GPT Re Limited v Wollongong City Council

Land and Environment Court (NSW)|2006-07-01|Before: Biscoe J

CITATION : GPT Re Limited v Wollongong City Council [No 2] [2006] NSWLEC 401 This decision has been amended. Please see the end of the judgment for a list of the amendments.

APPLICANT: GPT Re Limited

PARTIES : FIRST RESPONDENT: Wollongong City Council

KEY ISSUES: Discretion :- General discretion to refuse relief where development consent invalid - power and discretion to make an order under s 25B of the Land and Environment Court Act 1979 suspending the operation of the consent and specifying terms compliance with which will validate the consent.

LEGISLATION CITED: Land and Environment Court Act 1979, Part 3 Division 3

ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67; Association for Berowra Creek v Minister for Planning (2003) 124 LGERA 99; Associated Minerals Consolidated Ltd v Wyong Shire Council [1974] 2 NSWLR 681; Centro Properties Ltd v Warringah Council [No 2] (2003) 132 LGERA 45; Centro Properties Ltd v Hurstville City Council (2004) 135 LGERA 257; Centro Properties Ltd v Hurstville City Council [2006] NSWLEC 78; Doueihi v Canterbury City Council (2003) 133 LGERA 138; Edwards v Sutherland Shire Council [2006] NSWLEC 128; Everall v Ku-Ring-Gai Municipal Council (1991) 72 LGRA 369; F Hannan v Electricity Commission (NSW) (1985) 66 LGRA 306; Harris Farm Markets Pty Ltd v Ashfield Fresh Pty Ltd (2002) 121 LGERA 176; CASES CITED: Johns v Australian Securities Commission (1993) 178 CLR 408; Kindimindi Investments Pty Ltd v Lane Cove Council (2006) 143 LGERA 277; Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWLEC 399; Lewiac Pty Ltd v Gold Coast City Council [1993] QPLR 160; Liverpool City Council v Roads and Traffic Authority of NSW (1991) 74 LGRA 265; Melville v Craig Nowlan and Associates Pty Ltd (2002) 54 NSWLR 82; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; Rowley v NSW Leather Trading Co Pty Ltd (1980) 46 LGRA 250; Somerville v Dalby (1990) 69 LGRA 422; Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335; Weal v Bathurst City Council [1999] NSWLEC 132; Woolworths Limited v Wyong Shire Council [2005] NSWLEC 607

APPLICANT: Mr S Gageler SC with Ms S Pritchard, barrister SOLICITORS Allens Arthur Robinson

FIRST RESPONDENT Mr A Galasso, barrister LEGAL REPRESENTATIVES: SOLICITORS Phillips Fox

SECOND RESPONDENT Mr S Austin QC with Mr S Balafoutis, barrister SOLICITORS Norman Waterhouse

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

JUDGMENT HIS HONOUR: A. INTRODUCTION 1 In my recent judgment in this matter [2006] NSWLEC 303 I found that the development consent granted by the first respondent, Wollongong City Council, to the second respondent (Belmorgan) was invalid because the Council resolution delegating authority to its General Manager was invalid. The issue now before me is what relief, if any, should be granted.

2 The applicant submitted that I should make the following orders as sought in its Application:

(1) A declaration that development consent number 2004/1565 dated 1 August 2005 granted by the first respondent to the second respondent for the development of the land described as 31 Crown Street, 26 and 16 Burelli Street, Wollongong is void and of no effect. (2) An order that the second respondent be restrained from carrying out any works on the said premises pursuant to the said development consent. 3 The Council submitted that the Court should make one of the following alternative orders: (1) Pursuant to Division 3 Part 3 of the Land and Environment Court Act 1979 : (a) an order suspending until further order the operation of the development consent the subject of these proceedings; (b) an order that compliance with the terms of orders 1(c)-(d) below will validate the consent the subject of these proceedings; (c) a direction that the General Manager of the first respondent consider within 14 days whether, if he was to have been delegated the first respondent's powers pursuant to s 80(1) of the Environmental Planning and Assessment Act 1979 , he would have granted the development consent the subject of these proceedings in the terms of the development consent the subject of these proceedings; (d) a direction that, in the event that the General Manager's answer to direction 1(c) above is in the affirmative, any motion seeking an order validating the development consent and revoking the suspension of the development consent be filed within 21 days.

(2) In the alternative to order 1 above, pursuant to Division 3 Part 3 of the Land and Environment Court Act 1979 : (a) an order suspending until further order in whole the operation of the development consent the subject of these proceedings; (b) an order that compliance with the terms of Orders 2(c)-2(e) below will validate the consent the subject of these proceedings; (c) an order that the first respondent consider by 31 July 2006 whether it delegates to its General Manager the first respondent's powers pursuant to s 80(1) of the Environmental Planning and Assessment Act 1979 in relation to the development consent the subject of these proceedings; (d) an order that, if the first respondent does delegate to the General Manager in accordance with order 2(c) above, the General Manager of the first respondent is to consider within 14 days of that delegation whether in the light of that delegation he would grant the development consent the subject of these proceedings in the terms of the development consent the subject of these proceedings; (e) a direction that, in the event that the General Manager's answer to direction 2(d) above is in the affirmative, any motion seeking an order validating the development consent and revoking the suspension of the development consent be filed within 14 days thereof. (3) That this matter be re-listed before me on a date to be specified.

4 Belmorgan submitted that the Court should, in its general discretion, decline to grant any relief; or alternatively that it should make the following orders, which are similar to the Council's proposed order (1) above, pursuant to Division Part 3 of the Land and Environment Court Act. 1979: (1) an order suspending the operation of development consent number 2004/1565 dated 1 August 2005 granted by the first respondent to the second respondent until further order; (2) an order that a letter from the General Manager of the first respondent in the terms set out in paragraph 3 will validate development consent number 2004/1565; (3) a direction that, if the General Manager of the first respondent is of the opinion that he would have granted development consent number 2004/1565 dated 1 August 2005 if he had been delegated the first respondent's powers pursuant to s 80(1) of the Environmental Planning and Assessment Act 1979 , the General Manager write a letter to the Court and to the parties to that effect within 14 days; (4) a direction that, in the event that the General Manager of the first respondent writes a letter in the terms set out in paragraph 3, the first respondent file and serve a motion seeking an order pursuant to s 25C of the Land and Environment Court Act 1979 within 21 days; (5) this matter be re-listed before me on a date to be specified.

B. GENERAL DISCRETION TO REFUSE RELIEF 5 Belmorgan, but not the Council, submitted that no relief should be granted in the general discretion of the Court.

6 The Court has a discretion to refuse declaratory and injunctive relief: Land and Environment Court Act 1979 (NSW) (LEC Act) ss 20(2) and 20(3), Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act). s 124; F Hannan v Electricity Commission (1985) 66 LGRA 306 at 312 - 313 (CA); Liverpool City Council v Roads and Traffic Authority of NSW (1991) 74 LGRA 265; Edwards v Sutherland Shire Council [2006] NSWLEC 128. In F Hannan v Electricity Commission at 312 - 313 Street CJ held that it is the duty of the Court to formulate any order having regard to the objects expressed in s 5 of the EP&A Act. Section 124(1) of the EP&A Act provides that: "Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach". In Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 (CA) at 339C Kirby P said: "The discretionary power conferred on the Court by s 124 of the Act is wide. Relevantly to the present case, it is as wide as the discretion enjoyed by the Supreme Court in its equitable jurisdiction". His Honour also said at 342B: …the exercise of the discretion should not be seen as the illegitimate interference by judges in the even-handed application of planning law which local government authorities have the responsibility of enforcing. Instead, it is an important part - a fulcrum as it were - of that planning law, designed to introduce into it the protection, in reserve, of a salutary discretion.

7 Factors relevant to the exercise of the Court's discretion to grant or decline relief have referred to in a number of cases, including Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 (CA); ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 (CA); and Liverpool City Council v Roads and Traffic Authority of NSW (1991) 74 LGRA 265. In ACR at 82 Kirby P said that the discretion permits the refusal of relief where to grant relief would work such an injustice as to be disproportionate to the ends secured by enforcement of the legislation. Chronology 8 The following chronology of events should be taken into account.

9 On or about 1 August 2005 Belmorgan commenced the preparation of a stage two development application for two towers to be located on the roof of the project. Costs incurred by Belmorgan on this development application to date are approximately $330,000 comprising specialist consultant fees.

10 On 9 August 2005 the Council informed Belmorgan and others who made submissions in relation to the development application that the determination date of the stage one development application was 5 August 2005. 11 On 10 August 2005 Belmorgan entered into an option agreement with the Salvation Army (NSW) Property Trust (Salvation Army) to purchase part of the subject site then owned by the Salvation Army.

12 On 30 September 2005 Belmorgan prepared and lodged with the Council a s 96 application comprising modifications to the original development. Costs incurred by Belmorgan in relation thereto were approximately $30,000 comprising development application fees and specialist consultant fees.

13 On 28 October 2005 the applicant filed its application in these proceedings.

14 On 31 October 2005 Belmorgan was served with a copy of the application. Belmorgan had no prior warning that the applicant would challenge the development consent and did not know the basis of the challenge until the applicant filed and served its Points of Claim on 9 December 2005.

15 On 25 November 2005 there was a timetable set by the Court at a directions hearing which required Points of Claim to be filed by 9 December 2005.

16 On 9 December 2005 the applicant filed and served its Points of Claim.

17 In the meantime, on 1 December 2005, Belmorgan exercised its option under the option agreement. Belmorgan had 20 business days from 1 December 2005 to exercise that option.

18 On 30 November 2005 Wollongong City Plaza Pty Ltd [WCP Pty Ltd], a company which has effectively common ownership and a common sole director with Belmorgan, entered into lease agreements with third parties for space in the subject development when completed. If WCP Pty Ltd is unable to fulfil its obligations, it will be liable for costs incurred by the lessees pursuant to those agreements and the stamp duty thereon.

19 On 2 December 2005 WCP Pty Ltd, entered into a contract to purchase the Salvation Army land for $3.25 million. Under the contract, the consideration was satisfied by the construction of a replacement building complex with the Salvation Army for that equivalent cost. As at the date of the hearing before me, 3 July 2006, construction of the replacement building complex was approximately 15 percent complete. WCP Pty Limited would not have purchased the Salvation Army land if development consent had not been granted.

20 On 14 April 2006 Belmorgan lodged with the Council a development application for a complementary and dependent development on land across from the subject site. Costs incurred by Belmorgan in relation to this development are estimated to be $420,000. The application would not have been lodged if the subject development consent had been refused.

21 There is no evidence as to what portion of the expenditure referred to above and in the affidavit of Mr Kosseris was incurred between 9 August 2005 (when Belmorgan and other interested parties were notified of the development consent) and 31 October 2005 (when Belmorgan was served with the application in these proceedings), except for the expenditure on the s 96 application.

22 Belmorgan submitted that the following factors were relevant to the exercise of discretion in the present case: (a) whether the breach was procedural; (b) whether there has been proper and comprehensive consideration of all relevant matters; (c) the public interest in upholding the law; (d) whether the error was made in bad faith; (e) whether the litigation was brought by a commercial competitor; (f) the conduct of the parties; (g) whether hardship is caused to the holder of the development consent. Whether the breach was procedural. 23 Belmorgan submitted that the Court is less likely to grant relief if a breach is procedural or "technical": Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339 per Kirby P; Somerville v Dalby (1990) 69 LGRA 422 at 434; Everall v Ku-Ring-Gai Municipal Council (1991) 72 LGRA 369 at 377. Belmorgan submitted that in the present case the breach essentially related to the procedural mechanism that the councillors chose to give effect to their desire to approve the development. Belmorgan submitted that I had recognised in my principal judgment at [47] - [48] that the councillors' intention was that the development application be approved. Belmorgan submitted that it followed from my findings that the decision to approve the development had effectively been made by the councillors and that this emphasised the minor nature of the irregularity. An analogy was drawn with Weal v Bathurst City Council [1999] NSWLEC 132. Belmorgan sought to distinguish cases where the courts had declared a consent invalid on the basis of a failed delegation on the basis, inter alia, that in none of those cases was there a finding that the Council manifested an intention to approve the development application.

24 The applicant submitted that the breach was not procedural but substantive, for the delegate had acted without power and his decision was therefore a nullity.

25 I accept the applicant's submission. The earlier hearing before me proceeded on the basis expressly agreed by the applicant and Belmorgan, which I accepted, that the councillors did not make a decision to approve the development application. There is a sharp distinction between that situation and a situation where councillors do make such a decision and merely direct a council officer to give effect to it (as in Weal, above). So far, no one with power to do so has determined the development application. Whether there has been proper and comprehensive consideration of all relevant matters 26 Belmorgan submitted that there had been proper and comprehensive consideration of all relevant matters: Somerville v Dalby (1990) 69 LGRA 422 at 434; Everall v Ku-Ring-Gai Municipal Council (1991) 72 LGRA 369 at 377.

27 I am not satisfied that this is so because of the considerations expressed in paragraph 47 of my principal judgment: "To limit the conclusion that can be reached is to limit the determination. It is difficult to see how s 79C matters can be properly, genuinely and realistically considered in making a determination if the determination can go only one way. To delegate to the general manager a power to approve only is a limitation on the nature of the opinion that can be formed and, I think, inconsistent with the statutory scheme that the delegate standing in the shoes of the council must make a s 80 determination on relevant matters referred to in s 79C". The public interest in upholding the law 28 Belmorgan submitted that there was a public interest in upholding the law and seeing that it is obeyed: Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339 - 340 per Kirby P. Belmorgan submitted that the following remarks of Cripps CJ in Liverpool City Council v Roads and Traffic Authority of NSW (1991) 74 LGRA 265 at 280 are applicable: "Where an order would serve no practical usefulness to order a determining authority to 'go-through-the-motions' runs the risk of undermining the integrity of the whole system". I do not think that these remarks are applicable in the present case. The public interest in upholding the law tends to weigh in favour of the applicant. The obvious intention of the EP&A Act is to ensure that those purporting to exercise power under it do so in accordance with its provisions. I see no injury to the public interest in having the law observed. Whether the error was made in bad faith 29 It is common ground that no issue of bad faith arises. Whether the litigation is brought by a commercial competitor 30 Belmorgan submitted that where an application for enforcement of the Act is made by the Attorney-General or a council, a court may be less likely to deny equitable relief than it would in litigation between private citizens because the Attorney-General or the council are the proper guardians of public rights: Rowley v NSW Leather Trading Co Pty Ltd (1980) 46 LGRA 250 at 261 per Cripps CJ; Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 340 per Kirby P; Liverpool City Council v Roads and Traffic Authority of NSW (1991) 74 LGRA 265 at 277 per Cripps CJ; Associated Minerals Consolidated Ltd v Wyong Shire Council [1974] 2 NSWLR 681 at 692 (PC); Lewiac Pty Ltd v Gold Coast City Council [1993] QPLR 160 at 179 - 180 per Rowe DCJ. Belmorgan submitted that the combined effect of ss 123 and 124 of the EP&A Act is that the Court is always mindful of the oppression that may occur if the real reason for the complaint is a collateral one such as the effect on a competitor's business rather than the amenity of the neighbourhood, and that the Court would exercise its discretion accordingly: Melville v Craig Nowlan and Associates Pty Ltd (2002) 54 NSWLR 82 at 120 per Young CJ in eq; Harris Farm Markets Pty Ltd v Ashfield Fresh Pty Ltd (2002) 121 LGERA 176 at 184 per Bignold J. The applicant owns a nearby shopping centre and is a commercial competitor of Belmorgan. Belmorgan suggested that it can readily be inferred that the applicant's reason for bringing the proceedings is to minimise competition to its shopping centre, rather than to guard public rights.

31 These are relevant considerations but I would temper them by two observations. First, the cases say that the Attorney-General is in a preferred position, not that a competitor of a respondent who is the recipient of an invalid development consent is in a worse position than any other applicant. Secondly, s 123 of the EP&A Act permits applications by anyone. The conduct of the parties 32 Belmorgan submitted that the discretion to be exercised by the Court in proceedings brought by a private citizen involves the weighing up of a number of factors, including matters of conduct such as delay: Rowley v NSW Leather and Trading (1980) 46 LGRA 250 at 261 per Cripps CJ. Belmorgan pointed to the fact that the applicant filed its application in this Court on 28 October 2005, less than a week before the expiry of the three month period in which such applications may be made (EP&A Act s 101), and in the preceding three months the applicant had not given notice to Belmorgan that it was contemplating challenging the development consent. In Doueihi v Canterbury City Council (2003) 133 LGERA 138 at [47] McClellan CJ considered that the applicant's failure to warn the respondent that proceedings may be commenced was a relevant consideration. That was in circumstances where it was obvious to the respondent that building work was proceeding on the bases of a development consent later held to be invalid. Belmorgan submitted that the Court should infer that the applicant knew that Belmorgan would most likely be incurring significant expense in that three month period.

33 The weight to be given to these matters is reduced, I think, by the following considerations. The applicant had a statutory right to commence proceedings within three months. The evidence does not disclose when it began contemplating a challenge to the development consent. Any delay of which Belmorgan complains was not causative of detriment to Belmorgan with the possible exception of expenditure in relation to the s 96 application. Between 9 August 2005 when Belmorgan was notified of the development consent and 31 October 2005 when it was served with the application in these proceedings, there were two significant events affecting Belmorgan. The first was Belmorgan's entry into the option agreement on 10 August 2005. This was the day after it was given notice of the development consent. No conduct of the applicant contributed to that decision. The second event was on 30 September 2005 when Belmorgan made a s 96 application in respect of which it has incurred expenditure of some $30,000. The $30,000 is to be viewed in the context of a $60 million development. This expenditure and the decision to enter into the option agreement were made at a time when I consider that Belmorgan ought to have been aware of the commercial risks, namely: (a) there was a statutory period of three months under s 101 of the EP&A Act in which to bring proceedings; (b) there was no final or operative consent because of the deferred commencement conditions, such that the consent was still not operative. The expenditure will not have been wasted if the Council does, in the future, grant development consent. Whether hardship is caused to Belmorgan 34 Belmorgan submitted that the Court should weigh the injury to the public interest by any denial of relief against the loss which Belmorgan, as the holder of the development consent, has suffered while the applicant has been standing by: Associated Minerals Consolidated Ltd v Wyong Shire Council [1974] 2 NSWLR 681 at 692 (PC); Rowley v NSW Leather and Trading (1980) 46 LGRA 250 at 261 (Cripps CJ); Liverpool City Council v Roads and Traffic Authority of NSW (1991) 74 LGRA 265 at 278 (Cripps CJ). Belmorgan submitted that severe hardship would be caused to Belmorgan in the event that the development consent was declared invalid, as evidenced by the affidavit of Mr Kosseris. This factor substantially overlaps with the conduct of the parties factor considered above. Other considerations 35 Belmorgan also submitted that no good end would be secured by granting the relief sought by the applicant. I cannot agree. No one with power to do so has yet consented to Belmorgan's development application.

36 I think that there are further considerations. First, the ordinary consequence of an invalid delegation of power is that a declaration of invalidity should be made: Lyons v Sutherland Shire Council (2001) 117 LGERA 334 (CA) at [16] - [18], [23] and [45]; Wyong Shire Council v MCC Energy (2005) 139 LGERA 296 (CA). In Lyons no discretionary issue arose. In Wyong the court's discretion was not invoked against the declaration of invalidity, but a stay for three months was ordered in respect of an order requiring removal of an extension to a dwelling constructed pursuant to the invalid development consent. In R v Attorney-General; ex parte ICI [1987] I C.M.L.R. 72 at 109 [112] (CA), Oliver LJ stated that: "It does seem to me that it must be wrong in principle, when a litigant has succeeded in making good his case and has done nothing to disentitle himself to relief, to deny him any remedy, unless, at any rate, there are extremely strong reasons in public policy for doing so". In the present context, I would add "or unless there is adequate reason for doing so having regard to the objects of the EP&A Act".

37 Secondly, as indicated in my principal judgment at [47] - [50], not only was the purported delegation not permitted under s 377 of the Local Government Act 1993 (NSW) in that there could not be delegation of part of a function, but in addition the effect of the purported delegation was such that the delegate could not properly exercise the function under s 80 of the EP&A Act including taking account properly of the matters enumerated in s 79C.

38 Thirdly, this is not a case where there is any practical impediment to the grant of relief sought, such as might exist if Belmorgan had started construction and a demolition order was sought (as in the Wyong case, above).

39 Weighing up all the considerations in the circumstances of the case, I am not satisfied that the substantive relief sought by the applicant should be refused. C. S 25B OF THE LAND AND ENVIORNMENT COURT ACT 1979 40 The next issue is whether, instead of declaring or determining that a development consent is invalid the Court has power and, if so, whether it should exercise its discretion to make an order under s 25B of the LEC Act suspending the operation of the consent and specifying terms compliance with which will validate the consent. Belmorgan and the Council respectively submit that a s 25B order should be made on terms set out earlier in this judgment. Division 3 Part 3 of the LEC Act includes ss 25A to 25E which provide as follows: 25A Application of Division

(1) This Division applies to: (a) a development consent granted, or purporting to be granted, under the Environmental Planning and Assessment Act 1979: (i) by the Minister, and (ii) whether before or after the commencement of this subsection, and (b) a development consent granted, or purporting to be granted, under the Environmental Planning and Assessment Act 1979: (i) by any other consent authority, and (ii) in respect of a development application made on or after the commencement of this subsection. (2) This Division extends to invalidity arising from any steps preliminary to the granting of a development consent to which this Division applies, whether those steps were taken, or should have been taken, by the Minister or any other consent authority, or by any other person or body. (3) In particular, this Division extends to invalidity arising from non-compliance with requirements declared to be mandatory requirements under section 102 of the Environmental Planning and Assessment Act 1979. (4) A reference in this Division to the Minister is a reference to the Minister responsible for the administration of the Environmental Planning and Assessment Act 1979. 25B Orders for conditional validity of development consents

(1) The Court may, instead of declaring or determining that a development consent to which this Division applies is invalid, whether in whole or in part, make an order: (a) suspending the operation of the consent in whole or in part, and (b) specifying terms compliance with which will validate the consent (whether without alterations or on being regranted with alterations). (2) Terms may include (without limitation): (a) terms requiring the carrying out again of steps already carried out, or (b) terms requiring the carrying out of steps not already commenced or carried out, or (c) terms requiring acts, matters or things to be done or omitted that are different from acts, matters or things required to be done or omitted by or under this Act or any other Act. 25C Orders for validity of development consents

(1) On application by the Minister or any other consent authority for an order under this subsection on the grounds that the terms specified under section 25B have been substantially complied with and that it is not proposed that the relevant development consent be regranted with alterations, the Court may make an order: (a) declaring that the terms have been substantially complied with, and (b) declaring that the consent is valid, and (c) revoking the order of suspension. (2) On application by the Minister or any other consent authority for an order under this subsection on the ground that the terms specified under section 25B have been substantially complied with and that the development consent has been regranted with alterations as referred to in section 103 of the Environmental Planning and Assessment Act 1979, the Court may make an order: (a) declaring that the terms have been complied with, and (b) declaring that the development consent has been validly regranted, and (c) declaring that the suspended development consent has been revoked, and (d) revoking the order of suspension. 25D Power to grant another development consen t

Nothing in this Division prevents the grant of another development consent in relation to the same matter, during or after the period of suspension, pursuant to a development application duly made. 25E Duty of Court

It is the duty of the Court to consider making an order under this Division instead of declaring or determining that a development consent to which this Division applies is invalid, whether in whole or in part.

41 In my opinion, as the applicant submitted, ss 25A and 25B should be considered against the background of the common law principles expressed in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 and Johns v Australian Securities Commission (1993) 178 CLR 408. In Project Blue Sky the difficulty addressed by the High Court was how to determine the consequence of failure to comply with a procedural step set out in a legislative scheme. The High Court pointed out the difficulty of determining whether something fell within the old mandatory/directory dichotomy and, if a mandatory requirement, whether substantial compliance was sufficient in the circumstances to avoid invalidity. It was held that this was a matter of statutory interpretation and a difficult question. It is to the similar problem of what the Court should do when there has been non-compliance with a step required by law that ss 25A and 25B of the LEC Act are directed.

42 In Johns the High Court was concerned with the remedial power conferred on the Federal Court by s 16(1)(d) of the Administrative Decisions (Judicial Review) Act 1977 (Cth). That subsection provided that: "On an application for an order of review in respect of a decision, the Federal Court or the Federal Magistrates Court, may, in its discretion, make all or any of the following orders: … (d) an order directing any of the parties to do, or to refrain from doing, any act or thing the doing, or the refraining from the doing, of which the court considers necessary to do justice between the parties". On the face of it, this is a broad discretion. However, Brennan J, with whom two other members of the High Court agreed, said at 434: "The relief which may be ordered under s 16(1)(d) of the AD(JR) Act is not so much at large that the Court may make an order against a party to litigation even though no ground for relief under the general law is established against that party. Section 16(1)(d) does not set the Court on an uncharted course without legal reference points by which to steer… However, s 16(1)(d) applies only when the making of an order is 'necessary to do justice between the parties'. That means justice according to law". I accept that as informative of the approach that should be taken under s 25B of the LEC Act.

43 Two questions then arise in relation to s 25B. Is there power to make a s 25B order in the circumstances of this case? If so, should the discretion to do so be exercised and by reference to what terms?

44 A "preliminary steps" limitation on the power was expressed in Glowpace Pty Ltd v South Sydney City Council (2000) 111 LGERA 84 by Pearlman CJ, who declared a development consent invalid and declined to make a s 25B order. The finding of invalidity was made on two grounds. First, the failure of the council to give notice of the development application was in breach of the requirements of procedural fairness. Secondly, the consent lacked finality and certainty. Her Honour held at [30] that s 25B was limited by s 25A(2) to steps "preliminary" to the grant of a development consent, which embraced the first ground of invalidity but not the second. I observe that the first ground of invalidity concerned a procedural matter.

45 Glowpace did not explain why s 25A(2) has limiting effect despite its use of the word "extends". I would suggest the following explanation. The purpose of s 25A(1) is to define the types of "development consent" to which s 25B applies. The shift in language between s 25A(1) ("This Division applies to a development consent" etc) and ss 25A(2) ("This Division extends to invalidity arising from any steps preliminary to the granting of a development consent") is explicable as indicating the source of the invalidity with which the section is concerned. Thus, if the invalidity of a development consent, as defined in s 25A(1), arises from any steps preliminary to the granting of that development consent, then there is power to make an order under s 25B.

46 Glowpace was followed by Pain J in Centro Properties Ltd v Warringah Council [No 2] (2003) 132 LGERA 45 and Woolworths Limited v Wyong Shire Council [2005] NSWLEC 607. In Centro, Pain J held that a deliberation under s 79C of the EP&A Act is part of the decision whether or not to grant development consent under s 80 and not a step "preliminary" to it, with the consequence that a s 25B order could not be made where the ground of invalidity was failure to consider a matter under s 79C.

47 Such reasoning may explain why in Centro Properties Ltd v Hurstville City Council (2004) 135 LGERA 257 McClellan CJ left open the question of whether s 25B was available in circumstances where a council had failed to consider a relevant significant matter. There it was held that the council had failed to consider noise impact when granting development consent. McClellan CJ made a declaration that the development consent was invalid and of no effect and made an order that the recipient of that consent be restrained from acting upon it. His Honour considered it would not be appropriate to instead make s 25B orders which would require the council to consider a noise report and then decide whether to confirm its original decision. His Honour said at [85]: Apart from the question of whether s 25B is available, where the Council's decision-making process has miscarried, as opposed to a failure to consult with or obtain the concurrence of another authority, I do not consider it to be an appropriate course in this case. In my opinion, any decision to be made in relation to the present proposal should be made after the Council has had an opportunity to consider all of the relevant material including information in relation to the noise aspect of vehicles in Hampden Lane. (see also Glowpace Pty Ltd v South Sydney City Council (2000) 111 LGERA 84; Centro Properties Ltd v Warringah Council (No 2) (2003) 132 LGERA 45.

48 In a later case of the same name, Centro Properties Ltd v Hurstville City Council [2006] NSWLEC 78, Talbot J declared a development consent invalid as a consequence, inter alia, of a council's failure to consider a draft SEPP. Talbot J declined to accede to an application by the council for a s 25B order which would have involved the council considering the provisions of the draft SEPP. His Honour said: "This step necessitates a re-opening of the whole process. It is not the intention of s 25B to allow the consent authority to re-open the whole of its consideration (see Noble and Anor v Cowra Shire Council (2001) 114 LGERA 440 at [30])".

49 In Association for Berowra Creek v Minister for Planning (2003) 124 LGERA 99, Lloyd J found that a development application was invalid as the development proposed was designated development and the development application was not accompanied by the necessary environmental impact statement, such that there was no development application to which the Minister could grant his consent. The respondents in that case asked the Court to make a s 25B order suspending the operation of the development consent and allowing the Minister to consider whether to form the opinion that the alterations or additions proposed did not significantly increase the environmental impacts of the total development. The applicant submitted that s 25B was not available where the cause of invalidity was jurisdictional error. His Honour did not find it necessary to resolve the availability issue because he was not inclined to exercise the Court's discretion under s 25B as there did not appear to be any "terms compliance with which would validate the consent" which could be specified in the circumstances of the case.

50 A second view of the scope of the s 25B power has recently emerged in this Court. In Kindimindi Investments Pty Ltd v Lane Cove Council (2006) 143 LGERA 277 the council considered that a school drop-off facility was a necessary part of a development. Instead of imposing this as a condition of the development consent, the council entered into a deed with the developer for the provision of the facility. The Court of Appeal held that it was in error in failing to impose this requirement by way of a condition of consent. The Court of Appeal, by consent, remitted the matter to this Court to be dealt with under s 25B. On the remitter, Lloyd J in Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWLEC 399 declined to follow Glowpace, reasoning that s 25A(1) should be given full impact as a source of power and that ss 25A and 25B are beneficial provisions which should be construed widely. His Honour made a s 25B order imposing a validation term to the effect that the development application be remitted to the council for redetermination so that it could consider imposing the requirement of a drop-off facility as a condition of consent. An appeal is pending against Lloyd J's decision.

51 A third view of the scope of the s 25B power, which may be considered as a refinement of Glowpace, was advanced by the applicant in the present case. On this view, s 25B is directed to taking steps to substantially remedy a failure to take a procedural step required by an Act (or by the general law, such as procedural fairness). It is not, according to the applicant's submission, concerned with a substantively wrong exercise of power, such as failure to consider matters in s 79C of the EP&A Act, or absence of power on the part of the person purporting to grant a development consent, as exists in the present case. The reasoning in support of this view is to the following effect. Section 25A opens the doorway to s 25B. There are signposts on that doorway in s 25A(2) and (3) which are indicative that the nature of the power in s 25B is directed to curing only procedural and not substantive defects. The words "steps preliminary" in subsection (2) refer to procedural steps. The introductory words to subsection (3) are "In particular", indicating that what follows are particular illustrations of the matters in subsection (2). What follows in subsection (3) is a reference to s 102 of the EP&A Act. That section is solely concerned with the procedural matter of time periods for the public exhibition of development applications. Thus, s 25B is confined to identifying procedural steps which have not been taken, which could be taken and which, if taken, would result in substantial validity. It is in this context that s 25B allows the Court to pause and allows steps to be taken that will bring about substantial compliance with the Act. Assuming that s 25A(2) is to be construed as extending s 25A(1), s 25A may be viewed as dealing not just with failure of procedural conditions subsequent but also with failure of procedural conditions precedent to the grant of a development consent.

52 It is unnecessary for me to decide between the competing views as to the scope of the power.

53 I do not think that any of these views of the power go so far as to permit an order to be made where there has been a complete absence of power to grant a development consent. The mere fact that an invalid purported delegation of power temporally precedes a consequential purported development consent, does not, in my view, mean that it falls within the words "steps preliminary to the granting of a development consent" in s 25A(2). Those words are hardly an apt description of a grant of delegated power. In Gee v Gosford City Council [2002] NSWLEC 204 at [18] Pain J expressed a preliminary view that she would not have applied s 25B in the event that the decision made pursuant to the council's delegation policy have been beyond power. It is unclear whether that was because of absence of power to make the order or as a matter of discretion.

54 Assuming that there is power to make a s 25B order in the present case, then the question remains whether the discretion under s 25B should be exercised. Part of that inquiry involves considering whether there are any appropriate terms, compliance with which will validate the development consent. In my view, such terms should identify steps which have not been taken, which could be taken and which, if taken, would result in substantial validity. 55 The first order proposed by the Council in the present case and the orders proposed by Belmorgan (which I have set out in paragraphs 3 and 4 of this judgment) do not address or rectify the lack of delegation which gave rise to the invalidity. They also contain the unattractive feature that validation will result from the untested assertion of the Council's General Manager based on a hypothesis. The second order proposed by the Council is tantamount to what can happen anyway, if a declaration of invalidity were to be made. Not only does it start the entire process again, it proposes that validation would result from the untested assertion of the General Manager.

56 In all the circumstances, assuming that there is power to make an order under s 25B, I decline in my discretion to do so.

Declaration that development consent number 2004/1565 dated 1 August 2005 granted by the first respondent to the second respondent for the development of the land described as 31 Crown Street, 26 and 16 Burelli Street, Wollongong is void and of no effect. 2. Order that the second respondent be restrained from carrying out any works on the said premises pursuant to the said development consent.

58 The only issue that remains outstanding is costs. I direct the parties on or before 11 July 2006 to arrange with the Registry for the matter to be listed before me during the week commencing 17 July 2006 for submissions in relation to costs. Written submissions in relation to costs are to be delivered to my Associate by 4 pm on the immediately preceding day.

13/02/2009 - Judge not specified on cover - Paragraph(s) cover page

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.

(2004) 135 LGERA 257

(2003) 133 LGERA 138

(2002) 121 LGERA 176

(2006) 143 LGERA 277

(2001) 117 LGERA 334

(2005) 139 LGERA 296

(2001) 114 LGERA 440

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