CSR Ltd v Fairfield City Council and Anor

C. Upon the completion of the requirements of the matters set out in the deferred commencement condition, paragraph A above, within a period of two years from the date of this consent, then this consent becomes operative subject to the following conditions of consent: (there follows a list of conditions, numbered from 1 to 45).

For convenience, I shall refer to each of the conditions set out above as condition A, condition B and condition C.

I have proceeded upon the assumption that the requirements specified in condition A have not been fulfilled. There may be some argument as to whether that is in fact the case, but for the purpose of determining the issues now raised it is appropriate to make that assumption.

On 18 October 2000, CSR applied to the council for what it called "an extension to the period after which the development consent … will lapse". The application was expressly made under the provisions of s 95A of the Environmental Planning and Assessment Act 1979 ("the Act") in its amended form. The council did not determine that application, and CSR accordingly instituted a class 1 appeal based on a deemed refusal of the application.

Both the council and Jacfin have raised a number of preliminary questions of law, but the essential question which they each raise is whether the period of two years specified in condition B may be extended under s 95A. The determination of that question, of course, goes to the competency of the current appeal. I deal exclusively with that question, because it is the critical issue, although I will outline the other questions later in this judgment and address them briefly.

At the outset, and in order to set the statutory context, it is relevant to note some historical facts. The development application for the site was lodged with the council in 1997. At that time, the Act in its unamended form was in force. Development consent was granted by this Court on 20 October 1998, at which time the amended Act was in force, but by reason of transitional provisions, consent was granted pursuant to the unamended Act. The amended Act came into force on 1 July 1998. I am prepared to accept (although not finally deciding that point) that it is the amended Act which applies to the application for extension the subject of the current appeal. For the purpose of determining the issues which now arise, nothing turns upon the difference between the unamended Act and the amended Act, because the relevant provisions are equivalent. However, for the sake of clarity, in this part of my judgment, when setting out the relevant provisions, I refer to the equivalent of each particular provision.

Turning now to the relevant provisions, it is to be noted that the extension application was expressed to be made pursuant to s 95A of the amended Act (equivalent to subs 99(4B), (4C) and (4D) of the unamended Act), which relevantly provides as follows: 95A(1) If, in granting a development consent, the consent authority reduces the period after which the consent lapses to less than 5 years, the applicant or any other person entitled to act on the consent may apply to the consent authority, before the period expires, for an extension of 1 year. (2) The consent authority may grant the extension if satisfied that the applicant has shown good cause.

(3) A person making an application under subsection (1) who is dissatisfied with the … failure of the consent authority to determine the application within 40 days after it is made, may … appeal to the Court, and the Court may determine the appeal.

Condition A expressly states that the consent was granted pursuant to s 91AA of the unamended Act (basically equivalent to s 80(3) of the amended Act), which relevantly provides as follows: 91AA(1) A development consent may be granted subject to a condition that the consent is not to operate until the applicant satisfies the consent authority as to any matter specified in the condition. Nothing in this Act prevents a person from doing such things as may be necessary to comply with the condition. (2) Such a consent must be clearly identified as a 'deferred commencement' consent (whether by the use of that expression or by reference to this section or otherwise).

(3) A 'deferred commencement' consent must clearly distinguish conditions concerning matters as to which the consent authority must be satisfied before the consent can operate from any other conditions.

(4) The consent authority may specify the period in which the applicant must produce evidence to the consent authority sufficient to enable it to be satisfied as to those matters.

(5) The applicant may produce evidence to the consent authority sufficient to enable it to be satisfied as to those matters and, if the consent authority has specified a period for the purpose, the evidence must be produced within that period.

(6) If the applicant produces evidence in accordance with this section, the consent authority must notify the applicant whether or not it is satisfied as to the relevant matters. If the consent authority has not notified the applicant within the period of 28 days after the applicant's evidence is produced to it, the consent authority is, for the purposes only of section 97, taken to have notified the applicant that it is not satisfied as to those matters on the date on which that period expires.

Another relevant provision concerns the lapsing of development consents found in s 99 of the unamended Act (equivalent to s 95 of the amended Act). Section 99(1) provides, so far as is relevant for present purposes, that a development consent shall lapse five years after the date from which it operates. Section 99(2) provides as follows: 99(2) A consent authority, in granting development consent, may vary either or both of the periods referred to in subsection (1), despite that subsection.

Finally, s 83 of the amended Act (equivalent to s 93 of the unamended Act) deals with the date from which a development consent "becomes effective and operates". So far as concerns the development consent in this case, that date is, pursuant to s 83(2), the date of determination of the appeal. Apart from s 95A, all the following references to section are to the unamended Act.

Against that statutory background, the competing claims may be set out. It is convenient to deal with the respondents' claims first and collectively, because it is the case put by Mr Maston of counsel on behalf of the council and by Mr Tobias QC of counsel for Jacfin, that there is no power to grant an extension of the condition B period under s 95A. Their claim may be summarised as follows:

(1) Section 95A applies to the situation where the consent authority has reduced the period after which the development consent lapses to less than five years. By necessary implication, that refers to a situation where a consent authority has exercised the power conferred upon it by s 99(2) to vary the period of lapsing provided for in s 99(1); (2) In particular, the variation contemplated by s 99(2) is a variation of the period "after the date from which (the development consent) operates";

(3) But condition B does not purport to vary the period "after the date from which (the development consent) operates". Instead, condition B has the effect of suspending the operation of the development consent unless the requirements specified in condition A have been satisfied within a period of two years; (4) Condition B refers to the consequence if the requirements set out in condition A are not fulfilled. In that circumstance, the development consent is to "… lapse and become inoperative". On its proper construction, those words must mean that the development consent never operates, or, conversely, remains permanently inoperative. Accordingly, condition B integrally relates to the deferred commencement condition; (5) Condition B could not therefore have been imposed pursuant to s 99(2), and therefore s 95A does not apply to CSR's application, and the appeal from the council's deemed refusal of that application is incompetent.

The applicant's claim, put by Mr Hale SC on its behalf, may be summarised as follows. The deferred commencement condition is condition A. That follows from the wording of the conditions. Condition A is expressed to be the deferred commencement condition and it comprises three separate paragraphs, numbered 1, 2, and 3. Condition B is not expressed to be, and does not purport to be, a deferred commencement condition, and it is instead an additional condition of consent. It expressly provides that the development consent "shall lapse" if the requirements imposed by condition A are not fulfilled. However, s 91AA, which empowers the making of a deferred commencement condition, makes no provision for the lapsing of a development consent. Section 91AA(4) simply provides for the period in which the applicant must provide evidence to the consent authority. Hence, the consequence of lapsing contemplated by condition B must be referrable to some other power. The only available power was s 99(2). It must be assumed that condition B was imposed within power, and hence s 99(2) was the source of the power. Consequently, s 95A now applies to permit an application for an extension of the period specified in condition B.

The answer to the question of whether or not s 95A applies and whether or not the appeal is incompetent depends on the proper construction of the conditions of consent, in particular conditions A, B and C, and upon the proper application of the relevant statutory provisions.

The first step in resolving the question is to acknowledge that a development consent was granted by the Court and that it was granted subject to conditions. Condition A expressly states that the consent was granted pursuant to s 91AA, and that it was a "deferred commencement" condition. The effect of condition A was to suspend the operation of the development consent, not to make the actual grant itself conditional. So much is plain from the opening words of condition A which speaks of the fact that the "… consent is granted pursuant to s 91AA …" and that the consent "… shall not be operative …" until the specified requirements have been fulfilled.

Conditions B and C are concerned with the suspension of the operation of the development consent, and neither of those conditions is directed to the lapsing of the consent, despite the use of the word "lapse" in condition B. That follows from the language of those conditions read as a whole in their context. They form part of the section of the consent which deals with the suspension of the operation of the consent, and they are followed by conditions numbered 1 through to 45 which are directed to the manner of operation of the development once the consent has become operative. In that context, condition B is directed towards imposing a time limit for the fulfilment of the deferred commencement requirements. Accordingly, when condition B speaks of the consequence that "… the consent shall lapse and become inoperative …", it is, properly construed, directed to the period of suspension of the operation of the consent, and I agree that its meaning, as Mr Maston submitted, is that, if the requirements are not fulfilled within the specified period, then the consent is rendered "permanently inoperative". If, on the other hand, the requirements are fulfilled within the specified period, then condition C takes effect, the suspension of the operation of the consent is lifted, and, in the words of condition C, the consent "… becomes operative subject to the following conditions of consent" (referring to conditions number 1 to 45).

In this context, the relevant statutory provisions take effect in the following way. Once the development consent was granted by the Court, then, pursuant to s 93(2)(b), it would normally "become effective and operate" from the date of the Court's decision. But s 91AA empowers a consent authority (and the Court on appeal) to impose a condition which requires the consent not to operate until the applicant has satisfied specified requirements. It is clear that the actual grant of development consent is not itself made conditional by the operation of these sections. Section 91AA expressly states that development consent "may be granted" subject to a deferred commencement condition, and s 93(2)(b) is predicated, of course, upon the grant of development consent having been made.

Section 99(1) relevantly provides that a development consent, once granted, will lapse after the expiration of five years "after the date from which it operates". (It will not lapse if the use of any land, building or work is actually commenced before the date upon which the development consent would otherwise lapse - s 99(4A)). The period of five years may be varied by the consent authority in granting the development consent - s 99(2). It is clear, in my opinion, that the period of five years stipulated in s 99 has not yet commenced to run in relation to the development consent the subject of these proceedings. That is because the development consent has not yet commenced to operate. It is also clear that the Court, in granting the development consent, did not, under s 99(2), vary the five year period. Properly construed, condition B does not have any impact upon the five year period. Condition B is directed to the suspension of operation of the development consent, not to its lapsing.

Hence, s 95A has no application in relation to the two year period specified in condition B. Section 95A is predicated upon there having been a variation of the period of five years under s 99(2). No such variation is effected by condition B, and therefore s 95A has no work to do in connection with it. Accordingly, CSR's application to extend the two year period under s 95A is misconceived, and its appeal from the council's deemed refusal of its application is incompetent.

I return to a matter I noted earlier in par 6. Four preliminary questions of law were raised by the council, and in effect repeated in Jacfin's statement of issues. In summary, they are as follows:

(1) Is the period of two years in condition B able to be extended under s 95A? (2) If yes, is the council the consent authority to whom the s 95A application should be made? (3) If no, is the period of two years in condition B able to be extended by way of modification under s 96 of the amended Act?

(4) If the answer to question 1 is no, and the answer to question 3 is no, has the development consent lapsed in circumstances where the requirements specified in the deferred commencement condition have not been satisfied?

There was some discussion during addresses as to what steps (other than a s 95A application) might have been or might still be available to the applicant in order to render the development consent operative, such as an application to modify condition B pursuant to s 96, or a challenge to the validity of condition B. However, no such proceedings were before the Court and it is not appropriate to deal with them in this judgment. In particular, as there is no application to modify the development consent (and, in particular, condition B), I consider it would not be appropriate to answer question 3, it being hypothetical in those circumstances.

If it was the case (contrary to the finding I have made) that condition B provided for a lapse of the development consent upon non-fulfilment of the deferred commencement requirements, and that provision purported to be made under s 91AA and not s 99(2), then there must be a question as to whether condition B would be valid - see Pulver Cooper and Blackley Pty Ltd v Johnson and Anor (1998) 101 LGERA 76 at 95 - 96. Section 91AA(4) empowers the imposition of a time limit in which the applicant must produce evidence of the fulfilment of the requirements, but it does not make any provision for the consequence of non-fulfilment within the time limit so specified. In view, however, of the finding I have made that, on the proper construction of condition B, the consequence of non-fulfilment of the requirements is simply that the development consent remains permanently inoperative, the question of potential invalidity of condition B does not arise.

Question 4 raises an issue as to whether the development consent has lapsed. For the reasons I have outlined, I do not think that the fact that the deferred commencement requirements have not been satisfied has the consequence that the development consent has lapsed, and, were question 4 not framed by reference to question 3, I would have formally answered question 4 in the negative. However, the consequence of the non-fulfilment of the requirements is that the development consent will remain permanently inoperative. Mr Maston submitted that this is merely "semantics", and that, as a practical matter, the development consent has lapsed. That may be the practical consequence, but it is not the legal consequence. In my opinion, the development consent remains on foot, and the applicant may have courses open to it to take as a consequence of that finding.

The parties made submissions in relation to costs. Mr Maston and Mr Tobias submitted that, if I should answer the preliminary questions of law in favour of the respondents, then I should also make an award of costs in their favour. Mr Hale resisted such an order upon the basis that CSR's application to the council under s 95A was appropriate since it was but one solution to the problem it faced as a consequence of the deferred commencement conditions potentially not being fulfilled within the specified period.

Paragraph 10 of the Court's Practice Direction 1993 provides that the practice of the Court is that no order for costs is made in planning and building appeals unless the circumstances are exceptional. Whilst the validity of par 10 remains an open question following the decision of the Court of Appeal in relation to par 10A of the Practice Direction (see Maurici v Chief Commissioner of State Revenue [2001] NSWCA 78), I take the view that par 10 remains the practice of this Court, and exceptional circumstances need to be established. I also take the view that the raising of a preliminary question of law in class 1 proceedings has the consequence only that it is a factor to be taken into account in considering whether there are exceptional circumstances. I am aware that this view is contrary to that taken by Talbot J in Gibson v Mosman Municipal Council [2001] NSWLEC 201, but, for the reasons which I set out in Outdoor Australia Pty Ltd v Auburn Council (1996) 89 LGERA 365 I would not wish to depart from it.

I turn, then, to consider whether the raising of the preliminary question of law in these proceedings is an exceptional circumstance. The question here, of course, went to the whole basis for the class 1 appeal, and whether that appeal was incompetent. It raised an issue which was fundamental to the proceedings themselves, not simply to the issue of whether or not to grant consent to CSR's application on its merits. It was raised by the council very early in the proceedings, indeed, two weeks after the first callover, and it called the whole proceedings into question. In my opinion, those matters constitute exceptional circumstances, and it follows that the respondents are entitled to an order for costs in their favour.

(1) I answer the preliminary questions of law as follows: Question 1: Is the period of two years referred to in condition B of the development consent granted by this Court on 20 October 1998 able to be extended under s 95A of the Environmental Planning and Assessment Act 1979?

Question 2: If the answer to question 1 is "yes", is the first respondent the "consent authority" to whom the application under s 95A must be made?

Question 3: If the answer to question 1 is "no", is the period of two years referred to in condition B able to be extended by way of modification under s 96 if an application pursuant to that section was not made before 20 October 2000?

Answer: The question is hypothetical, as no s 96 modification application is before the Court, and hence it is inappropriate to furnish an answer.

Question 4: If the answer to question 1 is "no" and the answer to question 3 is "no", has the development consent lapsed if the deferred commencement conditions were not satisfied by 20 October 2000?

Answer: I decline to answer this question as framed (since question 3 is not answered) but I hold that the development consent would not have lapsed by reason of the fact that the deferred commencement conditions may not have been satisfied by 20 October 2000. The development consent instead would remain inoperative. (2) I order the applicant to pay the costs of both respondents arising out of or in connection with the raising of the preliminary questions of law. 28. The answers which I have provided would seem inevitably to require the dismissal of the class 1 appeal, but I refrain from making any final orders to this effect until the parties have had an opportunity to consider this judgment. Accordingly, I stand the proceedings over for mention before me at 9:30am on 8 October 2001.

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.