El Khouri v Gemaveld Pty Ltd

barra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55; [1999] NSWCA 8 Woolworths Ltd v Pallas Newco Pty Ltd (2004) 61 NSWLR 707; [2002] NSWCA 422 Category: Principal judgment Parties: Peter John El Khouri (First Applicant) Goumana Therese El Khouri (Second Applicant) Effi Theodorakopoulos (Third Applicant) Gemaveld Pty Ltd (First Respondent) Land and Environment Court (Second Respondent) Georges River Council (Third Respondent) Representation: Counsel: J Lazarus SC with J Farrell (Applicants) C Leggat SC with S Berveling and C Koikas (First Respondent)

Solicitors: Pikes & Verekers Lawyers (Applicants) Salim Rutherford Lawyers (First Respondent) File Number(s): 2022/00197368 Publication restriction: Nil Decision under appeal Court or tribunal: Land and Environment Court of New South Wales Jurisdiction: Class 1 Citation: [2022] NSWLEC 1182 Date of Decision: 7 April 2022 Before: Horton C File Number(s): 2021/293258

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

JUDGMENT

1. GLEESON JA: I agree with Leeming JA.
2. LEEMING JA: The applicants invoke this Court's supervisory jurisdiction seeking to quash development consent granted by the Land and Environment Court over the first respondent's neighbouring land because they have established on evidence which was not before that Court that the development exceeds a height restriction applicable to the land. Following a remitter at which facts were found, the principal and dispositive issue is one of statutory construction, namely, whether compliance with the height restriction is a jurisdictional fact which can be reviewed by this Court on the basis of evidence not before the Land and Environment Court. For the reasons which follow, I have concluded that it is not a jurisdictional fact. It follows that the summons should be dismissed.

Factual background

1. The applicants, Mr Peter and Ms Goumana El Khouri and Ms Effi Theodorakopoulos, are neighbours to the north and south of land owned by the first respondent, Gemaveld Pty Ltd. All three lots are on Stuart Street, Blakehurst in southern Sydney. All three lots are long, thin and descend steeply from street level on the east to the Georges River to the west, as is seen from the aerial photograph from the Statement of Environmental Effects lodged with the development application (the red line identifies the boundaries of Gemaveld's land).
2. Gemaveld's land has a frontage of 15.24m, and northern and southern boundaries of 147.555m and 149.049m respectively, with an area of some 2029m2.
3. Gemaveld applied for approval of development comprising demolition works and the construction of a multi-level dwelling house, swimming pool, front fence, landscaping and site works. The plans approved for Gemaveld's land are for a residence with four levels, numbered 0 (which is street level), -1, -2 and -3.
4. The land is zoned residential. The Kogarah Local Environmental Plan 2012 (Kogarah LEP) imposes a height restriction of 9m over all three blocks. It is not straightforward to apply that restriction. Building height is measured "from ground level (existing) to the highest point of the building", with "ground level (existing)" defined to mean "the existing level of a site at any point". The thinness and steepness of the lots has meant that the home constructed by Mr and Ms El Khouri, and that approved for construction by Gemaveld, occupies almost the entirety of the narrow width of the lots, and extends down the slope. There is an existing dwelling on Gemaveld's land (which is to be demolished) which is apt to complicate determining the existing ground level. Further, the land does not slope evenly from the road level to the Georges River. Instead, it slopes unevenly and there is also a "cross fall", which is to say that the slope on the northern boundary of Gemaveld's land is different from the slope on the southern boundary of Gemaveld's land. Finally, and significantly for present purposes, there is a part of the lot where the land falls away very sharply, referred to by the surveyor as a "rock wall". Most of the building envelope sits on the high side of the rock wall. However, a small portion of the north west corner of one of the levels of the proposed building (level -1) extends over the edge of the rock wall (as will be made clearer from the surveyor's plan reproduced below).

Was the height of the proposed building a jurisdictional fact?

1. The starting point is to construe the power whose exercise is impugned in this proceeding.
2. Section 34(3) of the Land and Environment Court Act is reproduced above. There is no issue that agreement was reached between Gemaveld and the Council so as to engage the subsection. The Commissioner was thereupon under an obligation to dispose of the proceedings in accordance with the agreed decision, subject only to the words in brackets: "being a decision that the Court could have made in the proper exercise of its functions".
3. As Basten JA explained in Al Maha Pty Ltd v Huajun Investments Pty Ltd (2018) 233 LGERA 170; [2018] NSWCA 245 at [16]: If a decision of the Land and Environment Court could be set aside or declared invalid by this Court, it is not "a decision that the Court could have made in the proper exercise of its functions". Nor would it make sense to read s 34(3) as implicitly authorising such a decision. If the development application lacked essential elements, the deficiencies could render a consent one which could not have been granted in the proper exercise of the Court's functions.
4. To the same effect, Preston CJ of LEC wrote at [71] of the subsection: A jurisdictional requirement that has remained constant from the original enactment of s 34 to date is that the power of the Commissioner to dispose of the proceedings in accordance with the parties' decision is made conditional on that decision "being a decision that the Court could have made in the proper exercise of its functions" (in s 34(3) of all versions of the section). If the parties' decision does not answer that description, the Commissioner has no power to dispose of the proceedings in accordance with the parties' decision.
5. Substantially the same was said in AQC Dartbrook Management Pty Ltd v Minister for Planning and Public Spaces (2021) 105 NSWLR 152; [2021] NSWCA 112 at [8]-[11].
6. Thus it was necessary for the Commissioner to ask whether the decision to which the parties had agreed was one which the Court could have made in the proper exercise of its functions. "Function" is defined in s 4 of the Land and Environment Court Act to include a power, authority or duty, and "exercise a function" is defined to include perform a duty. There is nothing in s 34(3) to displace the defined meanings. That in turn requires regard to be had to the powers which would have been exercised, and the duties to which the Court would have been subject, had agreement not been reached at the conciliation conference.

Jurisdictional fact

1. When reference is made to a "jurisdictional fact", the issue is whether a precondition to the exercise of statutory power has been satisfied. The High Court has described jurisdictional facts as "an essential condition of the jurisdiction of the magistrate" (Ridley v Whipp (1916) 22 CLR 381 at 385; [1916] HCA 76), "an essential preliminary or a condition precedent" to the jurisdiction (Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 385; [1938] HCA 7), "any event or fact or circumstance" which is "made a condition upon the occurrence or existence of which the jurisdiction of a court shall depend" (Parisienne Basket Shoes at 391), a "condition of jurisdiction" (R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 399; [1970] HCA 8), and "a preliminary question on the answer to which … jurisdiction depends" (R v Judges of the Federal Court of Australia; Ex parte Pilkington ACI (Operations) Pty Ltd (1978) 142 CLR 113 at 125; [1978] HCA 60). Many of the more modern decisions have arisen in the context of challenges to decisions under planning and environmental laws, including Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297; [1997] HCA 10, Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55; [1999] NSWCA 8, Woolworths Ltd v Pallas Newco Pty Ltd (2004) 61 NSWLR 707; [2002] NSWCA 422 and Anvil Hill Project Watch Association Inc v Minister for the Environment and Water Resources (2008) 166 FCR 54; [2008] FCAFC 3. However, there is nothing peculiar to the principles governing jurisdictional facts in decisions made under planning and environmental laws. In Gedeon v Commissioner of the New South Wales Crime Commission (2008) 236 CLR 120; [2008] HCA 43 at [43]-[44], the High Court noted that the term could be used imprecisely, and gave the following description: The expression "jurisdictional fact" was used somewhat loosely in the course of submissions. Generally the expression is used to identify a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question. If the criterion be not satisfied then the decision purportedly made in exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker. The concept appears from the following passage in the reasons of Latham CJ in R v Connell; Ex parte The Hetton Bellbird Collieries Ltd: "The subject matter with which the Industrial Authority deals is, inter alia, rates of remuneration. There is power to deal with this subject matter in respect of rates of remuneration which existed on the specified date only if the authority is satisfied that the rates in question are anomalous. Unless this condition is fulfilled, the authority cannot act - it is a condition of jurisdiction."

Ross v Lane

1. In Ross v Lane [2022] NSWCA 235, a neighbour brought proceedings in Class 4 of the jurisdiction of the Land and Environment Court to challenge the validity of a consent granted by council, lost and appealed to this Court. Simplifying slightly, the issue in this Court was whether an application for development approval was the "substantial redevelopment or the substantial refurbishment of an existing building". If so, then State Environmental Planning Policy 65 - Design Quality of Residential Apartment Development applied. That was because of cl 4(1) of that SEPP which provided as follows: 4 Application of Policy (1) This Policy applies to development for the purpose of a residential flat building, shop top housing or mixed use development with a residential accommodation component if - (a) the development consists of any of the following - (i) the erection of a new building, (ii) the substantial redevelopment or the substantial refurbishment of an existing building, (iii) the conversion of an existing building, and (b) the building concerned is at least 3 or more storeys (not including levels below ground level (existing) or levels that are less than 1.2 metres above ground level (existing) that provide for car parking), and (c) the building concerned contains at least 4 or more dwellings.
2. All members of this Court favoured dismissing the appeal, but they divided on whether the application of cl 4(1)(a)(ii) was a jurisdictional fact, or else was a matter left to be determined by the decision-maker. Macfarlan JA and Basten AJA held that the application of cl 4(1)(a)(ii) was not a jurisdictional fact.
3. Macfarlan JA agreed with the reasons on this issue given by Basten AJA (at [1]), but gave four reasons by way of emphasis at [2]-[5], namely: 1. the fact that "[t]he present case does not involve prohibited development, but development which may be carried out with consent", in contrast with Pallas Newco; 2. the fact that "consideration of what is a 'substantial' redevelopment is an inherently evaluative exercise"; 3. the fact that the issue arose under s 4.15 in a context "where many, if not all, of the matters referred to in the following paragraphs of that section are of a clearly non-jurisdictional fact nature"; and 4. characterisation of the application of SEPP as a jurisdictional fact would "render Council consents more readily open to challenge", which "could be seen as detrimental to the public interest where the point in issue, being a subjective one of planning and development, is one upon which the Council would be well-equipped to opine and (subject to conventional judicial review challenge) reach a final conclusion".

Application to a consent granted by the Land and Environment Court following a conciliation conference

1. Significantly, the development consent challenged in the present appeal was granted by the Land and Environment Court constituted by a Commissioner exercising the power conferred by s 34(3) of the Land and Environment Court Act , rather than by the local council exercising the powers and functions under ss 4.15 and 4.16 of the Environmental Planning and Assessment Act, as had been the case in Ross v Lane. It was primarily on this basis that the applicants sought to distinguish the result reached in Ross v Lane.
2. However, the only issue for the Commissioner was whether the decision to which Gemaveld and the Council had agreed during the conciliation conference was one which could have been made by the Land and Environment Court in the proper exercise of its functions. That involves a notional inquiry. But it involves the same considerations, and the same powers, as if there had been a hearing by that Court in the exercise of Class 1 of its jurisdiction, and that in turn involves the same powers and functions of the consent authority, including ss 4.15 and 4.16. In order for the Commissioner to determine whether the decision to which the parties had reached agreement was one which "the Court could have made in the proper exercise of its functions" within the meaning of s 34(3), it was necessary to identify the powers and functions of the Court determining an appeal from the refusal of Gemaveld's application under s 8.7 of the Environmental Planning and Assessment Act, which included at least by reason of s 8.14 "all the functions and discretions which the consent authority whose decision is the subject of the appeal had in respect of the matter the subject of the appeal", and that picked up the obligations to have regard to the matters in s 4.15(1) and to exercise the power in s 4.16(1).
3. Thus on the reasoning upheld by this Court in Ross v Lane, compliance with cl 4.3 of the Kogarah LEP being a matter to which regard was required pursuant to s 4.15(1)(a) was not a jurisdictional fact. The same considerations of public inconvenience in the exposure of development consents to be the subject of challenges such as the present apply. The same considerations based on the structure of s 4.15(1) apply - namely, that paragraphs (b), (c), (d) and (e) are all evaluative and could not plausibly be regarded as jurisdictional facts, and for that reason it is unlikely that paragraph (a) would be in a different position. Similar but not identical considerations arise from the nature of the statutory process. In particular, there will ordinarily have been (and there was in the present case) a process of public consultation, during which objectors have an entitlement to make their views known, which tells against a legislative purpose permitting challenges on the basis of different evidence in this Court's supervisory jurisdiction.

Clause 4.3 of Kogarah LEP applied of its own force

1. First, the applicants said that cl 4.3 applied directly of its own force. It was said: an environmental planning instrument has force of law independently of s 4.15 of the Act. It's delegated legislation authorised by the Act, and there's no reason for it not to be applied according to its terms, notwithstanding that s 4.15 simply refers to an obligation to take it into consideration.
2. It was said that the power to make an environmental planning instrument contemplated "a great deal of flexibility within the statutory scheme". Reliance was also placed upon the regime for standard instrument provisions (of which cl 4.3 was one). The conclusion was that "cl 4.3 and 4.6, and indeed any other provision of an environmental planning instrument have effect by it and have force of law simply because of those provisions. They don't require a separate obligation under s 4.15 to have effect."
3. No authority was cited in support of that proposition. It is inconsistent with what all members of the Court said in Ross v Lane at [33], [37] and [101]. It is also inconsistent with planning regime in s 4.15(1)(a) which is superfluous and indeed (as Beech-Jones JA pointed out) inconsistent with the applicants' submission, for it is one thing to take into account a matter, and another thing to be bound by it.
4. A plan is an instrument for the purposes of the Interpretation Act 1987 (NSW), including for the purposes of its construction pursuant to Part 5, but it is not a statutory rule and therefore not subject to disallowance pursuant to Part 6: see Interpretation Act, s 21. Instead it has the benefit of the privative clause in s 3.27 of the Environmental Planning and Assessment Act. It is true that a plan may disapply the application of other laws for the purpose of enabling development to be carried out in accordance with another environmental planning instrument or a consent, so long as the Governor approves the provision before the plan is made (s 3.16, and see Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd (2011) 243 CLR 492; [2011] HCA 27), and it is also true that a plan may be expressed to prohibit certain specified development (s 3.19). But none of the foregoing supports the applicants' proposition that the Kogarah LEP of its own force creates prohibitions and indeed an offence.
5. The applicants' submission is inconsistent with the basic and longstanding structure of the Environmental Planning and Assessment Act, including s 4.2(1) (the former s 76A) and s 4.3 (the former s 76B) which provide that: 4.2 Development that needs consent (cf previous s 76A) (1) General If an environmental planning instrument provides that specified development may not be carried out except with development consent, a person must not carry the development out on land to which the provision applies unless - (a) such a consent has been obtained and is in force, and (b) the development is carried out in accordance with the consent and the instrument. Maximum penalty - Tier 1 monetary penalty. … 4.3 Development that is prohibited (cf previous s 76B) If an environmental planning instrument provides that - (a) specified development is prohibited on land to which the provision applies, or (b) development cannot be carried out on land with or without development consent, a person must not carry out the development on the land. Maximum penalty - Tier 1 monetary penalty.

Section 4.15 not engaged because s 34(3) operates independently

1. The applicants also said that s 4.15 was not engaged, because the power came directly from s 34(3): GLEESON JA: All right. Then is it not appropriate then when you're referring what had to be considered by the Commissioner, why couldn't that then link into s 39(2), ie, if the Court heard and disposed this appeal, it would have all the functions and discretions of the body et cetera? LAZARUS: But the important point is the limitation in s 34(3) is in the proper exercise of its functions, so although there might be some linkage, as your Honour pointed out, as the Court held in Al Maha, it's of a very limited nature, and it certainly does not involve s 4.15 of the Environmental Planning and Assessment Act.
2. That submission stressed the fact that s 34(3) did not require an actual decision by the Land and Environment Court. As Mr Lazarus SC stressed, it was a "hypothetical exercise". Nonetheless, that exercise required regard to the powers and functions the Land and Environment Court would exercise when hearing and determining Gemaveld's Class 1 appeal, and that in turn picked up s 4.15 in the manner indicated above, because the Court had the powers and functions of the Council which had refused the development application.
3. The applicants placed reliance on this Court's decision in Al Maha. Al Maha confirms that a consent granted pursuant to s 34(3) may be quashed if consent of the owners of land on which the development is to be carried out has not been obtained. Basten JA said at [11]: The critical aspect of s 34(3) may be found in the words in parentheses providing that the Commissioner could only dispose of proceedings, following an agreement between the parties, if the proposed decision was "a decision that the Court could have made in the proper exercise of its functions". That language might have been invoked with respect to the lack of owner's consent. The Land and Environment Court could not have upheld an appeal seeking development consent for an application relating to land owned by Al Maha if Al Maha had not consented to the application.
4. Preston CJ of LEC said at [174]: The Commissioner's decision to grant consent to the further amended development application without the owner's consent of Al Maha involved jurisdictional error. Owner's consent was a jurisdictional prerequisite to the valid exercise of the power to grant consent to the further amended development application. Owner's consent is not merely a requirement to be fulfilled before work is undertaken on any affected land. The Commissioner's decision to grant consent was therefore outside power.

The "objective" form of certain clauses including cl 4.3 of the Kogarah LEP

1. The applicants engaged in extensive submissions of the various clauses of the Kogarah LEP, with a view to pointing out that the majority were evaluative, but a minority including cl 4.3 were "objective" and therefore lent themselves to being jurisdictional facts. It was said, "The submission that we ultimately put is that if it had been the intention to make height and the other development standards subjective, the instrument would have said so".
2. This is wrong in principle and contrary to authority. The content of the Kogarah LEP cannot determine whether a power conferred by statute is subject to a precondition which is a jurisdictional fact. The question is one of statutory construction. The same error was made in Ross v Lane and was rejected by this Court at [37] and [101].

Criminal offences

1. The applicants submitted, repeatedly, that contravention of cl 4.3 of the Kogarah LEP was a criminal offence. It was said, "So it's actually a criminal offence not to comply with cl 4.3 unless dispensation is granted under cl 4.6, and that we say is a matter that bears significant weight." This submission was expressly based on ss 4.2 and 4.3 of the Environmental Planning and Assessment Act, and thus was supplemental to the primary submission that local environmental plans had force of themselves.
2. It is true that it is a criminal offence to carry out development which is permitted only with consent where consent has not been given, just as it is an offence to carry out prohibited development. But that does not undercut the threefold distinction in the statute, which is a significant aspect of this Court's decision in Ross v Lane, that attaches significance to the fact that the development was permissible with consent as opposed to being prohibited development.

Public interest

1. The applicants said there was a compelling public interest in ensuring compliance with the height restrictions. That may be acknowledged, although its force is diluted to an extent by the ability to seek dispensation. There is likewise a compelling public interest in preventing third parties such as the applicants from bringing proceedings such as the present, thereby throwing doubt upon consents which may have been granted much earlier in time, and potentially in respect of land which has subsequently been sold, especially where the legislation creates a careful regime of notification and consultation.

Conclusion and orders

1. For those reasons, there is no material difference for the purposes of jurisdictional facts, between a development consent granted "on the merits" whether by the consent authority or by the Land and Environment Court after hearing an appeal, and a development consent granted under s 34(3) following a successful conciliation conference. In both cases, environmental planning instruments are a mandatory consideration by reason of s 4.15(1)(a). In the case of a determination on the merits, that occurs at the time the power is exercised. In the case of a successful conciliation conference, that occurs when the Court forms the opinion required by s 34(3) that the agreed decision is one which the Court could have made in the proper exercise of its functions. But in neither case is compliance with the environmental planning instrument a jurisdictional prerequisite to the power to grant consent.
2. It is plain that the Commissioner had regard to cl 4.3 of the Kogarah LEP. He expressly formed the only view that was open to him on the evidence which was available to him, namely, that there was compliance with the height requirement. That decision is not vitiated merely because the applicants can establish, by evidence not made available to the Commissioner, that there was not compliance with that clause.
3. Accordingly, the amended summons filed on 2 August 2022 must be dismissed.
4. White J reserved the costs of the determination of the questions to this Court. There is no reason for the costs of the questions litigated not to be borne by the applicants. The parties indulged in around 70 pages of submissions on the costs of the grounds which were abandoned by the applicants shortly before the hearing before White J. In fact the submissions on costs occupied more paper than the submissions on the substantive ground of the summons. In addition to the five sets of submissions were some 50 pages of affidavits. None of this reflects well on the parties, and it suggests a disregard of the obligation that costs be proportionate, reflected in s 60 of the Civil Procedure Act 2005 (NSW).
5. The applicants chose to commence proceedings against two active respondents. They have been wholly unsuccessful. Contrary to the applicants' submissions, the Council was entitled to be separately represented in order to respond to the grounds which the applicants abandoned. Consistently with the principles in R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13; [1980] HCA 13, the Council did not thereafter take an active role. Although the applicants complain that the Council's evidence was supplied belatedly, leading to the eventual abandonment of their grounds, I nonetheless see no reason to depart from the usual rule that the applicants pay the respondents' costs, including the respondents' costs on grounds which the applicants commenced but abandoned along the way.

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: 26 April 2023