Prejudice to objectors - removal of condition of development consent requiring agreement with them

Second and Third Respondents: Macedone Christie Willis Solari Partners

COLIN NEVILLE SWADLING and GIANNA GELSOMINA SWADLING

The applicants are the owners of Lot 1 DP 778352, known as 234A Woolooware Road, Cronulla. The second and third respondents are the owners of Lot 2 which adjoins Lot 1 to the east and is known as 236 Woolooware Road. The respondents gain access to Woolooware Road along a right of carriageway over the land of the applicants and adjacent land having a frontage to Woolooware Road, being Lot 1 in DP 566233.

On 14 December 1992, the first respondent granted development consent to a subdivision of Lot 2 into two lots subject to 28 conditions. By application made pursuant to s 102 of the Environmental Planning and Assessment Act (EPA Act) on 15 March 1993, the second and third respondents requested deletion of one of those conditions. An application class one pursuant to s 97 of the EPA Act by way of an appeal against the determination of the development consent of 14 December 1992 was lodged in this Court on 10 June 1993.

On 19 July 1993, the first respondent purported to determine the application for modification by deleting the condition.

A notice of discontinuance was filed in the Court on 29 July 1993.

The applicants are seeking a declaration that the determination on 19 July 1993 was invalid and a consequential order restraining the second and third respondents from carrying out development otherwise than in accordance with the deleted condition.

"28. A letter from all parties using the existing Right of Carriageway shall be submitted prior to the release of the Engineering Plans agreeing to the creation of additional traffic on the Right-of-Carriageway together with appropriate improved access works."

"(a) The First Respondent had no power to determine the Application pursuant to S102 of the Act to modify the Development Consent at that time, and by reason of S.93(2) and the lodging of the Appeal by the Second and Third Respondents, the Development Consent the subject of S.102 Application had ceased to be effective.

(b) The First Respondent had no power to modify the Development Consent since it could not have reasonably been satisfied that no prejudice would be caused to the Applicants, being persons who objected to the Development Application the subject of the Development Consent.

(c) The First Respondent had no power or, in the alternative, mis-exercised its power to modify the Development Consent under s.102 on the basis of matters occurring in, and bearing upon, the First Respondent's grant of Development Consent and not on matters occurring subsequently to the grant of Development Consent.

(d) The First Respondent had no power or, in the alternative, mis-exercised its power to modify the Development consent under s.102 when the Second and Third Respondents had the right to appeal against the Development Consent pursuant to s.97 of the Act.

(e) The First Respondent misdirected itself in exercising its power to modify the Development consent under s.102 in relation to:

(ii) the alleged absence of prejudice to the Applicants as persons who objected to the development application the subject of the Development Consent; and

(iii) the alleged adoption by the First Respondent of a rule or policy in clause 9(6)(vi) of the First Respondent's Subdivision Policy allegedly disabling the First Respondent from exercising its discretion in individual cases or allegedly inconsistent with its statutory obligations and duties.

(f) The First Respondent took into account irrelevant matters, namely one or more of the matters in (e) (i)-(iii).

(g) The s.102 Determination was so unreasonable that no reasonable council could have made it having regard to the matters in (a)-(f) above and the impact future traffic generated from the subdivided lots when fully developed might have on the Swadling land."

Condition 28 had as its genesis a recommendation from the assessing officer that as the right of way will provide access to more than two internal lots, the applicants for consent should be required to submit an agreement from all parties using the right of carriageway to the creation of additional traffic and any improved access works. This concern appears to arise out of cl 9(6) of council's code for subdivision which provides where additional internal allotments are proposed and access is by way of right of carriageway, the following requirement, inter alia, will apply:-

"vi) this pattern of subdivision is not to apply to internal lands already served by a right-of-carriageway over a road frontage allotment, unless all parties indicate their agreement to the creation of additional traffic on such rights-of-carriageway, together with appropriate improved access works."

The applicants and the owner of Lot 1 DP 566233 lodged an objection to the grant of development consent to the subdivision with the council. The Royal Motor Yacht Club also made a submission.

The notice of determination of the development application stated that the conditions had been imposed to eliminate any detrimental effects which the proposed development might have on the environment including the amenity of the area.

The reason expressed for the s 102 application was that the agreement from adjoining property owners could not be obtained.

Prior to determining the s 102 application, the council obtained the advice of counsel in regard to the validity of condition 28. Senior counsel advised that he believed that condition 28 "should not have been imposed in the first place and should therefore be deleted pursuant to the Section 102 Application."

The only matter raised as an issue in the s 97 appeal was the deletion of condition 28.

In Somerville v Dalby 69 LGRA 422 Hemmings J had occasion to consider the power of a council to grant a consent to the alteration of a development consent which was the subject of appeal to this Court. The facts in that case were that the council had granted a development consent subject to conditions following which an appeal was lodged pursuant to s 97 of the EPA Act. Subsequently council considered a request for reconsideration and resolved to vary the original conditions of consent. It was not until after that resolution that the appeal in the Court was discontinued. His Honour held that upon determination of the development application, and the giving of notice thereof, council had no further function or jurisdiction with respect to its terms or conditions and that, unless and until a consent authority is in receipt of either an application to modify pursuant to s 102 or a further development application, it has no jurisdiction to grant another or modify development approval. His Honour was not prepared to recognise the written representations requesting reconsideration of the original conditions as a further development application. For that reason, and in the absence of an application pursuant to s 102, he held that council had no jurisdiction to amend its development consent.

He then went on to consider the effect of the appeal and determined that whilst an appeal is pending the Court is the only lawful consent authority with respect to that application and the council has no power to amend or modify the development approval.

In Mekol Pty Ltd v Baulkham Hills Shire Council (1971) 2 NSWLR 54 Asprey JA expressed the opinion that a council had no power to grant a conditional building approval once the matter was properly before the Appeal Board as the council ceased to have any jurisdiction after the appeal was lodged. Mekol involved an appeal against a deemed refusal by virtue of s 314(2) of the Local Government Act 1919. In Grace Bros v Willoughby Municipal Council & Ors (1981) 2 NSWLR 80, to which Hemmings J referred in Somerville v Dalby, the question of whether a council retains its power to give consent after an appeal has been lodged was left open. The following observation by Hardie J in Albert G Sims Ltd v Leichhardt Municipal Council (1961) 7 LGRA 71 at 81 is instructive:-

"Having regard to the fact that the council had previously refused the application and that an appeal against that refusal had been instituted and was pending, it would seem that the council did not at this point of time have any power to grant a consent; this being so it probably operates only as an indication by the council of its willingness to submit to a form of order allowing the appeal subject to the conditions mentioned."

Apart from the embracing nature of what Hemmings J had to say in Somerville v Dalby, where in fact no s 102 application had been made, the above cases were limited to a factual situation where the council purported to deal with an application while an appeal was pending against the actual or deemed refusal of the application.

The question that arises in the present case is whether the council had the power to consider an application under s 102 notwithstanding the lodgement of an appeal against the conditional grant of the original development application.

The relevant part of s 102(1) of the EPA Act should be set out.

"102.(1) Upon application being made in the prescribed form by the applicant or any other person entitled to act upon the consent, a consent authority which has granted development consent under this Division may modify the consent ......."

As a matter of construction, there are two classes of persons who may make an application, namely the original applicant or any other person but the latter must be entitled to act upon the consent. The right of appeal pursuant to s 97(1) is limited to an applicant who is dissatisfied with the determination. The second class of persons recognised by s 102, namely those entitled to act upon the consent, do not have a right of appeal under s 97.

An appeal to the Court pursuant to s 97 shall be by way of re-hearing of the original development application. The Court is not constrained by what was decided by the council because on an appeal, the whole of the matters previously before the council, and in particular those matters referred to in s 90, may be reconsidered.

That contrasts with s 102 where the power is significantly more limited because the original consent is maintained.

Section 93(1) establishes the date the consent "shall become effective and operate from -". Subsection (2) provides that on appeal being made, a consent shall cease to be, or shall not become "effective". Where the appeal is successful, it shall "become effective and operate" from the date of the decision. The legislature must have intended to draw a distinction between the effectiveness and the operation of a consent.

Hemmings J acknowledged in Somerville v Dalby, that a consent does not cease to exist upon the lodgement of an appeal. It is not revoked nor is it void. Section 93(2)(b) recognises that the same consent can become effective and operative again at the later date of the decision on the appeal except where the decision is to refuse development consent. It is only if development consent is refused on appeal that the consent is void.

Although a consent ceases to be effective once an appeal is lodged, it nevertheless continues to operate. In other words it still has some life pending the decision on the appeal. Its existence continues even though it cannot be effective to allow the applicant to act on it by carrying out the subject development. That benefit, of acting on the consent, for the time being, is embargoed or suspended.

The scheme of Part 4 of the EPA Act will not be disrupted by a council acting to modify a consent notwithstanding a pending appeal by the original applicant.

It is not difficult to envisage circumstances where a successful s 102 application might resolve a dispute between an applicant and the consent authority more effectively, efficiently and economically than an appeal. Mature reflection or negotiation after the appeal has been made may narrow the issue to one capable of being dealt with under s 102.

Section 96(2) already contemplates that a consent authority may determine a development application notwithstanding a deemed refusal by the operation of s 96(1). Where a subsequent determination by the consent authority effectively resolves any issue in dispute s 96(4) provides the machinery for the discontinuance of the appeal proceedings. Subsection (3) recognises that the matter can still be determined on an appeal pursuant to s 97. The subsequent enactment of s 96(2), (3) and (4) overcomes the problems discussed in Mekol in respect of a deemed refusal.

It would be inconsistent if the same procedure could not be applied where the dispute is resolved by a modification of what council has already approved.

Section 102(1)(b) protects the interest of any person who objected to the development application.

A determination made pursuant to s 102 does not revoke or replace a development consent already granted. It is not the granting of development consent. By dint of s 102(4) any reference in the Act to a development consent shall be a reference to the development consent so modified. There is no reason why the reference to a consent in s 93(2) cannot be read to include a consent modified pursuant to s 102.

In Albert G Sims the original application had been refused. Section 102 applies only where a consent has been granted.

There was no s 102 application in Dalby and if his Honour intended to decide that no s 102 application could have been dealt with, then, I must respectfully disagree with him.

I reject the argument that the council had no power to determine the s 102 application on 19 July 1993. Notwithstanding the appeal the consent granted on 14 December 1992 still operated to allow the s 102 determination to be made.

I agree with Hemmings J and his reasons given in Dalby that upon discontinuance of an appeal there is nothing to prevent a development consent becoming effective and operative.

In the present case (subject to the further arguments raised by the applicants in regard to the validity of the s 102 determination) the development consent as modified became effective and operated when the appeal was discontinued on 29 July 1993.

Much of the argument before the Court related to the belief held by council that condition 28 was invalid. Until a consent is declared invalid all parties, including the council, must treat it as valid. A declaration that a decision is invalid can only be made by a court of competent jurisdiction, in this case the Land and Environment Court.

To adopt the words of Lord Radcliffe in Smith v East Elloe Rural District Council [1956] UKHL 2; 1956 AC 736 at 769 - 770 "it bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders".

It follows therefore that the council was not entitled to deal with the s 102 application as if condition 28 had never existed. If the respondents are of a mind to challenge the validity of condition 28 then the appropriate and only course is to commence proceedings in this Court for an appropriate declaration and consequential orders. That has not been done. The present matter must therefore be determined on the basis that condition 28 is valid.

It is not appropriate for me to pre-empt what the Court might decide. Having heard some part of the argument on that issue, it is obvious to me that the validity of condition 28 is not free from doubt.

The applicants and Mrs Blanch lodged formal objections with the council. They raised concerns in respect of increase in traffic on, and works proposed within, the right of carriageway.

In an attempt to allow the parties to resolve these concerns in a mutually satisfactory way the council imposed condition 28. Even if the stipulation for an agreement arose out of cl 9(6)(vi) of the council's subdivision code, the issue that the condition seeks to address is the same.

In other words, council consented to the subdivision as a matter of principle. The council apparently believed that its obligation under s 90 and s 91 would be satisfied if any detrimental impact arising from the increased use and proposed works was resolved or accepted by agreement.

A mechanism was created whereby, if there was no consensus the development could not proceed. Such an arrangement had obvious advantages for the owners of the servient tenement.

While condition 28 remained, there could be no adverse impact from traffic or the proposed works in the right of carriageway on the applicants or Mrs Blanch unless they agreed to accept it voluntarily or for consideration, under the terms of an agreement. That was an important right. Any diminution of that right could mean that they would lose the control vested in them by the condition. It was not the prospect of additional traffic that could cause prejudice to the objectors if the condition was revoked but rather the loss of the right to decide whether or not to accept that additional traffic.

In the absence of an express waiver or acquiescence by each objector, the council could not be satisfied that no prejudice would be caused to them by removal of condition 28. Acting on the assumption that there could be no prejudice because condition 28 was invalid, the council reached a conclusion that was not open to it. Section 102(1)(b) leaves no room for the exercise of discretion or for balance. Where prejudice will in fact be caused by the proposed modification, the application must be refused.

The determination of the s 102 application on 19 July 1993 was in breach of s 102(1)(b) and consequently is invalid.

A number of other matters were raised in the course of argument including an assertion that the consideration of discretionary matters by the council miscarried when it determined the s 102 application. It is alleged, relying on the decision of this Court in Progress and Securities Pty Ltd v North Sydney Municipal Council (1988) 66 LGRA 236, that the council proceeded to determine the application in the absence of any changed circumstances or any new or additional material relevant to the determination. The applicants assume the difficult onus of ascertaining and proving what was in the decision maker's mind (c.f. Parramatta City Council v Hale (1982) 47 LGRA 319 and Boulton v Burwood Municipal Council (1988) 66 LGRA 131 and Marnal Pty Ltd v Cessnock City Council (1989) 68 LGRA 135). Although it is not necessary to make a formal finding whether council considered there was changed circumstances or additional material, the only matter referred to in the material before the Court is the alleged invalidity of condition 28. Even if I accepted that the council failed to consider whether the circumstances had changed since the development application had been determined that would only go to the manner of the exercise of the discretion and would not, on its own, necessarily lead to a finding of invalidity.

The determination of the council to modify the original development consent by deletion of condition 28 is invalid and the applicants have satisfied me that the Court should make a declaration to that effect generally in accordance with paragraph 1 of the application. Further the Court would be prepared to make an order restraining the second and third respondents from carrying out development other than in accordance with the conditions imposed by council upon its determination of development consent No. 1408/92. That would be more appropriate than the form of order in paragraph 2 of the application.

I have read an affidavit sworn by the second respondent on 17 March 1994 referable to the issue of whether the Court should exercise its discretion and not make the order to which the applicants are otherwise entitled. I accept and take into account that substantial expenditure has been incurred and that financial losses are continuing as a consequence of the delay caused by the commencement of these proceedings. However there are a number of courses open to the second and third respondents whereby the problem can be resolved either by agreement, a new development application or further proceedings and either of those, in my opinion, is a more appropriate course than an exercise of discretion in circumstances where there has been a serious breach of the EPA Act which has the potential for serious adverse impacts on the applicants and others if not resolved in an appropriate way. The Court is not prepared to exercise its discretion in favour of the respondents.

Leave is granted to the parties to bring in short minutes of orders to give effect to my findings.

The applicants have been successful and are entitled to an order for costs. I anticipate there may be an argument between the respondents in regard to their respective liability and therefore it is appropriate for the question of costs to be reserved.

The parties have liberty to apply to re-list the matter to settle the form of orders and to argue the question of costs if required.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 12 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGEMENT HEREIN OF THE HONOURABLE JUSTICE TALBOT