CK Design Pty Ltd v Penrith City Council

Land and Environment Court (NSW)|2022-07-26|Before: Robson J, Pepper J

Introduction and finding

These Class 1 appeal proceedings were commenced by CK Design Pty Ltd ('CK Design') following the refusal by the Penrith City Council Local Planning Panel (exercising the functions of Penrith City Council as consent authority) of a development application made by CK Design seeking development consent for a two to three storey boarding house at Kingswood.
As a result of concerns regarding the interpretation and application of a savings provision in a recently made state environmental planning policy ('SEPP'), on 6 July 2022, pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW), Pepper J (in CK Design Pty Ltd v Penrith City Council [2022] NSWLEC 82 ('CK Design No 1')) ordered that the following questions be heard and determined prior to final hearing: "a. Whether development application DA21/0225 was made, but not yet determined, on or before the commencement date of State Environmental Planning Policy (Housing) 2021; and b. If the answer to (a) is 'yes', does State Environmental Planning Policy (Affordable Rental Housing) 2009, as in force on 25 November 2021 apply?"

Background

On 6 April 2021, CK Design, the registered proprietor of land at 27-28 Park Avenue, Kingswood lodged a development application ('Application') with Penrith City Council ('Council') seeking development consent for the demolition of existing structures on the land and construction of a two to three storey boarding house with basement parking and associated works.
On 21 July 2021, Penrith City Council Local Planning Panel ('Panel'), a local planning panel constituted under s 2.17 of the Environmental Planning and Assessment Act 1979 (NSW) ('EPA Act') for the Local Government Area of the City of Penrith, determined the Application by way of refusal pursuant to s 4.8 of the EPA Act, and on 6 April 2022, pursuant to s 8.7 of the EPA Act, CK Design commenced these Class 1 appeal proceedings.
At the date the Application was lodged, and at the time of the Panel's determination, State Environmental Planning Policy (Affordable Rental Housing) 2009 ('SEPP ARH') was in force and applied to the Application.
However, subsequent to the Panel's refusal, on 26 November 2021, State Environmental Planning Policy (Housing) 2021 ('SEPP Housing') came into force and repealed SEPP ARH: SEPP Housing, s 10(1)(a).
On its coming into force, SEPP Housing contained a schedule titled "Schedule 7 Savings and transitional provisions", which provided within s 2, inter alia: "2 General savings provision The former provisions of a repealed instrument continue to apply to the following - (a) a development application made, but not yet determined, on or before the commencement date, …"
On 18 March 2022, SEPP Housing was amended by, among other things, the renumbering of Sch 7 as Sch 7A and by the making of amendments to certain provisions.
As renumbered and amended, Sch 7A, s 2 of SEPP Housing states: "2 General savings provision (1) This Policy does not apply to the following matters - (a) a development application made, but not yet determined, on or before the commencement date, … (2) The provisions of a repealed instrument, as in force immediately before the repeal of the repealed instrument, continue to apply to a matter referred to in subsection (1)." ('the Savings Provision').
SEPP ARH is an instrument repealed under Ch 1, s 10(1) and thus is a repealed instrument as defined in s 1 of Sch 7A to SEPP Housing.
The validity of the determination of the Application by the Panel has not been the subject of any legal challenge.
The concern regarding the separate questions arises in circumstances where a hearing date for the Class 1 appeal has not been allocated and where there is a dispute as to whether the Court is to apply SEPP Housing or SEPP ARH when it hears the substantive appeal.
For present purposes, it is agreed between the parties that if the Court determines that the Application was made and determined, on or before the commencement date of SEPP Housing, SEPP Housing applies to the determination of the development application and SEPP ARH does not apply.
The significance of the separate questions, which involves statutory construction, is that if the Application takes the benefit of the Savings Provision, SEPP Housing does not apply, and the Application will be assessed at the hearing of the Class 1 appeal under the now repealed SEPP ARH. The significant differences between the requirements for boarding houses under SEPP ARH and the requirements for "Co-living" housing (as the development the subject of the Application would now be characterised) under SEPP Housing were noted by Pepper J at [26] and [27] in CK Design No 1. Without repeating Pepper J's summary, in simple terms, there are material differences between the policies including in relation to communal living areas; communal open spaces; landscaping requirements; workspace requirement for managers; laundry facilities; setbacks; and building separation distances.

Council's position

Council contends that the Application, having been determined by the Panel prior to the commencement date of SEPP Housing, is not caught by the Savings Provision and, therefore, is to be determined under SEPP Housing rather than SEPP ARH.
Adopting the modern approach to statutory interpretation, Council submits that the plain and ordinary meaning of the word "determined" should be adopted and contends that this is consistent with the use of "determined" in the EPA Act where the word refers generally to a decision of a consent authority to approve or refuse a development application (for example, ss 4.16, 4.18, 8.7, 8.9, 8.11, and 8.15 of the EPA Act).
Council submits that the commencement of this Class 1 appeal does not alter the fact that the parties agree that the Application was, in fact, "determined" (by the Panel) prior to the commencement date of SEPP Housing; and submits that the Class 1 appeal has no effect on the validity or existence of the Panel's determination.
Council points to the fact that on the same date as Housing SEPP was amended to include the current Savings Provision, an additional savings provision was inserted into SEPP Housing at s 39(10) which relates to site compatibility certificates and provides: "If a certificate is valid at the time a development application is made, the certificate remains valid for the purposes of the development application until the development application is finally determined." (Council's emphasis.)
In these circumstances, Council draws attention to the use of the expression "finally determined" in s 39(10) of SEPP Housing as opposed to the wording of the relevant clause presently under consideration and submits that if the legislature had intended that the Savings Provision was to apply to save a development application which was made, but not yet finally determined, it would have used those plain words as it did in s 39(10) instead of using the word "determined".
Council submits that an interpretation which effectively requires the word "determined" and "finally determined" to be used interchangeably would be inconsistent with the plain and ordinary meaning of the text of SEPP Housing, would not give effect to the intention of legislature, and would give the word "finally" within s 39(10) no work to do.
Council submits that the proper interpretation of the Savings Provision and the consequent application of SEPP Housing to the Application is consistent with the purposes of both the EPA Act and SEPP Housing which include - the promotion and delivery of affordable housing with good design and amenity; the development of diverse housing types that will meet the needs of more vulnerable members of the community; ensuring new housing development provides residents with a reasonable level of amenity; and, the promotion of the planning and delivery of housing in locations with existing and planned infrastructure and services.
Council makes reference to the use of the words "finally determined" in a number of other environmental planning instruments (namely, SEPP ARH, ss 54(1), 54B(1), 54C(1) and 57; Penrith Local Environmental Plan 2010, cl 1.8A; State Environmental Planning Policy (Transport and Infrastructure) 2021, Sch 9, ss 1(1), 1(3)-(4), 2 and 3; State Environmental Planning Policy (Primary Production) 2021, s 2.6; State Environmental Planning Policy (Biodiversity and Conservation) 2021, s 4.16; State Environmental Planning Policy (Industry and Employment) 2021, s 2.45; State Environmental Planning Policy (Resources and Energy) 2021, ss 2.47(1), 2.48 and 2.49 (but noting that s 2.18(4) does not use the word "finally"); State Environmental Planning Policy (Planning Systems) 2021, s 4.5 and Sch 1, s 15(5); State Environmental Planning Policy (Precincts - Western Parkland City) 2021, ss 3.9(2)(b), 4.51(1), 5.8, 7.7(1)(b) and 7.23(2); State Environmental Planning Policy No 65 - Design Quality of Residential Apartment Development, ss 31(2)-(3) and 32; and State Environmental Planning Policy (Exempt and Complying Development Codes) 2008, ss 1.13(1)-(2), 1.13(4)-(5), 1.14(7)), and submits that in the circumstances the draftsperson intended "determined" and "finally determined" to have different meanings such that "yet" is in a sense superfluous within s 2(1)(a) of Sch 7A to SEPP Housing.
Council submits that as the Application was determined prior to the commencement date, the first question should be answered in the negative (meaning that SEPP Housing applies) and the precondition to the second separate question is not met such that the SEPP ARH does not apply to the assessment of the Application by the Court.

CK Design's position

CK Design submits that the answer to the separate questions ought to be in the affirmative because the Application was made before the commencement of SEPP Housing and because of the institution of these appeal proceedings, the Panel's determination has not finally resolved the Application.
CK Design submits that in construing the Savings Provision, the instrument as a whole must be considered and although s 4 of SEPP Housing adopts the definitions in the dictionary to the policy, the dictionary does not define the term "determined"; and points to the fact that although there are nine occurrences of the word "determined" in the instrument being, ss 5(1)(a), 39(10), 42(3)(b), 47(4), 48(1)(b), 48(4), and Sch 7A, ss 2(1)(a), 2(1)(b) and (3), the composite phrase "but not yet determined" is used only in Sch 7A, subss 2(1)(a) and (b).
In these circumstances, CK Design submits that the legislature clearly intended that that word "yet" has work to do. CK Design submits that to adopt Council's interpretation would lead to a situation where one development application which was approved by Council subject to conditions prior to the commencement date would be saved by the Savings Provision in any appeal, as it would be suspended under s 8.13(1) of the EPA Act, whilst a second development application on the same parcel of land which was refused by Council prior to the commencement date would not be saved in any appeal.
CK Design submits that Council's reliance on the language in s 39(10) of SEPP Housing (which relates to site compatibility certificates for residential flat buildings) is of no assistance in relation to construing a provision which relates to development applications primarily because a site compatibility certificate is a separate determination by the Planning Secretary that a proposed residential flat building is compatible with surrounding land uses and any such certificate otherwise would have a limited five year validity (unless otherwise specified). CK Design further submits that Sch 7A and s 39(10) deal with two very different subject matters - a savings provision that protects a development application made under a different instrument, and the validity of a certificate. Notwithstanding the different subject matter, the word "determined" is used consistently between the two provisions.
CK Design submits that "determined" has the plain and ordinary meaning of a "final resolution" in Sch 7A and s 39(10); and that, because SEPP Housing (like other SEPPs) is made by the Governor and not pursuant to a 'standard instrument' under s 3.20 of the EPA Act (like the Standard Instrument (Local Environmental Plans) Order 2006 which applies to local environmental plans), the Court should only give weight to other SEPPs which form part of SEPP Housing's statutory scheme under the EPA Act and its regulations, being State Environmental Planning Policy No 65 - Design Quality of Residential Apartment Development, and State Environmental Planning Policy (Exempt and Complying Development Codes) 2008. In any event, CK Design reiterates that there is no ambiguity within SEPP Housing to resolve which would otherwise enable the Court to look outside of SEPP Housing.
CK Design points to appeals to this Court pursuant to ss 8.6 and 8.14 of the EPA Act in relation to development consents and notes that s 8.14(1) confers all the functions and discretions which the consent authority (whose decision is the subject of the appeal) had in respect of the matter, in this case the determination of a development application. CK Design submits that the power the Court exercises pursuant to s 8.14 is not the determination of a fresh application made to it, rather, the Court determines the same development application while adopting the same powers of the consent authority. Given the finality of a "determination", the words in the Savings Provision, seen in this context, mean that there can only be one determination in relation to a single development application.
CK Design submits that apart from the above, a grammatical analysis of the text of the Savings Provision supports its position. It submits that s 2(1)(a) of Sch 7A to SEPP Housing comprises a primary noun, ("a development application made…"); a first modifier ("…, but not yet determined, …"); and a second modifier ("…on or before the commencement date"). Looked at in this way, "determined" must be read with the composite words "but not yet" which is a verb tense that describes actions that will continue up until a point in the future. As such, the plain and ordinary meaning of the composite phrase must then be considered in the statutory context of the clause and the instrument itself. The grammatical analysis demonstrates that for the Savings Provision to apply, the Application must have been made on or before the commencement of SEPP Housing because the appositive word group "but not yet determined" does not define or further identify the noun phrase proceeding it, meaning that the words "but not yet determined" identify that the ultimate "decision" is to occur in the future - again, noting that there can only be one "determination" of a development application.
As considered later in this judgment, CK Design made submissions in relation to various decisions in relation to the interpretation of similar savings provisions by this Court including: Jokona Pty Ltd v Liverpool City Council [1997] NSWLEC 17 (Bignold J) ('Jokona'); Bardetta v Baulkham Hills Shire Council [2001] NSWLEC 164; (2001) 120 LGERA 17 ('Bardetta') (Talbot J).
CK Design further submits that to construe the Savings Provision as Council contends would deprive an applicant of the benefit of a 'savings' provision, and would constitute a deprivation of an applicant's right to prosecute a development application prepared after careful advice from planners and consultants; that the Court cannot draw upon other provisions which use the words "determined" and "finally determined" where those provisions concern determinations other than determinations of development applications; and that although there is no error in the drafting of the Savings Provision, the golden rule of statutory interpretation (which provides for the modification of literal words to overcome a perceived defect in the text) should be applied due to the "linguistic absurdity" that would otherwise be caused by Council's interpretation.

Consideration

The questions before the Court concern the proper construction of s 2(1)(a) of Sch 7A to SEPP Housing and whether SEPP ARH applies to the Court's consideration of the Application.
The applicable legal principles that I am to apply when undertaking the task of statutory construction are well-known. The objective is to construe the relevant provision so it is consistent with the language and purpose of the relevant instrument when considered as a whole: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 ('Project Blue Sky') at [69].
While, ordinarily, the legal meaning of the provision will reflect the grammatical meaning of the provision, in certain limited circumstances the context of the words, the consequences of construction, the purpose of the statute, or the cannons of construction may require the words of the provision to be read in a different way: Project Blue Sky at [78]; SZTAL v Minister for Immigration and Border Protection; SZTGM v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 at [14].
The now well-accepted approach was considered in Hunter Quarries Pty Ltd v Alexandra Mexon as Administrator for the Estate of the Late Ryan Messenger (2018) 98 NSWLR 526; [2018] NSWCA 178, where Payne JA stated at [57]: "The relevant principles of statutory construction were not controversial. The parties referred to Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 at [47], where the plurality emphasised that construction must begin with a consideration of the text itself and while the language employed is the surest guide, its meaning may require consideration of the context, which includes the general purpose and policy of the provision, in particular the mischief it is seeking to remedy. The importance of context, including the general purpose and policy of the provision has subsequently been emphasised by the High Court: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500; [2012] HCA 32 at [41]; Federal Commissioner of Taxation v Consolidated Media Holding[s] Ltd (2012) 250 CLR 503; [2012] HCA 55 at [39]; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 91 ALJR 936 at [14] and [25]-[39]."
These general principles apply to the interpretation of environmental planning instruments such as SEPP Housing: Cranbrook School v Woollahra Municipal Council (2002) 66 NSWLR 379; [2006] NSWCA 155 at [36]. In this respect, while environmental planning instruments should be interpreted in a practical manner, this does not override general principles of statutory construction nor does it require "laxity or flexibility" in interpretation: Tovir Investments Pty Ltd v Waverley Council [2014] NSWCA 379 at [54]; Wingecarribee Shire Council v De Angelis [2016] NSWCA 189 at [20]; 4nature Incorporated v Centennial Springvale Pty Ltd (2017) 95 NSWLR 361; [2017] NSWCA 191 at [45]. This is also consistent with s 33 of the Interpretation Act 1987 (NSW) ('Interpretation Act'), which applies to environmental planning instruments by virtue of s 5(6) of that Act, and requires a construction which promotes the purpose or object of an Act over one which would not.
In Sydney Seaplanes Pty Ltd v Page (2021) 106 NSWLR 1; [2021] NSWCA 204 at [33] ('Sydney Seaplanes'), Bell P noted that "[e]mphasis on the importance of context in statutory interpretation at least overlaps with and reinforces the need for purposive construction". That is, where the text read in context permits more than one potential meaning, the choice between those meanings may ultimately turn on an evaluation of the relative coherence of each within the scheme of the statute.
Accepting that "determined", when used in the EPA Act (and its associated delegated legislation), although not defined, generally refers to a decision by a consent authority (a council, planning panel or the Minister) to approve or refuse a development application, for reasons that follow, I do not consider this is decisive when considering the Savings Provision where the statutory scheme provides for an appeal from a determination of a consent authority, and where I consider it appropriate to adopt a purposive construction based upon text, context and purpose as required by s 33 of the Interpretation Act.
As a preliminary observation, I note that the nature of an appeal in Class 1 of the Court's jurisdiction from a decision of a consent authority is well-understood. The question for determination in such an appeal is whether the decision made by the consent authority in relation to a specific development application was correct or preferable on the material before the Court at the time of the hearing of the appeal. Although there is a distinction between the Court and the consent authority because the Court is not a consent authority, the Court is not within the executive, and, in undertaking a merits review, the Court is not exercising a judicial function (Ku-ring-gai Council v Bunnings Properties Pty Ltd [2019] NSWCA 28; (2019) 236 LGERA 35 ('Bunnings') at [155]-[163]), the Court metaphorically stands "in the shoes" of the consent authority and it then determines, albeit in a de novo hearing, the (single) development application that was before the consent authority (McDougall v Warringah Shire Council (1993) 30 NSWLR 258 at 264-265; Bunnings at [155]).
As such, where a consent authority's refusal is the subject of an appeal, the Court's determination of a development application (as a matter in its original and not appellate jurisdiction) is substituted for the decision of the consent authority and is deemed to be the "final decision" (Court Act, s 39(5); Bunnings at [149]-[154]; Janlz Constructions Pty Ltd v Randwick Municipal Council [1976] 2 NSWLR 427 at 429-430). I consider it follows that when an appeal has been commenced, until the time of the final determination, by reference to s 4.16 of the EPA Act, the development application is not "determined" in the sense required by the wording of the Savings Provision.
Further, considering both text and context, it is in my view inappropriate to focus simply on the word "determined", when the wording "but not yet" needs to be read in the context of the instrument and must be given work to do. In that way, "determined" must be read with the composite words "but not yet" which causes the phrase to be expressed in the future perfect tense which, as submitted by CK Design, is a verb tense that describes actions that will continue up until a point in the future. When read in this way, the phrase ("but not yet determined") means that the development application has not been finally decided, settled or resolved. I consider the words are plain.
I do not find Council's reliance on other environmental planning instruments and s 39(10) of SEPP Housing, in the sense that they evidence a difference between "determined" and "finally determined", persuasive. I accept that the language in s 39(10) of SEPP Housing is structured differently to the Savings Provision, and although I am attracted to Council's submission that the simple inclusion of the word "finally" into the Savings Provision would have put the matter beyond any reasonable doubt, as noted above, I consider that the inclusion of the words "but not yet" means that the determination is not yet final, or put another way, it is not "yet" determined.
Although (as noted above at [23]) the Court was taken to many examples of the use of "determined" and "but not finally determined" (and variations thereof) in other environmental planning instruments, I accept the submission of CK Design that the various occurrences of the word "determined" in SEPP Housing (noted at [26] above), highlight that the composite phrase "but not yet determined" is used only in the Savings Provision. As such, I accept the submission that the legislature intended to include the word "yet" and it must be given work to do.
I do not consider that the earlier, conflicting, decisions to which the Court was taken to be of assistance. Jokona concerned an appeal against the deemed refusal by a council of a development application to use an industrial building as a cinema complex in circumstances where the council formally refused the development application soon after the appeal to this Court had been commenced and the council had adopted a draft local environmental plan which prohibited cinemas in industrial areas. The draft local environmental plan contained a savings provision that provided that the earlier local environmental plan would continue to apply if "the application was made but had not been determined before the appointed day…". Justice Bignold, noting that some savings provisions in other "planning instruments" included the word "finally", found that the application had been "determined" for the purpose of the relevant savings provision by the council when it refused the development application after the appeal proceedings had been commenced and thereby deprived the application of the benefit of the savings provision.
I note that the relevant savings provision in Jokona did not contain the word "finally", nor did it have a phrase (such as one containing "yet") consistent with a meaning of "finally" and Bignold J's reasons do not take into account whether there could be more than one "determination" of a development application when regard is had to the legislative scheme.
I also note Talbot J's comments in Bardetta at [23]-[24], where his Honour considered a savings provision in a SEPP in the same terms as the local environmental plan in Jokona, as well as similar decisions of the Court in other matters. His Honour, in obiter dicta at [24], considered that if it had been necessary to determine the question of whether a development application had been "determined", the approach adopted by Cowdroy J in Gameplan Sports & Leisure Pty Limited v South Sydney City Council [2000] NSWLEC 112 ('Gameplan') was more consistent with the legislative framework of the EPA Act under which determinations are made by both consent authorities and the Court. In Gameplan, Cowdroy J, considering the effect of a clause in Environmental Planning and Assessment (Savings and Transitional) Regulation 1998 (NSW), found that although the council had determined the development application, the word "determination" in the phrase "any development application made, but not determined by the consent authority" applied to a determination which finally disposed of the development application. To the extent that there appears to be some inconsistency in these authorities, I prefer the analysis of Cowdroy J and the comments of Talbot J.
Leaving aside absurdity, although the prospect of inconvenience (or concerns about finality and/or further costs) cannot be determinative in statutory construction, and while I am conscious that questions of statutory construction are not answered by the circumstances of a particular case, the statutory scheme of which SEPP Housing is part of provides that any appeal must be commenced within a fixed time frame (in the present circumstances as a result of COVID-19 pandemic arrangements, allowing an extended time) and an interpretation that provides for the Savings Provision to preserve an applicant's position for a fixed time operates harmoniously with the statutory scheme and its purpose - where, as noted above, the Court is deciding the (same) development application in the same manner as the consent authority (albeit in a de novo hearing).
In summary, while I accept that the plain meaning of a word is an important consideration, the question of construction cannot be resolved merely by resorting to the literal meaning of words because words always exist and take meaning from their statutory context (Sydney Seaplanes at [41]); and I consider that adopting a strictly literal approach (construing "determined" as confined to the determination of the consent authority) would not conform to the intent of the legislature and would, in my view, likely result in capricious outcomes (possibly similar to the matters considered by Talbot J in Bardetta at [22]), and, moreover, simply does not reflect the context that a decision of a consent authority, when an appeal is lodged, is not, in reality, the end of the matter.

Conclusion

For the reasons above, as I consider that until the time of final determination by reference to s 4.16 of the EPA Act, the development application is not "determined" for the purpose of s 2(1)(a) of Sch 7A to SEPP Housing, each separate question should be answered in the affirmative.

Costs

CK Design submits that the general costs rule in Class 1 proceedings (that each party pays its own costs) should be departed from in circumstances where Council raised these preliminary questions of mixed law and fact; where the central issue was potentially determinative as the Application would require amendment if the Court found that SEPP Housing did apply; and further, where there has been no evaluation of the merits of the Application.
Council rejects the contention that determination of the separate questions could be determinative of the whole proceedings where Pepper J found in CK Design No 1 at [33], that it would not dispose of the proceedings irrespective of the answer. Council submits that the Court would not depart from the general rule within Class 1 proceedings where, as Pepper J found in CK Design No 1 at [33]-[40], the questions involved a real contest; the determination would substantially narrow the controversy between the parties; the utility of a conciliation conference would be eroded if the separate questions had remained unresolved; and where the determination of the separate questions promoted the just, quick and cheap resolution of the proceedings, such that the determination of the separation questions benefitted both parties and was at no extra cost to the applicant.
I agree with Council's submissions, and I find that it is not appropriate to depart from the general rule within Class 1 proceedings. There is nothing in the material before the Court relating to the conduct of either party that would make it fair and reasonable that a costs order be made. The parties are to bear their own costs of this separate questions hearing.

Orders

The Court orders: 1. The answer to the first separate question, whether development application DA21/0225 was made, but not yet determined, on or before the commencement date of State Environmental Planning Policy (Housing) 2021, is yes. 2. The answer to the second separate question, if the answer to the first question is 'yes', does State Environmental Planning Policy (Affordable Rental Housing) 2009, as in force on 25 November 2021 apply, is yes. 3. No order as to costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 August 2022

Environmental Planning and Assessment (Savings and Transitional) Regulation 1998(NSW)

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