Validity of the CCs
290Thirdly, I come to the validity of the CCs, the question which finally emerged to be the central issue for the court.
291Part 4A certificates of various types have been attacked in several cases, since their introduction in 1997.
292As can be seen from the terms of Part 4A, a finding that a certificate is invalid can sterilise a project completely, e.g., if a CC fails, an OC based on it fails as well.
293In Newcastle City Council v Northern Residential Pty Ltd [2009] NSWLEC 10; (2009) 165 LGERA 274, Lloyd J held subdivision certificates to be invalid, on the ground that the certifier had delegated inspections to a non-certifier, but the Court of Appeal overturned that decision: Northern Residential Pty Ltd v Newcastle City Council ("Northern Residential") [2009] NSWCA 141; (2009) 75 NSWLR 192.
294In delivering the judgment of the Court of Appeal, Hodgson JA closely examined the legislative history of the certification system, and the various sections in part 4A, noting that some (e.g. s 109E) "required" the certifier to be "satisfied" of something, and that others (e.g. ss 109H and 109J) provided that a certificate "must not be issued ... unless" something is the case. Section 109E regulates the certifier, while ss 109H and 109J regulate the certificate.
295His Honour acknowledged the terms of s 109P as well, legislating an entitlement to assume a certificate has been duly issued, and that "all conditions precedent ... have been duly complied with".
296His Honour upheld the Northern Residential appeal on grounds related to the delegated inspections, but went on to discuss (at [49]-[60]) the competing submissions of counsel regarding the consequences (including possible invalidity) of any breach involved in the issuing of the Part 4A certificates. That section of His Honour's judgment was obiter, and, while Mr Clay (subs par 27) relied on it, Mr Tomasetti urged the court not to follow it (Tp776, LL35-45, and Tp787, L22-p788, L8).
297Caution must be exercised in relying upon, or in disregarding, such dicta, and it would be extremely unwise for a trial judge in this court to dismiss, without careful consideration, any views expressed by so eminent a jurist as Hodgson JA.
298As Pepper J noted in Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38; (2013) 195 LGERA 229 (at [279]):
It has long been the case that the weight accorded to obiter dicta will vary depending on the circumstances in which the remarks are made. Considered dicta of an appellate court, although not strictly binding on courts of a lower position within the judicial hierarchy, must be afforded considerable weight and should only be departed from with caution (Ying v Song [2009] NSWSC 1344 at [19]-[21] per Ward J).
299Hodgson JA, in the relevant section of his judgment, quoted (at [50]) from Spigelman CJ's judgment in Smith v Wyong Shire Council ("Smith") (2003) 132 LGERA 148, regarding "indicators of legislative intention that the breach of a provision ... should or should not result in invalidity".
300The disciplinary regime administered by the BPB was seen by Hodgson JA as an appropriate response to a failure by the certifier, as distinct from a fault in the certificate. His Honour concluded ([54]) that it was not the legislative intention of Part 4A that a breach of s 109E would always or automatically result in invalidity of the certificate. Disciplinary consequences or a civil action for damages could result from, e.g., unauthorised delegation of functions, but the s 109E certificate in that case could stand.
301Hodgson JA said (at [57], emphasis added):
In my opinion, a crucial consideration is the form of s 109J, as compared with that of s 109E(3). The former sets out a number of things that must happen before a subdivision certificate is issued. Since the 2007 amendment, these things must happen in fact, not merely to the satisfaction of the principal certifying authority. The fact that in 2007 the Legislature made that change to s 109J and not to s 109E(3) confirms, in my opinion, that the intention was that the requirements of s 109J be conditions of validity, whereas satisfaction of the principal certifying authority under s 109E(3) was not.
302His Honour concluded this point (at [60]) thus:
Accordingly, had I considered s 109E(3)(d) to have been breached, I would not in any event have found invalidity.
303Counsel have not demonstrated to this court that Hodgson JA was "plainly wrong", especially in [57], in the light of any binding or more persuasive authority, and Mr Clay observed (Tp829, L15-830, L12), that these were "considered dicta", and that Tobias JA, "a judge well experienced in planning matters agreed ... without qualification". Pain J appeared to accept Hodgson JA's analysis, and I too am very comfortable to do so on the certificate question.
304Although the question of discretion also did not arise in Smith, Hodgson JA expressed his views on it ([62]-[71]), finding that Lloyd J's inadequate reasoning indicated that he may not have taken into account some highly relevant matters of cost and safety risk.
305In Friends of Turramurra Inc v Minister for Planning ("Turramurra") [2011] NSWLEC 128, Craig J, in declaring that a particular LEP was made contrary to Division 4 of Part 3 of the EPA Act, and was of no legal force or effect, made the following remarks ([58] - emphasis added):
58 It is now settled legal principle that not every act of an administrative decision maker, when breaching an empowering statutory provision, will visit invalidity upon that act. As has been acknowledged (Smith v Wyong Shire Council [2003] NSWCA 322; (2003) 132 LGERA 148 per Spigelman CJ at [6]), the principle is settled by the majority judgment of the High Court in Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 as articulated at [91]:
"An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue."
306Craig J concluded ([66]) that, on the proper construction of Div 4 of Pt 3, and in reliance on the principles in Smith v Wyong and Project Blue Sky, it was not a legislative purpose to invalidate a local environmental plan where no valid s 65 certificate had been issued, but the plan had been made conformably with the provisions of that Division.
307His Honour continued (in [69]-[71] - emphasis added):
69 In arriving at the conclusion that he did in Smith v Wyong , Spigelman CJ applied the observations of McHugh JA (as his Honour then was) in Woods v Bates (1986) 7 NSWLR 560. The reasoning in the latter case was approved by the High Court in Project Blue Sky. In Woods v Bates, McHugh JA said (at 567):
"In recent times the courts have shown great reluctance to invalidate an act done pursuant to a statutory provision because of the failure to comply with an antecedent condition: [citation of authority omitted]. Speaking generally, I think that, at the present time, the proper approach is to regard a statutory requirement, expressed in positive language, as directory unless the purpose of the provision can only be achieved by invalidating the result of any departure from it, irrespective of the circumstances or resulting injustice: cf Hatton v Beaumont [1977] 2 NSWLR 211 at 226 per Mahoney JA."
70 Applying the observations made in Woods v Bates , it is appropriate to ask, "can the purpose of s 65 only be achieved by invalidating the result of the departure from it?" In my opinion, the answer is "no".
71 It is for these reasons I discern no legislative purpose in the EPA Act to invalidate a local environmental plan, otherwise lawfully made, by reason of failure on the part of the Director-General (or his or her delegate) to have issued a certificate under s 65. As the consequences (if any) of the failure to issue the certificate must necessarily be addressed as part of the statutory process of which s 65 is an earlier component, it cannot have been the intention of Parliament that such breach would have all the adverse and potentially serious consequences sounding in a determination that the local environmental plan is invalid (cf Smith v Wyong at [26] - [29]).
308The challenge to any Part 4A certificate must confront the provisions in s 109P, which creates an entitlement to assume its validity, such that one does not "go behind" the certificate, which, in the case of a CC, must predate the commencement of work if it is to have effect (ss 109E and 109F, amended to overturn the effect of Marvan Properties v Randwick City Council [2005] NSWLEC 9). Without a CC, a proponent cannot obtain an OC, occupy the project, or obtain and register a strata certificate.
309All three of those steps were, at the time of the hearing, not, but have since been, completed in the present case (see [101]-[107] above).
310The certificate challenged in Cessnock City Council v Laila ("Laila") [2012] NSWLEC 206 was an OC, and the respondent PCA filed a submitting appearance, so there was no contradictor to resist a declaration of invalidity involving s 109H. Pain J noted that there was no case where this court had to consider declaring an OC invalid. She also noted the different terminology in Part 4A, but applied the principles stated by Hodgson JA in Northern Residential. As distinct from the Court of Appeal's decision in that case that there was no breach of either s 109E or s 109J, and despite the absence of a contradictor in Laila, Pain J noted an undertaking given, and made the declaration sought that the OC was invalid, but she saw no utility in making an order restraining occupation.
311Dix was the PCA in the case of Kogarah City Council v Armstrong Alliance Pty Ltd (No 2) ("Armstrong") [2013] NSWLEC 32. All parties agreed on the making of both a declaration of invalidity of a CC, and costs orders against both respondents, including Dix, so there was no fulsome argument of the relevant question which is now squarely raised in the present case.
312Pepper J introduced her judgment in Armstrong with the following comments:
1. Once again before the Court is an application for declaratory relief sought by a council occasioned by the unlawful certification by an accredited certifier of a development that is markedly different to the approval granted by that council. Regrettably this is becoming an all too common occurrence in this Court. It must not be tolerated. It brings the certification system into disrepute and undermines the planning regime in this State.
2. Indeed, the unlawful conduct by the certifier in the present case is so egregious that the application has been able to be resolved by consent between the parties. This includes the certifier agreeing to a costs order against him notwithstanding that he has filed a submitting appearance.
313Her Honour accepted evidence that showed "significant inconsistencies" in that case, as between what was certified and constructed, and what had been approved. They included construction of an additional unit, storey, outdoor terrace and elevator shaft. Breaches of the EPA Act were admitted, and Her Honour found that Regulation 145(1)(a) "was flagrantly transgressed by Dix". She found utility in, and a "very real necessity" for, her declaring the CC invalid, by consent. Again there was an undertaking to cease construction work pending a new CC and a building certificate.
314The 2009 DC at the heart of Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5)("Foxman") [2013] NSWLEC 68, which was a class 4 civil enforcement proceeding regarding landfill and earthworks, included the usual condition that work not commence "prior to the issue of" a CC by the PCA, and other conditions precedent to either the CC or works.
315Before any CC was issued in Foxman, Council forwarded two Notices of Intention to Serve an Order for restoration of land to its pre-works state. The PCA later issued a CC "after the event", clearly contrary to s 109F(1A), and Pepper J found it (at [63]) to be void and of no effect, and (at 288) of "scant reassurance" to the parties.
316Council sought no orders against the PCA in Foxman, and the PCA played no active role in those proceedings, but there was evidence before Her Honour of roads/fire trails being relocated by the CC plans, agreed (see 263) to constitute a breach of s 76A(1)(a) of the EPA Act. Her Honour set aside the CC.
317Turning to the present case, clearly cl 145 of the Regulation plays a key role in determining the validity of the CCs.
318In its original form, cl 145 provided that a PCA must not issue a CC unless satisfied of various matters, but, after the Court of Appeal's decision in Lesnewski v Mosman Municipal Council [2005] NSWCA 99;(2005) 138 LGERA 207, it was amended to remove its subjective element (see the terms of the amended clause, as quoted in [233] above).
319It has since relevantly provided that the PCA must not issue a CC unless (cl 145(1)(a) - emphasis added):
the design and construction of the building (as depicted in the plans and specifications and as described in any other information furnished to the certifying authority under clause 140) are not inconsistent with the development consent
320I set out the relevant principles of construction in my first-instance judgment in Abret Pty Limited v Wingecarribee Shire Council [2009] NSWLEC 132, at [24]-[32], and that summary was not disturbed on appeal ([2011] NSWCA 107; 180 LGERA 343). Essentially, courts must construe instruments, with commonsense, to avoid irrationality, absurdity, and injustice, and to give practical effect to the clear intent of the draftsperson.
321Mr Clay argued in the present case, but failed to satisfy the court, that there were faults in the furnishing of documents to the PCA. Even if that were so, and it has not been established, I would likely consider such a "breach" to be "technical" in nature, in the overall circumstances of this case, and not sufficient to warrant a finding of invalidity.
322Relying, by way of analogy, on Hodgson JA's dictum in Northern Residential ([57]), and also on views expressed in departmental circular PS07-009 (Exhibit C26), Mr Clay also submitted (pars 27-34) that (1) the question of "not inconsistent" makes cl 145 "now unequivocally jurisdictional", such that (par 37) a finding of inconsistency leads to invalidity, and (2) this court should follow Armstrong and Laila, and find and declare invalidity.
323In Laila, the grounds for invalidity of the OC were failure to satisfy some essential and mandatory conditions of the DC. In Armstrong, the relief was based on a number of "inconsistencies", which, on any test, were major, and included the certification of an additional unit, storey and terrace. In Foxman, the parties agreed that some changes made by the CC amounted to "inconsistency". In the present case, the principal changes to which objection has been taken were to elements of finish.
324Relief is sought on the grounds that some, if not all, of those changes/variations which were
(1)admittedly made, by or on behalf of Ralan, to the project as it was defined by the DC; and
(2)certified by Dix, on the application of Bowers on behalf of SNC and Ralan,
amount to "inconsistencies" which breach cl 145, and lead to a breach of s 76A.
325On any measure, this has been a huge development on a confined site, in difficult circumstances. A certain amount of adjustment or reconfiguration was inevitable, and the court, while respecting Byrnes's analysis of the changes made, accepts the explanations provided by Bowers, and also his assurance that he at no stage deliberately ignored the question of whether his changes might, in some cases, warrant the making of a modification application.
326Some adequately explained adjustment in the colour of some glazing, and the decision to abandon the proposed louvres, which Council now says (Tp835, L17) were "a major and important design feature", resulted in changes in final presentation which proved unacceptable to Council, and to its design expert, Morrish.
327As I have already noted, reasonable minds differ on such merits issues, and I certainly express no view on them.
328However, I do echo the concern expressed by Pepper J in Armstrong ([312] above): Private certifiers play a vital role in ensuring appropriate (including "consistent") development takes place, and the certification system must not fall into disrepute and so undermine the planning regime in this State. What might be seen as unacceptable by some, including regulators and expert commentators, as here, may not represent a breach of the certifier's duty, and/or any infringement of the planning regime.
329What matters to the court is that all the fundamentals of the project, as defined in the DC ([14] and [38] above), remained in place after certification.
330I have concluded that they clearly do, and that the challenged CCs are valid.
331Those engaged by and on behalf of Ralan to complete the project were entitled to rely on them, and there is absolutely no evidence that they strayed beyond them. The evidence suggests, on the contrary (Tp780), that the building works were performed to a satisfactory standard.
332In those circumstances, I conclude that (1) none of the nine declarations finally sought, in respect of the CCs, and (2) neither of the declarations, and none of the orders finally sought, against Ralan, ought be made.