heritage consultants, gave evidence, inter alia , premised on the requirements of cl 1.13 of the HDCP.
The appellant's contentions in this regard are correct. In particular, the lack of coincidence was acknowledged by the respondent before the Commissioner in response to the submission by the appellant that, on the question of demolition, Helou was irrelevant. The respondent submitted that, far from disregarding Helou , the Court would be assisted by a consideration of the planning principle articulated in it.
Although the substantial overlap in content between the principle espoused in Helou and cl 1.13 of the HDCP cannot be denied, cl 1.13 of the HDCP did not require consideration of whether there was any scope for extending or altering the buildings to achieve the development aspirations of the appellants in a way that would have a more minimal impact on the integrity of the conservation area than demolition ( Helou no 4), or contemplation of whether the cost of doing so was so unreasonably high that demolition should be permitted ( Helou no 5). Similarly, cl 1.13 of the HDCP did not specifically call for an examination of the quality of the replacement building in respect of its assimilation into the conservation area ( Helou no 6).
I acknowledge that there is force in the respondent's contention that these considerations would have been implicit in any consideration of cl 1.13 and that it may therefore be inferred that "in substance" the Commissioner addressed the subject matter of the HDCP in her contemplation and application of Helou (North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435 at 441 and Manly Council v BDSI Pty Limited [2010] NSWLEC 31 at [36]). Alternatively, the debate was framed this way, viz , to the extent that there was no unanimity of coincidence in the matters for consideration in Helou and cl 1.13 of the HDCP, the additional matters taken into account by the Commissioner ( Helou nos 4-6) were just that, additional, and did not result in the Commissioner failing to consider a material aspect of cl 1.13 of the HDCP.
But upon closer examination, the additional matters considered by the Commissioner were, in my opinion, significant because they deflected attention from the requirements of cl 1.13 of the HDCP, which on any view imposed a less onerous burden on the appellant than satisfaction of the elements contained in Helou .
I accept as correct the submission of the appellant that an unfavourable determination under Helou did not automatically mean an unfavourable determination under cl 1.13 of the HDCP. However, it appears that this is the assumption that both the Commissioner and the respondent have made.
By exclusively focussing on, and applying, the planning principle in Helou , the Commissioner disregarded the less demanding requirements for permissible demolition contained in cl 1.13 of the HDCP. This is not to say that, contrary to the submissions of the appellant before the Commissioner, the planning principle in Helou was irrelevant. Plainly it was relevant. But this did not mean that the reasoning in Helou could simply supplant the mandatory matters for consideration contained in cl 1.13 of the HDCP.
Yet the irresistible inference, having regard to the Commissioner's decision both in its totality, and to her specific findings (particularly, her finding that she had not been provided with sufficient evidence that there were no alternate options available for the redevelopment and expansion of the site to justify allowing demolition of the two dwellings: at [79]), is that this is precisely what occurred.
Of course the question of the weight to be given to the matters contained in cl 1.13 of the HDCP or to those articulated in Helou was ultimately a matter for the Commissioner. However, even on a generous reading of the Commissioner's reasons, I cannot find any evidence, either explicit or implicit, that the Commissioner turned her mind to the actual substance of cl 1.13 of the HDCP, or that she considered the clause but proceed to give it no weight in light of the planning principle Helou . Had she engaged in either of these tasks no criticism could ensue.
Because of the lesser threshold contained in cl 1.13 of the HDCP in respect of demolition, it was incumbent upon the Commissioner to have regard to the clause in order to consider whether it ought to apply to the development proposal, particularly the separate request to demolish the buildings, or whether it was appropriate to apply the principle contained in Helou . From a study of the form, structure and content of the Commissioner's reasons I am not sufficiently confident, and I am therefore unwilling, to draw an inference that this process occurred.
To the extent that the respondent relied heavily on the decision in BDSI , I agree with the submission of the appellant that it is distinguishable from the facts of present case. In BDSI the Court found that the hearing was conducted on a merit basis without any reference to the terms of the relevant clause. The parties were bound by their conduct in this regard (at [39] and [40]). This is to be contrasted with the present situation. Unlike BDSI , cl 1.13 remained a live issue and the factual findings made by the Commissioner did not, in my opinion, demonstrate that the questions posed by it were addressed.
Accordingly, I find that the Commissioner erred in law by failing to consider cl 1.13 of the HDCP.
But does this error vitiate the Commissioner's decision? That is to say, is the error sufficiently material to the decision made that her decision must be set aside? In my opinion, this result is inevitable once it is accepted, as I do, that cl 1.13 of the HDCP and the planning principle in Helou upon which the decision was premised were not coincident and that the former required satisfaction of a different - and less demanding from the perspective of the appellant - mental state from the Commissioner. It therefore follows that the decision must be set aside.
Was There a Failure to Determine Principally Contested Issues?
The Commissioner was bound to address the principally contested issues joined between the parties (Segal v Waverly Council [2005] NSWCA 310; (2005) 64 NSWLR 177 at [42]-[43]). The obligation arises only in respect of issues that have a bearing on the outcome of the proceedings (Segal at [43]).
As identified above, there are two contested issues that constitute this ground of appeal. Turning to the first, the appellant may properly be criticised for failing to raise with sufficient clarity the issue of the conflict between the requirements of the HDCP and the planning principle in Helou , particularly when regard is had to the conduct of the hearing by the appellant in attempting to meet, understandably given the position of the respondent, the requirements of Helou .
It is incumbent on parties, especially in appeals in Class 1 of the Court's jurisdiction before Commissioners who may not be legally qualified, to fully and pellucidly identify issues for determination in the proceedings.
But the issue of the disparity between the requirements of the HDCP and the requirements of the planning principle articulated in Helou with respect to demolition of the buildings was raised by the appellant when it submitted, albeit late, that "the Helou principle has little relevance in this case", and once raised the Commissioner was, in my opinion, required to determine it. This is because the resolution of whether it was necessary for the appellant to meet only the requirements of cl 1.13 of the HDCP in respect of demolition, or whether it had to answer the questions posed in Helou , could not be characterised as having no bearing on the decision-making processes of the Commissioner, including the separately argued issue of whether the buildings ought to be demolished absent the proposed development being approved.
Although such determination can be expressed either explicitly or implicitly ( Segal at [93]), neither was possible in the present case because of the Commissioner's failure to consider cl 1.13 of the HDCP. There having been no consideration whatsoever of that clause of the HDCP, it must follow that there was no determination of the issue by the Commissioner and the first limb of this ground of appeal must also be upheld.
Dealing with the second contested issue, namely, the economic feasibility of the retention of the buildings, it should be noted that the Commissioner did not make a positive finding that the economic viability of retaining the buildings albeit with extensions or alterations was either feasible or unfeasible. This was so despite a contention by the appellant that the cost of the repair works necessary to make the buildings habitable when compared to the before and after value of the existing buildings rendered the retention of the buildings financially unviable.
Rather, the Commissioner stated that (at [70] and [79]):
70 Utilising the sales evidence provided in Exhibit K, I do not accept that the value of the two properties if subdivided would make the upgrading of the two dwellings economically unviable. I do not have any evidence to the contrary. I accept Ms Pearman's submission that if the cost of works was so high, there would be no restoration of terrace development carried out on the majority of sites within the city area.
...
79 I have not been provided with sufficient evidence that there are no other options available for the redevelopment and expansion of the site incorporating the existing buildings to justify allowing demolition of the two dwellings.
A fair reading of the Commissioner's reasons discloses that the appellant did not discharge the onus of satisfying the Commissioner that the retention of the buildings was economically unfeasible. However, this is not equated with a positive finding that retention was economically feasible. The Commissioner arrived at her conclusion after consideration of the evidence of the quantity surveyors, heritage consultants, engineers and town planners and after a consideration of the oral and written submission of the parties. In these circumstances it cannot be said that the Commissioner failed to determine this principally contested issue. Plainly she did insofar as she determined that the appellant had failed to persuade her that retention of the buildings imposed an unreasonable economic burden on it.
It follows therefore that the second limb of this ground of appeal must be rejected.
Did the Commissioner Make Findings Absent Any Evidence?
The appellant submits that the Commissioner made a finding (at [70]) that the subdivision of the property would make the upgrading of the two dwellings economically viable and that such a finding was premised on no evidence, as the Commissioner herself recorded when she said (at [41]):
41 In this regard, I heard evidence in relation to the extent of works that would be required to firstly, bring the building up to a standard that is suited for use for residential purposes, secondly, its use for commercial purposes and thirdly, the costs of rectification works so that the building is fully compliant with the Building Code of Australia (the BCA) and use for residential or commercial purposes. None of the scenarios considered by the parties involved the retention of any part of the building and its incorporation into another building. Ms Pearman for the applicant, did raise the question of whether subdividing the site would increase its value however, no evidence was available to quantify this scenario .
A finding of fact made on no evidence whatsoever, as opposed to a finding of fact that is incorrect but is founded on some evidence, can and does amount to an error of law, particularly for the purposes of s 56A of the LECA ( Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 355-356, Bruce v Cole (1998) 45 NSWLR 163 at 188, Tuite v Wingecarribee Shire Council (No 2) [2008] NSWLEC 321 at [75]-[76] and Kostas v HIA Insurance Services Pty Limited [2010] HCA 32; (2010) 241 CLR 390 at [90]-[91]). If the fact is jurisdictional it may give rise to jurisdictional error ( Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611 at [120]).
In order to determine this ground of appeal it is necessary to examine the evidence that was before the Commissioner concerning the issue of economic feasibility.
As recorded in the Commissioner's reasons, Mr Wang, the respondent's heritage specialist, estimated that it would cost between $150,000 to $300,000 per dwelling to bring the buildings up to a level where they could be used for residential or commercial purposes (at [34]). By contrast, Mr Staas, for the appellant, considered that it would not be economically feasible to upgrade the buildings from their current state (at [35]).
Estimates of the scope of the works and costs required for the use of the existing buildings for commercial and residential purposes were prepared by the engineers and builders (Messrs Moisidis, Waters and Chahda). These estimates varied between $660,000 to $1,227,600 for commercial premises (at [45]-[46]), and $660,000 to $1,190,000 for residential premises (at [47]-[48]).
Evidence from quantity surveyors (Messrs Madden and Baum for the respondent and appellant respectively) was tendered with the appellant content to proceed on the costings provided by Mr Madden (at [50]). According to Mr Madden, remediation works were estimated to cost between $586,880 and $991,625 depending on whether the dwellings were to be used for residential or commercial premises (at [51]).
Uncontested expert valuation evidence from Mr Fields (obtained on behalf of the appellant) comprised a certificate of valuation in the amount of $1,250,000, which was later updated in a further report to between $1,300,000 and $1,550,000 after completion of the remediation works. The valuations were carried out on the basis that the property was unsubdivided and the initial report by Mr Fields that accompanied the certificate stated:
I note that the property is held on one title. It would be difficult and costly to separate the two terraces, and would require council consent.
The respondent did not seek to separately tender any valuation evidence.
The reasons why this ground of appeal must be dismissed are four-fold. First, on a fair reading of the Commissioner's reasons she did not, in my opinion, make the positive finding ascribed to her by the appellant. Put another way, the Commissioner did not find that the value of the property if subdivided would make the upgrading of the two dwellings economically viable, instead she held that the appellant had not satisfied her, as it was required to do (either pursuant to cl 1.13 of the HDCP or Helou ), of the contrary position.
This is consistent with, and reinforced by, her statement that she did "not have any evidence to the contrary" and her statement (at [41]) that there was "no evidence available to quantify" the "scenario" that subdivision would increase the value of the property. That is to say, having regard to the valuation material before her, if subdivision were to occur, while the Commissioner could not be satisfied that any increase in value would occur rendering the proposed development economically feasible, equally, again having regard to the valuation evidence before the Court, the Commissioner did not have sufficient evidence upon which she could find that the value of any subdivision would render the development financially unviable. Put another way, the Commissioner did not have any evidence in support of either contention.
Second, and in any event, in addition to Mr Fields' valuation evidence, the Commissioner also had before her material to the effect that subdivision was possible (as recorded at [41], [69] and [70]); building, engineering and quantity surveying evidence as to the likely cost of the works to be carried out, which was in part premised on two separately remediated dwellings, albeit located on the one title; and evidence from Mr Wang and Mr Staas, the former of which stated orally that if the cost of the works was $300,000 per dwelling and assuming a value of approximately $600,000 per dwelling, "considering the potential of the site I think there must be some people like to purchase the site". It cannot therefore be said that there was no evidence before the Commissioner upon which she based her finding.
Third, at its highest the error complained of is that the finding is premised on an incorrect statement of the evidence, or alternatively is contrary to the weight of the evidence. Neither characterisation, however, gives rise to an error of law (Azzopardi at 155-156).
Fourth, it should be noted that it was no part of this appeal that the Commissioner's reasons in this (or any other) respect were irrational, illogical or not based on findings of fact supported by logical grounds (for a discussion of this potential ground of appeal see generally SZMDS ).
Was There a Failure to Give Reasons?
The appellant submits that the finding (at [70]) discussed above was made in the absence of sufficient reasons thereby amounting to an error or law.
The general duty to give reasons in the context of a decision by a commissioner of this Court was discussed by Tobias JA in Segal (at [65]-[77]).
More recently, the importance of the necessity to give reasons was emphasised by the High Court in Wainohu v State of New South Wales [2011] HCA 24; (2011) 278 ALR 1 (at [54]-[58] and [92]).
However, in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Mahoney JA stated these cautionary words, which apply all the more forcefully, in my opinion, to Commissioners of this Court (at 273):
To require that a judge detail the way in which he has reasoned step by step to his conclusion is, in my opinion, to mistake the nature of the reasoning process.
Expressing a similar sentiment McHugh JA stated (at 280-281, quoted in Sasterawan v Morris [2008] NSWCA 70 at [30] per Tobias JA):
Moreoever, I agree with the statement by Mahoney JA in Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd (at 386) that the extent of the duty to give reasons is related "to the function to be served by the giving of reasons". Thus more elaborate reasons are required where legislation gives a right of appeal against a decision than where no appeal lies. In the first class of case, unless the basis of the decision is properly articulated, the losing party may be effectively deprived of his right of appeal.
In a case where a right of appeal is given only in respect of a question of law, different considerations apply from the case where there is a full appeal. An ultimate finding of fact, which is not subject to appeal and which is in no way dependent upon the application of a legal standard, can be treated less elaborately than an issue involving a question of law or mixed fact and law. If no right of appeal is given against findings of fact, a failure to state the basis of even a crucial finding of fact, if it involves no legal standard, will only constitute an error of law if the failure can be characterised as a breach of the principle that justice must be seen to be done. If, for example, the only issue before a court is whether the plaintiff sustained injury by falling over, a simple finding that he fell or sustained injury would be enough, if the decision turned simply on the plaintiff's credibility. But, if, in addition to the issue of credibility, other matters were relied on as going to the probability or improbability of the plaintiff's case, such a simple finding would not be enough.
Equally in Wainohu, French CJ noted in relation to the duty to give reasons that (at [56]) "its content - that is, the content and detail of the reasons to be provided - will vary according to the nature of the jurisdiction which the court is exercising and the particular matter the subject of the decision."
In the present case a right of appeal is only given in respect of a question of law. The ultimate findings of fact by the Commissioner are not subject to appeal and can therefore be treated "less elaborately" than would otherwise be demanded.
Turning to the Commissioner's decision, when paragraph [70] is read, not in isolation as the appellant seeks to do, in the context of the decision as a whole, the suggestion that the purported inadequacy of the Commissioner's reasons was such that it amounted to an error of law must be rejected.
Having accepted that subdivision could occur (at [69]), based on the valuation and sales evidence of Mr Fields and informed by the evidence concerning the economic feasibility of the proposed development outlined by her in her judgment, including the absence of any evidence that the value of the property would increase were subdivision to occur (at [41]), the Commissioner proceeded to reject the factual contention proposed by the appellant that the value of the property if subdivided would make the upgrading economically unviable.
The reasons for the rejection, even if incorrect or illogical (which, it is suspected, is the appellant's real complaint) nevertheless constituted adequate reasons for the purposes of this ground.
Did the Commissioner Fail to Afford the Appellant Procedural Fairness?
The appellant contends that the finding at paragraph [70], predicated as it was on the future subdivision of the two properties and the cost of separately upgrading them, was made in circumstances where it was denied the opportunity of commenting on it.
A failure to afford procedural fairness is an error of law ( Design Power Associates at [70], Castle Constructions Pty Ltd v North Sydney Council [2008] NSWLEC 239 at [20], Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65; (2010) 173 LGERA 456 at [39] and Aldi Stores v Newcastle City Council [2010] NSWLEC 227 at [39]-[42]). But what is required by procedural fairness is a fair hearing, not a fair outcome ( SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 at [25])
While the Commissioner was not bound to determine the proceedings solely by reference to the issues tendered by the parties, if her determination was to be made by reference to matters beyond the issues identified or argued by the parties, procedural fairness dictated that the parties be given notice of these additional matters and afforded the opportunity to be heard upon them ( Cavasinni Constructions at [39] and SZBEL at [35]).
The denial of procedural fairness in the present case is premised on an exchange between counsel for the appellant and the Commissioner after counsel for the respondent had sought to introduce the possibility of subdivision while questioning the heritage consultant, Mr Wang. The questioning took place after the building and engineering experts had given evidence and had been excused and in the absent of either party raising the possibility of subdivision as a contention relevant to the economic viability of the proposed development. The exchange was as follows:
McEWEN: Commissioner, the difficulty with this evidence of course is that none of the costings were done on the basis of re-dividing the buildings. We don't know for example what additional costs would be caused, what works would be required to fireproof those two separate units.
COMMISSIONER: Yes, I understand that.
McEWEN: The obvious questions and what proportion that other works would have.
COMMISSIONER: To be honest the question isn't really helping my decision.
McEWEN: It's got to be treated as a whole.
COMMISSIONER: Yes.
As a consequence of this exchange, the appellant submits that it did not call further evidence to address the issue of subdivision and made no further submission on the topic. It proceeded, the appellant said, on the basis that the Commissioner would determine the economic viability of the remedial works on the basis that the land was not subdivided and that the property was to be treated as "a whole", namely on one title, even if the individual residences were to be developed in a way that necessitated separate bathrooms, laundries, kitchens, rewiring and repainting.
Had the issue not been raised again before the Commissioner, I might have been persuaded to find that the appellant had been denied procedural fairness as asserted. But this is not what transpired
A reasonable construction of the exchange between the Commissioner and the appellant was that the Commissioner indicated to the appellant that she accepted its submission that she would not be assisted by a consideration of the economic viability of the proposed development on the basis of a potential subdivision of the subject property, and therefore, attempts to elicit evidence of this nature by the respondent were not relevant. Viewed this way, and leaving aside the correctness of the appellant's submission to the Commissioner that "none of the costings were done on the basis of re-dividing the buildings" - as opposed to subdividing the property - in light of the engineering and quantity surveying evidence, the reference to the "the question" in the Commissioner's statement "to be honest the question isn't really helping my decision" is a reference to the question posed to Mr Wang by counsel for the respondent, and the exchange that followed was a confirmation by the Commissioner that she agreed with the submission of the appellant on this issue. The affirmative response by the Commissioner ("yes") was therefore one of acquiescence and not comprehension.
Equally defensible, however, is the view that by her statements the Commissioner did no more than signal her understanding of the appellant's proposition that the costings were not undertaken on the basis of re-dividing the building and that the question put to the witness by counsel for the respondent did not "help" her because the assumption that the value of the property, and any associated works to upgrade it, could simply be divided in order to ascertain the economic viability of the proposed development while retaining the existing buildings was, at that stage in the hearing, just that, viz , an assumption. On this construction there was never a representation by the Commissioner that the issue of subdivision was considered by her to be irrelevant and was to be ignored thereafter.
This latter interpretation is consistent with the appellant's silence when the possibility of subdivision was raised squarely by the respondent in its oral and written closing submissions. There is no doubt that the topic was unequivocally confronted by the respondent during the hearing and that evidence was adduced, referred to and relied upon by it in this regard.
Even if the exchange had given rise to some understanding, misconceived or otherwise, between the Commissioner and the appellant, it must have been tolerably clear to the appellant during the respondent's closing submissions that the respondent was not a party to it and at this point it was incumbent upon the appellant to clarify the position.
Put another way, the appellant was afforded an opportunity to address the issue of subdivision during closing submissions, even if only to refer to the earlier exchange with the Court, and it did not do so. In such circumstances it cannot now be advanced by the appellant that it was not afforded the ability to comment upon the matter. Plainly it was. It chose not to avail itself of the opportunity.
For the appellant to rely on a representation by the Commissioner that the possibility of subdivision of the property would play no further part in her deliberations with respect to the economic viability of the buildings in the proposed development, it was, in my opinion, particularly in the context of a Class 1 appeal, under an obligation to confirm the extent and nature of any purported representation and was not entitled to sit mute in the face of submissions by the respondent that made it obvious that, at least from the respondent's perspective, the issue remained alive.
Therefore, irrespective of the limits of any representation or understanding that the appellant was labouring under as a result of the exchange between it and the Commissioner, after having been expressly put on notice by the respondent that it was continuing to rely upon the issue of subdivision, the appellant was afforded the opportunity of commenting upon it and in these circumstances it cannot be said that it was denied procedural fairness.
For these reasons this ground of appeal must be dismissed.
Did the Commissioner Fail to Consider the Appellant's Separate Request for Demolition Pursuant to s 80(4) of the EPAA?
Although, as the appellant readily concedes, the DA contemplated both demolition and construction, on the last day the appellant made the following submission:
And commissioner can I say this at this point, even if you were against us in relation to the replacement building we would be seeking that you permit the building to be demolished.
This is not your ordinary case. If you are satisfied on the economic grounds that the buildings are not able to be brought back into a habitable state because of the economic cost then the consequence is that these buildings will remain vacant and unsafe and uninhabitable and that is their current status on all of the evidence, particularly the council orders and one would then in my respectful submission, say, why would the buildings be required to be retained in those circumstances.
It's not as if they have a useful life left in them in their current state and on the evidence that sum of money whether it's 880 or nine hundred and sixty, seventy [sic] thousand, given the holdings costs and council rates and the like over a 12 month period are such that these works will just never be undertaken and there seems, in our respectful submission, no purpose in withholding permission to demolish them and the power to grant consent to demolish is to be found of course in s 80(4) [of the EPAA].
The respondent replied in these terms:
In my submission there is sufficient material before the Court to say that it would not be appropriate to grant consent to demolition in this matter but if you are against me there are certainly sufficient, in terms of the existing proposal before the Court, to say that this proposal does not merit consent. So that even if you say yes to demolition, not a consent for this particular proposal, particularly in light of the circumstances in which this matter has come before the Court.
It is this exchange that gives rise to the sixth complaint on the part of the appellant, not contained in the summons, namely, that the Commissioner failed to consider the request for demolition pursuant to s 80(4) of the EPAA.
Section 80(4) of the EPAA provides as follows:
80 Determination
(4) Total or partial consent
A development consent may be granted:
(a) for the development for which the consent is sought, or
(b) for that development, except for a specified part or aspect of that development, or
(c) for a specified part or aspect of that development.
Although the Commissioner did not specifically reference the appellant's request pursuant to s 80(4) of the EPAA for separate consent to demolition of the buildings, it is clear from a fair and reasonable reading of the totality of her decision that she considered the substance of the request and refused to grant consent.
So much so is apparent from her express reference to this discrete issue when the Commissioner listed "the issues in the case" (at [20]). It is also obvious given her conclusion concerning the significance of the HCA and the importance of the buildings on the site as contributory buildings to the area (at [78]) and in light of her finding that she had not been provided with sufficient evidence to justify allowing demolition of the two dwellings (at [79]). It is further revealed by her specific finding (at [80]) that "I do not find it appropriate to allow the demolition of the two dwellings".
It is therefore clear that the Commissioner, while seemingly not specifically considering the species of demolition founding this complaint, nevertheless considered the genus ( Segal at [99] and Mohamad El Dana at [27]). This ground, therefore, cannot be maintained.
Remitter to the Commissioner
Because I have determined that the appellant has been successful and the Commissioner's decision must be set aside, a question arises as to whether it is appropriate to remit the matter to the Commissioner for redetermination or to another commissioner of the Court.
Whether it is appropriate to order an exclusionary remitter will always depend upon the facts and circumstances of each case (Hurstville City Council v Goreski [2011] NSWLEC 188 at [112]).
The appellant seeks an exclusionary remitter on the basis that because the Commissioner will be required to redetermine the demolition issue, an issue that she has already determined adversely to the appellant, the Commissioner has prejudged the issue.
The topic of an exclusionary remitter was recently discussed in detail by Sheahan J in Goreski (at [109]-[132]). I gratefully adopt his Honour's useful recitation of the principles and authorities contained in that decision without repeating them here.
In general a Court will be slow to order an exclusionary remitter, particularly absent any adverse finding of credibility or an indicated preference for one witness over another ( Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208 at [13] and Castle at [76]). Thus it has been stated that "something more than error" must be established ( Castle at [83]-[85]).
In the present case there can be no cogent basis for submitting that if remitted to the Commissioner, a reasonable apprehension would arise that she would decide the appeal partially or with prejudice (British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2; (2011) 242 CLR 283 at [32]-[48 ] and [139]), rather than merely adversely to one party. It may be that once the less onerous criteria in cl 1.13 of the HDCP are considered by the Commissioner, a different outcome than the one that has given rise to this appeal results. Ultimately it is a matter for the Commissioner, but it is a curious contention by the appellant that having failed to consider cl 1.13, the Commissioner is now said to have prejudged its application. Logically this cannot be correct.
The conclusion I have reached must stand, in my opinion, even if I am wrong in my finding that the decision is not tainted by procedural unfairness. This is because, as the Court of Appeal has observed in Baulkham Hills Shire Council v Basemount Pty Ltd [2003] NSWCA 189; (2003) 126 LGERA 339 (at [24]), on no view could the error alleged to have been committed by the Commissioner have given rise to "prejudgment of quite a high order".
The respondent submitted that an exclusionary remitter would not satisfy the overriding purpose contained in s 56 of the Civil Procedure Act 2005 because to have the proceedings commence again in front of another commissioner would not be in the interests of "just, quick and cheap" litigation. But the overriding purpose contained in the provision can never be an answer to a decision that is infected with bias.
The appellant has failed to demonstrate that the Commissioner's decision is infected with anything more than error and the arguments it has advanced in favour of an exclusionary remitter order must be rejected.
Orders
The orders of the Court are therefore as follows:
(1) the appeal is allowed and the decision of the Commissioner is set aside;
(2) the matter is remitted to the Commissioner for redetermination in light of these reasons;
(3) the respondent is to pay the appellant's costs of the appeal unless within seven days either party applies to the Court for some alternative costs order; and
(4) the exhibits are to be returned.
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Decision last updated: 24 November 2011
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