Wyong Shire Council v MCC Energy Pty Ltd

[2005] NSWCA 86

Reported Decision: 139 LGERA 296

Court of Appeal

CITATION:	Wyong Shire Council v MCC Energy Pty Limited & Ors [2005] NSWCA 86
HEARING DATE(S):	11 February 2005
JUDGMENT DATE:	29 March 2005
JUDGMENT OF:	Sheller JA at 1; Hodgson JA at 2; Tobias JA at 3
DECISION:	(1) Appeal allowed in part; (2) Order 2 of the Orders made by the Land and Environment Court on 18 February 2004 is stayed until further order of that Court to enable the determination of development application DA 1370/02 either by the Appellant having regard to the judgment of this Court or by the Land and Environment Court on appeal to it pursuant to s 97 of the Environmental Planning & Assessment Act 1979 in respect of that development application; (3) Reserve liberty to apply to the Land and Environment Court on seven days notice by any of the parties in respect of Order 2; (4) That each party pay its own costs of the appeal

CATCHWORDS:	LOCAL GOVERNMENT AND ENVIRONMENT - Development consent - Consent granted pursuant to delegation - Whether delegation was current - Whether conditions of exercise of delegation satisfied, namely, that development application "largely complied" with Council's codes and policies, and that development application not subject to "significant public objection" - ADMINISTRATIVE LAW - Failure to take into consideration relevant factor - Whether proposed development's impact on views taken into consideration by Council - ADMINISTRATIVE LAW - Whether opinion properly formed - Whether erroneous conclusion that proposed building was two storeys vitiated delegate's opinion that proposed development was compatible with zone objective that height of buildings "generally" not exceed two storeys - ADMINISTRATIVE LAW - Wednesbury unreasonableness - Initial development application rejected by Council - Altered development application approved - Whether decision to approve altered application manifestly unreasonable
LEGISLATION CITED:	Local Government Act 1993 Environmental Planning and Assessment Act 1979
CASES CITED:	Weal v Bathurst City Council (2000) 111 LGERA 181 Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223 Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422 Attorney-General (NSW) v Quin (1990) 170 CLR 1 Minister for Immigration & Multicultural Affairs v Eshetu (1999) 197 CLR 611
PARTIES:	Wyong Shire Council MCC Energy Pty Limited Scott James Ford Lorraine Gayle Ford
FILE NUMBER(S):	CA 40178/04
COUNSEL:	A: Mr M Craig QC / P Tomasetti R: S Duggan / E Ozen
SOLICITORS:	A: Abbott Tout, Sydney 1R: Coudert Brothers, Sydney 2R & 3R: Aubrey Brown Partners, Wyong

LOWER COURT JURISDICTION:	Land & Environment Court
LOWER COURT FILE NUMBER(S):	L&E 41031/02
LOWER COURT JUDICIAL OFFICER:	Cowdroy J

CA 40178/04
L&E 41031/02

SHELLER JA
HODGSON JA
TOBIAS JA

Tuesday 29 March 2005

WYONG SHIRE COUNCIL v MCC ENERGY PTY LIMITED & ORS

Judgment

1 SHELLER JA: I agree with Tobias JA.

2 HODGSON JA: I agree with Tobias JA.

3 TOBIAS JA: Mr and Mrs S Ford are and were at all material times the owners of the residential property known as 26 Elizabeth Drive, Noraville (the land). In June 2002 they lodged with Wyong Shire Council (the Council) an application to redevelop the existing house upon the land by the construction of an additional storey (the application). The application was objected to by a number of other property owners located to the south-west, west and north-west of the land on the basis that the additional storey would significantly limit, and in some cases obliterate, their views of the ocean and headland. These objections notwithstanding, the Council’s Manager Development Services, purportedly under delegated authority, granted consent to the application on 16 September 2002 (the consent).

4 The respondent, MCC Energy Pty Limited (MCC), one of the objectors to the development and the owner of No. 29 Budgewoi Road, Noraville, instituted proceedings in Class 4 of the Land and Environment Court's jurisdiction, claiming that the consent was void and of no effect. On 18 February 2004 Cowdroy J declared the consent invalid and ordered that the third storey addition to the dwelling house upon the land erected pursuant to the consent be removed within 90 days of his Honour's order. The Council appeals to this Court against that declaration and order. Mr and Mrs Ford filed submitting appearances.

The zoning of the land

5 The land is within Zone 2(b) (Multiple Dwelling Residential Zone) under Wyong Local Environmental Plan 1991 (the LEP). In that zone dwelling houses are permissible with consent. The zone has a number of objectives of which the following is presently relevant:

"(a) To cater for a wide range of housing types essentially domestic in scale and character and generally not exceeding a height of two storeys."

6 The objectives of the zone were relevant to the Council's consideration of the application as clause 10(3) of the LEP provided that:

"Except as otherwise provided by this plan, the Council must not grant consent to the carrying out of development on land to which this plan applies unless, in the opinion of the Council, the proposed development is compatible with the objectives of the zone within which the development is proposed to be carried out."

7 Accordingly, before the Council could grant a valid consent to the development application, it was required to form the opinion that the proposed development was compatible with the objective of the zone that dwelling houses and other permissible residential buildings should “generally" not exceed a height of two storeys.

8 The provisions of State Environmental Planning Policy No 6 – Number of Storeys in a Building (SEPP 6) determined the height of a building for the purposes of the LEP. Clause 6(1) of SEPP 6 provided that, where the application of a provision of an environmental planning instrument required a determination of the number of storeys that a building contains, that number would be deemed to be

"the maximum number of storeys … of the building which may be intersected by the same vertical line, not being a line which passes through any wall of the building."

9 Clause 6(3) of SEPP 6 provided that a reference in clause 6(1) to the maximum number of storeys of a building did not include the whole or any part of a roof used as an "uncovered garden, terrace or deck". It was common ground that this exception did not apply to a terrace that was roofed even though it was open at the sides. It was also common ground that a storey included one occupied by a garage, storeroom or the like.

The Council's procedure for dealing with development applications

10 Relevantly for present purposes, development applications were considered by Council's Development Management Panel (the DMP), which was an operational executive team responsible for the consideration of development applications and related matters and for the preparation of recommendations to the Manager Development Services where the latter had delegated authority to determine the application or, where that authority would be exceeded, for the preparation of recommendations to the Council itself.

11 The DMP comprised six senior officers of the Council being the Director Strategic Planning, Director Health and Development, Director Engineering Services, Manager Development Services, the General Manager and one Senior Development Planner.

12 By s 377 of the Local Government Act 1993 (the LG Act), the Council was empowered by resolution to delegate to the General Manager any of its functions other than a series of functions not presently relevant. By s 378(1), the General Manager was empowered to delegate any of his functions other than his power of delegation and, by s 378(2), to sub-delegate a function delegated to him by the Council.

13 In the present case, the General Manager had, pursuant to either s 378(1) or (2), delegated to the Manager Development Services the following functions set out in paragraph 5 of Schedule 5.100 of the Council's Delegation of Authority Manual (the Delegation Manual):

"5. In accordance with the decisions of the Development Management Panel
a. Determine applications for Development Consent up to the value of $5 million where:
Approvals
i) the application largely complies with Council's Codes, Policies, etc; or

ii) the application is not subject to significant public objection; or

iii) any legal agreements with Council have been completed; or

iv) the application is not in respect of a designated development.
Refusals
i) the non-compliance with codes, policies, etc are significant; or
ii) there has been significant public objection to the proposed development; or

iv) legal agreements with Council have not been completed; or

iv) the application is not in respect of a designated development."

14 In the present case, the development application was approved by the Manager Development Services in accordance with a recommendation of the DMP pursuant to paragraph 5(a) of Schedule 5.100 of the Delegation Manual. However, two of the grounds upon which the validity of the consent was challenged were that the Manager Development Services exceeded his authority as the development application firstly, did not largely comply with Council's Codes, Policies, etc (contrary to paragraph 5a.(i) above) and, secondly, was subject to significant public objection (contrary to paragraph 5a.(ii) above). It was common ground that all of the conditions in (i)–(iv) under “Approvals” in paragraph 5a. needed to be satisfied before the Manager Development Services could validly approve an application, despite the fact that the conditions were separated by the disjunctive “or”.

15 The Delegation Manual also contained provisions relating to delegations by the General Manager. Relevant for present purposes is clause 1 under the heading "Term of Delegation". It provides as follows:

"1. Authorities issued by the General Manager will include a 'use by' date and will become obsolete on such date. …
The initial expiry date has been set at 31 July 1996 and will be each two years thereafter.
It is the responsibility of each Department Director and the incumbent of the position to ensure that the delegation is reviewed and renewed by the 'use by' date.
2. Authorities can be reviewed, added to or deleted from at any time during the currency, by following the procedures set out under the heading ' Authority and Procedure to Alter '."


As will be seen, an issue arose in the present case as to whether the Manager Development Services’ authority was current at the time he determined the application.

The relevant history of delegations

16 It was common ground that the Council had, pursuant to s 377(1) of the LG Act, and subject to a number of irrelevant exceptions, delegated to the General Manager, the authority to exercise all discretionary functions which the Council was capable of delegating and which it was not statutorily prohibited from so doing. Those functions included that of determining development applications under the Environmental Planning and Assessment Act 1979 (the EPA Act). Paragraph 33 of that delegation was in the following terms:

"Pursuant to s 378 of the Local Government Act 1993 and subject to any conditions deemed by the General Manager to be appropriate, delegate wholly or partly the functions set out in Schedules 1-70 inclusive of this Manual to the holders for the time being of the office or position nominated in each such Schedule and revoke, wholly or partly any delegation."

17 It would not appear that Schedules 1-70 of the Delegation Manual were tendered in evidence. Nevertheless, in my opinion the power of the General Manager pursuant to s 378(1) and (2) of the LG Act to delegate or sub-delegate any of his functions included the power to delegate those functions subject to conditions including one limiting the term of the delegate's or sub-delegate’s authority.

18 On 20 August 1998 the General Manager, acting pursuant to s 378 of the LG Act, delegated to the Manager Development Services the functions set forth in Schedule 5.100 of the Delegation Manual. The Staff Memorandum containing this delegation stated that it was

"the responsibility of the current incumbent in the position to ensure that the authority is reviewed and renewed by the expiry date of July 31 2000 ." (original emphasis)

19 It was common ground that on 31 July 2000 the authority of the Manager Development Services to determine development applications in accordance with Schedule 5.100 of the Delegation Manual was renewed to 31 July 2002. On that date, the General Manager issued a Staff Memorandum in which he stated that current delegations to, inter alia, the Manager Development Services were:

"to remain in place until I have reviewed."


No such review had taken place as at September 2002. An issue therefore arose between the parties as to whether the Manager Development Services' authority was current as at that time.

History of the development applications

The first development application

20 On about 15 March 2002, Mr and Mrs Ford lodged development application No. 609/02 (DA 609) with the Council. The Statement of Environmental Effects that accompanied that application stated that "the three bedroom residence with double garage under" existing upon the land was in dire need of maintenance and upgrading. It further stated that the application involved the removal and replacement of the existing deck area, removal of the rear rumpus area and the addition of an upper floor extension to the existing residence. The choice was made to construct an upper floor extension

"as the existing residence is situated to the rear of the property and a further extension behind the building was inappropriate due to lack of space, [while] extensions to the front of the lot would be difficult due to the steep slope of the site."

21 The plans accompanying DA 609 revealed an upper floor extension to the existing residence with a north-south dimension of 9.46m and an east-west dimension of 11.33m and with a pitched roof. It comprised a bedroom, en-suite, walk-in wardrobe, TV room, study and sitting area. Further, a covered deck was located off the sitting area adjoining its northern wall with dimensions of 4.15m x 2.3m. The additional floor space proposed for this level excluding the deck was 106.7m² and, including the deck, 117.9m². Four objections were received to the application. They were from the owners of 29 Budgewoi Road (No. 29), 31 Budgewoi Road (No. 31) and 33 Budgewoi Road (No. 33). No. 33 adjoined the rear boundary of the land whereas Nos. 29 and 31 were to the immediate south-west of the land.

22 DA 609 was the subject of a report by officers of the Health & Development Department of the Council (the H&D Department). They reported that the proposed addition would create a two-storey dwelling at the rear of the property but that the position of the development was at the highest portion of the property and, although providing greater views for the applicants, would reduce the views of properties to the rear fronting Budgewoi Road.

23 Under the heading "Views" the following was stated:

"Photo montages were created to assess the impact of the proposed addition on existing view corridors. The development will reduce the views from No. 33 Budgewoi Road, Noraville significantly. The height of the building is considered excessive in its proposed position, especially as there is a large portion of the property vacant in front of the existing dwelling. A two-storey addition could be erected in this area creating additional views for the applicants and reducing the impact of lost views to the properties behind."

24 Under the heading "Cumulative Impact" it was asserted that

"[t]he approval of the second storey addition in its proposed position would create an unfavourable precedent by establishing an excessive roofline that future developments may follow as there are many single storey dwellings sited at the rear of the property in Elizabeth Drive, Noraville."

At this time the owner of 28 Elizabeth Drive (No. 28) had lodged a development application with the Council to add a second storey to his existing dwelling but that application had been rejected.

25 The report stated further that the land was suitable for two-storey development at the front of the property where the impact to adjoining properties would be lessened. However, the proposed position of the

"second storey addition will reduce the amenity of adjoining properties significantly as vast portions of existing view corridors will be lost."

26 In response to the objections and, in particular, to that which complained that the extension would create a three-storey development, the authors of the report remarked that it would have a maximum two-storeys as defined in the Building Code of Australia. As to the objection that the proposed extension would eliminate views to the north and east, they commented that it would eliminate most of the views to the north from No. 33 and that views to the north-east would be lost from No. 29 and No. 31. The authors concluded in these terms:

"It is considered that the proposed second storey addition will eliminate excessive portions of existing view corridors. The site has enough space at the front of the existing dwelling to construct a two-storey development that will have less impact on the view corridors of adjoining properties. The application is therefore recommended for refusal."

27 It would appear that on 9 May 2002, the Manager Development Services adopted the recommendation of the Development Assessment Panel to refuse DA 609 on six grounds. In any event, by letter dated 9 May 2002, Mr and Mrs Ford withdrew that application.

The second development application

28 On 3 June 2002, a new development application No. 1370/02 (DA 1370) was lodged by Mr and Mrs Ford. It proposed a more limited upper floor extension. In response to the advertising of the application, objections were received from the owners of No. 29, No. 31, No. 33 and 35 Budgewoi Road (No. 35). The owner of No. 28 indicated that he had no objection. Again, the major complaint was interference with views of the water and headland.

29 The changes made to the upper floor extension were, in my opinion, significant. In particular, the extension deleted the TV room and sitting area proposed in DA 609 and relocated the study. Relevantly, although the east-west dimension increased from 11.33m to 11.61m, the north-south dimension reduced from 9.16m to 5.48m, a reduction of 40%. A slightly larger bedroom and a roofed terrace with a north-south dimension of 3.86m and an east-west dimension of 4.78m replaced the sitting area and deck of DA 609. The additional floor space proposed in DA 1370 excluding the terrace was 63.8m² and, including the terrace, 80.4m². This involved a floor space reduction, excluding the deck/terrace of 40% and, including the deck/terrace, of 32%. It was also common ground that in DA 1370 the higher of the ridge of the extension's roof had been reduced by 700mm.

30 On 12 June 2002 a site meeting was held between representatives of the Council and the objectors on the rear veranda of No. 33 to assess the potential impact of the proposed extension on water views from that property. Officers of the Council took a large number of photographs in order to assess the impact of the proposal on properties fronting Budgewoi Road. The outline of the proposed extension was imposed on a number of the photographs taken in the form of a photomontage. Officers of the H&D Department of the Council assessed the application in a report to the DMP dated 29 July 2002 in which they recommended that consent be granted subject to conditions. Again, the impact on views became the dominant issue. Under the heading "Views", it was stated that

"[t]he applicant recognising that the original proposal had a significant impact upon the views of the property at the rear, designed the current application to permit and entrench a view corridor across the subject allotment. This has been achieved by locating the liveable areas to the south of the current footprint and an open-roofed porch atop the north portion of the existing footprint.
…
In this case it is acknowledged that some views will be lost by the properties in Budgewoi Road, however, the applicant has presented a design that integrates with the fabric of the existing dwelling and provides view corridors for the properties at the rear."

31 Under the heading "Public Interest" and the sub-heading "Loss of View", the authors commented that digital photos and site-lines of existing view corridors of affected properties had been used to assess the impact on views. It was acknowledged that a portion of the existing view would be lost from No. 33 but that the design of the proposal allowed for retention of significant views from this property and had allowed for view sharing. It was also stated that views from surrounding properties would be retained.

32 On the issue of the number of storeys, it was remarked that the

"proposed development will consist of 3 storeys, however, as the ground floor consists only of a garage and workshop, the definition of storey in SEPP 6 excludes this area from the calculation. It is recognised as a 2 storey dwelling."

33 The foregoing comment was picked up in subsequent reports and became a matter of contention at the hearing before the primary judge. His Honour, for the same reasons as those developed in the Council officers’ report, concluded that the dwelling, notwithstanding the extension, would remain a two-storey building. However, this is clearly incorrect. As I have indicated (in [9] above), SEPP 6 does not exclude from a storey the space occupied by a garage and/or workshop. It was ultimately conceded by the Council at the hearing of the appeal that the building with the extension would become, at least in part, a three-storey dwelling.

34 It would seem from an assessment of the drawings that the three-storey section of the building would comprise the area immediately beneath the kitchen and bedroom 2 on its middle level and bedroom 1 and part of the terrace in the extension above. On my calculation, the third level comprising the workshop behind the garage would occupy a floor area at the ground level of approximately 36m². The middle level of the building comprises a floor area of approximately 153m². Accordingly, there can be little doubt that the greater part of the building is only two storeys. Furthermore the portion of the building, which is three storeys, appears from the plan elevations to be partially excavated into the slope of the land.

35 The report concluded that the proposed addition was consistent with the height and storey objectives of the zone and the applicable development standards. The design was said to enable properties at the rear to maintain their views through corridors across the land. Based on an asserted assessment of the application against the relevant heads of consideration referred to in s 79C of the EPA Act, the application was recommended for approval.

36 However, on 29 July 2002 the DMP recommended that the matter be deferred for preparation of further photographic details to demonstrate the impact of the proposed development from the north on the views from properties to the west.

37 More photographs were taken and a further assessment provided in a report by the officers of the H&D Department to the DPM dated 19 August 2002. In that report the authors noted that the owner of No. 28 had withdrawn his application for a second storey to the existing dwelling on his land thus removing any possible cumulative impact on properties facing Budgewoi Road. The further photographs were taken from the centre and north side of the deck of the property immediately to the rear of the land with the proposed addition superimposed to indicate the impact on views. The authors considered that the additions as currently proposed would result in the loss of some views by properties to the west but that that loss was considered minimal, especially given that a stand of trees currently restricted much of the view which would otherwise be lost. They accordingly concluded in these terms:

"In the circumstances, it is considered that the extent of view remaining from the property to the rear is reasonable.
Panorama views of the headland and Bird Island will remain accordingly the application is recommended for approval."

38 At its meeting on 19 August 2002 the DMP again recommended the application be referred back for further consideration and report with advice that, based on the information available to it, the DMP favoured refusal of the application.

39 Officers of the H&D Department further considered the application. On 16 September 2002 they provided an even more detailed report to the DMP. It noted the history of the matter including the fact that after further discussions with Council staff the applicant had made "considerable modifications" to the original proposal (DA 609) and as a consequence had submitted the current proposal. It was noted that the zoning of the land permitted dwellings "generally not exceeding two storeys" and that the proposed development was to consist of two storeys. As I have already observed, this was inaccurate. Had the report stated that the proposed development would generally consist of two storeys, it would have been correct.

40 Under the heading "Design, Bulk and Scale", the authors stated that the design of the building was contemporary and compatible with recent developments in the Noraville and Nora Head area. The report noted that the design provided architectural relief by the use of openings, verandas and a varied roofline to reduce the appearance of bulk. Under the heading "Views" the report repeated the comments contained in the reports of 29 July 2002 and 19 August 2002 (see [30] above).

41 Where the report differed from its predecessors was that under the heading "View Corridor", the authors noted that as a result of a further presentation to the DMP on 26 August 2002, Council officers undertook a reassessment of the view corridors of Nos. 29-37 Budgewoi Road against the current application and that of an additional storey superimposed on No. 28. To assist in this exercise Council staff produced diagrams that indicated the impact on view corridors from the five properties at the rear of the land.

42 The report then proceeded to deal individually with each of Nos. 29-37 Budgewoi Road by describing the current situation and then the impact of the proposed development. In relation to No. 29, the report stated that the subject proposal, when viewed from the north-west corner of the balcony of that property, would impact on ocean and bombora views, but that the view of Bird Island and the headland would remain. If both Nos. 26 and 28 were developed, then views to the north-west would be lost although views from the veranda of No. 29 to the east of the banksia tree would be unimpeded. As to No. 31, it was observed that the combination of the subject proposal and the large banksia tree on the adjoining allotment would result in 90% of the view currently enjoyed being lost. However, the banksia tree had been recently pruned and a view corridor created between Nos. 26 and 24 Elizabeth Drive to compensate for that loss. It was thus concluded that the subject proposal would result in some ocean vistas across the current roofline being lost although a corridor would remain between the land and the property immediately to its south.

43 As to No. 33, it was stated that the subject proposal would have an impact on the vistas presently enjoyed by that property's occupants but that the location of the extension on the south side of the existing building, with the deck on the northern side with a railing of stainless steel, would facilitate views across the property. It was concluded that the subject proposal would result in the loss of some ocean vistas but that the majority of the view would remain.

44 As to No. 35, it was concluded that the subject proposal would have a minimal impact on the view corridors of that property which would retain panoramic vistas across 30 Elizabeth Drive and further north. As far as 37 Budgewoi Road (No. 37) was concerned, it was concluded that the proposal would have a minimal impact on the view corridors of this property.

45 Under the heading "Conclusion", the authors stated:

"The current application is consistent with the height and storey objectives of the 2(b) zone and replicates many of the buildings that currently exist on both sides of Elizabeth Drive, particularly in height as owners endeavour to secure panoramic views of both ocean and headland.
In this case the applicant has significantly modified his proposal by placing the major portion of the additions on the southern side of the existing structure and providing a roofed but open deck that creates a significant view corridor across his property.
…
In reaching a decision the Council must endeavour to achieve a balance between the right to reasonably develop the subject site and the right to preserve views and amenity of adjoining properties.
This proposal on its own would allow Council to reach a decision that achieves a required balance. … Therefore the current application is worthy of support and is recommended for approval."

46 Appendix 2 to the report was a plan of the layout of the relevant allotments and provided an outline of the buildings thereon including that the subject of DA1370 and those on Nos. 29-37 Budgewoi Road. Superimposed on the plan were view corridors indicating both the extent of the view from each dwelling and the extent of the impact thereon of the subject proposal. It revealed little impact on Nos. 33, 35 and 37 and a partial, albeit not insignificant, impact upon Nos. 29 and 31.

47 The recommendation of the DMP was accepted by the Council's delegate, the Manager Development Services, who determined the application by granting conditional consent to it on 18 September 2002.

The challenges to the validity of the consent

48 MCC instituted proceedings in Class 4 of the jurisdiction of the Land and Environment Court against the Council and Mr and Mrs Ford. A number of grounds of invalidity were argued before the primary judge, not all of which were pressed on the appeal. Further, some issues were found in favour of the Council and were then made the subject of a notice of contention and/or notice of cross-appeal by MCC. It is convenient to deal with the challenges the subject of argument before this Court under separate headings and to include the primary judge's determination and reasoning, the submissions in the appeal, the notice of contention or the cross-appeal, and my conclusion with respect thereto.

Absence of current delegation

49 Before the primary judge and before this Court by way of cross-appeal, MCC submitted that the Manager Development Services did not hold a valid delegation of authority as at 16 September 2002 which authorised him to grant the consent. It was submitted that the authority delegated to him by the General Manager to determine development applications had expired on 31 July 2002 and had not been renewed.

50 It was common ground that on 31 July 2000, the Manager Development Services' authority was renewed by the General Manager to 31 July 2002. On that date the General Manager's Staff Memorandum stated that current delegations to, inter alia, the Manager Development Services were to "remain in place until I have reviewed". The primary judge considered that the effect of this memorandum was to continue the authority delegated to the Manager Development Services on and after 31 July 2002 until such time as his authority was reviewed by the General Manager. On that basis, his Honour considered that the authority was valid and current when the consent was granted.

51 MCC submitted that the General Manager had no power to extend the delegation in the manner adopted. His only power was to review and renew a delegation and not to extend it. The legal basis of this submission was the provision in the Delegation Manual referred to in [15] above which, it was assumed, had been adopted by the Council and pursuant to which authorities issued by the General Manager would include a "use by" date and would become "obsolete" on that date. Further, although there was a power to add to, delete or otherwise alter an authority, there was a set procedure for that in the Delegation Manual which in the present case had not been followed.

52 The Council submitted that the Delegation Manual had no legal force with the consequence that failure to follow the procedures set out therein, such as failing to review a delegation before renewing it beyond its “use by” date, did not render the delegation invalid. Accordingly, it was submitted that the extension by the General Manager on 31 July 2002 of Manager Development Services' authority, until such time as the General Manager reviewed it, was a valid exercise of power by the General Manager pursuant to s 378 of the LG Act.

53 There is no doubt that pursuant to s 378 the General Manager had power to delegate any of his functions including power to sub-delegate functions that had been delegated to him by the Council. The Council had adopted the Delegation Manual pursuant to which it had laid down the conditions upon which the General Manager could delegate his functions pursuant to s 378. The Manual required any authority delegated by the General Manager to be limited to a period of two years expiring, relevantly, on 31 July 2002. On that date the authority would lapse unless the delegation had been "reviewed and renewed".

54 In the present case, the General Manager neither reviewed nor renewed the Manager Development Services' authority which was due to expire on 31 July 2002. On the contrary, he purported to continue or extend the "use by" date until an indeterminate time in the future. In my opinion, he did so in a manner contrary to the condition upon which he was authorised by the Council to sub-delegate functions that had been delegated to him. Accordingly, in my view the primary judge erred when he held that the Manager Development Services' authority to grant consent was current as at 16 September 2002. That authority had expired on 31 July 2002 and had not been renewed. It follows that for this reason alone the Manager Development Services had no power to grant the consent which was therefore void and of no effect.

Failure to satisfy conditions of delegation – did the subject development application largely comply with Council's Codes, Policies etc?

55 MCC submitted that the development the subject of DA 1370 did not "largely compl[y]" with objective (a) of Zone 2(b) which provided for a wide range of housing types "generally not exceeding a height of two storeys".

56 The primary judge held (at [36]) that it was a matter for the Council to determine whether the application "largely complies" with its codes or policies. In so doing, both the officers of the H&D Department and the DMP had erroneously concluded that the proposed development, when completed, would consist of only two storeys. His Honour then correctly construed SEPP 6 and concluded that a portion of the development would be of three storeys. He therefore concluded (at [42]) that the finished building would not "largely comply" with "Council's Codes, Policies etc" since the objective of Zone 2(b)

"permits housing ' generally not exceeding a height of 2 storeys .' The building would only comply if the council treated it as an exception to the objective stated in the LEP. The proposed development did not satisfy the condition of the exercise of the power by the delegate. As such the approval under the delegation was beyond the power of the delegate and therefore void."

57 What his Honour meant by the second-last sentence of the above quote is not clear. The objectives of the zone were not development standards, a point that his Honour acknowledged in [36] of his judgment. Assuming the LEP fell within the description of "Council's Codes, Policies etc", a matter his Honour also seemed to assume rather than decide as it was in issue, it does not follow that, because the proposed development when completed would be in part a three-storey building, it did not "largely comply" with an objective that permitted housing "generally not exceeding a height of 2 storeys". It is clear that the objective itself did not contemplate that every building within the zone would not exceed two storeys in whole or in part. The use of the adverb "generally" makes that clear. Furthermore, a particular development was only required to "largely comply", as distinct from "strictly comply", with the relevant code or policy.

58 In my opinion, the primary judge erred in concluding that paragraph 5(a)(i) of Schedule 5.100 of the Delegation Manual was not complied with. In my view the development the subject of the application did "largely comply with Council's Codes, Policies, etc". It is thus unnecessary to decide finally whether the LEP fell within that description. My prima facie view is that it did not.

Was the application one which was not subject to significant public objection?

59 Although five objections to DA 1370 were received, the Council submitted that those objections were ones by individuals and were not "public" objections. It was submitted that the word "public" in its context of qualifying the noun "objection" required that the objection relate to or affect the community as a whole rather than a small number of individuals albeit that they were members of that community. The primary judge rejected this submission holding (at [44]) that the word "public" should be given its ordinary meaning of "members of the community". He considered (at [46]) that there was no doubt that the objections made to the application were "from the public". According to his Honour, to uphold the Council's submission he would have to have found that the amorphous mass of the general public would need to raise objection before the qualification to the delegate's power would operate. His Honour rejected this submission and held that it was sufficient that the objections, albeit of individuals, emanated from members of the public.

60 On the appeal, the Council repeated the arguments rejected by his Honour but drew attention to the fact that the phrase "significant public objection" was only used in paragraph 5a.(ii) of Schedule 5.100, whereas in paragraphs 1b, 5b(i), 6a, 7a, 8a and 14a of that schedule the phrase used was "significant objection(s)" without the qualification of "public". Accordingly, it was submitted that the use of the word "public" carried with it the construction that the objection must be one which offended the community as a whole rather than a small number of individuals.

61 Although it was conceded that objections from "the public" were made by individuals, it was submitted that the primary judge's construction rendered the word "public" otiose by treating it as though it were a noun whereas it was used as an adjective in the relevant phrase qualifying the word "objection".

62 In my opinion, the construction accepted by his Honour was correct. In its context it is not surprising that the Manager Development Services' power to approve a development application up to a value of $5 million was confined to cases where there were no significant public objections. In such a case, it is more appropriate for the application to be dealt with by the Council itself. The subject limitation should be read in conjunction with paragraph 5b of Schedule 5.100 which empowers the Manager Development Services to determine applications for development consent with a value in excess of $5 million with the exception of "applications where significant objection has been lodged".

63 It would be odd, to say the least, to construe these limitations differently. It would mean that the delegate would have power to determine applications up to a value of $5 million even though there are significant objections to the development, both qualitative and quantitative, by members of the public who are impacted thereby but which do not qualify as objections affecting the whole or a substantial section of the community. In my opinion, his Honour was correct to find that the objections that were lodged were "public objections".

64 The primary judge also held that the objections were "significant”, as a consequence whereof the delegate did not possess power to grant the consent. There is no doubt that a reading of the reports with respect to DA 1370 makes it abundantly clear that the objections with respect to loss of view were not only treated as significant by those who dealt with the application but also were, in fact, significant. The Macquarie Dictionary 3rd ed meaning of the word "significant", referred to by his Honour in [48]. is "important; of consequence". There can be no doubt that the subject objections so qualified. As I understand the Council's submissions on the appeal, it was not seriously contested that if, the objections were "public objections", they were not "significant".

65 Accordingly, in my opinion his Honour was correct in finding that DA 1370 was subject to “significant public objection" as a consequence whereof the Manager Development Services did not have authority to grant the consent.

Did the delegate fail to take into account a relevant consideration?

66 It was common ground that in relation to DA 1370, no consideration was given by the officers of the H&D Department, the DMP or the Manager Development Services to the impact of the development on views from 27 Budgewoi Road (No. 27). Although the application had been advertised, the Council did not specifically notify the owners or occupiers of No. 27 of the application although it did so with respect to Nos. 29-35. No objection was received from the owner of No. 27. This notwithstanding, MCC in its objection on behalf of No. 29 asserted that the proposed development would deprive four residences in Budgewoi Road (namely, Nos. 27-33) of the majority of their views.

67 Although not apparently dealt with by the primary judge, it was submitted by MCC on the appeal by way of notice of contention that the failure of the Council to assess the impact of the proposed development on No. 27 constituted a failure to take into account a relevant consideration which rendered the consent invalid.

68 An affidavit by Michael Wright, a director of Domain Pty Limited, Landscape Architects and Planners, was tendered before the primary judge. Annexed to this affidavit was a visual assessment report which, inter alia, assessed the impact of the proposed development on No. 27. Mr Wright concluded that following construction of the proposed addition to No. 26, approximately 50% of the ocean view from No. 27 would be obscured leaving a narrow corridor through which to view the headland. Further, it would be a loss of the distant horizon and ocean views. He illustrated the impact with photographs. Mr Wright assessed that loss at 50% although I would have assessed it at closer to 40%. Nevertheless, the loss was significant.

69 Section 79C(1)(b) of the EPA Act obliged the Council to take into consideration the likely impacts of the development, including environmental impacts. In the present context, this required the Council to take into consideration the impact of the proposed development upon views from properties in the locality. The Council through its officers, considered the impact on views in detail with respect to all relevant properties other than No. 27. The fact that it omitted to assess the impact on No. 27, especially where no objection had been received from the owner, does not mean that the Council failed to take into consideration the impact of the development within the meaning of section 79C(1)(b). If it were otherwise, any consent could be challenged upon the basis that, notwithstanding that there was no objection from the property owner concerned and the relevant impact was otherwise the subject of detailed consideration, the consent was invalid because there was one property that might be similarly impacted by the development that was overlooked.

70 In my opinion, the issue is whether the impact on views was taken into consideration in the sense that it was the subject of a “proper, genuine and realistic consideration upon the merits.” In my opinion, it clearly was. Thus, the consideration of the impact of the development on views accorded with the tests stated by Mason P in Weal v Bathurst City Council (2000) 111 LGERA 181 at 185 [9] and by Giles JA at 201 [80]. No authority was cited to us by MCC that would support the proposition that, notwithstanding that the Manager Development Services took into consideration all relevant impacts including those on views, nonetheless, his decision was vitiated by his overlooking the impact on a property in respect of which no submission had been lodged. In my opinion, this ground of challenge should be rejected.

Did the delegate fail to comply with clause 10(3) of the LEP?

71 By its notice of contention, MCC further submitted that there was a failure by the Manager Development Services to form the opinion required by clause 10(3) of the LEP, namely, that the proposed development was compatible with the objectives of the subject zone. Again, this was not an issue that appears to have been dealt with by the primary judge although we were informed that the point was taken before him.

72 MCC acknowledged that in the H&D Department's report of 16 September 2002 to the DMP, it was concluded that

"the current application is consistent with the height and storey objectives of the 2(b) zone."

MCC accepted that this statement was capable of constituting the necessary opinion within the meaning of clause 10(3). It was also accepted that the adoption by the Manager Development Services of the recommendation contained in the report constituted his adoption of the opinion so expressed. Nevertheless, it was submitted that the expression of opinion referred to was vitiated by the erroneous conclusion of the H&D Department and the DMP that the proposed development should be classified as two rather than three storeys as the ground floor consisted only of a garage and workshop, and the definition of storey in SEPP 6 excluded that area from the calculation.

73 In my opinion, it was clearly open to the Manager Development Services to form the opinion that the development was compatible with the relative objective of the 2(b) zone. Nevertheless, it is apparent that the conclusion that the application was consistent with the storey objective of the zone was based upon the conclusion by the authors of the report that the building, when completed, would only be of two storeys. The question is whether that vitiates the opinion.

74 In my view, it does not. Whether the building was of two or three storeys, it was not suggested that the opinion was one which was not open to the authors of the report to form. Nor was it suggested that it was Wednesbury unreasonable. The opinion was, in my view, justifiable in respect of this particular building even on the basis that it was, in part, three storeys. I have already expressed the view (at [34]) that it was essentially, albeit not wholly, a two-storey building, a conclusion which was not really challenged. The application was acknowledged in the reports as proposing a third storey on what was an existing two-storey building but, due to an erroneous interpretation of SEPP 6, the final development was classified as two stories.

75 However, the thrust of MCC’s challenge is that the Council officers and, therefore, the Manager Development Services, asked themselves the wrong question. The question they asked themselves was whether the proposal, being a dwelling of two storeys, was consistent with the storey objective of the zone. What they should have asked themselves was whether the proposal, being a part two part three storey dwelling, was so consistent. The answer to both questions may be and, in my opinion, must have been the same. Nevertheless, it was submitted, the opinion formed was based on a factual error and was thus invalid.

76 In my opinion, though somewhat technical, there is some merit in this ground of challenge. However, it is unnecessary to come to a final view on this issue as the consent is otherwise invalid upon the ground that the Manager Development Services had no power to grant it.

Was the delegate's decision unreasonable in the Wednesbury sense?

77 It would seem that this was a major issue before the primary judge and, from MCC's perspective, the most significant issue on the appeal if only because, if the primary judge erred in his finding on this issue, then it remains open to the Council itself to grant consent to the application.

78 The primary judge (at [75]) upheld the submission that the consent granted was so unreasonable that a reasonable council, properly advised, could not have made such a decision: Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223. He did so notwithstanding that he accepted (at [63]) that the reports prepared in respect of DA 1370 demonstrated it was investigated in considerable detail particularly with respect to the issue of impact on views and view corridors. As his Honour noted, there was a site inspection and the application was referred three times to the DMP, which included three senior Council staff.

79 The principles applicable to a challenge based on Wednesbury unreasonableness are well known. As Mason P observed in Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422 at 188 [27] and Spigelman CJ noted at [91], the test is stringent. The decision

"… must amount to an abuse of power … or be so devoid of plausible justification that no reasonable person could have taken that course."

See Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 36-37 per Brennan J.

80 His Honour referred (at [64]) to the report prepared in relation to DA 609 recommending its refusal because it would set an undesirable precedent and would not be considered to be in the public interest. DA 1370, however, was considered by the Manager Development Services, on the basis of the reports of the H&D Department and the DMP, to have a lesser impact upon the view corridors of surrounding houses than DA 609.

81 However, it was submitted by MCC to the primary judge that the plans forming part of DA 1370 were "virtually identical" to the plans the subject of DA 609. As to this submission, the primary judge (at [66]) said:

"No expert evidence has been tendered from either party to assist the Court to determine whether the applicant's contention is correct. However, a comparison of plans for both DA 609/02 and DA 1370/02 shows that the alterations appear to be minor. The north-south profile of the uppermost level of the proposed dwelling has been slightly reduced, but otherwise the plans appear to be identical."

82 In my opinion, his Honour has, with respect, misconstrued the plans the subject of DA 1370. Given my findings in [29] above, it is clear that not only were the alterations not "minor" but that the north-south profile of the proposed uppermost level of the dwelling had been significantly more than "slightly reduced". In my opinion, the differences between the two sets of plans with respect to the uppermost storey are readily apparent and the modifications effected by DA 1370 were substantial or, as the authors of the 16 September 2002 report described them, "considerable". I mention this error on his Honour's part at this point as his upholding of MCC's contention that the plans were "virtually identical" underpinned his finding that the consent was unreasonable in the Wednesbury sense.

83 At [68] of his judgment the primary judge refers to the report of 29 July 2002 as well as the further report of 16 September 2002. In that paragraph, his Honour selects the following statement from the September report under the heading "The View Corridor"

"… the additions as currently proposed will result in the loss of some views by properties to the west, however, this view loss is considered minimal, especially given that a stand of trees currently restricts much of the view to be lost."

His Honour then alludes to the inaccuracy of this statement by pointing to the finding of the September report that, with regard to No. 31, 90% of its view would be lost arising from the impact of the development and the banksia tree.

84 What his Honour has overlooked is that the quoted statement was picked up in the September report from the previous July and August reports. What his Honour does not do is refer to the further assessment that the H&D Department officers had carried out and which was the subject of a further presentation to the DMP on 26 August 2002. As noted, his Honour does pick up from the further material in the September report the impact of the combined effect of the subject proposal and the large banksia tree on No. 31. However, he makes no reference to the comments in the report with respect to the impact of the proposal on the views from Nos. 29, 33, 35 and 37. In fact, he erroneously asserts that no reference was made in the report to the view lost from No. 29.

85 In [69] the primary judge refers to a statement in the August report under the heading "Privacy". In [70] he then asserts that the statement is "misleading" because although the "sitting area" in DA 609 had been deleted, the size of the covered terrace had been increased. That may be so, but the increased terrace size had nothing to do with the issue of privacy, only with that of views. The statement said to be misleading related to the former and not the latter. His Honour's criticism is, with respect, misconceived.

86 In the same paragraph his Honour goes on to assert that

"[t]he north-south solid walls have been shortened, but the east-west dimensions remain unchanged. As a result there has been little practical difference of the impact of the development upon neighbouring properties."

87 The last sentence of the foregoing quotation is, with respect, plainly incorrect. Although the east-west dimension does remain unchanged and is not irrelevant to the question of view loss, an inspection of the photographic material before the Manager Development Services makes it clear that the north-south walls of the building as proposed in DA 609 had a far greater impact on the view corridors than did the east-west wall. To suggest that foreshortening the north-south wall by 3.6 m or some 40% had "little practical difference" on the impact of the development upon views of neighbouring properties was to do less than justice to the detailed assessment of the Council's officers whom his Honour has so trenchantly criticised.

88 The primary judge then referred (in [71]) to the following statement in the September report:

"The design of the building is contemporary and compatible with recent developments in the Noraville and Nora Head area."

He then (at [72]) referred to the report on DA 609 and observed that the assessment of that application took into consideration the impact of the development upon the amenity of adjoining properties. He continued:

"In contrast, the assessment of DA 1370/02 referred, not to the adjoining properties but to ' developments in the Noraville and Nora Head area '. Such a generalisation does not address the impact of the proposed development upon the adjoining properties."

89 In my opinion, the last sentence of the above finding is also incorrect. The reference to recent developments in the Noraville and Nora Head area in the September report is found under the heading "Design, Bulk and Scale" and had nothing to do with the issue of views or view corridors. The report then proceeded for some five pages to deal in detail with the issue of views and view corridors and their impact upon individual adjoining properties. To suggest, as his Honour's finding does, that the report did not address the impact of the proposed development upon adjoining properties, but only upon "developments in the Noraville and Nora Head area", is without foundation.

90 The primary judge then referred (at [73]) to the objective (a) of the 2(b) zone and to the fact that the Council officers’ reports had classified the proposed development as two storeys. His Honour correctly considered that that conclusion was, as he termed it, untenable. He then added:

"Additionally the conclusion that the development was ' consistent with the height and storey objective of the 2(b) zone ' is wrong."

91 With respect, for the reasons referred to in [57] above, I can see no justification for this finding.

92 The primary judge's conclusions were encapsulated in the following paragraphs of his reasons:

"74. Accordingly the concern expressed in the assessment for DA 609/02, namely that the development was ' not sensitive to the site attributes ' and that an undesirable precedent would be created, remains. Similarly the conclusion as stated in the recommendation against the approval for DA 609/02 remains, namely that the proposal was of a ' design which is not in keeping with those of adjoining properties, in terms of overall height design, bulk and scale .' The plans for DA 1370/02 did not alter the height of the proposed building. The bulk remains virtually unchanged, thereby confirming the Development Department's concern that an undesirable precedent would be created.
75. In the Court's consideration, the decision to grant consent to DA 1370/02 was so unreasonable that the council, properly advised could not reach the decision to grant consent."

93 His Honour's assertion that the plans for DA 1370 did not alter the height of the proposed building was factually in error. As I have already noted, the height of the roof ridge was reduced by 700mm. Further, in my opinion, his Honour was in error in finding that the bulk of the building remained "virtually unchanged": see [29] above.

94 The findings in [66], [68], [70], [72], [73] and [74] of his Honour's reasons underpinned his conclusion that the consent was Wednesbury unreasonable. The fact that those findings were erroneous means that his Honour's finding of Wednesbury unreasonableness cannot stand. There is no doubt that the differences between the two applications were substantial and that the modifications made in DA 1370 significantly restored view corridors which would have been lost had DA 609 been approved.

95 This is not to say that the development proposed in DA 1370 had no or minimal impact upon the properties to the west and south-west; but the impact was significantly less than that which would have resulted from approval of the earlier application.

96 The Council, by its delegate the Manager Development Services, considered in detail the issue of view impact and, consistent with the principle of view sharing, ultimately came to the conclusion that the impact was not so great as to justify refusal of the application. Although opinions might well differ on the issue, the conclusion at which the Council officers arrived (and which was adopted by the delegate) was one that was clearly open to them.

97 Nevertheless, MCC submitted that the Manager Development Services' approval of DA 1370 lacked plausible justification. It was submitted that there was no explanation as to how he and/or the DMP could reasonably determine that the first application proposed a gross interference with views to properties to the west and south-west of the land and was therefore considered unacceptable, and could also determine that the second application that again proposed a gross interference with those views was acceptable in reliance upon minor changes to the plans.

98 The difficulty with this submission is that in my opinion the changes to the plans were not "minor". Further, while the first application involved gross interference with views, the second did not (although clearly there was interference). As I have observed, there is no doubt that that interference was substantially less than that which would be effected had the earlier application been approved.

99 MCC's submission comes close to requiring the Court to undertake a merits consideration of the issue of views. This, of course, is impermissible: Minister for Immigration & Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 627 [44]; Weal at 201 [82] per Giles JA. The only question is whether it was open to the Manager Development Services, acting reasonably, to come to the conclusion that the impact upon views was not such as to require refusal of the application. In my opinion, it was so open as a consequence whereof the finding of Wednesbury unreasonableness cannot stand.

Summary of the challenges to the validity of the consent

100 In summary, therefore, in my opinion the primary judge was correct to declare the consent invalid. However, the only grounds of invalidity are that:

(a) the authority of the Manager Development Services to grant the consent expired on 31 July 2002 and, therefore, was not current as at 18 September 2002;

(b) even if his authority was current at the time the consent was granted, he exceeded his powers as the development the subject of the consent was subject to " significant public objection" within the meaning of paragraph 5a.(ii) of Schedule 5.100 of the Delegation Manual and the opinion of the delegate formed pursuant to clause 10(3) of the LEP, may have been vitiated by the erroneous conclusion that the building, when completed, would only be of two storeys within the meaning of SEPP 6.

101 On the other hand, the primary judge erred in the following respects:

(a) In finding that the Manager Development Services' authority to grant the consent was current as at the date of grant;

(b) In finding that the application did not largely comply with Council's Codes, Policies etc within the meaning of paragraph 5a(i);

(c) In finding that the consent was unreasonable in the Wednesbury sense.

Discretion

102 In the exercise of his discretion, the primary judge ordered that the third storey extension of the subject dwelling erected pursuant to the consent be removed within 90 days of the date of his Honour's order.

103 In my opinion, this order was appropriate given his Honour's finding that the consent was unreasonable in the Wednesbury sense. My rejection of that finding requires a different approach to the exercise of the Court's discretion. Although the declaration that the consent is invalid stands, the basis of that invalidity is significantly different to that which underpinned his Honour's decision in terms of the exercise of his discretion. The application will now be determined by the Council itself, thus avoiding any of the delegation problems that have resulted in the declaration of invalidity.

104 For reasons already referred to, and subject to any issues which may arise by virtue of the fact that some work has been performed pursuant to an invalid consent, determine the application on its merits. Nothing I have said in these reasons should be read as reflecting any view of mine on the merits of DA 1370. However, it must be recognised that ultimately the Council may refuse the application and, if there is an appeal to the Land and Environment Court, that appeal may fail. It is only if that scenario comes to pass, that his Honour's order that the third storey extension be removed should take effect.

105 Accordingly, in my opinion it is appropriate that Order 2 made by the primary judge on 18 February 2004 should stand but that it should be stayed for a period of three months from the date hereof with liberty to either party to apply to a judge of the Land and Environment Court for a further stay of that order or such other order with respect thereto as that Court may deem fit in the circumstances then prevailing.

Costs

106 The primary judge ordered that the Council pay MCC's costs of the proceedings before him and it is not suggested that that order should, in the circumstances, be disturbed. So far as the costs of the appeal are concerned, the Council has been partially successful in having his Honour's finding that the consent was invalid on the ground of Wednesbury unreasonableness set aside, thus giving the Council itself the opportunity, if it deems it appropriate, to determine the application by granting consent thereto. On the other hand, MCC has been successful in maintaining the invalidity of the consent, albeit on grounds generally confined to the authority of Council's delegate to grant the consent.

107 As both parties have been partially successful, in my opinion the appropriate order for costs on the appeal is that each party should pay its own.

Conclusion

108 In my opinion the following orders should therefore be made:

(1) Appeal allowed in part.

(2) Order 2 of the Orders made by the Land and Environment Court on 18 February 2004 is stayed until further order of that Court to enable the determination of development application DA 1370/02 either by the Appellant having regard to the judgment of this Court or by the Land and Environment Court on appeal to it pursuant to s 97 of the Environmental Planning & Assessment Act 1979 in respect of that development application.

(3) Reserve liberty to apply to the Land and Environment Court on seven days notice by any of the parties in respect of Order 2.

(4) That each party pay its own costs of the appeal.

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