HAMMAN & ANOR v LAKE MACQUARIE CC & ORS

W R Davison SC/P R Clay(Appellant) COUNSEL : I J Hemmings (1st Respondent) J H Blackman (2nd & 3rd Respondent) McIntosh, McPhillamy & Co (Appellant) SOLICITORS : Peter Rees (1st Respondent) Turnbull Hill (2nd & 3rd Respondent) CATCHWORDS : ACTS CITED : Local Government Act 1993 DECISION : Dismissed with costs

1 MASON P: The second and third respondents own land at 114 Mandalong Road, Mandalong. It is zoned Rural 1(a) under the Lake Macquarie Local Environmental Plan 1984. It comprises approximately 40 acres, and is used as a residence and for rural purposes. 2 On 5 June 1997 those respondents applied for building consent for the erection of a tractor and farm food storage shed. The application was dealt with by Mr McGrath, an employee of the council who is a building surveyor. He acted pursuant to a delegation whose terms shall be referred to below. After inspecting the respondent's land he issued a building permit subject to conditions on 14 July 1997. The shed was then erected. 3 The validity of the permit is challenged by the appellants who commenced proceedings in the Land and Environment Court for declaratory relief together with an order that the shed be demolished. 4 The appellants' land fronts Mandalong Road and comprises approximately 25 acres. There is a house erected on it approximately 40 metres from the common boundary with the respondent's land. The shed on the respondent's land has been erected 6.1 metres from the common boundary. It is 26 metres long, 7.6 metres wide and 3.5 metres high. It is constructed on the site of an old existing shed. 5 Justice Pearlman, Chief Judge of the Land and Environment Court dismissed the claim. 6 Mr McGrath determined the building application in accordance with s 89 of the Local Government Act 1993. There is no challenge to the way in which he addressed the substantive powers conferred in that section. The challenge however focuses upon s114 of the Act which, at the relevant time provided: 114 (1) The council must give notice of an application for approval to erect a building to the persons who appear to the council to own the land adjoining the land to which the application applies if, in the council's opinion, the enjoyment of the adjoining land may be detrimentally affected by the proposed building after its erection. (2) In forming its opinion, the council must take into consideration the effect that the proposed building would have, after its erection on the following: • the views to and the views from the adjoining land; • the overshadowing of the adjoining land; • the privacy of the adjoining land; • the likelihood of the adjoining land being detrimentally affected by noise; • the streetscape; • any relevant matter in criteria in a local policy adopted under Part 3 by the council. (3) The council must also give notice of the making of an application for approval to erect a building to persons to whom notice is required to be given under criteria in a local policy adopted under Part 3 by the council. (4) For the purposes of this section, land adjoins other land if and only if it abuts that other land or is separated from it only by a pathway, driveway or similar thoroughfare. 7 Section 114(1) imposed a duty to give notice in certain circumstances of an application for approval to erect a building. However, in contrast to the predecessor provision, namely s 312A of the Local Government Act 1919, the duty is triggered by the formation of a particular opinion by the council as distinct from an objectively determined state of affairs. 8 There were two sets of arguments raised in support of the challenge to the determination of the building application by Mr McGrath. The first relates to his compliance with s114, because no notice of the building application was served upon the appellants by the council. The second challenge relates to the question whether Mr McGrath had the power which he purported to exercise under delegation to determine the application, and as an incident of that determination to form the opinion under s114(1). 9 It is convenient to address the delegation point first. 10 The combined operation of ss377 and 378 of the Act permits the sub-delegation by the general manager of a council of various functions which the council has by resolution delegated to the general manager. By instrument dated 23 May 1997, the general manager of the first respondent sub-delegated various delegations to Mr McGrath, building surveyor. The instrument is set out at pp 79 and 80 of the combined appeal book. The instrument is in four parts, two of which are as follows: COMMUNICATION/CONSULTATION DELEGATIONS: 1. Sign for receipt of registered and certified mail. 2. Sign glossary/standard form letters, notification advices, confirmation of telephone advice and applications on behalf of Council. APPLICATIONS/CONSENTS/PLANNING DELEGATIONS: 1. Sign building approvals and plans of Class 1 and 10 associated with these approvals to a value not exceeding $2 million. 2. Determine development applications for wharves, jetties, slipways, launching ramps, marina and permissive occupancy tenures to a value not exceeding $200,000.00 3. Determine applications for advertising signs. 4. Authorise minor alterations to approved plans. 5. Fix and vary building lines up to 20% under the Local Government Act. 6. Issue or refuse approvals under the Local Government Act 1993 or any other Act regulating functions under the control of Council and modify, extend or renew such approvals to a value not exceeding $2 million. 11 Acting pursuant to this authority, Mr McGrath received and considered the building application submitted on behalf of the second and third respondents. He inspected the respondents' land, formed the opinion contemplated by s114(1), and determined the building application by giving conditional approval. He relied upon the power in para 6 under the heading Applications/Consents/Planning Delegations. There is no dispute about the value of the building work being under $2-million. It is not suggested that there was any breach of s 89 of the Act as regards what may be described as the substantive aspects of the decision. 12 However, the appellants challenge Mr McGrath's authority to act on behalf of the council in this matter. Two points are raised. First it is submitted that the power to "issue" approvals in para 6 did not include the power to determine applications but rather was confined to the power to transmit an approval granted by the council itself or by some other duly authorised agent of the council. 13 Secondly and alternatively it was submitted that any power to determine a building application by approving it did not extend to exercising the function of dispensing with notice conferred by s114(1). 14 Justice Pearlman rejected these submissions and, in my view, she was correct to do so. 15 As to the first proposition advanced by the appellants, her Honour held that "issue" in para 6 is not confined to the mere administrative act of sending out the formal notice of determination in accordance with s99 of the Act. She gave two reasons: First, para 6 relates to both the "issue" of approvals and the "refusal" of approvals. That indicates that "issue" refers to the granting of approval rather than the mere giving of notice of approval. Secondly, the context of para 6 indicates that the authority which it confers extends to the determination of applications for approval, because it appears within a section of the document that confers authority to determine certain development applications (paras 2 and 3), to authorise minor alterations to plans (para 4) and to fix and vary building lines (para 5). 16 A third reason may be added, namely that it is the earlier section of the instrument of delegation, ie that headed Communication/Consultation Delegations that addresses and confers the function of communicating notices of determination under s99. 17 Justice Pearlman also rejected the second contention in relation to Mr McGrath's authority to address s114 in the context of determining a building application falling within his subdelegation. Once again I entirely agree with her Honour's reasons which are set out at pp10 and 11 of her judgment. She said: An authority granted in general terms carries with it an authority to perform subordinate acts which are necessary or ordinarily incidental to the exercise of the express authority (Small and Others v Smith and Others (1884) 10 AC 119 at 129; D'Emden v Pedder (1904) 1 CLR 91 at 109-110). In my opinion, the express authority in this case to "issue...approvals" under the LG Act carries with it the authority to carry out all the functions which are a necessary part of the approvals process under the LG Act. One of those functions is the formation of the opinion required under s 114. This follows from the structure of the LG Act in relation to approvals. Chapter 7 of the LG Act deals with the regulatory functions of a council, and pt 1 of ch 7 deals specifically with approvals. The prior approval of the council is required for the carrying out of specified activities, one of which is the erection of a building, as provided in cl 1 of pt A to the Table to s 68 of the Act. A process is involved. Division 3 of pt 1 of ch 7 deals with the making and determination of applications for approval. Division 3 includes s89 which specifies the matters to be considered by the council in determining an application; and s94 which provides that a council may determine an application by granting approval conditionally or unconditionally or by refusing approval. Division 4 of pt 1 of ch 7 contains special provisions relating to notice of applications to erect buildings, and this is the part of the LG Act where s114 is found. Section 114, as I have pointed out, requires notification to adjoining owners in certain circumstances. Section 118(1) provides that a person to whom notice is given under s114 may make a written submission to the council concerning the application for approval to erect a building, and s118(2) requires the council to consider all such submissions before it determines the application. That statutory framework makes it clear, I believe, that the formation of the opinion required under s114 is part of the approvals process. If the council forms an opinion that an adjoining owner may be detrimentally affected, it must give notice of the building application to the adjoining owner, and must take into account any submission made by that adjoining owner before it determines the building application. It follows, therefore, that a delegation of an authority to issue approvals under the LG Act carries with it the authority to form the opinion under s114 as part of the process of issuing those approvals. 18 The decision as to whether or not building approval should issue requires compliance with s 114. Section 114 ensures among other things informed decision making. The delegation to Mr McGrath of authority to determine a class of building applications that included the one in question carried with it as a necessary incident the power to exercise any other function incidental to the delegated function (see Interpretation Act 1987 s 49(4)). 19 I turn to the challenge based upon non-compliance with s 114(1). Mr McGrath gave evidence by affidavit and he was cross-examined. He deposed to forming the opinion that there would be no significant detrimental or adverse impact on views, that there would be insignificant overshadowing, that the privacy of adjoining land would be unaffected, that there was no likelihood of detrimental effects from noise and that there would be no effect on the streetscape. This evidence was not shaken during cross-examination. 20 Justice Pearlman found that in giving oral evidence Mr McGrath confirmed his approach - to take into account the matters in s114(2), to form an opinion as to the detrimental effects as required by s114(1), and to notify adjoining owners if he formed the opinion that there was such a detrimental effect, despite the fact that the notification policy excluded notification in cases of land zoned Rural 1(a) (see judgment p 7). 21 Her Honour accepted Mr McGrath's evidence. She found that he did take into consideration the relevant matters set out in s114(2) and having done so, he formed the opinion as required by s114(1) that the enjoyment of adjoining land would not be detrimentally affected by the proposed building after its erection (see judgment p9). 22 The appellants do not challenge the finding that the council officer formed the opinion that the enjoyment of the appellant's land would not be detrimentally affected and that this opinion was formed, having taken into consideration the matters in s114(2). However the appellants' contend that the learned judge fell into error in treating this finding as satisfying the requirement to form the opinion required of s114(1). For reasons elaborated in para 7 of their written submissions, the appellants submit that the inquiry required by s114(1) is broader than that under s114(2) and that such inquiry requires assessment of the possibility, I emphasise that word, of detrimental effect. It is submitted that Mr McGrath never formed the opinion required by s114(1). 23 In my view these submissions should be rejected for the reasons set forth by Justice Pearlman at p6 of her judgment: The language of s114 requires, in my opinion, a different interpretation. Subsection (1) requires an opinion to be formed. Subsection (2) uses the words "...in forming its opinion...". Accordingly subs (2) expressly specifies the matters which must be taken into account in the formation of that opinion. The language of s114 indicates that the list of matters in subs (2) is the exclusive list. If, after considering those matters, the council forms the opinion that the enjoyment of the adjoining land may be detrimentally affected, it must give notice to the adjoining owner. In my opinion, the use of the word "would" in subs (2) and the use of the word "may" in subs (1) does not require a different interpretation. The council is required to consider the effect that the proposed building would have in relation to the specified matters. The use of the word "would" demonstrates that it is not the possible effect of the building, but its actual effect. Its actual effect is then to be the basis for the formation of the council's opinion. That actual effect may or may not lead the council to form the opinion that the enjoyment of the adjoining land may be detrimentally affected. The question then turns upon whether Mr McGrath did in fact consider the matters specified in s114(2), and, if he did, whether, taking into account those matters, he formed the opinion that the enjoyment of the adjoining land would not be detrimentally affected by the proposed building after its erection. 24 Section 114(1) imposed an obligation to give notice but it conditioned that obligation upon the formation of a particular opinion. Subsection (2) provided a list of the matters which must be taken into consideration in the formation of the opinion. Mr McGrath inspected the site, considered the question of notice, and, having taken into consideration the matters referred to in s 114(2) did not form the opinion that the enjoyment of the appellant's land may be detrimentally affected by the proposed building after its erection. In fact, he formed the opinion that it would not. 25 This process, and her Honour's decision to the effect that no error was revealed by it, did not involve an elision of different meanings of "may" and "would". To the extent that "would" is a stronger verb than "may", this firmer negative conclusion reached by Mr McGrath covered the relevant field. But the real point is that s 114 has to be read as a whole. It necessarily addresses a prediction or assessment of the effect of the "proposed building" because ex hypothesi it has not been erected. Subsection (2) focuses the decision maker's attention upon aspects of the proposed building in its likely impact upon the neighbourhood. But only one dispositive opinion is contemplated, that is, that referred to in subs (1). 26 Mr McGrath was accepted in his sworn evidence that he formed that opinion, indeed that he formed the converse of the requisite opinion. And he was accepted in his evidence that he reached this view after taking into consideration the matters in s114(2). This credibility-based finding is not challenged and it is not undermined by reference to the fact that the council's notification policy did not call for notification. 27 The appellants' submissions appear to involve a logical fallacy. They appear to address the situation that might hypothetically arise if a council formed the opinion that a proposed building would detrimentally affect the enjoyment of adjoining land in one or more of the matters addressed in s 114(2) but went on to conclude that nevertheless the enjoyment of that land may not, I emphasise those words, be detrimentally affected. 28 This is the very opposite of what happened here. 29 Senior counsel for the appellants was pressed in argument today to identify what he submitted was the something over and above the s114(2) factors that s114(1) imports. He submitted that it was the impact upon the actual adjoining owner, having regard to the possible attitude of that owner in the light of the current use of the adjoining land. He accepted that the decision maker did not have to take regard to the attitude, actual or assumed, of an unreasonable adjoining owner, but otherwise maintained the submission. 30 In my view this is to read words into s114(1) that are not there. Section 114 addresses the rights of the adjoining owner by its terms and according to its tenor. Furthermore, s114(2) appears to address each and every conceivable aspect of the adjoining owner's amenity. This particular submission defeats the very purpose of s114 indicated by its very terms. That purpose is to arm the decision maker with the capacity in a proper case to dispense with notice. To oblige a council or its delegate to contact an adjoining neighbour, to inquire whether the neighbour wished to have notice before being capable of forming the requisite opinion, would be to deprive the provision of its obvious utility. I do not suggest that all of the appellants' submissions carry this extreme and self defeating consequence, but some at least of them appear to do so. 31 For these reasons I propose that the appeal be dismissed with costs. 32 PRIESTLEY JA: I agree. 33 POWELL JA: As do I. 34 MASON P: The appeal is dismissed with costs.

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