CSKS Holdings Pty Ltd v Woollahra Council

Agreed Facts 4The Applicant is the lessee of Crown land at 2-4 Quarry Street, Paddington, being Lots 3 and 5 on Deposited Plan 1156846 (the subject land). The registered proprietor of the subject land is "The State of New South Wales". On 30 December 2011, the Applicant became the lessee of the subject land following the transfer of the lessee's interest in the Crown lease from Paddington Bowling Club Ltd. This transfer was completed with the consent of the Minister administering the Crown Lands Act 1989 in relation to the subject land (at the time this was the Minister for Primary Industries) dated 19 December 2011. 5The Crown lease is for a term of 50 years and is scheduled to terminate on 30 November 2060. Relevantly, the Crown lease contains the following provisions relating to the redevelopment of the subject land: 34. The Holder [the lessee] covenants with the Lessor that the Holder will obtain the Lessor's consent to the lodgement of any development application in respect of the [Subject Land]. ... 56(a). For the purpose of this clause "Improvement" means any building structure facility or work. 56(b). The Holder will not construct effect erect or undertake any Improvements on the Premises [the Subject Land] other than with the prior consent in writing of the Lessor or which may be authorised or required by a provision of this Lease. 6On 14 March 2013, the Applicant lodged the DA with the Council. The DA seeks consent for "Site remediation and construction of new childcare centre to provide 120 long daycare places for ages 0 to 6 years with operating hours between 6.30am to 7.30pm Monday to Friday". 7By letter dated 5 March 2013, landowner's consent for the DA to be lodged was granted by the Minister administering the Crown Lands Act 1989 in relation to the subject land. The grant of landowner's consent was subject to six conditions which are: 1. Consent is given without prejudice so that consideration of the proposed development may proceed under the Environmental Planning and Assessment Act 1979 and any other relevant legislation; 2. This consent does not imply the concurrence of the Minister for Regional Infrastructure and Services for the proposed development, or the issue of any necessary lease, licence or other required approval under the Crown Lands Act 1989; and does not prevent the NSW Trade & Investment (NSW Trade & Investment) from making any submission during public exhibition of the subject application/s; 3. Consent will expire after a period of 12 months from the date of this letter if not acted on within that time. Extensions of this consent can be sought; 4. Having regard to the former uses of part of the site as a quarry and rubbish tip, any further Environmental Site Assessment required by the consent authority in order to demonstrate the precise nature and extent of soil and/or groundwater contamination is to be provided to this Office concurrent with submission of such Assessment to Council; 5. The Minister reserves the right to issue landowner's consent for the lodgment of applcations for any other development proposals on the subject land concurrent with this landowner's consent; and 6. Irrespective of any development consent or any approval given by other public authorities, any work or occupation of Crown land cannot commence without a current tenure from the NSW Trade & Investment authorising such work or occupation. 8Also on 5 March 2013, Mr Stephen Fenn, a delegate of the Minister administering the Crown Lands Act 1989, signed the development application form lodged as part of the DA. 9On 21 March 2013, the Council issued a "Stop the Clock" letter requesting additional information pursuant to cl 109 of the Environmental Planning and Assessment Regulation 2000 (EPA Regulation). The information requested was provided on 10 May 2013. 10In April 2014, the NSW Government ordered an independent review into the transfer of the lease for the subject land from the Paddington Bowling Club Ltd to the Applicant. The terms of reference included consideration of the transfer of the subject land to the Applicant and obtaining of owner's consent to the DA in March 2012. 11A Development Application Assessment Report dated 19 May 2014 (19 May Report) was prepared by an officer of the Council recommending approval of the DA subject to conditions. The 19 May Report was considered at the Council's Development Control Committee meeting on 19 May 2014 at which it was resolved: That the matter be referred to a Site Inspection Meeting to be held on Wednesday 21 May 2014. 12On 21 May 2014, the Council's Site Inspection Committee recommended as follows: That the matter be referred to Council for determination with the following additional information being submitted to the Council Meeting: 1. The impact the proposal will have on traffic and parking in Quarry Street and surrounding roads. 2. Details of the hours of operation of the Paddington Bowling Club and the proposed Child Care Centre. 3. Details of other areas within the Municipality where child care centres are located in the near vicinity to licensed premises. 13On 26 May 2014, the elected Council resolved as follows: (a) That consideration of Development Application 94/2013/1 for 2-4 Quarry Street, Paddington be deferred until after the Minister's own enquiries into the transfer of the Crown lease held by Paddington Bowling Club has been completed. (b) That in the event any Development Approval is obtained through a Land and Environment Court Appeal, the Council requests that the Minister, as land owner, not approve the commencement of this development under condition 6 of the land owner's consent from NSW Trade and Investment dated 5 March 2013. 14On 29 May 2014, the Council wrote to the Applicant and informed it of the Council's resolution of 26 May 2014. 15On 17 June 2014, the Applicant's solicitor wrote to the Council foreshadowing these proceedings. 16On 3 July 2014, these proceedings were commenced. 17On 28 July 2014, following advice from the Council's solicitors, the elected Council resolved as follows: A. That the Council in respect of Land and Environment Court of New South Wales Class 4 Summons to Development Application No. 94/2013 for site remediation and construction of new childcare centre to provide 120 long day care places for ages 0-6 years with operating hours between 6.30am and 7.30pm Monday to Friday on land at 2-4 Quarry Street Paddington, resolve to determine Development Application No. 94/2013. B. That the Council in respect of Land and Environment Court of New South Wales Class 4 Summons to Development Application No. 94/2013 for site remediation and construction of new childcare centre to provide 120 long day care places for ages 0-6 years with operating hours between 6.30am and 7.30pm Monday to Friday on land at 2-4 Quarry Street Paddington, resolve to make the legal advice provided by Council's solicitor Dr Lindsay Taylor of Lindsay Taylor Lawyers dated 11/07/2014 available to the public. C. That Development Application No. 94/2013 be referred back to the Development Control Committee for determination on 18 August 2014. 18On 14 August 2014, the Secretary of the Department wrote to the General Manager of the Council. That letter states that the review into the transfer of the lease for the subject land from the Paddington Bowling Club Ltd to the Applicant had been completed on 11 August 2014 and that the review report had been referred to the Independent Commission Against Corruption (ICAC) for its consideration. The letter went on to relevantly state: Had the Review Report findings been known at the time land owner's consent was sought to lodge the DA, it is doubtful whether it would have been recommended. The Department is considering whether consent can be withdrawn at this stage. ... Should the development be approved, the Minister will consider the adequacy of the current tenure over the [Subject Land] and what actions are available and appropriate to be taken in respect of it. 19A further Development Application Assessment Report dated 18 August 2014 was prepared which recommended approval of the DA subject to conditions (18 August Report). 20The 18 August Report was considered at the Council's Development Control Committee meeting on 18 August 2014 at which it was resolved: That Development Application No. 94/2013 for site remediation and construction of new childcare centre to provide 120 long day care places for ages 0-6 years with operating hours between 6.30am and 7.30pm Monday to Friday on land at 2-4 Quarry Street Paddington be deferred until the outcome of the NSW Trade and Investment referral to the ICAC is known and completed, for the following reasons:

1. The considerable and long standing concern of the community.
2. The letter from the Secretary of Trade and Investment provided new and significant information casting doubt over whether the Crown felt comfortable granting the land owners consent to lodge the DA.
3. Although aware of the strict legal obligations of the Council, those legal obligations are outweighed by the significant community interest. It is essential that the community have trust in the system and certainty in the probity process. 21On 26 August 2014, the Council wrote to the Applicant to inform it of the resolution of 18 August 2014.

The Court's powers to make the order 22The Land and Environment Court has jurisdiction under s 20(2)(b) of the Land and Environment Court Act 1979 (the Court Act) to: review, or command, the exercise of a function conferred or imposed by a planning or environmental law or a development contract. 23The EPA Act is a "planning and environmental law" by reason of s 20(3) of the Court Act.

Council's duty to determine a development application 24Section 80(1) of the EPA Act provides: A consent authority is to determine a development application by: (a) granting consent to the application, either unconditionally or subject to conditions, or (b) refusing consent to the application. 25Section 4 of the EPA Act defines a "consent authority" for the purpose of the EPA Act as, relevantly: consent authority, in relation to a development application or an application for a complying development certificate, means: (a) the council having the function to determine the application, or ... 26Clause 7 of the Woollahra Local Environment Plan 1995 (WLEP) provides that the Council is the consent authority for the purposes of the plan. The DA is a development application made pursuant to s 78A of the EPA Act to which the WLEP applies. 27The parties agree the Land and Environment Court has the power to make an order in the nature of mandamus to compel the Council to determine the DA if satisfied that the facts of the matter warrant the Court's intervention.

Applicant's submissions 28The Court may properly take into account the Applicant's failure to appeal the deemed refusal of a development application pursuant to s 97(1)(b) of the EPA Act in the exercise of its discretion regarding the orders sought in the Amended Summons. The DA was deemed refused on or about 15 July 2013. The appeal period against the deemed refusal of the DA therefore expired on or about 15 January 2014. (The Council submitted the appeal period expired in December 2013). 29It is evident from the 19 May Report of the Council that the assessment was progressing in this period and that further information was being requested of and provided by the Applicant. The affidavit of Mr Sanchez affirmed 8 October 2014 outlines that Mr Sanchez, the director of the Applicant, was hopeful of a positive outcome via the Council's assessment and misapprehended the effect of the "Stop the Clock" request pursuant to cl 109 of the EPA Regulation on the applicable timing for an appeal. Further the potential cost of an appeal was a consideration in the decision not to appeal the deemed refusal of the DA. 30In any event, the right of appeal against a refusal of a development application arises in two circumstances under the EPA Act: on the deemed refusal of a development application and the actual refusal. By not availing itself of the appeal right against the deemed refusal, the Applicant's later right of appeal (which has not yet accrued and cannot until the Council determines the DA) ought not be prejudiced or ignored. 31The failure of the Applicant to appeal the deemed refusal of the DA ought not weigh against it in the exercise of the Court's discretion in circumstances where no right of appeal currently exists. 32The Council's position in respect of the owner's consent provided by the Minister for Trade and Investment (the Minister) is unreasonable and is a constructive failure to carry out its duty to determine the DA. 33Firstly, the Department has not sought to withdraw its owner's consent. It has not even gone so far as to say owner's consent would not have been provided if it had been aware of the content of the review report. The letter from the Department (which is extracted at par 18 above) says only that it is "doubtful" that the granting of owner's consent would have been recommended. It then goes on to anticipate the consequences if the DA were to be approved which relate to the enforcement of the land owner's property rights. 34Secondly, and in any event, the withdrawal of owner's consent after the lodgement of a development application would not deprive the Council of the power to determine the DA: see Stafford Quarries Pty Ltd v Kempsey Shire Council (1992) 76 LGRA 52. 35Thirdly, owner's consent to a development application does not equate to a right to complete the development on land not belonging to the applicant for consent. It merely provides a right to have a proposal assessed and determined. The land owner has property rights which it may enforce. 36Regarding the Council's reliance on the public interest to justify deferral of determination of the DA, the public interest does not arise when the land owner is not seeking to withdraw or to positively impugn its grant of owner's consent. The public interest is protected by the ability of the land owner to enforce its property rights in relation to the Applicant if any adverse findings from the ICAC were to be eventually made. Further, the Department could otherwise seek to restrain the Council's determination of the DA or to challenge any approval that might be granted. 37In the Applicant's submission, the Council has failed to determine the DA by resolving on 18 August 2014 to defer determination to an unspecified time in the future which is contingent on the outcome of an inquiry by the ICAC, the status and scope of which is unknown. Deferral of the determination in this manner is unreasonable given the time that has already elapsed since the lodgement of the DA (some 19 months) and that the assessment of the merits of the application is otherwise complete. 38Further, if the Council is not currently satisfied that a valid owner's consent has been granted or that the DA is in the public interest, it is still able to determine the development application: it may refuse the DA on those grounds.

Reasonable time 39The Council has not refused to determine the DA, either actually or constructively. It has merely deferred making a decision. In those circumstances, the real issue is one of timing: is the Council under a duty to determine the DA now, or is it entitled to defer making its determination until the conclusion of the ICAC investigation? The Applicant relied on 19 months as being the relevant period, being the time from when the DA was lodged with the Council but the relevant period is from the date of the Department's letter of 14 August 2014 advising that the matter has been referred to the ICAC. Following that letter the Council deferred its determination for a second time. There was no earlier action by the Applicant to suggest that the Council was acting unreasonably.

Owner's consent 40Owner's consent is a jurisdictional prerequisite to a valid determination of a development application: Sydney City Council v Ipoh Pty Ltd [2006] NSWCA 300; (2006) 68 NSWLR 411 at [34(c)]. It is well established that owner's consent, once given under cl 49(1) of the EPA Regulation, cannot be withdrawn: Stafford Quarries Pty Ltd v Kempsey Shire Council (1992) 76 LGRA 52 at 55-56. However, the owner's consent provided by the Department on 5 March 2013 might not be a valid consent if it is demonstrated that that consent was tainted or procured by corrupt conduct. The requirement for owner's consent will not be satisfied "if a purported consent is not in law a consent at all": see Mulyan Pty Ltd v Cowra Shire Council [1999] NSWLEC 212; (1999) 105 LGERA 26 at [23]. Thus, if the owner's consent was obtained by fraud (for example, if the owner's signature is forged), then, as a matter of law, the consent would thereby be invalidated. By parity of reasoning an owner's consent obtained by corrupt conduct might not be a valid consent, subject of course to the nature of the corrupt conduct that is established. 41The Department has now indicated in no uncertain terms that, having now been apprised of certain facts, had they been known at the time it is doubtful whether owner's consent would have been recommended to the Minister (and therefore doubtful whether it would have been provided by the Minister). Although the precise nature of those findings is unclear, the suggestion implicit in the Department's letter is that the Minister was misled or deceived in some way in providing owner's consent. 42Under the general law, consent is vitiated by, amongst other things, unconscionable conduct, mistake, illegality and misrepresentation relying on Peter W Young The Law of Consent (1986, Law Book Company Limited) at p 73-79. Subject to further investigation, it is therefore possible that the owner's consent provided by the Minister was vitiated by corrupt conduct and was for that reason not a valid consent in law. 43Having been put on notice of those matters, the Council was therefore entitled (and possibly even under a duty) to investigate the circumstances in which owner's consent was provided by the Minister, and whether that consent was vitiated by corrupt conduct. That is precisely the purpose of the ICAC investigation. It was therefore appropriate for the Council to defer making a determination of the DA pending the outcome of that investigation. The Department has refused to provide a copy of the review report to the Council. Council can only act on the basis of information available to it. 44It is plainly not in the public interest that development consents be tainted or procured by corrupt conduct, even if the corrupt conduct only infects antecedent dealings in the relevant land. Support for this proposition is to be found in recent decisions concerning the ICAC investigation "Operation Jasper", which related to allegations of corruption in the grant of a mining licence at Mount Penny: Duncan v Ipp [2013] NSWCA 189; (2013) 304 ALR 359, Duncan v Independent Commission Against Corruption [2014] NSWSC 1018; (2014) 311 ALR 750. 45Those decisions confirm that allegations of corrupt conduct may be taken into account as a public interest consideration as part of the determination of applications for development under the EPA Act even if they relate to antecedent conduct concerning the grant of a licence over the relevant land, and do not directly concern the environmental or planning considerations of the development the subject of the application. 46Applied to the present case, the allegations of corruption which relate to the transfer of the lease to the Applicant may be taken into account as part of the Council's consideration of the public interest under s 79C(1)(e) of the EPA Act. Although the precise nature of the allegations of corrupt conduct has not been made public (or made known to the Council), it is clear that they are sufficiently serious to warrant referral to the ICAC and the strong conclusion reached by the Department concerning the giving of owner's consent. The Council was therefore entitled to defer making a determination of the DA until those serious allegations of corrupt conduct have been properly investigated. There was no constructive failure to determine the DA by the Council. Nor did the Council act unreasonably in doing so.

No order of mandamus made 47The Council can determine the DA given that owner's consent has been provided by the Department. It deferred its decision on the DA in May 2014 and again in August 2014. The Development Assessment Report dated 18 August 2014 recommended approval of the DA. If the Council's behaviour is unreasonable and/or there was a constructive failure to determine the DA by the Council the Court can exercise its discretion to make an order of mandamus. As the party seeking relief from the Court the Applicant bears the onus of establishing that these circumstances exist. 48As the Council submitted (and the Applicant agreed), the High Court has stated on a number of occasions, most recently in Plaintiff S297/2013 v Minister for Immigration and Border Protection [2014] HCA 24; (2014) 309 ALR 209 at [37], that where an Act is silent as to the period in which a statutory decision must be made, a reasonable time period is implied. What amounts to a reasonable time is ultimately a matter for determination by the Court, having regard to the circumstances of the particular case within the context of the decision-making framework established by the Act: Plaintiff S297/2013 at [37]. 49The requirement for owner's consent to a DA over land arises under cl 49(1) of the EPA Regulation. As identified in Ipoh the giving of owner's consent is an important part of the statutory framework for development assessment under the EPA Act per Hodgson JA at [4]-[5] in obiter. 50The Council is acting as the consent authority under the EPA Act in assessing the DA. Under s 79C(1)(e) the Council is required to take into account the public interest inter alia. As the Council submitted and the Applicant accepted, the range of matters relevant to the public interest is very wide: Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal [2012] HCA 36; (2012) 246 CLR 379 at [42]; Shoalhaven City Council v Lovell (1996) 136 FLR 58 at 63. In Pilbara, the High Court confirmed (at [42]) that when used in a statute, the expression "public interest" imports a discretionary value judgment to be made by reference to undefined factual matters and is "unconfined except in so far as the subject matter and the scope and purpose of the statutory enactments may enable the Court to pronounce given reasons to be definitely extraneous to any objects the legislature could have had in view". The granting of owner's consent is a requirement in the development application process under the EPA Act. It is within the Council's discretion in considering a DA in accordance with s 79C to consider in the public interest whether owner's consent has been validly granted. This is confirmed by observations of Bathurst CJ (Barrett and Ward JJA agreeing) at [206] in Duncan v Ipp. More relevantly given relatively similar facts to this matter, in Duncan v ICAC McDougall J held at [112] and [119]-[120] that corrupt conduct was relevant to the assessment of a Pt 3A application under the EPA Act by the relevant Minister as part of his consideration of the public interest. 51The Applicant accepted that owner's consent purportedly given under cl 49 of the EPA Regulation may be vitiated by corrupt conduct, if established. This is supported by general law principles outlined in The Law of Consent at p 77-79. 52The letter dated 14 August 2014 from the Department identifies a substantial concern by the Department in relation to the granting of owner's consent inter alia following the conduct of the independent review and is not speculative in nature. The Applicant's submissions underestimate the strength of the view expressed in the letter that it is doubtful whether the giving of owner's consent would have been recommended. The reasons given by the Council for its decision on 18 August 2014 to defer determination of the DA include reference to the letter from the Department dated 14 August 2014. The Council's reasons are set out above in par 20 and are matters within the Council's proper contemplation given its assessment functions under the EPA Act. As the Council submitted, as summarised in par 40, an owner's consent if tainted by fraud is likely to be invalidated. 53Mulyan considered different circumstances and the requirement for owner's consent (then s 77(1) of the EPA Act), Lloyd J holding that no owner's consent had in fact been given to a DA. The consequence was that the development consent issued by the Council was not a consent in law. That reasoning can apply by analogy in that if owner's consent is found to have been fraudulently or corruptly granted in this matter there is arguably no valid DA for which development consent can be granted in this case. Owner's consent is an essential precondition for a valid DA as found in Ipoh at [34(c)] and hence for a development consent. My finding is not based on any assumption of wrongdoing by the Applicant who may have no involvement in the behaviour under investigation. 54The Applicant relied on John Alexander Graham v Hornsby Shire Council (Land and Environment Court (NSW), 4 March 1998, Pearlman J unreported) where Pearlman J held (at p 2-3): The remedy of mandamus is a discretionary remedy. Its purpose is to compel a public authority charged with the performance of a public duty to discharge that duty (The King v The Mayor, Alderman and Councillors of Stepney (1902) 1 KB 317 at 321) and it is an appropriate remedy in circumstances where a council fails to determine the application before it (cf City of Marion v Lady Becker and Ors (No 2) (1973) 30 LGRA 288 at 322; Lee v Sydney City Council (1983) 50 LGRA 382 at 386). The basis for the grant of mandamus was enunciated by Dixon CJ in Tooth and Company Ltd and Anor v The Council of the City of Parramatta (1955) 97 CLR 492 at 498 in the following terms: But, where the legislature has provided for the very description of case a remedy designed as appropriate and adequate, a court should be careful that mandamus is not used to avoid recourse to the remedy or as a substitute for it. The general rule is that the court exercises its discretion against granting a writ of mandamus where a remedy is provided by way of appeal or the like which is equally convenient, beneficial and effective. If the writ of mandamus does not provide the party with a more convenient and better remedy, the court, in such a case, leaves the party with that which has been provided. 55Pearlman J at p 4-5 held: I am satisfied that there is no equally convenient, beneficial and effective remedy available to the applicant. It seems to me that, when Dixon CJ in Tooth v Parramatta referred to "a remedy ... by way of appeal or the like", he was referring to a remedy which relates to the circumstance which it is designed to cure. In this case, that circumstance is the council's failure to determine the development application which is currently before it. The lodging of a new development application does not cure that circumstance, it merely avoids it. ... the failure to appeal is only one factor to be considered in the exercise of the Court's discretion. In particular, it does not absolve the council from its statutory duty to determine the development application. 56The reasoning of Pearlman J can be embraced, identifying as it does the discretionary nature of the remedy and that it is directed to failure of a council to determine a DA. The passage of Dixon CJ in Tooth cited above emphasises that where another remedy exists such as an appeal right mandamus would not be granted. In Graham the Council sought to postpone determination of a DA to enable a lengthy period for investigation of groundwater. In that case the absence of an appeal right at the time of the application for mandamus was recognised as a relevant factor where the appeal right had lapsed as is the case here. Pearlman J considered that no effective remedy was available the appeal right having lapsed and that an order of mandamus was warranted. Each case must be determined on its own facts and those before me differ markedly from Graham. 57The Council submitted the failure of the Applicant to appeal was a self-inflicted prejudice, as it is in the sense that the Applicant did not avail itself of the right to a merits appeal which it had (whether at December 2013 or January 2014). Mr Sanchez's explanation in his affidavit is that he was uncertain of when the appeal period lapsed given the "stop the clock" letter sent by the Council, the cost of the appeal was of concern and that the Council appeared to be considering the development actively. I view this as a neutral factor in the context of this case as the key question is whether the Council acted reasonably in deferring for an undefined time a decision on the DA in these particular circumstances, rather than whether Mr Sanchez acted unreasonably in not pursuing his statutory appeal right. 58It is not appropriate to view the relevant period of delay of the decision by the Council as commencing from when the DA was lodged in March 2013. As events show, much of the intervening period was spent by the Council assessing the DA in the usual course of its business. As the Council submitted the relevant period is from the letter from the Department to the Council in August 2014 and the subsequent decision of the Council to defer the matter on 18 August 2014. The relevant period therefore is presently about three months. 59In all of these circumstances I do not consider the Council has acted unreasonably in deferring the DA as it has done, or constructively failed to determine the DA. Refusing the DA, an option the Applicant submitted was open to the Council, is not properly open. A Council must be clear about the basis on which it is refusing a DA and it is not presently in a position to be clear on the issue of whether owner's consent was properly granted. The outcome of the ICAC investigation is unknown. As a practical matter, if the DA was refused and an appeal right exercised to the Court under s 97 the same question would presumably arise in any event with similar uncertainty until the ICAC provides findings or advises that it does not intend to investigate the matter. 60My finding that the Council has acted reasonably is not undermined by the Applicant's submission that the owner, namely the Crown, may have avenues available to it, such as preventing the use of the subject land by the Applicant as lessee. I will not speculate on whether such avenues are available in the absence of any evidence. 61Accordingly I will not exercise my discretion to make the order of mandamus sought in the Amended Summons filed by the Applicant and the Amended Summons is dismissed.

Orders 62The Court makes the following orders: (1)The Amended Summons dated 3 September 2014 is dismissed. (2)Costs reserved. (3)Exhibits to be returned.

Amendments 13 November 2014 - Misnumbered Amended paragraphs: Par 48/49 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: 13 November 2014