Hoxton Park Residents Action Group Inc v Liverpool City Council

CONTENTS Paragraphs INTRODUCTION 1-5 RELIEF 6-51 Discretion to refuse relief s 124 Environmental Planning and Assessment Act 9-13 Lack of environmental utility 14-20 Hardship 21-26 Delay 27-28 Conclusion as to discretion 29 Orders under s 25B Land and Environment Court Act 30-51 COSTS 52-62 ORDERS 63

INTRODUCTION 1I am dealing with a remitter from the Court of Appeal and costs. 2In these proceedings the applicant challenged the validity of a development consent granted with effect from 30 June 2009 under Part 4 of the Environmental Planning and Assessment Act 1979 (EPA Act) by the first respondent, Liverpool City Council, to the third respondent, Malek Fahd Islamic School Ltd, for the construction and use of a school and road on land owned by the second respondent, Australian Federation of Islamic Councils Inc, at Hoxton Park (Land). The second and third respondents are associated and in the same interest. It is convenient to refer to them together as "the proponent". 3The challenge related to the environmental impact on an endangered ecological community (EEC) of the construction of a bridge over a creek running across the southern boundary of the Land. Construction of the bridge will require the clearance of about 998 square metres of the EEC. Two disconnected arms of a road called Pacific Palms Circuit terminate at or very close to the south-eastern and western boundaries of the Land. A condition of the consent requires connection of the two terminal points by a road across the Land. The bridge is part of this connecting road. The bridge and EEC are partly over the south-eastern corner of the Land, which is to be dedicated to the Council under a condition of the development consent, and mostly over adjacent Council-owned land on which there is a road reserve. 4I dismissed the proceedings: Hoxton Park Residents Action Group Inc v Liverpool City Council [2010] NSWLEC 242 and Hoxton Park Residents Action Group Inc v Liverpool City Council (No 2) [2010] NSWLEC 259. I decided that the development consent was invalid because the Council had failed to consider a matter mandated to be considered by s 79C(1)(b) of the EPA Act: the likely environmental impacts of construction of the bridge on the EEC. However, I also decided that the proceedings were time barred under s 101 of the EPA Act, which provides that: "If public notice of the granting of a consent...is given in accordance with the regulations by a consent authority...the validity of the consent...cannot be questioned in any legal proceedings except those commenced in the Court by any person at any time before the expiration of 3 months from the date on which public notice was given". In the present case the proceedings were commenced more than three months after public notice was given. Among the requirements of the regulations was one requiring that the public notice contain a statement that the development consent is available for public inspection "during ordinary office hours": Environmental Planning and Assessment Regulation 2000 cl 124(1)(c). In the present case the public notice did not expressly contain that statement but indicated that it was available for inspection at the Council's administration centre. I considered that it was so obvious that the consent could be inspected during ordinary office hours that it went without saying and therefore was implicit. I followed authority against the proposition that a particular notice in this form did not comply with the requirement of the Regulation, namely, Hastings Co-operative Ltd v Port Macquarie Hastings Council [2009] NSWLEC 99, 167 LGERA 205. In that case Lloyd J disposed obiter of a challenge to the validity of a notice by reason of its the omission of a statement referring to it being available for inspection during ordinary office hours by saying that it was "self-evident that the office would be open during ordinary office hours": at [54]. However, lest the omission to expressly include that statement in the public notice did not comply with the regulations, I decided that it was not the legislative intention to invalidate a notice because of the omission of words that were self-evident: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, 194 CLR 355 at [91]. 5The Court of Appeal upheld my decision that the development consent was invalid but overturned my decision that the proceedings were time barred by s 101. The reasoning was that as the public notice did not expressly state that the development consent was available for inspection "during ordinary office hours", it was not "in accordance with the regulations" as required by s 101. Their Honours did not express disagreement with my view that, on a reading of the public notice, it was self-evident that the consent was available for inspection during ordinary office hours. They remitted the proceedings to this Court for determination of the appropriate relief and costs: Hoxton Park Residents Action Group Inc v Liverpool City Council [2011] NSWCA 349, 184 LGERA 104.

RELIEF 6The proponent submits that the Court should: (a)exercise its general discretion under s 124 of the EPA Act and make no final orders in the form of relief; or (b)alternatively, make orders pursuant to s 25B of the Land and Environment Court Act 1979 (LEC Act) suspending the operation of the consent in part and specifying terms compliance with which will validate the consent. 7The Council maintains its submitting appearance and does not seek to be heard on relief. 8The applicant submits that the Court should: (a)declare that the consent is invalid; (b)restrain the proponent from carrying out any further works unless and until a development consent authorising those works is granted; (c)restrain the proponent from using the Land as a school; and (d)suspend the operation of order (c) during 2012 in order to soften its effect by avoiding disruption for that period to the schooling of children who, through no fault of their own, have been induced to enrol for schooling in the buildings currently erected on the Land.

Discretion to refuse relief under s 124 EPA Act 9Section 124(1) of the EPA Act provides: 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. 10The discretion under s 124 is wide and extends to withholding relief: F Hannan Pty Ltd v Electricity Commission of New South Wales [No 3] (1985) 66 LGRA 306 (NSWCA) at 312 per Street CJ. It permits, in appropriate cases, the refusal of injunctive relief where to grant such relief would work such an injustice as to be disproportionate to the ends secured by enforcement of the legislation: ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 at 82D per Kirby P. In the case of delay, it has been said that relief will frequently be denied: Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422, 61 NSWLR 707 at [66] per Spigelman CJ. This is illustrated by Liverpool City Council v Roads and Traffic Authority (1991) 74 LGRA 265 at 269 and 278 where the applicant stood by and allowed $67 million worth of work to proceed before it raised an issue about the sufficiency of the environmental assessment for a freeway. Cripps CJ dismissed the suit, finding that it was too late to make any significant remedial order: at 281. 11Section 124 permits the Court to soften, according to the justice of the particular circumstances, the application of the rules which, though right in general, may produce an unjust result in the particular case: Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 341A per Kirby P. However, as his Honour noted at 339G - 340B and 340C: In exercising the discretion, it must be kept in mind that the restraint sought is not, in its nature, the enforcement of a private right, whether in equity or otherwise. It is the enforcement of a public duty imposed by or under an Act of Parliament, by which Parliament has expressed itself on the public interest which exists in the orderly development and use of the environment...Because s 123 of the [EPA] Act permits any person (and not just the Attorney-General or a person with a sufficient interest), to bring proceedings in the Court for an order to remedy or restrain a breach of the Act, there is indicated a legislative purpose of upholding, in the normal case, the integrated and co-ordinated nature of planning law. Unless this is done, equal justice may not be secured. Private advantage may be won by a particular individual which others cannot enjoy. Damage may be done to the environment which it is the purpose of the orderly enforcement of environmental law to avoid... ...the obvious intention of the Act is that, normally, those concerned in development and use of the environment will comply with the terms of the legislation. Otherwise, if unlawful exceptions and exemptions became a frequent occurrence, condoned by the exercise of the discretion under s 124, the equal and orderly enforcement of the Act could be undermined. A sense of inequity could then be felt by those who complied with the requirements of the Act or who failed to secure the favourable exercise of the discretion under s 124. 12The Court should weigh up all the relevant factors including the injury to the public interest by denial of relief, the likely hardship to the holder of the development consent by granting relief, and any conduct of the applicant in standing by and allowing substantial expenditure on work before mounting a challenge to validity: Associated Minerals Consolidated Ltd v Wyong Shire Council [1974] 2 NSWLR 681 (PC) at 692D, Rowley v NSW Leather and Trading Co Pty Ltd (1980) 46 LGRA 250 at 261, and Liverpool City Council v Roads and Traffic Authority. 13The proponent submits that the Court should not grant relief in the face of error by the Council because, first, it would have no environmental utility; secondly, it would be likely to cause the proponent severe hardship; and, thirdly, the applicant delayed bringing the proceedings.

Lack of environmental utility 14The proponent submits that there is no environmental utility in granting relief which has the effect of requiring the Council to consider the likely impact of the proposed bridge upon the EEC for the purpose of development consent because: (a)the Council on 12 August 2011 considered the likely impact of the bridge upon the EEC in the context of granting a "draft approval" for the bridge pursuant to the environmental assessment procedure in Part 5 of the EPA Act; and (b)therefore it is virtually certain that the Council would grant Part 4 development consent if it now had to consider the likely impact of the bridge on the EEC in the development assessment context. A later, more modest (and possibly alternative) version of this submission spoke of the draft Part 5 approval letter as encouraging the conclusion that the Council would grant development consent. 15"Draft Part 5 Approval" is the title of a letter written by a Council officer to the proponent on 12 August 2011. This is the letter to which the proponent's submission draws attention. However, the evidence discloses that on 17 August 2011 the Council issued another "Draft Part 5 Approval" letter in identical terms except that it added a second condition (referred to below). It is convenient to deal with the proponent's submission by reference to this second letter. The title is a misnomer because there is no such thing as an "approval" under Part 5 of the EPA Act. Part 5 does not apply to any act, matter or thing for which development consent under Part 4 is required: s 110(1)(g). There may be a requirement for approval of an activity under another Act which triggers consideration of its environmental impact under Part 5 of the EPA Act: Goldberg v Waverley Council [2007] NSWLEC 259, 156 LGERA 27 at [15] - [17]. In the present case, consent under s 138 of the Roads Act 1993 is required to carry out the proposed bridge works on the Council's land and this triggers environmental assessment under Part 5 of the EPA Act. No Roads Act consent has yet been granted. 16After identifying the Land, the letter states "Description of development: culvert [ie bridge] construction" and "Determination: approved". There follow sections headed "Project background", "Recommendation", "Attachments" and "Conditions". It is signed by the "A/Manager Technical Services". The recommendations start with the statement: "Although the activity described in the REF [Review of Environmental Factors] will have some environmental impacts these can be ameliorated satisfactorily". The two conditions in the letter are that prior to bridgeworks commencing, first, a "Works-In-Kind agreement" shall be in place between the proponent and the Council; and, secondly, the proponent shall obtain a permit under s 138 of the Roads Act to carry out works in Council's road reserve. 17A letter dated 23 February 2012 from the Council to the proponent's planner states that a works-in-kind agreement will be presented to the Council at its next council meeting to be held on 26 March 2012 after the determination of the current legal matter before the Court, which will be heard on 9 March 2012. This is a reference to the matter I am now determining. A letter of 12 December 2011 from the proponent's planner, to which the letter above was in reply, asserted that the development consent and the Part 5 process were separate issues, and requested that the Council proceed with the agreement as "the Court case is about the process followed in assessing the development application and this has nothing to do with the Part 5 process which the Council and School have embarked upon". That is inconsistent with the submission now pressed upon me by the proponent that the Part 5 process reflected in the Council's draft Part 5 approval letter is relevant to the Part 4 development consent process such that there is no utility in the Council now proceeding to consider the likely impact of the bridge on the EEC in the context of the Part 4 process. 18I think that the draft Part 5 approval letter is nothing more than a copy of the Council officer's report, including recommendations. There is no satisfactory evidence that the Council has considered the report or adopted the recommendations. Further, the recommendations are conditional upon an agreement which the Council is not prepared to consider until after determination of the matter now before me. I consider that the letter is of little significance for present purposes. 19In my view, there is in fact "environmental utility" in the Council considering the likely impact of the bridge on the EEC in the Part 4 development assessment context because there has been no construction in the EEC, no approval for the road has been given, and it is conceivable that the Council, if given the opportunity, may determine to grant access to the school in an alternative location in the event that it considers the development application afresh, thus avoiding the need for a road in the EEC. The school has been operating already for a year with the approval of the Council without access across the EEC and proposes to do so with increased numbers this year. 20Refusal of relief would effectively mean that the Council would never consider a mandatory matter (the likely effect of the construction of the bridge on the EEC) in the Part 4 context. In the circumstances, I am not persuaded that this departure from the statutory scheme is justified by the proponent's lack of utility submission.

Hardship 21The proponent submits that any orders which might prevent or otherwise restrict the continued use and expansion of the proposed school would impose severe hardship upon the proponent financially and would impose considerable difficulties and disruption to the school's future operation. The proponent bases the submission on the following evidence: (a)Stage 1 of the school development, including installation of 13 demountable structures, was completed on 26 April 2011 and the school was opened for primary school students on 27 April 2011. (b)The works undertaken on the school now include an extension of the road to Pacific Palms Circuit, which has been built with a roundabout at the end adjacent to the adjoining reserve over which the bridge is proposed to be constructed, together with 19 car parking spaces and the connections for sewer, water and electricity to the demountables. (c)Final earthworks involving the draining and filling of sediment ponds, removal of tree stumps and levelling of the site were due for completion in December 2011; tenders have been called for the construction of the staff car park providing for a total of 60 car parking spaces; and electrical works with the installation of a substation to provide power for Stage 2 and the following stages has commenced whilst Stage 2 of the school is under construction and due for completion in April 2012. (d)A total of approximately $1,300,000 was expended prior to 22 October 2010 in the design and construction of the school and since that date additional expenditures totalling approximately $2,900,000 have occurred. (e)The estimated cost of contracts requiring further expenditure total approximately $4 million. (f)The total expenses incurred to date and expenses that will be incurred until the completion of Stage 2 amount to approximately $13,147,000. (g)Any delay in construction is estimated to cost the school approximately $2,200 per day for the cost of equipment being idle on the site. (h)Negotiations have taken place over months between the respondents and documents have been produced manifesting an intention to authorise the proponent to construct the bridge on payment of s 94 EPA Act contributions. (i)Approximately 94 children are presently enrolled in the school from Kindergarten to Year 3. It is proposed that on completion of Stage 2 in April 2012, 32 additional Kindergarten children and a new Year 4 class will commence at the school. All of the children, except those who have applied for Year 4 enrolment, have paid admission fees and the school has received 56 applications for permission to enrol in Year 4. The school currently employs a Deputy Principal, five teachers and one clerical staff member. (j)the present school is a specialist school providing to the community a high standard of education and Islamic knowledge. A number of parents of the children enrolled in the school have relocated to nearby suburban centres on the premise that the school will continue in operation. Additionally, the school provides low school fees in comparison to other Islamic schools, and there is concern expressed of the impact upon the children that might occur if they are required to move again should the school cease operation. 22In partial support of its financial hardship submission, the proponent adduced evidence that it had spent over $100,000 purchasing items for the bridge and that works to construct the bridge are currently under tender. I do not propose to take those items into consideration because they were premature: no approval to construct the bridge has yet been obtained under s 138 of the Roads Act. 23The proponent also notes that the applicant did not press for an interlocutory injunction to restrain school works. I consider that that was reasonable because, as recorded in correspondence between the parties' solicitors between March and June 2010, it was bridge or road works, not school works, which potentially impacted on the EEC and the proponent and the Council agreed to give the applicant notice before commencing bridge or road works. 24The applicant criticises the proponent's hardship submission because the proponent has not put forward financial information and statements revealing its financial position: Director-General, Department of Environment, Climate Change & Water v Venn [2011] NSWLEC 118 at [336]. The remarks in that case were in a different context. In the present case, the evidence of the scale of expenditure and financial obligations of the proponent are such that a more complete picture by reference to the relative impact on the proponent's financial position is of lesser significance than otherwise would be the case. 25The applicant submits that: (a)it beggars belief that the proponent would enter into contracts after the proceedings had commenced or at least while an appeal was pending without provision for relief if the consent were to be declared invalid. Consequently, the applicant criticises the absence from the evidence of any outstanding contracts entered into by the proponent and whether or not these contracts provide relief from financial obligations in the event that the consent is declared to be invalid. (b)It is a telling fact that the proponent was aware of and was a party to these proceedings challenging their development consent well before any work was done by them on the site. The proponent undertook work subsequently and entered into contracts in full knowledge of the risks it faced if the challenge were successful. No conduct of the applicant contributed to its decision to expend money while the litigation was on foot. The applicant warned it by letter at the earliest stage, in May 2010, that any money expended was at its risk. The proponent took a commercial risk at each stage it expended money on the development. (c)Expenditure will not have been wasted if the Council does, in the future, grant development consent: GPT Re Ltd v Wollongong City Council (No 2) [2006] NSWLEC 401, 151 LGERA 158 at [33] (last sentence). The proponent's evidence is that if the Court finds that the development consent is invalid, it intends to lodge a second development application. (d)The Court ought not to sanction or encourage the development of a practice whereby respondents escalate works during the course of litigation in order to gain a forensic advantage and secure an exercise of discretion in their favour. The proponent submits that it should not be criticised for continuing construction between the date of my decision and the date of the decision of the Court of Appeal. I think that the proponent would or should have appreciated that there was a risk in proceeding with works while the matter was under appeal. Moreover, the proponent continued with works both before the date of my judgment and after the date of the Court of Appeal's judgment. (e)This is not a case where works had been substantially commenced before the proponent was aware of a potential challenge and has been prejudiced by its incorrect reliance on a development consent: cf Liverpool City Council v Roads and Traffic Authority (1991) 74 LGRA 265. (f)The evidence indicates that the school had been operated for a time without the required interim occupation certificate in breach of s 109M of the EPA Act, which attracts a substantial penalty. The interim occupation certificate was not issued until 22 November 2011. Although there is evidence explaining the delay in obtaining the certificate, there was nevertheless a breach. (g)As to the impact on the children enrolled for 2012, the orders sought by the applicant will strike a fair balance between enabling them to continue their schooling during 2012 and preventing any further work or use of the school when and until the Council grants a further development consent. 26In my opinion, the matters listed above in the applicant's submissions collectively outweigh the proponent's hardship submission, provided that there is a softening order suspending for a year an injunction restraining the proponent from using the Land as a school. That would permit the Land to be used as a school for that year and give the proponent a reasonable opportunity to apply for and obtain development consent (and, if necessary, appeal on the merits against refusal). The proponent's evidence is that it proposes to make another development application if the Court finds that the consent is invalid. It has not yet done so notwithstanding that I found the consent invalid and that decision was confined by the Court of Appeal. The proponent says that is because it first wishes to test whether it can survive the current chapter in the litigation. I think that is not unreasonable. If consent to a further development application is obtained, hardship to the proponent will be at least substantially avoided. There should also be liberty to apply, which will permit an application for an extension of that period of suspension should circumstances arise which warrant an extension, such as delay in the determination of a new development application.

Delay 27In oral closing submissions the proponent contended that delay by the applicant in commencing proceedings weighs against the grant of relief. The proponent emphasised that it does not say that this, of itself, is a determinative factor. On 30 June 2009 the Council granted the development consent. On 8 July 2009 the s 101 notice was published. On 16 March 2010 these proceedings were commenced. Yet, the proponent points out, by 28 August 2009 the applicant knew of the development consent as evidenced by proceedings that it commenced in the Supreme Court on that date seeking a declaration that the Council's decision was invalid and an interlocutory injunction to stop construction. 28I am disinclined to attach significant weight to this delay contention for the following reasons, along the lines submitted by the applicant. First, from August 2009 the proponent knew that the applicant was pursuing substantially the same relief albeit in another forum, the Supreme Court, which, however, seems to have lacked jurisdiction. Commencement of proceedings in the wrong court may be explained by the fact that the applicant had no legal representation at that time. Secondly, there is no evidence that, at the time the applicant commenced the Supreme Court proceedings, it knew of the failure of the Council to consider the likely impact of the bridgeworks on the EEC. Thirdly, it is difficult to see what prejudice the proponent suffered by the delay in commencing similar proceedings in this Court. Work had not commenced by the date on which these proceedings were initiated and there appears to be no evidence of wasted costs as at that date. If it is necessary to go further, I would add that there is weight in the applicant's complaint that lack of notice by the proponent of the delay contention until closing submissions has disadvantaged the applicant by giving it no opportunity to consider the contention and put on evidence explaining the delay. The proponent did not plead or particularise delay and made no mention of it in its written submissions lodged prior to the hearing in accordance with the directions of the Court.

Conclusion as to discretion 29For these reasons, I decline to exercise the Court's discretion to refuse relief.

Orders under s 25B Land and Environment Court Act 30Alternatively, the proponent seeks orders under s 25B of the LEC Act. Division 3 (ss 25A-25E) of the LEC Act applies to a development consent granted by the Minister or any other consent authority and extends to invalidity arising from any steps preliminary to the granting of a development consent: s 25A. Division 3 is prescribed as a Division which the Court is bound to consider instead of declaring or determining that a development consent to which the Division applies is invalid, whether in whole or in part: s 25E. Sections 25B and 25C provide: 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. 31Sections 103 and 104 of the EPA Act provide: 103 Revocation or regrant of development consents after order of Court (1)This section applies to a development consent granted, or purporting to be granted, by a consent authority, to which an order of suspension applies under section 25B of the Land and Environment Court Act 1979. (2)The consent authority may revoke a development consent to which this section applies, whether or not the terms imposed by the Court under section 25B of the Land and Environment Court Act 1979 have been complied with. (3)However, if the terms imposed by the Court have been substantially complied with, the consent authority may revoke the development consent to which this section applies and grant a new development consent with such alterations to the revoked consent as the consent authority thinks appropriate having regard to the terms themselves and to any matters arising in the course of complying with the terms. Such a grant of a development consent is referred to as a regrant of the consent. (4)No preliminary steps need be taken with regard to the regrant of a development consent under this section, other than those that are required to secure compliance with those terms. (5)Section 81 and such other provisions of this Act as may be prescribed by the regulations apply to development consents regranted under this section. 104 Appeals and other provisions relating to development consents after order of Court (1)A development consent declared to be valid under section 25C of the Land and Environment Court Act 1979: (a)is final and the provisions of sections 97 and 98 do not apply to or in respect of it, and (b)is operative as from the date the development consent originally took effect or purported to take effect, unless the Court otherwise orders. (2)A development consent declared under section 25C of the Land and Environment Court Act 1979 to be validly regranted: (a)is final and the provisions of sections 97 and 98 do not apply to or in respect of it, and (b)takes effect from the date of the declaration or another date specified by the Court. 32It is clear from the legislative history that these provisions, although in separate Acts, need to be construed together, as Tobias JA observed in Kindimindi Investments Pty Ltd v Lane Cove Council [2007] NSWCA 38, 150 LGERA 333 at [38]. 33The mechanism in ss 103 and 104 of the EPA Act and ss 25A-25E of the LEC Act was introduced by the Environmental Planning and Assessment Legislation Amendment Act 1997 (81/1997). As originally enacted, it applied only to development consents by the Minister. It was extended to other consent authorities by the Environmental Planning and Assessment Amendment Act 1997 (152/1997). According to the Minister's Second Reading Speech for the earlier Bill (NSW Legislative Assembly, Parliamentary Debates (Hansard), 28 May 1997 at 9459-9460), the mechanism was aimed at "technical" breaches. After referring to delay caused by "challenging technical points of the process", the Minister said: "Whilst such challenges will still be possible, it will now be equally possible for the Land and Environment Court, should it so choose, to require the rectification of the technical breach, without sending all parties back to square one, as is presently the case, thereby invalidating the whole approval". 34The purpose of this mechanism is to give the Court a discretion designed to save the consent, and an obligation to consider exercising that discretion. Division 3 of the LEC Act, and in particular ss 25B and 25C, amount to a Court-supervised regime designed to effectuate that purpose. In general terms, where the Court exercises its discretion under s 25B, the operation of the existing consent is suspended until such time as, under s 25C, terms specified by the Court have been shown to the Court's satisfaction to be substantially complied with. Only then may effect be given, by declaration, either to the original consent or to a regranted consent with alterations. The statute uses the same concept of validation by declaration in relation to the two variants. The starting point is a development consent which would otherwise be declared to be wholly or partly invalid. The ending point is a development consent which is declared valid or validly regranted. This concept of validation by declaration is comparable to the familiar converse cases (such as the present) where a development consent may be invalid for some reason but the invalidity does not take effect until the Court makes a declaration of invalidity. 35As the heading discloses, the power to make orders under s 25B has two consequences. The immediate consequence is that the operation of the consent is suspended. The potential consequence is that in the event that there is substantial compliance with the terms specified in the order, the consent will be validated. 36However, a validation order under s 25B is futile unless a later s 25C application for a validity declaration is made and granted. An application for orders under s 25B need not be by the consent authority. In contrast, a subsequent application under s 25C must be by the consent authority. In the present case the s 25B application is by the proponent only, and the consent authority has not indicated whether or not it would make a subsequent s 25C application. 37In the s 25B context, there is a distinction between a discrete technical breach, on the one hand, and a breach of a mandatory consideration requirement in s 79C of the EPA Act requiring reconsideration of the whole development application, on the other. In Kindimindi Investments Pty Ltd v Lane Cove Council [2007] NSWCA 38, 150 LGERA 333 (Kindimindi) at [21], Hodgson JA said when speaking of Division 3 of Part 4 of the LEC Act: "The general intention was that technical breaches should be capable of being rectified". This squarely reflects the legislative aim expressed in the Minister's Second Reading Speech quoted above at [33]. The sole issue in Kindimindi was a technical breach: a council requirement was contained in a private deed when it should have been imposed by a condition of the consent. This was clearly an appropriate case for a s 25B order and one was made. At first instance, Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWLEC 399, 147 LGERA 118, the primary judge , Lloyd J, whose decision was upheld on appeal, said at [25]: In the present case the error of the council amounts to a discrete matter of a technical nature which can be considered in isolation from other matters. As I have said before, this was a simple failure to impose a condition to give effect to the council's intention. This is an appropriate case for the application of s 25B and I do so. 38This was noted and approved in Belmore Residents' Action Group Inc v Canterbury City Council [2006] NSWLEC 530, 147 LGERA 226 at [32] - [34] by Talbot J when declining to make a s 25B order in a s 79C EPA Act case. 39However, in Kindimindi Tobias JA went further than Hodgson JA by saying in obiter dicta that s 25B would authorise the imposition of a term requiring a consent authority to consider or reconsider a matter required to be considered by, for instance, s 79C of the EPA Act: at [32] - [33]. His Honour hastened to add that that does not mean that in every s 79C EPA Act case of invalidity, the Court would exercise its discretion under s 25B. He gave as an example Centro Properties Ltd v Hurstville City Council [2004] NSWLEC 401, 135 LGERA 257 where McClellan CJ declined to exercise the s 25B discretion in a s 79C EPA Act case. 40Assuming that s 25B is available in a s 79C EPA Act case, this Court has generally found it inappropriate to make s 25B orders in cases of failure to consider a mandatory matter under s 79C of the EPA Act because balancing and weighing the s 79C matters against all other matters relevant to the consent authority's consideration would necessitate a re-opening of the whole process: Centro Properties Ltd v Hurstville City Council [2004] NSWLEC 401, 135 LGERA 257 at [85] per McClellan CJ (approved in Kindimindi at [33] by Tobias JA); Centro Properties Ltd v Hurstville City Council [2006] NSWLEC 78 at [58] per Talbot J; Belmore Residents' Action Group Inc v Canterbury City Council [2006] NSWLEC 530, 147 LGERA 226 at [33] - [34] per Talbot J; Bungendore Residents Group Inc v Palerang Council (No 4) [2007] NSWLEC 536 at [41] - [42] per Pain J; Hastings Point Progress Association Inc v Tweed Shire Council [2008] NSWLEC 219 at [7] - [10] per Pain J; Aldous v Greater Taree City Council [2009] NSWLEC 17, 167 LGERA 13 at [100] per Biscoe J; Boral Resources (Country) & Cemex Australia Pty Ltd v Clarence Valley Council (No 2) [2009] NSWLEC 133 at [22] - [31] per Pain J; Nambucca Valley Conservation Association v Nambucca Shire Council [2010] NSWLEC 38 at [242] per Biscoe J; Reid's Farms Pty Ltd v Murray Shire Council [2010] NSWLEC 127, 182 LGERA 1 at [130] - [131] per Pepper J. 41Similarly, where there has been a successful challenge to a development consent on the basis of denial of procedural fairness, it has been held to be inappropriate to make s 25B orders because the whole merit assessment process had miscarried and would have to be redone: Clark & Davis v Wollongong City Council (No 2) [2008] NSWLEC 226 at [26] - [29] per Sheahan J. This Court has also held that s 25B is not available where there has been a complete absence of power to grant a development consent: GPT Re Ltd v Wollongong City Council (No 2) [2006] NSWLEC 401, 151 LGERA 158 at [53] per Biscoe J; NRS Group Pty Ltd v Cowra Shire Council [2008] NSWLEC 156 at [150] per Sheahan J; Aldous v Greater Taree City Council [2009] NSWLEC 17, 167 LGERA 13 at [101] per Biscoe J. 42The framing of a s 25B order in a s 79C EPA Act case is challenging. And difficult obstacles can arise if and when the necessary s 25C application is subsequently made. Both these matters are illustrated by the Mid Western case: Mid Western Community Act Group Inc v Mid-Western Regional Council [2007] NSWLEC 411 (Mid Western No 1) and Mid Western Community Action Group Incorporated v Mid-Western Regional Council (No 2) [2008] NSWLEC 143 (Mid Western No 2). 43In Mid Western No 1, the consent authority breached clauses of a local environmental plan by not making a prescribed assessment and thus was in breach of ss 76A(1) and 79C(1)(a)(i) of the EPA Act: at [39]. Given the view expressed by Tobias JA in Kindimindi (decided a few months earlier), Jagot J concluded that if satisfactory orders under s 25B of the LEC Act could be crafted, then such orders should be made, failing which she should declare the consent invalid: at [49]. Her Honour said at [48]: ...My preliminary view is that a satisfactory order would need to suspend the operation of the current consent pending compliance with terms under which the Council was required to assess the development as now proposed to be carried out against cll 27(3) and (4) of the LEP and, in so doing, to take into account any other relevant matter under s 79C(1) of the EPA Act and decide whether to revoke or regrant the consent with or without alterations. Further, at present, I can see no reason in principle not to require the development as proposed to be renotified as part of this process, having regard to the objects of the EPA Act to encourage public participation (s 5(c)). 44Jagot J directed the parties to file their suggested s 25B orders. Subsequently, her Honour was persuaded to make s 25B orders. They do not appear in her judgments but I have inspected them on the Court file. Since they are not easily accessible and illustrate the complexity of such orders in a rare case where they have been made in the s 79C EPA Act context, I will set them out, as follows: 1.Until further order, the operation of the whole of the consent to Development Application No. 164/2007 (Development Consent) is suspended. For the purpose of this Order, the Development Applicant [sic] shall be taken to include the plans referred to in Schedule A. 2.Compliance with the following terms will validate the Development Consent (whether without alterations or on being re-granted with alterations): (a)The First Respondent renotifies the Development Application by: (i)placing an advertisement in the Mudgee Guardian newspaper substantially in the form of the advertisement in Schedule B; (ii)making the Development Application and all accompanying documents available for inspection for a period of not less than 14 days from the date of the advertisement referred to in order 2(a) at the First Respondent's chambers. (b)After the expiry of the period referred to in paragraph 2(a)(ii) above, the First Respondent, as soon as reasonably practicable: (i)makes, in accordance with clause 27(3) of the Mudgee Local Environmental Plan 1998, an assessment of the extent to which the carrying out of the development in accordance with any consent granted to the Development Application would affect the historic, social, architectural or aesthetic significance of the Church Street and Market Street streetscape and any heritage items in that vicinity; (ii)makes, in accordance with clause 27(4) of the Mudgee Local Environmental Plan 1998, an assessment of the style, size, proportion and position of the building, including openings for windows and doors, the pitch and form of the roof and the colour, texture, style and type of finish of the materials to be used on the exterior of the building; (iii)in undertaking the assessment set out in order 2(b)(i) and (ii), takes into consideration any relevant submissions received as a result of the re-notification of the Development Application and any other relevant matter under s 79C(1) of the Environmental Planning and Assessment Act 1979 (NSW); and (iv)after taking the steps set out in order 2(a) and 2(b)(i) to (iii), does not resolve to revoke the Development Consent pursuant to s 103(2) of the Environmental Planning and Assessment Act 1979 (NSW) and resolves to make an application under s 25C(1) or 25C(2) of the Land and Environment Court Act 1979 (NSW). 3.Grant liberty to the parties to apply on 7 days' notice. 45In Mid Western No 2 at [50] Jagot J, on the consent authority's motion under s 25C: (a) declared that the terms in Order 2 had been complied with; (b) declared that the development consent had been validity regranted; (c) declared that the development consent suspended by Order 1 had been revoked, and (d) ordered the revocation of the order of suspension in Order 1. Along the way her Honour had to confront the obstacle of the applicant's opposition to the making of these further declarations and order on the ground the decision to regrant the development consent was vitiated by matters constituting legal error or, alternatively, that these matters warranted the Court exercising its discretion and refusing the declarations and order sought. 46So far as I am aware, Mid Western is one of only two cases in which the Court has made s 25B orders in a s 79C EPA Act case. The other is Western Sydney Conservation Alliance v Penrith City Council [2011] NSWLEC 244 at [109] - [111] per Moore AJ. His Honour appears to have been influenced by the fact that the matter which had not been considered in the context of the relevant development applications had nevertheless been considered as a planning matter for over two decades, and therefore there was a real prospect that, upon reconsidering it, the council would reach the same result, approval on the same basis as before. The consequential s 25B orders were to the effect, first, that the consents be suspended in part and, secondly, that the consents be validated upon consideration of that matter. The form of the latter order would not, I think, have been accepted by Jagot J in Mid Western, having regard to her Honour's quoted dicta at [43] above, and, with respect, I would side with Jagot J. However, the orders made by Jagot J were not drawn to the attention of Moore AJ. 47The proponent proposes s 25B orders to the following effect: (1)until further order, pursuant to s 25B(1)(a) an order suspending the operation of the development consent except for all works identified as Stage 1 and Stage 2 of the consent together with the use of those works pursuant to the development consent; and (2)pursuant to s 25B(1)(b), an order that compliance with the following terms will validate the consent: (a)that the Council take into account the impact of the bridge upon the EEC; (b)that the Council determine whether the construction of the bridge will impact upon the EEC; and (c)if that determination is in the affirmative, whether, having regard to the extent of that impact, the Council considers that: (i)the consent should be affirmed; (ii)the consent should be affirmed with alterations and, if so, the terms of such alterations; (iii)if so, whether the Council intends to re-grant the consent with alterations; or (iv)the consent should be revoked. 48It may be noted that the proponent's proposed orders would permit continuation of construction of Stage 2, which is not due for completion until April 2012: see [21(c)] above. 49The proponent relies on the following evidence: (a)On 28 May 2009 a Review of Environmental Factors relating to the construction of the bridge was submitted to the Council. This was made before the grant of the development consent in June 2009. It relied on an engineering report, including engineering drawings detailing the construction of the bridge, and a Vegetation Management Plan. (b)The Review of Environmental Factors was the subject of consideration and feedback from the Council in July 2009. (c)The proponent's ecological expert has undertaken ecological assessments for impact upon the EEC, which assessments have been provided to the Council. (d)The applicant's ecological expert, Dr David Robertson, has considered the material prepared by the proponent's consultants and in a joint expert report has expressed the opinion that: I believe that the culvert can be installed with minimal vegetation clearance. I agree that clearing in the creek line is not consistent with conservation of an endangered ecological community. However, the revegetation of the creek reserve on the school site with native plants will help to address the current state of degradation of the creek. (e)Dr Robertson has also stated: The impacts of the current proposal have been adequately investigated and assessed by [Ms Rawling]. VMP and supplementary investigations provided to [Dr Robertson] after his affidavit was sworn. (f)In July 2011 the proponent submitted to the Council a Review of Environmental Factors for the purposes of the Part 5 assessment of the bridgeworks. (g)On 12 and 17 August 2011 the "draft Part 5A Approval" letters, discussed above, were written by a Council officer. 50On the basis of this evidence, the proponent submits that even on the approach of the applicant's consultant, the construction of the bridge is unlikely to have any significant detrimental impact upon the EEC; and, secondly, there is, viewed objectively, utility in making a s 25B order. 51I do not consider a s 25B order to be an appropriate course in this case mainly for the reason often given in s 79C EPA Act cases referred to at [40] above. It is difficult to see a large difference between the consequences of making a s 25B order in a s 79C EPA Act case, on the one hand, and, on the other, declaring a consent to be invalid resulting in the submission and consideration of a new development application which may be substantially similar to that which has been invalidated. The former scenario would require a general opening up of the decision-making process, and a weighing and balancing of the consideration of the effect of the bridgework on the EEC against all other relevant matters, which may or may not lead to confirmation of the original decision. The latter would entail a similar process of weighing and balancing which may or may not lead to consent. In the case of technical breaches, the difference is more readily comprehensible. Taking this into account, and the complexities associated with the making of a s 25B order in a s 79C EPA Act case, it is more appropriate that the Council in this case consider all the relevant material afresh.

COSTS 52It is common ground that the respondents must pay the applicant's costs. There is a costs dispute as between the respondents. 53The Council seeks an order that the proponent indemnify the Council in respect of the Council's liability for the applicant's costs insofar as those costs are attributable to defences unsuccessfully raised by the proponent. This order would leave the Council liable for the applicant's costs insofar as they are not attributable to defences unsuccessfully raised by the proponent. Regardless of those defences, the applicant had to come to court to obtain a declaration of invalidity. 54The proponent seeks orders that: (a)the Council indemnifies the proponent in respect of the proponent's liability for the applicant's costs; and (b)the Council pay the proponent's costs. 55At an early stage of the proceedings the Council filed a submitting appearance save as to costs. The proponent contested the proceedings. At first instance, the proponent failed in its defence of the invalidity issue but succeeded on the statutory time bar issue. On appeal, the proponent failed completely. 56The proponent submits that the costs orders it seeks should be made because the Council: (a)erred by failing to perform its statutory duty to consider the impact of the bridge on the EEC; (b)denied the proponent the protection of the statutory time bar when it failed to prepare the public notice in accordance with the requirements of the regulations; and (c)did not inform the proponent that it did not consider the impact of the proposed bridge upon the EEC and only admitted the failure upon the administration of interrogatories which it answered on 12 August 2010. In April and May 2009 the proponent had provided the Council with the Vegetation Management Plan and the Review of Environmental Factors which were relevant to the consideration of the EEC. The proponent says that its position has been that the Council reviewed that information. (A concession by the proponent in closing submissions that it was always aware that the Council had failed to consider the impact on the EEC was, I accept, inadvertent, and was subsequently withdrawn). 57Opposing the orders sought by the proponent, the Council submits that: (a)At least from the time the proponent was on notice of the Council's response to the relevant interrogatory on 12 August 2010, the proponent was aware that the Council conceded that it did not take into account that matter. Yet the proponent maintained its defence of the proceedings on the contrary basis. (b)There was no evidence tendered on the costs argument as to the status of the proponent's knowledge as to what was or was not taken into account by the Council. However, the following matters recorded in my first judgment were known to the proponent and informed its knowledge as to the matters taken into account or not taken into account: a report to the Council's Independent Hearing and Assessment Panel of 14 May 2009 indicated the bridge was to be the subject of independent consideration under Part 5; the bridge was excluded from the development application as amended; Condition 174 of the development consent provided that an occupation certificate would not be issued until the bridge and connecting road were constructed; Condition 165 required that permits under s 68 of the Local Government Act 1993 and s 138 of the Roads Act 1993 were granted for work to be carried out on the Council's reserve; and Condition 195 provided that a linen plan was to be submitted to show the dedication to the Council of "a Pacific Palms Circuit" prior to occupation of the development. (c)The fact that the s 101 notice was held to be defective by the Court of Appeal should not weigh against the Council on costs because- (i)It was drafted in a way that accorded with the then accepted understanding of the law: Hastings Co-operative Ltd v Port Macquarie Hastings Council [2009] NSWLEC 99, 167 LGERA 205 at [54], followed in my first decision at [50]; (ii)As Basten JA observed in the Court of Appeal at [28], it is open to a developer, in the protection of its own interests, itself to consider the validity of a notice and invite the Council to publish a further notice if it has any concerns; (iii)There has been no disentitling conduct on the part of the Council: Barton v Orange City Council (No 2) [2008] NSWLEC 123; (iv)The proponent vigorously pursued the defence of the proceedings; and (v)To visit the Council with costs would discourage a decision-maker from submitting in accordance with the principles in Oshlack v Richmond River Council [1998] HCA 11, 193 CLR 72 at [46] and would shift a disproportionate costs burden to the public purse. 58The proponent argued unsuccessfully at the substantive hearing and on appeal that, notwithstanding Council's admission in its answer to the interrogatory, the Council in fact did consider the likely impact of the proposed bridge upon the EEC when determining the development application: see my first judgment at [16] and the Court of Appeal judgment at [38] - [40]. It is a reasonably clear inference (and the proponent does not submit to the contrary) that the proponent would have maintained this defence even if the information in the Council's answer to the interrogatory had been provided in a more timely way, as I think it should have been. I am therefore disinclined to think that the Council's late provision of this information through its answer to the interrogatory affects costs. 59The proponent submits that where a Council has made an error leading to invalidity of a development consent and files a submitting appearance, and the proponent unsuccessfully defends the proceedings, the Council should be responsible for the proponent's costs and the costs for which the unsuccessful proponent becomes liable to the applicant. I do not accept the submission. It would sweep away a considerable body of jurisprudence. It seems to treat costs as a form of punishment of the Council for its errors. However, costs are compensatory, not punitive: Latoudis v Casey [1990] HCA 59, 170 CLR 534 at 543. 60There is a general principle that a consent authority should file a submitting appearance and not defend a challenge to the validity of its decision other than in exceptional cases, generally limited to its power and procedures. This principle has its roots in the "Hardiman principle", named after R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA13, 144 CLR 13. Although that case concerned a tribunal rather than a consent authority, the principle for which it stands was applied to consent authorities in Oshlack v Richmond River Council [1998] HCA 11, 193 CLR 72 at [12] and [46] per Gaudron and Gummow JJ. Although their Honours' comments were obiter, this "Oshlack principle" has been applied by the Court of Appeal and this Court. For example, in the present proceedings in the Court of Appeal, Basten JA noted that the Council had filed submitting appearances in this Court and in the Court of Appeal "in accordance with the principles in Oshlack": at [38]. 61I proposed general guideline principles as to the costs consequences of a council's submitting appearance and where a proponent defends the proceedings in Cutcliffe v Lithgow City Council [2006] NSWLEC 463, 147 LGERA 330 at [50]. They have been applied in this Court, most recently in Brown v Randwick City Council (No 2) [2012] NSWLEC 28 at [25] and [28] where Preston CJ held: 25Ordinarily, where both the consent authority that grants a development consent or makes a decision and a beneficiary of the development consent or decision are joined as necessary or proper parties to a successful judicial review challenge to the development consent or decision, the successful applicant's costs will be awarded against both the consent authority and the beneficiary. As Biscoe J stated in Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330 at [50], the award of costs against the consent authority is because its error is the cause of the litigation. The consent authority cannot immunise itself from costs by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. The award of costs against the beneficiary who chooses to defend proceedings and take an active part in them is because of that choice. If a beneficiary wishes to avoid costs, it must choose not to defend the proceedings. ... 28The final issue is whether the Council should pay Mr and Mrs Sandilands' costs. I do not consider Mr and Mrs Sandilands [the beneficiaries of the development consent] have made out a case in the circumstances for an order that the Council pay their costs of the proceedings. True it is that the Council's errors caused the litigation. However, the Council did not continue to defend the applicant's claims; it filed a submitting appearance. Mr and Mrs Sandilands chose to defend the proceedings, as they were entitled to do. But having made that choice, the costs of the applicant in preparing for and conducting the hearing, and Mr and Mrs Sandilands' costs of defending the applicant's claim before and at the hearing, were a consequence of their choice actively to defend the proceedings. It would not be fair and just to order the Council to pay the costs of Mr and Mrs Sandilands' choice actively to defend the proceedings. 62Applying these principles, in the circumstances of this case I decline to make the costs orders sought by the proponent and propose to make the costs order sought by the Council.

ORDERS 63The orders of the Court are as follows: 1.Declaration that the development consent for DA-346/2009 granted by the first respondent to the third respondent on 30 June 2009 for the construction and use of a school and road on land owned by the second respondent at 612 Hoxton Park Road, Hoxton Park, NSW, being Lot 24 DP 1123873 and Lot B DP 418231, is invalid. 2.Order that the second and third respondents are restrained from carrying out any further work on the said land pursuant to the said development consent unless and until a further development consent authorising the work is granted. 3.Order that the second and third respondents are restrained from using the said land as a school unless and until a further development consent to do so has been granted. 4.Order that Order 3 be suspended until and including 31 March 2013. 5.Order that the respondents pay the applicant's costs of the proceedings. 6.Order that the second and third respondents indemnify the first respondent in respect of its liability for the applicant's costs insofar as those costs are attributable to defences unsuccessfully raised by the second and third respondents. 7.Liberty to apply on three days' notice. 8.The exhibits may be returned. 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 March 2012