Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : NAIRN -v- METRO-CENTRAL JOINT DEVELOPMENT ASSESSMENT PANEL [2016] WASC 56

Judicial review - Appeal from grant of certiorari to quash development approval - Unreasonableness - Inferred error - Where reasons for decision not required nor provided

Town planning - Development approval for predominantly residential building which exceeded the applicable maximum residential plot ratio - Where guidance statement provided that new development 'should consist of predominantly non-residential uses to ensure the precinct consolidates its role as an employment destination' - Where maximum residential plot ratio could be varied where it can be demonstrated to the panel's satisfaction that the development is consistent with applicable guidance statements

City of South Perth Town Planning Scheme No 6 (WA)

First Respondent : Mr M D Cuerden SC & Ms M M J Tannock

Second Respondent : Mr M D Cuerden SC & Ms M M J Tannock

A v Corruption and Crime Commissioner [2013] WASCA 288, (2013) 306 ALR 491

Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26; (1949) 78 CLR 353

Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163

Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531

Minister for Immigration v Li [2013] HCA 18; (2013) 249 CLR 332

R v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69 CLR 407

1 The appellant sought planning approval for the development of a building on land at 74 Mill Point Road, South Perth. The third respondent (the panel) granted that approval. The first and second respondents, who own neighbouring properties and opposed the proposed development, applied for judicial review of the panel's decision. The primary judge granted certiorari to quash the planning approval. The appellant now appeals against the primary judge's decision.

2 For the following reasons, the appeal must be dismissed.

3 The proposed building has 29 storeys and two basement levels. The appellant proposed a mixed use development comprising 91 residential apartments, 18 commercial tenancies (including a café), and various residential amenities. The ground floor consists of a café, lobbies and other facilities including parking. Six residential units were proposed for levels 1 to 3. Levels 4 to 7 comprised 17 commercial tenancies, proposed for office use. Various tenants' amenities were to be located on level 8. A further 85 residential units were proposed for levels 9 to 29.

4 Planning approval was required under City of South Perth Town Planning Scheme No 6 (TPS6). TPS6 is a local planning scheme which has effect as if enacted by the Planning and Development Act 2005 (WA). The subject land is located within 'Special Control Area SCA1' of the 'South Perth Station Precinct' (SCA1), classified under TPS6. It is also located within the 'Mends Sub-Precinct', and the 'Special Design Area', of SCA1.

5 The detail of the scheme provisions was identified in the primary judge's reasons,[1] and need not be repeated in full here. The critical elements of the scheme for present purposes are identified below.

6 Schedule 9 to TPS6 introduces specific development requirements relating to 'comprehensive new development' within SCA1. Table A to sch 9 is a list of 'Development Controls', each of which consists of an 'Element' (such as land use, building height or parking) for which 'Guidance Statements' and 'Development Requirements' are prescribed. It is common ground that the appellant's proposed building is 'comprehensive new development' for these purposes.

7 The panel was required to determine the appellant's application for planning approval as if it were the responsible authority under TPS6.[2] The panel granted conditional planning approval on 25 May 2015. The panel did not, and was not required to, publish reasons for that decision.

8 The grounds on which the judicial review application succeeded relate to the 'plot ratio' of the proposed development. 'Plot ratio' is relevantly the ratio of the gross total of the areas of all floors of a building to the area of land within the lot boundaries.[3] TPS6 refers, for example, to a ratio of 3:1 as a plot ratio of 3.0.

9 There is no maximum plot ratio within SCA1.[4] All 'comprehensive new development' is to have a non-residential component with a minimum plot ratio of 1.0.[5] Where the total plot ratio exceeds 3.0, the residential plot ratio is not to exceed 1.5 unless the Council approves a higher plot ratio.[6]

10 The non-residential plot ratio of the proposed development is 1.5. The residential plot ratio is 6.4.

11 The appellant accepted the following propositions (appeal ts 3 - 4). The panel could only grant planning approval for development which conformed to the Development Requirements in sch 9 to TPS6. The proposed development would only conform to those requirements if the panel, standing in the shoes of the Council, varied the maximum residential plot ratio to 6.4 or greater. The panel could only vary the maximum residential plot ratio for sites within the Special Design Area if 'it can be demonstrated to the satisfaction of [the panel] that the development is consistent with the Guidance Statements applicable to' the Element of 'Plot Ratio and Land Use Proportions'.[7]

12 Guidance Statement (a) to the Element 'Plot Ratio and Land Use Proportions' states that:

With the exception of the South Perth Esplanade and Stone-Melville Sub-Precincts, any comprehensive new development should consist of predominantly non-residential uses to ensure the precinct consolidates its role as an employment destination.

13 As the primary judge correctly observed, it is plain that the proposed development is for predominantly residential use [61].

14 The primary issue in dispute before the primary judge concerned whether the panel had to be satisfied that the proposed development was consistent with the Guidance Statement. The primary judge concluded that the panel did have to be so satisfied before varying the maximum residential plot ratio. There is no reason to doubt that conclusion, which is not challenged in this appeal.

15 The primary judge rejected a ground which contended that the panel failed to address the question of whether it was satisfied that the proposed development should consist of predominantly non-residential uses [88] - [91]. However, he inferred that, in addressing that question, the panel adopted an erroneous construction of TPS6 which was contained in submissions made to it by the City of South Perth and the appellant [89] - [95]. Those submissions argued that the development would be consistent with the Guidance Statement if the non-residential component had a minimum plot ratio of 1.5. The primary judge also concluded that the panel made a decision not properly or reasonably open to it because no reasonable or rational decision-maker could have been satisfied that the development consists of predominantly non-residential uses [96].

16 It is convenient to begin by considering ground of appeal 5, which challenges the conclusion that the panel's decision was unreasonable and therefore invalid. The appellant must succeed on that ground to succeed in the appeal.

The panel's satisfaction is a condition for the valid exercise of power

17 An express condition for the valid exercise of the panel's power to vary the maximum residential plot ratio was that it could be demonstrated to the panel's satisfaction that the development was consistent with the Guidance Statement.[8] Unless the panel was satisfied that the development was consistent with the Guidance Statement, it had no power to approve the development.

18 Where the valid exercise of statutory power is conditioned by the decision-maker forming an opinion or state of satisfaction, there may be an implied condition that the opinion or state of satisfaction be reasonably formed.[9] That ordinary rule of statutory construction is applicable to the requirement as to the panel's state of satisfaction contained in Development Requirement 13.1(a) of Table A in sch 9 to TPS6.

19 This construction is supported by the requirement that the relevant matters can be 'demonstrated to the satisfaction' of the relevant body. This indicates that the subject matter of the panel's satisfaction must be demonstrable. It also requires that the panel's state of satisfaction be based on material which is capable of demonstrating the relevant matters. If the panel concludes that the development is consistent with the Guidance Statement when it is not reasonably open to do so, and when the material before it is not capable of supporting that conclusion, then the state of satisfaction which TPS6 requires will be absent. In those circumstances, the condition for the valid exercise of the power to vary the maximum residential plot ratio will not be satisfied.

20 The appellant accepts that the panel could not reasonably have been satisfied that the appellant's proposed development consisted of predominantly non-residential uses, and that the material before the panel was not capable of supporting that conclusion. However, the appellant contends that this was not the only issue the panel was required to address (appeal ts 4 - 5). The appellant argues that its proposed development can reasonably be regarded as consistent with the Guidance Statement even though it does not consist of predominantly non-residential uses. This argument in the appeal was not advanced before the primary judge.

21 The crux of the appellant's argument in summarised in the following passage of its written submissions in the appeal:[10]

The question was whether a Council could be satisfied of consistency between the development and a 'Guidance Statement'. A Guidance Statement is a guide only, not a prescription or even a Development Requirement. The particular guidance here was that developments 'should' consist of predominantly non-residential uses for a purpose - to ensure that the precinct consolidates its role as an employment destination. The purpose is the critical thing. A development of a predominantly residential building is consistent with this if (say) it is an early development in a 'Special Design Area' and done with a view to bringing a critical mass of consumers to an area to facilitate later commercial (or non-residential) development in such Special Design Area. A development of a predominantly residential building is consistent with this if (say), within the Special Design Area it is in an area more suited to residential development than non-residential development. Say it is closer to parks, transport and the like. A predominantly residential building is consistent with staged development of an area in which the purpose of development is to consolidate the area as an employment destination.

22 Senior counsel for the appellant submitted that the panel had to satisfy itself that the proposed development was 'consistent with an aspiration that the building consists predominantly of non-residential uses for a purpose' (appeal ts 11). If that purpose could be otherwise achieved in a manner consistent with the performance requirements in Table B of sch 9, then a decision to approve the development would be consistent with the Guidance Statement. Senior counsel submitted that there was no need for the panel to have evidence that the purpose could be achieved, and what was required was 'the existence of a logical postulation of it only' (appeal ts 14). He submitted that the panel was required to ask itself whether the proposed development consisted of predominantly non-residential uses. If it did not, the panel was required to ask itself whether the proposed development was nonetheless consistent with ensuring that the precinct consolidates its role as an employment destination.

23 The appellant also relies on that part of the Guidance Statements to Element 13 in Table A which states that 'properties within the Special Design Area achieve greater development yields than permissible by the requirements of' that Table.

24 There are two difficulties with the appellant's submissions on ground 5.

25 First, the submissions proceed on an erroneous construction of TPS6. The Guidance Statement identifies a planning outcome - that comprehensive new development should consist of predominantly non-residential uses. The Guidance Statement also expressly states the purpose of provision for predominantly non-residential uses: ensuring that the precinct consolidates its role as an employment destination. The Guidance Statement does not contemplate any other means of pursuing that object. It specifies both the end and the means by which that end is to be achieved. Consistency with the Guidance Statement requires adherence to the specified means of pursuing that object. A development which does not consist of predominantly non-residential uses cannot be consistent with the Guidance Statement on the basis that it seeks to achieve the object by some other means.

26 The appellant's construction of the Guidance Statement, that the purpose is the critical thing, would deprive the reference to predominantly non-residential uses of any legal effect and is therefore inconsistent with the text of the provision. By contrast, the construction we have preferred gives effect to the last limb of the Guidance Statement as an expression of the legislative object of the provisions to which it relates. While objects clauses do not themselves have operative effect, they are a common means of indicating the purpose for which legislation is enacted.

27 A construction of Development Requirement 13.1(a) which requires the panel or Council to be satisfied that proposed development consist of predominantly non-residential uses is consistent with the broader structure of TPS6 as it relates to SCA1. Development in the residential sub-precincts of SCA1 is subject to non-variable height limits of up to 25 m.[11] In residentially zoned areas of the Mill Street Precinct which are adjacent to SCA1, there is a non-variable height limit of up to 28 m.[12] TPS6 does not accommodate the construction of a 29-storey residential tower in those areas.[13] TPS6 encourages the use of the Mends Sub-Precinct for small scale commercial/retail uses. The appellant's construction of TPS6 would allow high-rise predominantly residential towers in the Special Design Area of the Mends Street Precinct. That result is at odds with the limits for residential development imposed in other areas and with the planning objectives prescribed for the Mends Street Sub-Precinct. A construction which allows a variation of height limits and plot ratio only for developments consisting of predominantly non-residential uses avoids that incongruity.

28 Secondly, even if the appellant's construction were to be accepted, there was no material before the panel capable of demonstrating that the development would ensure that SCA1 consolidated its role as an employment destination.

29 The examples given in the submission quoted above are entirely hypothetical, and are inapt to the area in which the development is proposed. The subject land is not closer to parks or transport than other parts of SCA1.[14] The area is already densely populated, and the material before the panel did not support the suggestion made by senior counsel for the appellant that residences were required immediately above the proposed café to make it viable.

30 The idea of 'early development' with a view to 'bringing a critical mass of consumers' to the area to facilitate later commercial development is also inconsistent with the text of TPS6. The Guidance Statement refers to the consolidation rather than the establishment of an 'employment destination'. It also makes exceptions for the adjacent South Perth Esplanade and Stone-Melville Sub-Precincts,[15] thereby indicating the areas to which predominantly residential development is to be directed. That is confirmed by the Guidance Statements for Element 1 of Table A, which encourage land uses which preserve the residential character of the South Perth Esplanade and Stone-Melville Sub-Precincts (in the latter case, with limited commercial development).

31 Senior counsel for the appellant suggested that, even in this densely populated area of South Perth, it would be a relevant consideration that a predominantly residential tower would bring customers to a business (such as a coffee shop) operating on the lower floors. However, there was nothing before the panel that suggested this to be the case, or which advanced such a justification for the conclusion that a predominantly residential development would ensure the consolidation of the precinct as an employment destination.

32 As noted above, the requirement that the relevant matters can be 'demonstrated to the satisfaction' of the panel indicates that the panel's state of satisfaction must be based on material which is capable of demonstrating the relevant matters. More is required than a hypothetical possibility which has no relevant factual support in the material before the panel.

33 Senior counsel for the appellant relied on a passage from a planning report provided to the City of South Perth in relation to the application for planning approval. Page 6 of that report sets out the City's (erroneous) view that achieving a minimum non-residential plot ratio of 1.5 was sufficient to satisfy the requirements of the Guidance Statement. The author of the report also expresses the opinion that the development 'provides an appropriate mix of residential and non-residential land uses that will consolidate [SCA 1] as an employment destination'. However, the only support which the author offers for that opinion is the City's (erroneous) construction of the Guidance Statement and the nature of residences and related facilities which were proposed. This assertion, supported in the manner described above, cannot reasonably be regarded as demonstrating that the proposed development would consolidate SCA1's role as an employment destination.

34 Senior counsel for the appellant submitted, with 'some hesitation', that the City's construction of the scheme was not incorrect (appeal ts 15). His hesitance was justified. The construction that Development Requirement 3.4 provides for a minimum non-residential plot ratio of 1.5, rather than a maximum residential plot ratio of 1.5, is inconsistent with the text of the scheme and must be rejected.

35 The appellant's reference to provision for properties in the Special Design Area to achieve 'greater development yields' does not assist its argument. The limiting effect of the Guidance Statement in relation to plot ratio concerns the kind of development (predominantly non-residential) rather than 'development yields'.

36 For the two reasons explained above, the material before the panel was not capable of satisfying it that the appellant's proposed development was consistent with the Guidance Statement. The state of reasonable satisfaction which TPS6 required as a condition for the valid exercise of the power to vary the maximum residential plot ratio was absent. Without a valid exercise of that power, Development Requirement 3.4 provided that the residential plot ratio for the proposed development was not to exceed 1.5. The panel's decision to grant planning approval for development with a residential plot ratio of 6.4, contrary to the Development Requirements in sch 9 to TPS 9, was infected by jurisdictional error.

37 The decision to grant planning approval may also be regarded as legally unreasonable in a different sense, explained by Dixon J in Avon Downs Pty Ltd v Federal Commissioner of Taxation[16] in the following terms:

If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law.

38 In that manner the court may infer error where the result is unreasonable or plainly unjust, or where the decision lacks an evident and intelligible justification.[17]

39 Ordinarily a statute conferring an administrative power on a decision-maker will implicitly require that the decision-maker understands his or her statutory powers and obligations.[18] A decision-maker will ordinarily commit jurisdictional error when he or she misapprehends the nature or limits of the relevant statutory power.[19]

40 In the present case, for reasons explained above, the panel could only have approved the proposed development if the appellant demonstrated to its satisfaction that the building would consist of predominantly non-residential uses. In the absence of any reasons, and of any evident or intelligible justification for a conclusion that the proposed development consisted of predominantly non-residential uses, it may be inferred that the panel must have asked itself the wrong question or misapprehended the nature or extent of its powers. It can be inferred that the panel must have made a jurisdictional error, even if the particular error cannot be identified.

41 For the reasons explained above, the primary judge correctly made orders quashing the panel's decision on the ground of unreasonableness. Ground of appeal 5 is not made out.

42 Given the manner in which ground 5 has been resolved, it is unnecessary to deal with grounds of appeal 1 - 4. Those grounds attack, in various ways, the primary judge's inference that the panel adopted the erroneous construction advanced in submissions made to the panel. Even if that particular error by the panel is not established, the panel's decision remains invalid for the reasons explained above.

43 In light of the failure of the appeal, it is also unnecessary to deal with the first and second respondents' notice of contention.

44 For the reasons explained above, the appeal must be dismissed.

[1] Nairn v Metro-Central Joint Development Assessment Panel [2016] WASC 56.

[2] Regulation 8(1) of the Planning and Development (Development Assessment Panels) Regulations 2011 (WA).

[3] Schedule 1 to TPS6 (definition of 'plot ratio').

[4] Development Requirement 3.1 of Table A in sch 9 to TPS6.

[5] Development Requirement 3.2 of Table A in sch 9 to TPS6.

[6] Development Requirements 3.4 and 13.1 of Table A in sch 9 to TPS6.

[7] Under Development Requirement 13.1 of Table A in sch 9 to TPS6.

[8] Development Requirements 3.4 and 13.1(a) of Table A in sch 9 to TPS6.

[9] R v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69 CLR 407, 432; Minister for Immigration v Li [2013] HCA 18; (2013) 249 CLR 332 [90]; A v Corruption and Crime Commissioner [2013] WASCA 288, (2013) 306 ALR 491 [120] - [122].

[10] Paragraph 57 of the appellant's written submissions.

[11] For comprehensive new development in the South Perth Esplanade and Stone Melville Sub-Precincts, the height limits are prescribed by cl 6.1A(10)(b) of, and Development Requirement 5.1 of Table A in sch 9 to, TPS6. For development in SCA1 which the Council has determined to be a minor alteration, addition or extension to an existing development, the limits are provided by cl 6.1A(1) and cl 6.1A(10)(a) of TPS6 read with the relevant scheme maps.

[12] Clause 6.1A(1) of TPS6, read with the relevant scheme maps.

[13] By cl 7.8(2) of TPS6, the power to approve development that does not comply with requirements prescribed by the Scheme shall not be exercised with respect to the Building Height Limits referred to in cl 6.1A of TPS6.

[14] The Parks and Recreation Reserves are shown on the Scheme Map. According to the City of South Perth's report, the subject land is located between 500 - 800 m from a proposed train station which SCA1 is designed to accommodate: see page 8 of the Responsible Authority Report at GAB 114.

[15] In addition, by Development Requirement 3.7 of Table A in Schedule 9 to TPS6, the plot ratio requirements in Development Requirements 3.2, 3.3 and 3.4 do not apply to the South Perth Esplanade and Stone-Melville Sub-Precincts.

[16] Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26; (1949) 78 CLR 353, 360, cited with approval in Li [27], [68].

[19] Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531 [72]; Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163, 177 - 178.