Calardu Penrith Pty Ltd v Penrith City Council [2010] NSWLEC 50 | Case summary

Calardu Penrith Pty Ltd v Penrith City Council [2010] NSWLEC 50 | Case summary | Zoe

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Alumino Australia Pty Ltd v Minister Administering the Environmental Planning and Assessment Act (1995) 88 LGERA 388 Anderson v Director-General Department of Environment and Climate Change [2008] NSWCA 337, 163 LGERA 400 Anvil Hill Project Watch Association Inc v Minister for Environment and Water Resources [2008] FCAFC 3, 166 FCR 54 Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297 Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411 Barrick Australia Ltd v Williams [2009] NSWCA 275, 168 LGERA 43 Calardu Penrith Pty Ltd v Pipven Pty Ltd [2009] NSWLEC 119 Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 2) [2010] NSWLEC 1 Casa v City of Ryde Council [2009] NSWLEC 212 Centro Properties Ltd v Hurstville City Council [2004] NSWLEC 401, 135 LGERA 257 Colonial Bank of Australasia v Willan (1874) LR 5 PC 417 Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 Dowe and Gedeon v Commissioner of the New South Wales Crime Commission [2007] NSWCA 296 Ebner v Official Trustee in Bankruptcy [2000] HCA 63, 205 CLR 337 Enfield City Corporation v Development Assessment Commission [2000] HCA 5, 199 CLR 135 Gedeon v Commissioner of the New South Wales Crimes Commission [2008] HCA 43, 236 CLR 120 CASES CITED: Harvey and Tubbo v Minister Administering the Water Management Act 2000 [2008] NSWLEC 165, 160 LGERA 50 Hill Top Residents Action Group Inc v Minister for Planning [2009] NSWLEC 185 Hot Holdings Pty Ltd v Creasy [2002] HCA 51, 210 CLR 438 Kioa v West (1985) 159 CLR 550 Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 Lesnewski v Mosman Municipal Council [2005] NSWCA 99, 138 LGERA 207 Livesey v New South Wales Bar Association (1983) 151 CLR 288 McGovern v Ku-ring-gai Council [2009] HCATrans 48. McGovern v Ku-ring-gai Council [2008] NSWCA 209, 72 NSWLR 504 Minister for Local Government v South Sydney City Council [2002] NSWCA 288, 55 NSWLR 381 Sun Newspapers Ltd v Federal Commissioner of Taxation (1938) 61 CLR 337 Sutherland Shire Council v Finch [1970] HCA 49, 123 CLR 657 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63, 228 CLR 152 The Queen v Watson; Ex parte Armstrong (1976) 136 CLR 248 Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8, 46 NSWLR 55 Tubbo Pty Ltd v Minister Administering the Water Management Act 2000 [2008] NSWCA 356 Williams v Minister for Planning [2009] NSWLEC 5, 164 LGERA 204 Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422, 61 NSWLR 707

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JUDGMENT CONTENTS Paragraphs Introduction 1-3 Background 4-27 Ultra Vires 28-94 Economic Impact 95-115 Shared Parking Arrangement 116-124 Bulky Goods Opinion 125-135 Apprehended Bias 136-161 Procedural Fairness 162-181 Conclusion 182 INTRODUCTION 1 HIS HONOUR: The applicant, Calardu Penrith Pty Ltd (Calardu), challenges the validity of a development consent granted on 9 November 2009 by the first respondent, Penrith City Council, to development application DA 09/0746 lodged by the second respondent, Pipven Pty Ltd (Pipven), for "alterations and additions to existing Bulky Goods Retail Centre" on land owned by Pipven at 13-23 Patty's Place, Jamisontown, being Lots 10 and 11 in DP 1046110 (Pipven Land). 2 Calardu presses the following grounds of invalidity: (a) the council acted ultra vires in determining the development application because under clauses 13B and 13F of State Environmental Planning Policy (Major Development) 2005 ( Major Development SEPP ) power to do so was vested solely in a regional planning panel by reason of the capital investment value of the development being more than $10 million; (b) the council failed to take into account Calardu's submission as to the economic impact of the development, as required by s 79C(1)(d) of the Environmental Planning and Assessment Act 1979 (EPA Act); (c) the council failed to take into account the impact of the development upon the shared parking arrangement that was the subject of its own earlier development consents as modified, as required by s 79C(1)(b) of the EPA Act; (d) shops trading principally in bulky goods were permissible with development consent under the Penrith Local Environmental Plan 1996 (Industrial Land) if the council formed the opinion required by paragraph (b) of the definition of "bulky goods" therein, but the council did not form that opinion; (e) the council's decision was infected by apprehended bias; (f) the council failed to accord Calardu procedural fairness. 3 I do not accept any of the grounds and propose to dismiss Calardu's summons. BACKGROUND 4 The Pipven Land has an area of approximately 7 hectares. The bulky goods retail development thereon is known as the Penrith SupaCenta (SupaCenta) and has an area of approximately 27,561m2. 5 Calardu owns the adjacent land at Mulgoa Road, Penrith, being Lots 1, 2, 4 and 5 in Strata Plan 72448 (Harvey Norman Land). It is generally to the south and south-east of the Pipven Land and has an area of approximately 7.3 hectares. On the Harvey Norman Land are Harvey Norman, Domayne and Bunnings stores which, together with other businesses and related car parking, operate as the Penrith Homemakers Centre or the Harvey Norman Homemakers Centre. The Harvey Norman Homemakers Centre has an area of approximately 34,156m2. 6 The SupaCenta and the Harvey Norman Homemakers Centre together make up the Penrith Regional Bulky goods Centre, one of the largest bulky goods centres in greater Sydney.

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23 On 24 July 2009 I granted an adjournment of those proceedings pursuant to s 124(3) of the EPA Act pending determination of a proposed further development application, and vacated the hearing dates of 10-14 August 2009 upon undertakings from Pipven: Calardu Penrith Pty Ltd v Pipven Pty Ltd [2009] NSWLEC 119 at [19]. Relevantly, Pipven undertook to surrender the 2008 consent upon the final determination by grant of consent to the proposed further development application. Pipven's 2009 Development Consent 24 On 5 August 2009 Pipven lodged development application DA 09/0746 with the council. It proposed: (a) a single storey extension to the SupaCenta of approximately 6,468m 2 increasing the total gross floor area to approximately 34,029m 2 ; (b) the division of the extension into ten new tenancies (separated by partitions and divisions) and the creation of mall space; (c) a nominal increase in the total available parking for the SupaCenta from 695 spaces to 750 spaces (the development application is for an additional 6,468m 2 with a reduction of 250 car parking spaces from that approved under the 2001 consent for the Pipven Land); (d) re-arrangement of internal access including service access; (e) associated signage and landscaping. 25 The accompanying Statement of Environmental Effects noted that: "The general use of the proposed extension will be for bulky goods retailing and ancillary purposes. Specific uses will be subject to separate applications if and when required." 26 On 9 November 2009 the council consented to DA 09/0746: "Alterations and additions to existing Bulky Goods Retail Centre" (2009 consent). The notice of determination stated that the 2009 consent would commence to operate on 13 November 2009. Surrender of Pipven's 2008 Development Consent 27 On or about 7 December 2009, the 2008 consent was surrendered by instrument of surrender, pursuant to a condition of the 2009 consent and cl 97 of the Environmental Planning and Assessment Regulation 2000. ULTRA VIRES: WHETHER CAPITAL INVESTMENT VALUE MORE THAN $10 MILLION 28 The first ground on which Calardu challenges the validity of the 2009 consent is expressed in its summons as follows: "In purporting to grant the Consent, the First Respondent acted ultra vires as it did not have jurisdiction to grant development consent to any development application for development having a Capital Investment Value exceeding $10 million. The development the subject of the Consent has a Capital Investment Value exceeding $10 million". 29 This ground reflects one of the objections to the 2009 development application lodged on Calardu's behalf with the council that the development had a capital investment value in excess of $10 million and therefore, under the Major Development SEPP, the consent authority was the Sydney West Joint Planning Panel. 30 Section 80(1) of the EPA Act vests in a council jurisdiction to determine a development application. Section 23G of the EPA Act provides for joint regional planning panels (regional panels): " 23G Joint regional planning panels

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(1) The Minister may, by order published in the Gazette, constitute a joint regional planning panel for a particular part of the State specified in the order. (2) A regional panel has the following functions: (a) any of a council's functions as a consent authority that are conferred on it under an environmental planning instrument, (b) any functions that are conferred on it under Division 1AA (Planning administrators and panels) of Part 6, (c) to advise the Minister as to planning or development matters or environmental planning instruments relating to the part of the State for which it is appointed, or any related matters, if requested to do so by the Minister. (3) A regional panel has the functions conferred or imposed on it by or under this or any other Act. (4) A regional panel is not subject to the direction or control of the Minister, except in relation to the procedures of the regional panel and to the extent specifically provided for in this Act. (5) A regional panel is a statutory body representing the Crown. (5A) Subject to the regulations, a regional panel is, in the exercise of functions conferred under subsection (2) (a), taken to be the council whose functions are conferred on a regional panel as referred to in subsection (2) (a). (5B) A regional panel is to exercise functions conferred as referred to in subsection (2) (a) to the exclusion of the applicable council (subject to any delegation under this Act). (5C) Subsections (5A) and (5B) apply to the Commission in its exercise of the functions of a regional panel under an environmental planning instrument that are conferred on the Commission under section 23D (1) (d) in the same way as they apply to a regional panel in the exercise of functions conferred as referred to in subsection (2) (a). (6) Schedule 4 has effect with respect to regional panels." 31 The Minister is empowered to constitute a joint regional planning panel for part of the state: s 23G(1) EPA Act. Pursuant to s 23G(1), the Minister constituted the relevant regional panel, the Sydney West Joint Planning Panel. 32 The functions of a regional panel include any of the council's functions as a consent authority that are conferred upon it by an environmental planning instrument, and the regional panel must exercise those functions to the exclusion of the applicable council: s 23G(2)(a) and (5B) EPA Act. Part 3 of the Major Development SEPP (an environmental planning instrument) deals with regional development and confers on a regional panel certain of the council's functions as a consent authority, including the function of determination of development applications for developments to which Part 3 applies: cl 13F(1)(a). Developments to which Part 3 applies include "development that has a capital investment value of more than $10 million": cl 13B(1). "Capital Investment Value" is defined non-exhaustively in cl 3(2)(a). 33 Clause 13B of the Major Development SEPP provides: " 13B General development to which Part applies

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(a) the expression "jurisdictional fact" generally "is used to identify a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question. If the criterion be not satisfied then the decision purportedly made in exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker": Gedeon at [43], Enfield at [28]; (b) parliament can make any fact a jurisdictional fact by an intention that it must exist in fact (objectivity) and that its absence or presence will invalidate action under the statute (essentiality): Timbarra at [37], Dowe at [30]; (c) the normal rules of statutory construction apply when determining whether a factual reference is a jurisdictional fact: Timbarra at [39]; (d) where the process of construction leads to the conclusion that parliament intended that the primary decision-maker could authoritatively determine the existence or non-existence of the fact, then a court cannot itself determine the existence or non-existence of the fact, although (if it is in issue) the court will inquire, for example, as to whether the decision was manifestly unreasonable in the Wednesbury sense: Timbarra at [41]; (e) there is a distinction between a fact that is an essential preliminary (ie legally antecedent) to the decision-making process and a fact to be adjudicated upon in the course of the decision-making process: Colonial Bank at 442-443, Timbarra at [52], Woolworths at [46]. If the factual reference is preliminary to the exercise of statutory power, it is more likely to be a jurisdictional fact: Timbarra at [44], Woolworths at [48]; (f) the existence of a jurisdictional fact is often signalled by expressions such as "where X exists" or "when X exists" or "if X exists", then a person is empowered or obliged to act or refrain from action: Anvil Hill at [21]; (g) a jurisdictional fact includes the mental state of a decision-maker as to the existence of X where the statute mandates that that mental state enlivens the exercise of the statutory power. In such a case, judicial review by a court is limited to (i) determining whether that mental state existed and does not extend to determining whether X existed, and (ii) determining whether that mental state was reasonably open on the facts in the Wednesbury sense ie manifestly unreasonable: Timbarra at [41] - [42], Barrick at [35] - [36], [38], Australian Heritage Commission at 306-308; (h) where a factual reference appears in a statutory formulation containing words involving the mental state of the primary decision-maker - for example, "opinion", "belief", "satisfaction" - the construction is often, although not necessarily, against a conclusion of jurisdictional fact, other than in the sense that the mental state is a particular kind of jurisdictional fact. Where such words do not appear, the construction is more difficult: Timbarra at [42], Enfield at [28] and [34], Sutherland Shire Council at 666, Woolworths at [13] and [25], Anvil Hill at [21], Barrick at [30] - [39]. (i) the fact that questions of degree arise and that there will be room for differences of opinion does not mean that the matter would more appropriately be decided administratively rather than by judicial decision: Sutherland Shire Council at 666. However, the fact that a judgment is required on a matter of potentially significant disputation suggests, but it is not always the case, that it is less likely to be intended to be an objective fact, because it is, characteristically, a matter on which reasonable minds may differ: Timbarra at [89], Woolworths at [60]; (j) the scope and purpose of the legislative scheme may be an indicator of whether or not a factual reference is a jurisdictional fact: Woolworths at [30]; (k) a jurisdictional fact may be suggested by a prohibition of conduct unless a specified fact exists: Enfield at [34], Woolworths at [44]; (l) the location of a factual reference in a statutory formulation concerned with the requirements of an application is a significant factor suggesting that the factual reference is jurisdictional: Timbarra at [51]; (m) inconvenience arising from a jurisdictional fact conclusion is relevant to determining the legislative intention: Timbarra at [91], Woolworths at [63]. 40 The present case is unusual in that it concerns the question of which of two administrative bodies (the council or a regional panel) had a particular statutory function. The parties were unable to refer me to an equivalent case. 41 The respondents submit that the question whether the capital investment value of the development was more than $10 million is not a jurisdictional fact for the following reasons: (a) first, cl 13F(1) of the Major Development SEPP delimits the council's jurisdiction and does not stipulate a criterion the satisfaction of which enlivens a regional panel's powers: Gedeon ; (b) secondly, the determination of capital investment value is part of the council's function of assessing the development application under cl 13F(2)(d) and therefore the determination is in the exercise of a power rather than something preliminary to it; (c) thirdly, the concept of capital investment value is complex, requiring an exercise of judgment; (d) fourthly, having regard to the great inconvenience of a revolving door jurisdiction where conditions may increase or decrease the capital investment value of a development between receipt and determination of a development application, cl 13B(1)(a) should be construed as though the expression "development that has a capital investment value of more than $10 million" means "development that in the opinion of the council has a capital investment value of more than $10 million". The council's opinion then cannot be challenged except on the ground of Wednesbury unreasonableness. 42 I do not accept the respondents' submission. 43 In my view, the respondents' first point is incorrect. It is based on the distinction drawn in Gedeon between a criterion the satisfaction of which enlivens the exercise of a statutory power, which is a jurisdictional fact, and a delimitation on a statutory power, which is not a jurisdictional fact but a prohibition. Gedeon was a successful appeal from the NSW Court of Appeal's decisions in Dowe and Gedeon. The Court of Appeal had to consider whether authorities to conduct a controlled operation granted under s 6(1) of the Law Enforcement (Controlled Operations) Act 1997 were invalid. The Act provided: "6(1) After considering an application for authority to conduct a controlled operation, and any additional information furnished under section 5(3), the chief executive officer: (a) may authorise a law enforcement officer for the law enforcement agency concerned to conduct the operation …

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50 As for the respondents' fourth point, I cannot agree that cl 13B(1)(a) should be construed as though its requirement is for the formation of an opinion by the council that the development has a capital investment value of more than $10 million. In Sutherland Shire Council, a provision of the Local Government Act 1919 provided that the Minister could give a direction to a council to pay compensation to a servant whose services had been terminated if a report under the Act exists which is favourable to the servant. The provision read: "In any case where the council decides to terminate the services of the servant notwithstanding that the report of the person holding the inquiry is substantially favourable to the servant, the Minister, on the application of the servant...may, after such inquiry as he deems sufficient, direct the council to pay to the servant as from the date of termination of his services compensation..." 51 The issue was whether it was for a court or the Minister to finally determine whether the report was "substantially favourable" to the employee. Gibbs J (with whom the other members of the court agreed) held that it was for the court, at 666: "Before the Minister gives a direction, he must satisfy himself that this condition has been fulfilled and it is therefore true to say that the Minister is required to form an opinion as to whether the report is substantially favourable. However it does not follow that his opinion when formed is conclusive. The Minister must also form the opinion that the council has decided to terminate the services of the servant, and that the servant has made application within fourteen days, but he cannot acquire the power to give a direction by forming an erroneous opinion on those matters. The subsection does not state that the Minister may give a direction if in the opinion of the Minister the report is substantially favourable. No difficulty would have existed in framing the subsection to make the opinion of the Minister the governing consideration if that had been intended." 52 His Honour noted the discretion of the Minister to make appropriate inquiries, but considered that neither the existence of the power to inquire nor the breadth of the discretion supported the view that the condition precedent imposed by the section had been satisfied where it could be established in a court that the Minister erroneously considered that the report was substantially favourable to the servant: at 666-667 53 Similarly, cl 13B(1)(a) does not state that Part 3 of the Major Development SEPP applies if in the opinion of the council the development has a capital investment value of more than $10 million. No difficulty would have existed in framing that provision to make the opinion of the council the governing consideration if that had been intended. The provision, read naturally, treats the question as an objective one: it refers to a development that has a capital investment value of more than $10 million, that is, more than $10 million in fact and not merely in the opinion of the council. Moreover, in contrast to the language of cl 13B(1)(a), other clauses of the Major Development SEPP do adopt the opinion of a decision-maker as the criterion. Clause 6(1) declares a project to be a project to which Part 3A of the EPA Act applies if it is a development that "in the opinion of the Minister" answers a listed description. Clause 6A says that "development that, in the opinion of the Minister is described in Schedule 5, is also declared to be a critical infrastructure project". Similarly, see cl 9A(1). In further contrast, State Environmental Planning Policy No 34 - Major Employment-Generating Industrial Development (SEPP 34), which the Major Development SEPP replaced, made the Minister the consent authority if the development "in the opinion" of the Minister had a capital investment value of $20 million or more. 54 Finally, in the absence of clear words, it seems an unlikely construction that where an administrative function is vested in one administrative body if a specified value does not exceed $X but is otherwise vested in another administrative body, that the former (or either) administrative body should be the final arbiter of which of them has jurisdiction. Assume, for example, that a regional panel and a council both purported to determine a development application on the basis of their differing opinions as to the capital investment value of the development. In the absence of clear words, it is difficult to see why the opinion of one rather than the other should have been intended to be the criterion of jurisdiction. The more likely intention is that it is for the Court to determine objectively.

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55 The provision of the earlier SEPP 34 to which I have referred was considered in Alumino Australia Pty Ltd v Minister Administering the Environmental Planning and Assessment Act (1995) 88 LGERA 388 where the Minister notified that he had the required opinion. In a merits appeal to this Court from a deemed refusal of the application, objectors argued that whilst that opinion was open to the Minister at the time that he formed it, the capital investment value had fallen further below $20 million at the time of the appeal and therefore the Minister ceased to be the consent authority and the Court had no jurisdiction to determine the appeal. The preliminary question before the Court was whether its jurisdiction to hear the appeal could be removed by a change to the development resulting in reduction of the capital investment value below $20 million, because the functions of the Minister no longer existed. Talbot J held that the formation of an opinion about the reduced capital investment value was disconnected from, and not at the heart of the subject matter of, the deemed refusal. The Court could not in the appeal perform a function of the Minister of revisiting the opinion on the capital investment value. Even if this conclusion were wrong, his Honour considered that once the Minister formed the requisite opinion, the Minister's jurisdiction crystallised and remained good, whatever variations thereafter occurred in the calculation of the capital investment value. Once the Minister formed the opinion, he became the sole repository of the power to determine the development application, subject to the appeal to the Court. If the Minister subsequently formed the opinion that the capital investment value was less than $20 million, that could not be a relevant consideration in determination of the substantive development application. If a different construction were adopted, an applicant would be trapped in a continuous revolving door between two alternative consent authorities.

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(a) costs of a capital nature. There is an issue whether tenancy fit-out costs are of a capital nature; (b) costs incurred by the proponent, this would preclude tenancy fit-out costs to the extent that they were incurred by tenants in the future; (c) costs of the "development" the subject of the particular development application. The respondents then say that this would preclude development carried out under any earlier development consent, such as the 2008 consent, or future development consents, such as those under which tenancy fit-out costs would be carried out. 70 I do not accept the respondents' second and third submissions. They require there to be read into the definition words that are not there. However, even if the definition were construed as referring to "costs necessary to establish and operate the development the subject of the development application", in my view they would include the costs already incurred pursuant to the 2008 consent. That development and those works included the partially constructed reinforced concrete slab referred to in the development application. Those works were for the purpose of this particular development: an extension of the bulky goods warehouse. In my opinion, the cost of those works were "necessary to establish and operate the development" within the definition in cl 3(2). Accordingly, they should be included in the assessment of the quantum of capital investment value. 71 In my opinion, costs have to be of a capital nature in order to come within the definition. The presence of the word "capital" in the defined expression suggests that that is so, and is reinforced by the fact that the items listed in the second inclusion of the definition appear to be of a capital nature. Therefore I accept the respondents' first submission. 72 The parties were unable to assist me with any authority directly on point as to whether tenancy fit-out costs are of a capital nature. They include in the present case items such as tenancy floor and wall finishes and suspended ceilings. General guidance is provided by the classic judgment of Dixon J in Sun Newspapers Ltd v Federal Commissioner of Taxation (1938) 61 CLR 337 at 359: "The distinction between expenditure and outgoings on revenue account and on capital account corresponds with the distinction between the business entity, structure or organisation set up or established for the earning of profit and the process by which such an organization operates to obtain regular returns by means of regular outlay, the difference between the outlay and returns representing profit or loss." His Honour referred to a three-fold test for identifying a payment of a capital nature, at 363: "There are, I think, three matters to be considered, (a) the character of the advantage sought, and in this its lasting qualities may play a part, (b) the manner in which it is to be used, relied upon or enjoyed, and in this and under the former head recurrence may play its part, and (c) the means adopted to obtain it; that is, by providing a periodical reward or outlay to cover its use or enjoyment or periods commensurate with the payment or by making a final provision or payment so as to secure future use or enjoyment." 73 Under these general principles, I consider that tenancy fit-out costs are of a capital nature. 74 However, in the present case, in my view, tenancy fit-out costs are not costs of the subject development and therefore they do not come within the definition. The subject development is for alterations and additions to the existing bulky goods retail centre. That development includes that which was done under the 2008 consent but stops short of any specific tenancy development use in the future. Those tenancy fit-out costs are not "costs necessary to establish and operate" the subject development. The tenancy fit-out costs are those that would be incurred for specific tenancy uses pursuant to future development consents. The 2009 development application stated that: "Specific uses will be subject to separate applications if and when required". Tenancy fit-out costs may vary substantially according to the purpose for which a tenant may wish to put a particular tenancy. This reinforces the conclusion that the developments to which such costs relate are defined by reference to the development described in future development applications relating to particular tenancies and are not part of the subject development. 75 Calardu alternatively submits that the 2009 development application was a staged development application so far as concerns not only tenancy fit-outs but also works done under the 2008 consent and, therefore, cl 13G applies such that those costs must be included when calculating capital investment value. I do not accept the submission.

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(1) For the purposes of this Act, a staged development application is a development application that sets out concept proposals for the development of a site, and for which detailed proposals for separate parts of the site are to be the subject of subsequent development applications. The application may set out detailed proposals for the first stage of development. (2) A development application is not to be treated as a staged development application unless the applicant requests it to be treated as a staged development application. (3) If consent is granted on the determination of a staged development application, the consent does not authorise the carrying out of development on any part of the site concerned unless: (a) consent is subsequently granted to carry out development on that part of the site following a further development application in respect of that part of the site, or (b) the staged development application also provided the requisite details of the development on that part of the site and consent is granted for that first stage of development without the need for further consent. (4) The terms of a consent granted on the determination of a staged development application are to reflect the operation of subsection (3)." 78 Calardu proposes a construction of "staged development" in cl 13G of the Major Development SEPP which is unconfined by s 83B of the EPA Act. In my view, the proposed construction in untenable. As the Major Development SEPP is a subordinate legislative instrument, in the absence of a contrary definition cl 13B can only be referring to a s 83B staged development. 79 Section 83B(2) is fatal to Calardu's contention because the proponent did not request the subject development application to be treated as a staged development application. It may well be, but it is unnecessary to decide, whether s 83B(1) is also fatal. 80 In my opinion, for these reasons tenancy fit-out costs should be excluded in calculating the capital investment value of the development.

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The proposed development is anticipated to employ approximately 85-90 people during the construction of the proposed development. A total of 55-65 staff are expected to be employed during the operations of the proposed development with opportunities for 25 additional vacancies made available during peak season ie Christmas periods." 109 A section of the council report dealing with submissions made in relation to the development noted (at 35): "Council had engaged external consultants to undertake an Independent Peer Review of the subject Development Application in respect to the economic impact, traffic, parking as well as a review of the planning assessment process. HillPDA and AECOM were engaged respectively. The independent peer review for the economic and traffic aspects of the proposal have been conducted with their comments discussed throughout this report." 110 The council report listed many "key issues raised in the objections to the proposal", including Calardu's objection that: "It will have a significant economic impact on existing tenancies of Penrith Homemaker Centre and Supacenta". 111 It was then stated that those "issues have been addressed in detail with comments also made by [Pipven]. This address is provided as Attachment 1 [sic 11] to the business paper. It is considered that the issues raised in respect of the proposal have been addressed and does not warrant refusal of the subject application". Attachment 11 to the council report is a lengthy tabular summary of submissions which identifies each issue raised, Pipven's comment on each issue and the council's comment on each issue. Items 23, 26 and 28 in attachment 11 identified the economic impact issues raised by Calardu's submission, Pipven's comment and the council's comment. The council's comment in each case was: "Council engaged the services of HillPDA to conduct an independent review of the Economic Impact Assessment report which accompanied the subject application. HillPDA raised no objection to the Economic Impact Assessment Report prepared by Pitney Bowes and concluded that the proposed could be supported." 112 Calardu concedes that except for that council comment it would be difficult to conclude that there was failure to take into account a relevant consideration, but says that the comment demonstrates the council failed to take into account Calardu's submission because council did not refer to it.

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113 I disagree. The council report is not a statement of the council's reasons for its decision. It would have been open to Calardu to have requested a statement of the council's reasons using the processes of the Court, but it did not do so. The council report summarises the various submissions received including, relevantly, the submission put on behalf of Calardu. 114 Having regard to the material to which I have referred, in my opinion Calardu has not discharged its onus of proving that the council failed to take into consideration Calardu's submission relating to the economic impact of the development. 115 Accordingly, I do not accept this ground of challenge. SHARED PARKING ARRANGEMENTS 116 The third ground on which Calardu challenges the validity of the development consent is expressed in its summons as follows: "(c) In purporting to grant the Consent, the First Respondent failed to take into account a relevant consideration, namely the adverse impact the proposed development would have upon the operation of the Homemaker Centre on the adjoining land being land within SP 72448 approved pursuant to development consent No 986035 by rendering unworkable the existing approved car parking arrangements and access arrangements for heavy vehicles. DA 986035 for the Homemaker Centre and DA01/1231 for the SupaCenta were modified in 2002 by concurrent applications under s 96 of the Environmental Planning and Assessment Act 1979 such modification having the effect of integrating the car parking arrangements for the Homemakers Centre and the SupaCenta and creating a shared internal roundabout for heavy vehicle circulation, each of which will be removed by the Consent. (d) In the alternative to (c) above, in purporting to grant the Consent, the First Respondent failed to give proper, genuine and realistic consideration to the impact the proposed development would have upon the operation of the Homemaker Centre located on the adjoining land insofar as it affected integrated car parking arrangements and access arrangements for heavy vehicles to the Homemaker Centre." 117 Calardu's submission is expressed more simply that the council failed to take into account the impact of the development upon the integrated carparking arrangement that was the subject of its own consents, as modified.

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120 In my view, relevant matters summarised in the council report, including in attachment 11 thereto, provide a complete answer. The council report noted that under the earlier concurrent modifications, there was an expression of "car parking across the site boundary to maximise on-site parking" (at p 4). Attachment 11 lists each issue raised by the submissions received and next to each issue summarises Pipven's comment and the council's comment. Item 15 is "Shared parking between each centre is lost". Item 19 is: "Fails to consider the implications of the development on the shared access and parking arrangements in place through the terms of the approval to the Supa Centre (DA 01/0231 as modified) and the Penrith Homemaker Centre (DA 986035 as modified)". Item 20 is: "It is made on the false premise that the Supa Centre and the Penrith Homemaker Centre are separate and self-sufficient developments when in fact they include common and shared elements including parking and access arrangements". In relation to each of those items, the council's comment is: "Historically, there have been no formal arrangements between the two sites by way of an easement for shared parking. Accordingly, no shared parking existed or would have been lost as a result of the proposed development. Notwithstanding, a number of pedestrian linkage points are proposed which will maintain access between both sites." 121 Item 24 in attachment 11 to the council report includes Pipven's comment that: "Thus in summary the proposed extensions to the SupaCenta would not result in adverse parking impacts on the adjacent Homemaker Centre, customers would continue to be able to park at either centre and visit the other, and improvements are proposed to the basement carpark to make it even more attractive to customers". 122 Item 26 in attachment 11 to the council report summarises Pipven's comment on Calardu's objection, dealing specifically with centralised and shared carparking provisions. It includes the comment: "In all likelihood existing shared parking arrangements will continue after the completion of the proposed expansion. In any case, the CBHK analysis shows that the resultant changes would be immaterial to trading performance at worst, but most likely beneficial".

[94]

(a) the council failed to respond adequately or at all to questions raised by Calardu relating to a meeting: (i) which occurred on 23 June 2009 between representatives of Pipven and the council; and (ii) which was held for the purpose of settling a dispute in the nature of threatened or anticipated legal proceedings arising out of concerns raised by Calardu with the council in a letter dated 19 June 2009; (iii) at which a "consensus" was reached that Pipven was to lodge a new development application concerning the SupaCenta and Pipven was to apply to vacate the hearing of proceedings No 40418 of 2009; and (b) the council: (i) permitted a meeting to occur between its consultant, quantity surveyor and the quantity surveyor engaged by Pipven; (ii) was aware that Calardu's quantity surveyor had provided the council with a quantity survey on behalf of Calardu; (iii) excluded Calardu's quality surveyor from the meeting, and (iv) did not inform Calardu of the meeting. 138 The test of apprehended bias is whether a fair-minded lay observer might reasonably apprehend that the decision-maker might not bring an impartial mind to the exercise of the power: McGovern v Ku-ring-gai Council [2008] NSWCA 209, 72 NSWLR 504 at [14], [72] and [79]; The Queen v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 264; Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293 - 294, 300; Ebner v Official Trustee in Bankruptcy [2000] HCA 63, 205 CLR 337 at [6] - [7]. No different test applies in the case of local councils; but the test is applied more stringently in the case of judicial decision-makers: McGovern at [32], [71], [75]. The position of elected councillors of a local council, whose functions include the broadly political in representing the views of the local community and those of administrative decision-maker granting development applications in accordance with statutory criteria, are "far removed" from a judicial paradigm: McGovern at [75], [77]. It is therefore necessary to take "a significant degree of care" in applying the fair-minded observer test to a local council: at [77]. 139 In addition, since a council is a multi-member body it may be difficult to establish apprehended bias on the part of a council as a whole: McGovern at [60] - [62], [98], [237]. The High Court refused special leave from the Court of Appeal's decision: McGovern v Ku-ring-gai Council [2009] HCATrans 48. 140 A distinction must be drawn between a person in a decision-making authority with a determinative function, and a person whose involvement in the mechanics of the decision-making process is not determinative. In the latter case, the test of apprehended bias is not met, particularly if the person is an officer who has no more than a peripheral role: Hot Holdings Pty Ltd v Creasy [2002] HCA 51, 210 CLR 438 at [8], [24], [74]; McGovern at [166] - [183]. Thus, application of the fair minded observer test to employed officers of a council who are not vested with delegated power of the council to make the determination in question does not necessarily indicate whether there is apprehended bias on the part of the council. 141 The knowledge ascribed to the fair-minded observer should not be at the level of sophistication of a judge, lawyer, specially educated or informed citizen, or a party involved in the decision-making process: Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411 at 419. Knowledge of the actual circumstances of the case must be attributed to the fair-minded observer: McGovern at [78]. Basten JA said at [81]: "… it may be important not to take particular statements out of context. That may mean also taking into account contemporaneous statements by the decision-maker asserting that particular information had no influence on his or her decision." 142 As his Honour said at [83], the fair-minded observer test is not a test of what the person who alleges bias thinks of the decision-making process: "…reference to the views which might be held by a party to a dispute will tend to weaken the objective nature of the test. Thus a party might have a particular belief about the proper decision, perhaps based upon a level of detailed information which should not properly be ascribed to the fair-minded observer. Nor is it necessary to consider whether a party would hold a reasonable apprehension in circumstances where others might not." 143 An administrative decision-maker, in particular a regulatory agency or local council, does not have to be free from prior involvement in a decision. As Deane J said in Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 90: "acquaintanceship with or preconceived views about a party of a kind which would create the appearance of disqualifying bias in a judge exercising the judicial power of a court of law may be permissible and unobjectionable in a statutory body which, while required to accord procedural fairness in the discharge of a particular function, is entrusted with other functions which necessitate a continuing relationship with those engaged in a particular industry." 144 The meeting of 23 June 2009 was occasioned by a letter of 19 June 2009 from Calardu's solicitors jointly to Pipven, the council and Ticor Development Pty Ltd. After recounting some events, the solicitors wrote that they were instructed to commence urgent Class 4 proceedings in this Court for declaratory and injunctive relief, including a declaration that the 2008 consent is void. They said that Calardu will not immediately commence proceedings if they urgently provided a written undertaking to cease all building works on the site for one week and meet with Calardu in an attempt to negotiate a resolution.

Calardu Penrith Pty Ltd v Penrith City Council

At a glance

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Judgment (134 paragraphs)

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Cases Cited (37)

Cited By (24)