Ireland v. Cessnock City Council [1999] NSWLEC 153

Land and Environment Court (NSW)|1999-06-30|Before: Bignold J, Mr J, Sheahan J, And P

Land and Environment Court of New South Wales CITATION: Ireland v. Cessnock City Council [1999] NSWLEC 153

PARTIES APPLICANTS: Ireland

RESPONDENT: Cessnock City Council

LEGISLATION CITED: Environmental Planning and Assessment Act 1979, s 149D, s 149E, s 149F

DATE OF JUDGMENT DELIVERY: 06/30/1999

APPLICANTS: Mr G. Newport, Barrister SOLICITORS: Lorton Duke LEGAL REPRESENTATIVES: RESPONDENT: Mr J.B. Blackman, Barrister SOLICITORS: Cleaves Mallik & Gibbs

A. INTRODUCTION 1-3 B. THE RELEVANT FACTS 4-6 C. THE QUESTIONS OF LAW RAISED IN RESPECT OF THE BUILDING CERTIFICATE APPEAL 7. D. THE STATUTORY PROVISIONS RELATING TO BUILDING CERTIFICATES 8-13 E. THE COMPETING ARGUMENTS ON THE BUILDING CERTIFICATE APPEAL 14-17 F. THE PRESENT PROCEEDINGS (BEING THE BUILDING CERTIFICATE APPEAL) ARE NOT BARRED 18-38 G. THE POWER TO ISSUE A BUILDING CERTIFICATE IN RESPECT OF A BUILDING, THE SUBJECT OF A SUBSISTING DEMOLITION ORDER 39-68 H. DETERMINATION OF THE QUESTIONS OFLAW IN THE BUILDING CERTIFICATE APPEAL 69. QUESTIONS OF LAW RAISED IN THE DEVELOPMENT APPEAL 70-104 J. CONCLUSIONS 105.

IN THE LAND AND Matters Nos. 10170 and 20033 of 1999 ENVIRONMENT COURT OF Coram: Bignold J. NEW SOUTH WALES 30 June 1999

A. INTRODUCTION

In these two related proceedings (being respectively (i) an appeal pursuant to the Environmental Planning and Assessment Act 1979, s 97 (the EP&A Act) and (ii) an appeal pursuant to s 149F of that Act in respect of (i) the Council's deemed refusal of a development application for the use of a building erected on lot 1 Deposited Plan 819282, comprising some 15 hectares situate at Pokolbin; and (ii) the Council's refusal to issue a building certificate in respect of the same building) the Council has raised for determination by the Court a number of preliminary questions of law in both proceedings.

The parties jointly seek my determination of the questions of law and upon publication of my reasons for determination, ask me to adjourn the proceedings for future consideration of the merits of the respective appeals (in the event that the Court determines that the appeals are competent and are legally capable of yielding the relief claimed by the Applicants, being an outcome that the Council contends is not legally available).

By consent, the proceedings were heard together and the parties have asked the Court to first determine the questions of law raised by the Council in respect of the building certificate appeal (which was the principal focus of the hearing)and thereafter to determine the questions of law raised by the Council in respect of the development appeal.

The facts relevant to both appeals, which are set forth in the Statement of Agreed Facts (Exhibit 1), are as follows:
The applicants are the owners of property known as Lot 1 DP 819282 Broke Road and Ekerts Road Pokolbin (the subject land.)
There is presently constructed on the land, inter alia, a building constructed to lock up stage which was unlawfully erected without approval of the Council (the subject building.)
On 6 January 1998 the Council gave development approval DA 118/697/130 for the construction and use of two antique/collectable shops on the subject land in the vicinity of the subject building. This consent has not been surrendered.
On 9 October 1998 Justice Sheahan of the Land and Environment Court made findings, declarations and orders in matter No. 40073 of 1998 which related to the subject building. Those findings, declaration and orders are relevant to these proceedings.
On 30 November 1998 the applicants lodged with the Council a development application in respect of the subject land for the use of the existing unlawfully constructed building as a farm shed for motor vehicles, farm and winery equipment. This application has not been determined by Council.
The proposed use of a building on the subject land is permissible with the consent of the Council.
The plans in respect of this development application are those annexed to the affidavit of Peter Cavill Ireland dated 12 March 1999 filed in LEC proceedings 40073 of 1998.
The applicants have sought the issue by the Council of a building certificate under s.149A-149E of the Environmental Planning and Assessment Act. This application has been refused by Council on the grounds set out in the Schedule to letter dated 2 March 1999 (copy annexed and marked A).
The subject building a. has dimensions of 15m by 20m and a height of 5.5m; b. has access through timber doors on the southern elevation; c. is approximately 44.5m from the entrance of the subject property onto Ekerts Road; d. is approximately 7.7m to the north west of the winery.
The subject building has been erected to the lock up stage and consists of a. the concrete slab 15m by 20m has been poured; b. the stone and timber walls have been erected as shown in the plans; c. the internal framework and roof structure has been erected and roofing material installed; d. doors have been fitted as in the plans.
There is not sufficient material before the Court at this stage to determine the merits of whether or not, if it does have a discretion, the Court should issue a certificate under section 149D of the Environmental Planning and Assessment Act or grant the approval under 79C of the Environmental Planning and Assessment Act. The Council has not at this stage indicated to the Applicant the material it considers necessary to determine the building certificate. It is for this reason that there is not sufficient material before the Court at this stage to determine the merits of whether or not, if it does have a discretion, the Court should issue a certificate under section 149D of the Environmental Planning and Assessment Act or grant the approval under 79C of the Environmental Planning and Assessment Act.
If the development application had been for the construction of the subject building rather than for the use of the subject building, the development application would have been notified under Council's Public Notification Policy and plans of the height of the external configuration of the building would have been available for public inspection and comment.
The application for the use of the subject building was notified by the Council in the terms of letter dated 12 January 1999 (copy annexed and marked B). One objection was received from a neighbour dated 21 January 1999 (copy annexed and marked C).

In respect of the fact stated in par 8, the reasons for the Council's refusal to issue the building certificate were stated in the Council's Notice of Determination as follows:
There are matters that would entitle the Council under the Environmental Planning and Assessment Act 1979 as amended and the Local Government Act 1993 to order the building be demolished in that the building was not lawfully constructed with the consent or the approval of the Council nor did the building comply with any Building Approval granted by the Council.
There is a matter that would entitle the Council under the Environmental Planning and Assessment Act and the Local Government Act 1993 to take proceedings for an order or injunction requiring the building to be demolished in that the building was not constructed with the consent or the approval of the Council nor did the building comply with any Building Approval granted by the Council and further the building the subject of the application has been declared by the Land and Environment Court to be unlawfully constructed and the Land and Environment Court has on the application of the Council made an Order that the said building be demolished and removed from the property.

The work that would need to be done to enable the Council to issue a Building Certificate would be for the building to be demolished in accordance with the Orders of the Land and Environment Court and for the building then to be constructed strictly in accordance with an approval duly obtained from the Council under the Environment Planning and Assessment Act.

In respect of the facts stated in par 13, what is described as " one objection received from a neighbour " was a letter which stated:

Whilst an objection is not made to the subject application, Southcorp Wines wishes to advise that its activities on the adjoining property, namely viticulture, grazing land and the disposal of marc should not be restricted by the development. Southcorp Wines would appreciate a notation being placed on the consent if successful to this effect.

C. THE QUESTIONS OF LAW RAISED IN RESPECT OF THE BUILDING CERTIFICATE APPEAL

The relevant questions of law (Exhibit 3) are as follows:
Is the Council obliged to issue a certificate where it is not satisfied of the matters specified in s.149D(1).
If the answer to 1. is No, does the Council have a discretion to issue such a certificate.
If the answer to 2. is Yes, is the Council entitled to issue a certificate where the Court has declared that the building is unlawful and has order that it should be demolished.
If the answer to 2. is Yes, in the exercise of its discretion, should the Council take into consideration: a. the objectives of the EPA Act b. public policy regarding the orderly enforcement of a public duty, c. the obligation of the Council to uphold the decision of the Court, d. the finality of decisions of the Land and Environment Court, e. the fact that a certificate issued under s.149D does not regularise a building declared to be unlawful, f. The entitlement of any other person to bring proceedings for the demolition or removal of the unlawful building. g. the obligation not to sanction an illegality h. the precedential effect of the issue of such a certificate to avoid the obligations under the legislation, i. the present need for development consent for the erection of the building under the legislation. j. any other matters, and, if so, what. k. whether the fact that there has been no public notification or advertising of any application for the erection unlawfully of a building is relevant to whether or not there should be approval for the issue of the certificate.

D. THE STATUTORY PROVISIONS RELATING TO BUILDING CERTIFICATES

The relevant statutory provisions are now found in the EP&A Act, s 149A to s 149G (inclusive). (However, as will be revealed legislative antecedents to these provisions, date back to 1928 when s 317A was introduced into the Local Government Act 1919.)

These sections were inserted into the Act by the Environmental Planning and Assessment Amendment Act 1997 (Act No. 152) which came into force and 1 July 1998. Section 149A and Section 149E were themselves amended by the Statute Law (Miscellaneous Provisions) Act 1998 (which amendments also came into force on 1 July 1998). A question arises as to the scope and extent of the statutory discretion thereby conferred.

Section 149A(1) provides that a Council "may issue a building certificate in accordance with this section and Sections 149B - 149E".

Section 149B provides for the making of an application for a building certificate, subsection (1)(a) authorising such an application "by the owner of the land on which the building is erected".

Section 149D and Section 149E which deal respectively with "the obligations of Council to issue a building certificate" and the "effect of a building certificate" are important to the outcome of the present proceedings and must be recited in their totality:

149D Obligations of council to issue building certificate (1) The council must issue a building certificate if it appears that: (a) there is no matter discernible by the exercise of reasonable care and skill that would entitle the council, under this Act or the Local Government Act 1993 : (i) to order the building to be demolished, altered, added to or rebuilt, or (ii) to take proceedings for an order or injunction requiring the building to be demolished, altered, added to or rebuilt, or (iii) to take proceedings in relation to any encroachment by the building on the land vested in or under the control of the council, or (b) there is such a matter but, in the circumstances, the council does not propose to make any such order or take any such proceedings. (2) If the council refuses to issue a building certificate, it must inform the applicant, by notice, of its decision and of the reasons for it (3) The reasons must be sufficiently detailed to inform the applicant of the work that needs to be done to enable the council to issue a building certificate. (4) The council must not refuse to issue or delay the issue of a building certificate by virtue of the existence of a matter that would not entitle the council to make any order or take any proceedings of the kind referred to in subsection (1) (a). (5) Nothing in this section prevents the council from informing the applicant of the work that would need to be done before the council could issue a building certificate or from deferring its determination of the application until the applicant has had an opportunity to do that work.

149E Effect of building certificate (1) A building certificate operates to prevent the council: (a) from making an order (or taking proceedings for the making of an order or injunction) under this Act or the Local Government Act 1993 requiring the building to be repaired, demolished, altered, added to or rebuilt, and (b) from taking proceedings in relation to any encroachment by the building onto land vested in or under the control of the council, in relation to matters existing or occurring before the date of issue of the certificate. (2) A building certificate operates to prevent the council, for a period of 7 years from the date of issue of the certificate: (a) from making an order (or taking proceedings for the making of an order or injunction) under this Act or the Local Government Act 1993 requiring the building to be repaired, demolished, altered, added to or rebuilt, and (b) from taking proceedings in relation to any encroachment by the building onto land vested in or under the control of the council, in relation to matters arising only from the deterioration of the building as a result solely of fair wear and tear. (3) However, a building certificate does not operate to prevent a council: (a) from making order No 6 in the Table to section 121B, or (b) from taking proceedings against any person under section 125 with respect to that person's failure: (i) to obtain a development consent with respect of the erection or use of the building, or (ii) to comply with the conditions of a development consent. (4) An order or proceeding that is made or taken in contravention of this section is of no effect.

Section 149F(1) confers upon an applicant aggrieved by the Council's refusal to issue a building certificate a right of appeal to this Court, subsection (3) defining this Court's powers in the following terms: (3) On hearing the appeal, the Court may do any one or more of the following: (a) it may direct the council to issue a building certificate in such terms and on such conditions as the Court thinks fit, (b) it may revoke, alter or confirm a notice under section 149C, (c) it may make any other order that it considers appropriate.

E. THE COMPETING ARGUMENTS ON THE BUILDING CERTIFICATE APPEAL

I have been considerably assisted by the comprehensive arguments advanced on behalf of the parties. Essentially, the Council's argument is founded upon the following two propositions - (i.) The Applicants' appeal is barred by the principle of res judicata because it involves an attempt to re-litigate the question whether the building should be demolished, which question had been finally determined by the judgment of Sheahan J delivered on 9 October 1998 in class 4 proceedings, brought by the Council against the present Applicants. (ii.) As a matter of statutory construction of the provisions of the EP&A Act, s 149A to 149F, there is no power vested in the Council (or, on appeal, in this Court) to issue a building certificate in respect of a building which is the subject of a subsisting order made by the Council (or the Court) requiring the building to be demolished.

The Applicants contest both these propositions, arguing (i) that the Applicant's present appeal is not barred by any principle of res judicata because Sheahan J, in staying the demolition order, deliberately provided the opportunity "for the parties to attempt to regularise the planning law position in relation to the building to their mutual satisfaction" and (ii) that, properly construed, the enabling provisions of the EP&A Act permit the issue of a building certificate in respect of a building, the subject of a subsisting demolition order made by the Council (or by the Court in the form of a mandatory injunction).

The adjudication on these two contested propositions, which found the Council's case that the Applicants are not legally entitled to the relief claimed in either of the pending appeals will itself provide (either directly or indirectly) the complete answers to each of the specific questions of law raised by the Council. Indeed, except for the specific questions directly governed by the adjudication on the two contested propositions, I do not understand there to be any dispute between the parties as to how the other specific questions are to be answered.

In my judgment, neither of the two propositions advanced by the Council is correct, and I would reject each of them. I proceed at once to give my reasons for these conclusions.

F. THE PRESENT PROCEEDINGS (BEING THE BUILDING CERTIFICATE APPEAL) ARE NOT BARRED

The Council's argument was variously formulated in its written submissions. For example, the following submissions were made:
The starting point is that there has been an order for the demolition of this building. There has been no appeal against that order. The law will therefore regard as done that which ought to have been done. In other words, the Court cannot now have re-litigated before it whether or not the building is to remain. The first premise must be that there is no building.
There has already been litigation about the lawfulness of the building. And there has been a declaration that the building is unlawful. There is no stay of the declaration: only of the order.
Section 124(3) says that the Court can adjourn an injunction proceeding to enable a development application to be made. That was not the case here.
The application for the certificate or for development approval should have been made to the Council before the demolition order was made. That is the very reason for the Practice Direction 8 of the Land and Environment Court.
When the Class 4 proceedings were being heard in the Land and Environment Court, the owners of the land had a number of options which they did not avail themselves of. It is too late now to say that the order for demolition it should not have been made. It was made. And has to be obeyed.
There is an opportunity to exercise a discretion in favour of an applicant and decline to make the orders. But that discretion has already been exercised when the Court made the orders on 9/10/98
If there is a discretion, it is a discretion which has to be exercised before any order is made for demolition, etc.

The principles of res judicata and issue estoppel were classically expounded by Dixon J (as he then was) in Blair v. Curran (1939) 62 CLR 404 in the following passage at 531/533:

A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.

Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J. in R. v. Inhabitants of the Township of Hartington Middle Quarter (1), the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.

In phraseology of Lord Shaw, a fact fundamental to the decision arrived at in the former proceedings and the legal quality of the fact must be taken as finally and conclusively established (Hoystead v. Commissioner of Taxation (2)). But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation. (1) (1855) 4 E. & B. 780, at p. 794 [119 E.R. 288, at p. 293] (2) (1920) A.C. 155.

It is obvious that the present proceedings, being an appeal pursuant to the EP&A Act, s 149F(1) against the Council's refusal to issue a building certificate, do not raise any issue that was the subject of Sheahan J's judgment delivered on 9 October 1988 in the class 4 proceedings brought by the Council against the Applicants. The earlier judgment did not determine the issue that is raised by the present proceedings, namely whether a building certificate should be issued. Indeed, as will be seen, the earlier judgment deliberately left open the possibility of such action being taken, and accommodated the contemplated action by suspending the mandatory injunction.

However, the question arises as to whether there is scope for applying the extended res judicata principle as expounded by the High Court of Australia in Port of Melbourne Authority v. Anshun Pty Ltd (1981) 147 CLR 589.

The "extended" principle has its genesis in the exposition contained in the following passage from the judgment of Sir James Wigram V.C. in Henderson v. Henderson (1843) 3 Hare, at 115:

where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.

In Anshun , the joint judgment of Gibbs CJ and Mason and Aickin JJ, after surveying the course of case law in England where Henderson has been considered and applied, expresses the following conclusion as to the scope of the " extended " principle at 602 and 603:

In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few. See the illustrations given in Cromwell v. County of Sac. (70).

It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment. In this respect the discussion in Brewer v. Brewer (71) is illuminating.

There it was held that the wife's omission to plead matters which would have constituted a discretionary bar to her husband's suit for dissolution of marriage on the ground of adultery did not estop her from raising those matters in subsequent proceedings for maintenance. (70) (1876) 94 U.S. [24 Law. Ed., at p. 199] (71) (1953) 88 C.L.R. 1.

In Macquarie Bank v. National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543, Clarke JA in his judgment (agreed in by Priestley JA) discusses at 556 et seq the doctrine of res judicata and "Anshun estoppel" and that discussion includes the following observations at 558:

There is, of course, a similarity between estoppel by record and the Anshun principle but there are also fundamental differences. In the former, proof that a party is seeking further to litigate a cause of action which has previously been taken to judgment operates as a complete bar to the later action. In the latter, the estoppel operates only where the new litigation involves a point or points which properly belonged to the first proceeding ( Henderson ) or unreasonably was or were not included in it ( Anshun ), and the appropriate order is a stay of proceedings. However, even where it is found that the point was unreasonably omitted from the first case, the court retains a discretion not to stay the second proceedings if special circumstances exist.

The existence of the two principles sitting, as it were, side by side tells against an expansive view of estoppel by record. That is not to say that the defence should not succeed wherever the identity of cause of action is established. It should. Rather it means that a strict approach should be taken in inquiring whether there is in a given case the necessary identity.

In my judgment, there is no scope in the present case for the application of Anshun estoppel for the reason that the issue raised by an appeal pursuant to s 149F of the EP&A Act simply did not arise, and could not reasonably, have arisen in the proceedings which culminated in the Orders made by Sheahan J, in his judgment delivered on 9 October 1998. Those proceedings essentially involved the question whether what was virtually conceded to be a breach of the Local Government Act 1993 (and perhaps also, a breach of the EP&A Act ) should be remedied by mandatory injunction requiring the demolition of the offending building. The case conducted on behalf of the Irelands before Sheahan J was that since the offending building involved only a " minor variation " in terms of its approved position on the development site (which, might be properly regarded as de minimis) and that no environmental harm had been established, the Court, in the exercise of its wide judicial discretion would not require its demolition and removal from the site. Significantly for present purposes, this line of discretionary defence was augmented by a submission advanced on behalf of the Irelands that is recorded in the following passage of Sheahan J's judgment:

Accordingly, the respondents ask for any order for demolition to be suspended, so as to enable the necessary applications to be made to Council for whatever development and building approvals may be required and for a building certificate in respect of what has already been done.

This submission obviously was acceptable to his Honour and is reflected in the following passage in his Honour's judgment:
For all these reasons, while the appropriate order is to grant the relief sought, namely demolition, the operation of that order should be postponed , to provide an opportunity for the parties to attempt to regularise the planning law position in relation to the building to their mutual satisfaction.

and in the following orders made by his Honour: 4. That the said building be demolished and removed from the property. 5. That order 4 is stayed for a period until 31 March 1999 in order to provide an opportunity for the parties to attempt to regularise the planning law position in relation to the building to their mutual satisfaction.

It is clear, in my judgment, that the Applicants' application for the issue of a building certificate and the Applicants' development application, that were both made to the Council during the period of the suspension of the mandatory injunction, fall within the action contemplated by Sheahan J's order "for the parties to attempt to regularise the planning law position in relation to the building to their mutual satisfaction", as that Order is to be understood in the light of paragraphs 32 and 55 of his Honour's judgment.
The "notion of an ex post facto regularising" of what originally was an unlawfully erected building is not a new notion: see Ellmoos v. Sutherland Shire Council (1962) 8LGRA 16 at 22.

Recently, the Court of Appeal in Tynan v. Meharg (1998) 101 LGERA 255 at 259 referring to the factors relevant to this Court's exercise of statutory discretion to enforce a breach of the planning law included the factor "whether any injunction should be softened or mollified by suspending its operation in order to allow the appellants the opportunity to make fresh applications to the council to regularise the situation" (the "situation" being the unlawful erection of a building.)

I should interpose that when the present appeal (and the related development appeal) were filed in this Court on 11 March 1999, during the currency of the suspension of the mandatory injunction, at the same time the Applicants filed a Notice of Motion in the class 4 proceedings seeking an extension of the suspension. On 29 March 1999 the Court by consent granted a stay of the suspended mandatory injunction until 30 June 1999, noting the existence of the pending class 1 and 2 appeals. At the conclusion of the argument in the present proceedings, the parties asked the Court by consent to further extend that stay until 2 August 1999, to enable the two related appeals to be finally determined by this Court while the original mandatory injunction remained suspended or stayed.
Once the following facts are appreciated, namely that (i) Sheahan J, in his judgment had deliberately suspended the mandatory injunction in order to provide the opportunity for the parties "to seek to regularise the planning law position in relation to the building" (ii) the Applicants' two related appeals comprise action taken by the Applicants in their attempt to regularise the planning law position within the contemplation of his Honour's judgment; and (iii) such action was not within the direct purview of the proceedings determined by his Honour - it plainly follows, in my judgment, that the present proceedings are not barred by any principle of res judicata or Anshun estoppel. No relevant estoppel arises from the earlier judgment of Sheahan J that would preclude the Applicants from seeking the relief they claim in the two related proceedings.

The Council placed considerable reliance upon the judgment of Handley JA (sitting singly in the Court of Appeal) in Tynan v. Meharg (unreported Court of Appeal 23 November 1998) where his Honour determined a Motion to extend the period of time stipulated in a mandatory order made by the Court of Appeal for the demolition of a building, to enable the moving party "to obtain from the Newcastle City Council development consent and a building certificate", by holding that the process was "fatally flawed" (being in violation of the principle of res judicata) and was an "attempt to re-litigate a question finally decided by Sheahan J, subject to appeal to this Court and now finally decided by this Court".

Handley JA's conclusion that the Motion involved 'an attempt to re-litigate" a question finally decided (both by the trial Judge and by the Court of Appeal) is to be understood, in my respectful opinion, in the light of what had been decided in that litigation. The judgment of the Court of Appeal which is now reported - see Tynan v. Meharg (1998) 101 LGERA 255 - involved the re-exercise by that Court of the judicial discretion to grant or to withhold injunctive relief. At p 259, Stein JA (in his judgment, which had the concurrence of the other members of the Court) enumerated a number of factors relevant to the wide judicial discretion including the following consideration:

Whether any injunction should be softened or mollified by suspending its operation in order to allow the appellants the opportunity to make fresh applications to the council to regularise the situation. This was rejected by Sheahan J and, I think, rightly so. That the building had been erected in a location where it was not permitted was known to the appellants from around July 1995. They had more than ample opportunity from that time until today to make the necessary application for development consent and building approval. For whatever reason, they have not done so. The practice of the Land and Environment Court, if an application for consent or approval is made before class 4 civil enforcement proceedings have been heard, is to defer those proceedings until the merits application is determined. Even since the judgment by Sheahan J on 13 February 1998 the opportunity has been available to the appellants, which they have chosen not to pursue. In my opinion, little weight should be given to this aspect. In any event, the stay granted by Sheahan J, which has been extended to 1 October 1998, has, in effect, suspended the order for almost eight months.

The present case is entirely distinguishable on the facts, from Meharg . Here, Sheahan J deliberately suspended the mandatory injunction to provide the opportunity for the parties to seek to regularise the planning law position. It follows that any action taken within the contemplation of that order, including the action taken by the Applicants in seeking the issue of a building certificate and the grant of development consent, was not only deliberately left open in the earlier judgment, but was left open in deliberate recognition of the possibility that the regularising of the planning law position might significantly impact upon the mandatory injunction. It is not for me to speculate on precisely how any regularising of the planning law position might legally impact on the mandatory injunction other than to note the Applicants' foreshadowed application, assuming successes in the present appeals, to seek a permanent stay of the mandatory injunction. cf. Permewan Wright Consolidated Pty Ltd v. Attorney General for NSW (1978) 35 NSWLR 365 where the Court of Appeal (by majority) exercised the power conferred by Supreme Court Rules Pt 42 r 12 .

This position is radically different from the position in Meharg where both the trial Court and the Court of Appeal held that there should be no further possibility of seeking to "regularise the situation".

It is only in the light of what had been determined by both the trial Court and by the Court of Appeal in Meharg that Handley JA's conclusion that the Motion involved no more than "an attempt to re-litigate" the question finally determined, namely the exercise of the statutory discretion conferred by s 124 of the EP&A Act, to grant or to withhold the remedy of injunction, is to be understood.

For the same reasons, I would similarly understand Handley JA's statement (applying Anshun), that "all matters relevant to the exercise of his Honour's discretion under s 124 of the Environmental Planning and Assessment Act were material to that hearing and should have been brought forward at that time" and his further statement:

…..this Court does not have original jurisdiction based upon a change of circumstances to set aside one of its orders that was correct when made .

For all the foregoing reasons, I have concluded that the Applicants' present proceedings are not barred by any principle of res judicata or Anshun estoppel.

G. THE POWER TO ISSUE A BUILDING CERTIFICATE IN RESPECT OF A BUILDING, THE SUBJECT OF A SUBSISTING DEMOLITION ORDER

The Council's argument that no such power is conferred upon the Council (or, on appeal, this Court) was variously formulated in its written submissions. For example, the following was submitted:
The Council cannot give retrospective approval for the construction of the See Steelbond v. Marrickville 82 LGERA 192, Connell v. Armidale (unreported 25/9/96), Herbert v. Warringah (98 LGERA 270).
The decisions of the Land and Environment Court and the Land and Valuation Court were to the effect that development approval can be given prospectively for a use but not retrospectively for the erection of a building.
Handley JA in Tynan v. Meharg (unreported 23/11/98) held that there was no power to regularise an unlawful erection of a building.
Section 149D(1) requires a council to issue a certificate in certain circumstances.
The purpose of s.149D is to protect the holder of a certificate from a council bringing any proceedings or making any orders. It is not relevant after orders have been made and gives no protection. This is logically consistent with the wording of the section and is consistent with the object of the Act.
Paragraph (a) sets out what has to be absent for the certificate to be issued. Paragraph (b) then says that if those matters are present, the Council may, in effect, exercise a discretion.
This means that if the council is entitled to take proceedings for an injunction and has decided that it will not ignore that entitlement, the council cannot issue the certificate.

Ultimately, the solution to the present disputed question is the proper construction of the EP&A Act, s 149A to s 149F.

However, before construing those sections, I should consider the Council's submissions which do not involve the task of statutory construction.

Firstly, there is the submission that the Council is not empowered to grant a retrospective approval for the erection of a building that is already in existence.

Since this submission is neither challenged, nor is directly in point to the required determination of the questions of law raised by the Council, I need say very little in respect of it save this - that the decided cases have not been concerned with the relevant provisions of the EP&A Act, as currently in force ie since 1 July 1998 when Act No 152 of 1997 came into force.

However, the more telling answer to the submission is simply that the issue of a building certificate is something quite different from a retrospective development consent or building approval for the erection of building that already exists.

The Council's submission that Handley JA in Meharg decided that "there was no power to regularise a unlawfully erected building" must, however, be firmly rejected. Unfortunately, Council's submission does not accurately state what his Honour said. He said:

Development consent may regularise for the future what had hitherto been an unlawful use of land or buildings, but the line of authority in the Land and Environment Court or its predecessor which was analysed by Sheahan J in Herbert establishes that these powers were not available, prior to Act No 152 of 1997, to regularise the unlawful erection of a structure.

His Honour immediately proceeds to consider s 149E of the EP&A Act (as added by Act No 1523 of 1997), but without the benefit of full argument, his Honour was content to express tentative views on those new provisions of the EP&A Act .

I can now consider the question of construction.

The Council's argument which advances a purposive construction of the relevant sections is to the effect that since the obligation imposed upon a Council to issue a building certificate is predicated upon the absence of an entitlement on the Council "to order the building to be demolished etc" or "to take proceedings for an injunction requiring the building to be demolished etc" (including a case where there is such an entitlement but the Council foregoes it), where (as in the present case) that entitlement not only exists, but has in fact been exercised, the Legislature must be taken as not having intended to impose upon a Council the obligation to issue a building certificate.

I would respectfully adopt the proffered construction of s 149D since it would be bordering on the absurd to conclude that the obligation to issue the building certificate does not arise where the Council has the entitlement to issue a demolition order (or to take Court proceedings seeking such an order) but does arise where the Council has already exercised that entitlement.

However, this construction of s 149D does not conclude the disputed question in favour of the Council's contention because the question remains whether the Council (or the Court, on appeal) has the discretion to issue a building certificate in circumstances where the Council is not obliged to issue the certificate.

The answer to this question depends upon whether the power conferred by s 149A embraces such a discretion. The power is formulated in words which prima facie confer a discretion to issue or not to issue a building certificate. However, assuming that such a discretion is conferred, it is significantly curtailed by (i) the obligation imposed upon a Council by s 149D(1) to issue a building certificate; and (ii) the related obligation imposed by s 149D(4) not to refuse to issue a certificate except upon a ground which would entitle the Council to issue a demolition order etc.

Logically, the obligation to issue a building certificate unless fact A exists, coupled with the obligation not to refuse to issue a building certificate except on the ground of existence of fact A, does not exhaust the discretion to issue a building certificate even if fact A exists. In my opinion, s 149A confers a discretion on a council to issue a building certificate even in circumstances where the council is not bound to issue it. In other words, the discretion is wider than the duty, and the duty to issue the certificate, unless certain conditions apply, does not create an implied duty not to issue the certificate where those conditions apply.

However, the Council seeks to rebut this construction of s 149A by a further argument based upon a purposive construction of s 149E. It submits that the issue of a building certificate in relation to a building that already exists would serve no useful purpose because the limitations created by s149E on the Council's powers to take remedial action against the existing building, would be entirely unavailing in relation to the action that the Council has already taken in obtaining from Sheahan J the mandatory injunction requiring the demolition of the offending building. The Legislature could not have intended to confer on a council a discretion to issue a building certificate in circumstances where it would serve no useful purpose.

Despite the force of the Council's argument, I do not think that it should be accepted because I am not persuaded that the issue of a building certificate in the present case would serve no purpose. The effect of the issue of a building certificate is expressly declared by s 149E. That statutory effect is not neutralised or diminished by the fact that there is already in existence a mandatory injunction requiring the demolition of the building. In truth, the Council's argument travels well beyond the bounds of the legitimate process of statutory interpretation, by seeking to superimpose on that process the facts of the present case. This is to confuse the construction of a law with the application of that law, so construed, to found facts.

Moreover, even if attention were to be directed to the facts of the present case, it simply cannot be said, at this stage, that the issue of a building certificate would be self-evidently unavailing. On the contrary, for the reasons earlier stated in relation to the Council's res judicata argument, it is reasonable to infer that the issue of the building certificate is likely to have a significant effect upon the ultimate fate of the (presently suspended or stayed) mandatory injunction.

In so concluding, that a council has a discretion (rather than a duty) to issue a building certificate in respect of a building that already exists (including one, such as the subject building, that was unlawfully erected), I have been solely engaged in the task of statutory interpretation.

I am, of course, cognisant of the fact that the Council, in the present case, has taken the view (probably on the basis of legal advice) that it has neither the power nor the discretion to issue the building certificate. However, this fact cannot affect the question of the proper construction of the statute. Nor can the assumed fact that a council that has obtained a mandatory injunction requiring the demolition of a building is unlikely to exercise a power or discretion to issue a building certificate in respect of the building, affect the construction of the statute However, these are merely matters in illustration of how the power or discretion might ordinarily be exercised by a council in a case such as the present.

In this respect, it must not be forgotten that the refusal by a council to issue a building certificate is an appealable decision. Moreover, the powers vested in this Court by s 149F(3) of the EP&A Act in respect of any such appeal may well be wider than are the powers vested in the Council. An obvious example of the apparently wider powers vested in this Court is the power referred to in s 149F(3)(c) for the Court to "direct the Council to issue a building certificate in such terms and on such conditions as the Court thinks fit". The existence of this particular power suggests that the Court's powers on appeal are not to be confined to by the powers of the Council (by virtue of the application of the conventional interpretation of s 39(2) of the Land and Environment Court Act 1979).

In so concluding that there exists in the circumstances of this case the power or discretion to issue a building certificate, it has not been necessary for me to refer to the legislative antecedents to the EP&A Act, s 149A to s 149F or to the relevant case law on those antecedents. However, brief reference to those matters is apt to prove helpful, in confirming the interpretation that I have adopted of the current law.

As I have earlier mentioned, the earliest enactment was the introduction into the Local Government Act 1919 of s 317A by Act No 41 of 1928 which section enabled a person to apply to a council for a building certificate and empowered the Council to furnish such a certificate "…..if the building in its opinion complies with the Act, the ordinances, and the plans and specifications, if any, approved by the council, or if, in its opinion, any contravention of the provisions of the Act or ordinances or any departure from the approved plans and specifications is not such as need be rectified".

The certificate in favour of a bona fide purchaser for value provided "conclusive evidence that at the date thereof the building complied with the requirements of the Act and ordinances".

No appeal rights were created in respect of the Council's refusal to issue a building certificate until s 317A was amended in consequence of the enactment in 1979 of the EP&A Act when a right of appeal to this Court was created. Additionally, the scope of the certificate was extended to include the provisions of the EP&A Act and any environmental planning instrument: see Seeto Constructions Pty Ltd v. Snowy River Shire Council (1982) 47 LGRA 199.

Section 317A was repealed by Act No 157 of 1986 and was replaced by a comprehensive code relating to building certificates contained in a new Division 4D of Part XI of the Local Government Act 1919.

The provisions of that Code are essentially the same as the provisions now contained in the EP&A Act, s 149A to 149C, the only important difference being that the 1986 code did not extend to the provisions of the EP&A Act and its scope was confined to the Local Government Act 1919.

This statutory regime was essentially perpetuated by the Local Government Act 1993 in Part 4 of Chapter 7, and following the repeal of that Part by Act No 152 of 1997, the same provisions were essentially re-enacted in the EP&A Act, s 149A to s 149C, with the significant difference that the scope of a building certificate under the consent statutory regime extends to the EP&A Act.

The only reason that I have referred to the legislative antecedents of the current statutory provisions relating to building certificates is to note that since 1928, in one form or another, the Legislature has provided for what Jordan CJ in Knowles v. Fuller (1947) 48 SR (NSW) at 245 described as "an ex post facto certificate": see also Hayes v. Cable (1961) 7 LGRA 341.

The present statutory regime is clearly linked with the legislative antecedents that I have enumerated and the interpretation of the present provisions is assisted by the light cast by the decided cases on the previous enactments. What clearly emerges is that the Legislature has for a very long period made provision for the obtaining of a building certificate ex post facto which may be sought and issued in respect of a building that was originally erected without the requisite approval or consent of the Council, and when so issued, has always been conceived as to some extent "regularising" past breaches of the Local Government Act and/or the EP&A Act.

For all the foregoing reasons, I would hold that there is power or discretion to issue a building certificate in respect of the building

H. DETERMINATION OF THE QUESTIONS OFLAW IN THE BUILDING CERTIFICATE APPEAL

My conclusions rejecting the Council's two fundamental arguments based upon (i) res judicata and (ii) the proper interpretation of the statute, to enable me to determine the questions of law as follows (noting that the answers to questions 2 to 4 reflect the parties' common submissions):-

Question 1 Is the Council obliged to issue a certificate where it is not satisfied of the matters specified in s.149D(1)?

Question 2 If the answer to 1. is "No", does the Council have a discretion to issue such a certificate?

Question 3 If the answer to 2. Is "yes", is the Council entitled to issue a certificate where the Court has declared that the building is unlawful and has ordered that it should be demolished?

Question 4:If the answer to 3. is "yes", in the exercise of its discretion, should the Council take into consideration: a. the objectives of the EPA Act; b. public policy regarding the orderly enforcement of a public duty; c. the obligation of the Council to uphold the decision of the Court; d. the finality of decisions of the Land and Environment Court; e. the fact that a certificate issued under s.149D does not regularise a building declared to be unlawful; f. The entitlement of any other person to bring proceedings for the demolition or removal of the unlawful building; g. the obligation not to sanction an illegality; h. the precedential effect of the issue of such a certificate to avoid the obligations under the legislation; i. the present need for development consent for the erection of the building under the legislation; j. any other matters, and, if so, what; k. whether fact that there has been no public notification or advertising of any application for the erection unlawfully of a building is relevant to whether or not there should be approval for the issue of the certificate; Answer : Yes, but subject to what I have said in rejecting the Council's arguments based upon res judicata and the proper interpretation of the statute.

I. QUESTIONS OF LAW RAISED IN THE DEVELOPMENT APPEAL

The relevant questions of law (Exhibit 3) are as follows:
In the event that a building certificate is issued pursuant to s.149D of the Environmental Planning and Assessment Act, does that certificate have the effect of making lawful the construction of the building?
Can the Council grant consent to the use of the building the construction of which has been declared to be unlawful?
Can the Council grant consent to the use of a building the demolition or removal of which can be sought by any other person?
Does s.79C(1)(e) of the Environmental Planning and Assessment Act preclude the giving of consent in this case in the light of: a. the objectives of the EPA Act? b. public policy regarding the orderly enforcement of a public duty? c. the obligation of the Council to uphold the decision of the Court? d. the finality of decisions of the Land and Environment Court? e. the fact that a certificate issued under s.149D does not regularise a building declared to be unlawful? f. The entitlement of any other person to bring proceedings for the demolition or removal of the unlawful building? g. the obligation not to sanction an illegality? h. the precedential effect? i. the present need for development consent for the erection of the building under the legislation? j. any other matters, and, if so, what? k. whether the fact that there has been no public notification or advertising of any application for the erection unlawfully of a building is relevant to whether or not there should be approval for the use of the building?

As I stated at the outset of these reasons, the parties sought the Court's determination of the questions of law raised by the Council in respect of the development appeal only after the Court had determined the questions of law raised in respect of the building certificate appeal.

The reason for this approach is that the parties (and particularly the Applicants) acknowledged the difficulties they would encounter in their development appeal unless they had first established at least the possibility of their obtaining the issue of a building certificate.

In view of my conclusion that there exists the power or discretion to issue the building certificate in the present case, much of the argument in respect of the questions of law relevant to the development appeal has receded in importance.

Nonetheless the Council, in its written submissions, has raised some matters of general principle, which must be addressed.

These submissions include the following:
There could be a series of devices to get around statutory controls if once the Pandora's box is opened. For example, a compliant council can use this as a precedent to give retrospective approval to an illegal building without the neighbours having an opportunity of making submissions about its effect.
To grant a development approval for the use of the unlawful building would also go against the objects of the Act.
There can be no approval of the use of a building where the building can, at any stage disappear. a. There is an order of the Court which was obtained at the instance of the Council. The Council can, at any time enforce that order. b. Any other person can seek to have the order enforced.
In Tynan v. Meharg (unreported 23/11/98) Handley JA held that an order once made by the Land and Environment Court or the Court of Appeal cannot be rescinded.
The Council should not be asked to give approval for the use of a building which building is unlawful. If a third party at a later date sought to have the order enforced and that enforcement required the building to be demolished, the Council may be liable in damages because a building has been demolished around a business permitted in the unlawful building. The fact that the Court cannot be sued in damages, does not take away the precedental effect on Council if such a device were sanctioned by the Court for getting around an order made in Class 4 proceedings.
If approval were given for the use of the building that would, in effect, cancel the declaration already made as to the unlawfulness of the building and the order for the demolition of the building. It is too late now for the Court to exercise its discretion in favour of the applicants. That issue has been decided and cannot be decided again.
McClelland CJ said in Turier v. Nipote 48 LGRA 20, at p.34:

In my view it is in the public interest that a consent authority should uphold a decision of this Court which is expressed in the Land and Environment Court Act to be final for the purposes of that Act or any other Act or instrument. 32. To make an order for the approval of the use of the building is to make an order which is inconsistent with an order which has already been made. 33. The only way that the second order could be made would be to have the effect of revoking the earlier order. But the Court cannot do that because its (earlier) decision is final. Even if there is an argument that the order is delayed (although not cancelled) the declaration has to stand as a final order. 34. There is no power to stay the order for demolition as a process for the changing of that order. In other words, there is no statutory authority (and no fraud) to set aside an order which has already been made. (See Handley JA in Meharg 23/11/98.) 35. It is not appropriate for the Court to make an order sanctioning the use of something which is unlawful. 36. If the Court were now to give approval to the use of this unlawful building, it would be sanctioning the by-passing of the Council's obligation to notify applications for the erection of buildings.

This is something which is part of the object of the Act. It would have the potential to deprive possible objectors of the right to object to the erection of the building. The application for the use of the building was advertised. But this was advertised on the basis that the building was already in place. 37. If the Court did give approval to this development applications, the Court would be setting a precedent. It would flag to possible unscrupulous developers the fact that they can put up a building and then, without getting building approval or having to comply with the statutory requirements for the safety of the building or payment of fees, etc., they can then get an approval to use that building with no public participation, no proper consideration of the erection of the building (only its use), no consideration of what contributions may be required for its construction.

It is not appropriate to allow a ratepayer to escape its obligations under the Act. 38. Section 79C(1)(e) requires the Council (the Court) to take into consideration the public interest. This is a very broad concept. It has to include ( Sedevcic 10 NSWLR 335 ) the upholding of the legislation: the integrated and co-ordinated nature of planning law. That is, that approval will be given before a building is erected. 39. The Court cannot now give approval to the erection of the building ( Tennyson Textiles etc. ) Nor can the Court give approval to the use of a building which is not there unless approval is also given for the erection of the building. To obtain this approval (the use of the building) it will be necessary for the applicants to have approval for the erection and use of the building.

In my judgment, many (if not most) of these submissions are seriously flawed on account of their failure to give any recognition to two matters which can only be regarded as having obvious significance to the determination of the development appeal, namely: (i.) the effect of the issue of the building certificate (assuming that that is the outcome of the building certificate appeal); and (ii.) the effect of Sheahan J's decision to suspend the mandatory injunction to provide the opportunity for the parties "to regularise the planning position in relation to the unlawfully erected building".

In so concluding, it is to be understood that it is common ground that the highest and best result for the Applicants in the development appeal is the grant of consent to the prospective use of the building. That this is the most favourable outcome of a development appeal involving a use of land or buildings that had already been commenced unlawfully, was recognised as long ago as 1956 in the judgment of Sugerman J in Holland v. Bankstown Municipal Council (1956) 2LGRA 143 at 146.

It is true that in that case, Sugerman J expressed some reservation about a case where the responsible authority had issued an enforcement notice pursuant to s 342P of the Local Government Act 1919 in the following passage at 146:

However, a different set of considerations may arise once the responsible authority has given the " prescribed notice " pursuant to s.342P of the Act. The giving of the prescribed notice might be said to have involved an unappealable exercise of discretion with respect to the same subject matter as the application for consent, t hat is, the future use of the premises. In the present case it is not necessary to decide this matter, since the prescribed notice has not been given.

However, in relation to this expressed reservation, it must be appreciated that the relevant legislation conferred no right of appeal against the issue of an enforcement notice and there was no counterpart provision to s 149D of the EP&A Act in relation to contravention of the planning law.( s 317A of the Local Government Act 1919 provided for the issue of building certificates but only in respect of contraventions of the Local Government Act 1919 ).

A similar factual situation to the present case was considered by the Land and Valuation Court in 1962 in the decision of Hardie J in Ellmoos v. Sutherland Shire Council (1962) 8 LGRA 16. That case involved a development application to use existing premises for the purposes of residential flats in circumstances where the premises had previously been physically altered (and hence "erected") to provide for such use, without the grant of the requisite approval for such building work under Part XI of the Local Government Act 1919, and where in consequence, the Council had issued a demolition order pursuant to s 317B(1A) of the Act and there had been a successful appeal to the District Court against that demolition order.

At p 22, Hardie J encountered the applicant's submission that the function of the District Court in determining an appeal against the Council's demolition order vested it with the power "to determine in a quasi-arbitral manner all outstanding questions and disputes as between the Council and the appellants, and in particular, that it had power to make a decision regularising the position of the subject building and the appellants as its owners notwithstanding the fact that it breached and would continue to breach some of the mandatory provisions of Part XI of the Act".

Although Hardie J ultimately did not rule upon the proposition, he obviously doubted its correctness-see at p 23.

Nonetheless, for the purpose of determining the development appeal, Hardie J was prepared to assume that the decision of the District court had "wider significance and ramifications". Thus, his Honour continued at pp 23 and 24:

Assuming the District Court decision goes much further than I am disposed to think it does, in other words, that in some way or other it does establish the legality of the building as a structure for all purposes under Part XI of the Act and, in particular, requires the council and this Court to ignore the admitted breaches of the prohibitory provisions of s. 314 (1) c and the rigid requirements of Schedule Seven as to the minimum distance of external walls from lot boundaries, the question then arises as to what impact and significance that circumstance or situation has on and in relation to the appellants' application for development consent.

Under the proviso to cl. 27 of the Ordinance the Court is required to consider a number of matters including the circumstances of the case and the public interest. The fact that the tribunal sitting on appeal from a demolition order has decided that the structure, or the alteration to it, is not to be demolished by or on order from the council is a relevant circumstance of the case; further, public interest in the relevant sense may be said to lie in the direction of decisions of review tribunals dealing with somewhat similar local government problems being made to conform with each other. As against that, however, there could be said to be other strong countervailing factors and considerations in the field of public interest; I refer particularly to the overall problem of law enforcement in this branch of administration and control adverted to in Goodwins (Sydney) Pty Ltd. v. Sydney C.C. (8), and to the undesirable effect as a precedent of an application for development consent being placed, by reason of major breaches of the Local Government Act, in a stronger position than if the statutory provisions had not been breached.

                (1960) 5 L.G.R.A. 346, at P.354..

It is to be noted that some of the " countervailing " public interest factors identified by Hardie J are similar to the matters raised in the Council's submissions in the present case.

The views expressed by Hardie J, a distinguished Judge of the Land and Valuation Court, on an important matter of planning principle are of course entitled to great respect. However it is important to bear in mind that in 1962, when Ellmoos was decided, town planning laws in NSW were in their infancy and their effectual development was enhanced by (if not dependent upon) sensitive judicial nurture and protection by the specialist Land and Valuation Court.

Since then, the planning laws have developed apace, as have judicial attitudes. A significantly different judicial approach to the impact of past planning law breaches is reflected in the judgment of King CJ in the Full Court of the South Australian Supreme Court in Kouflidis v. City of Salisbury (1983) 49 LGRA in the following passages at 19 and 20:

In my opinion, moreover, the past unlawful use is not a relevant factor in determining whether consent should be granted. That decision should be made upon the planning considerations envisaged by the Act and regulations irrespective of the past or continuing conduct of the applicant. I do not think that there is any warrant in the Act or regulations for refusing or deferring an application or appeal by reason of the unlawful conduct of the applicant.

The learned judge in the Land and Valuation Court was rightly concerned with the activities of a person who, cynically and fraudulently, changes the use of his or her land, and who hopes, by doing so, to present planning authorities with a fait accompli, and thus to extract a planning consent to the changed use. His Honour posed the question: How should such a person fare when his or her application comes to be considered at the administrative and judicial level? The answer, it seems to me, is that the unlawful use should be ignored. It does not enter into the planning considerations upon which the planning decision must be made. The punishment of the unlawful conduct should be left to criminal proceedings. The supposed fait accompli should not be recognized as such. The unlawful user of the land should gain no advantage from having established an unlawful use. Any argument based either directly or indirectly upon the unlawful use should be firmly rejected. For instance, the argument put in the present case that the patronage given the unlawful business by the public indicates a local demand for the facility and is a consideration in favour of planning consent, should be rejected as an attempt to gain an advantage from the unlawful use by erecting an argument on the basis of that unlawful use.

Although an applicant for consent should derive no advantage, direct of indirect, from the unlawful use, I do not think that it should be an impediment to the consideration of his application on its planning merits. If on the merits a planning consent should be given, it is desirable in the public interest that it should be given irrespective of the past conduct of the applicant. It is desirable that the position should be regularized leaving the past unlawful conduct to be punished by penal sanctions. Refusal to entertain an application while an unlawful use continues might result in a pointless impasse. A landowner who maintained, contrary to the planning authority's view, that his use of the land did not require consent, but who was willing to seek consent to avoid conflict, would be unable to obtain consent unless he first desisted from the disputed use, perhaps closed his business. If refusal to consider the application were confined to cases of cynical, fraudulent or manipulative conduct, the planning authority and the Planning Appeal Board would be required to inquire into and decide whether the conduct in a particular case answered that description. I do not think that a planning authority such as a council or an administrative appeals tribunal such as the board is equipped by its constitution or procedures to deal with allegations of improper motives. I think that the most expedient course, and that indicated by the Act and regulations, is for the administrative authorities and the courts to deal with the planning application on its planning merits, ignoring any arguments based directly or indirectly upon unlawful use and leaving the punishment of the unlawful conduct to penal proceedings.

The approach taken in Kouflidis has been consistently applied in this Court in the exercise of its comprehensive appellate jurisdiction embracing planning appeals, building appeals, demolition order appeals and building certificate appeals. This is aptly reflected in the contemporaneous decision of Cripps J (as he then was) Longa v. Blacktown City Council (1985) 54 LGRA 422.

That case provides a good example of the benefits of this Court having comprehensive jurisdiction to determine building appeals, development appeals, appeals against demolition orders and appeals against the refusal to issue a building certificate. The existence of this comprehensive, unified jurisdiction vested in this Court eliminates many of the complications confronted and recognised in Ellmoos which involved, not only divided tribunals (the District Court and the Land and Valuation Court) but also a situation where there was no appeal against the refusal of a council to issue a building certificate.

Although Longa involved only an appeal pursuant to s 317B(5) of the Local Government Act 1919, the councils' demolition order, in respect of a partly erected building that had been erected without the council's required approval, Cripps J, in the following passage at 426 adverted to the interplay of the related laws (all of which fell within this Court's comprehensive appellate jurisdiction).

It is clear that Mr Longa is required, in law, to obtain building approval for the balance of the uncompleted work. As I have said, he cannot obtain approval for work that has been completed but it is open to him to make an application pursuant to s 317A and to make a building application in respect of the uncompleted work. In these circumstances, I have considered whether these proceedings should be adjourned to await the outcome of applications Mr Longa may make to the council and/or any appeals he may undertake or whether the notice should be set aside at the present time. I have come to the conclusion that it is appropriate for me to set aside the notice. I have concluded on the evidence that the building has been properly built in accordance with plans and specifications. Its attachment to the house will not put anybody else at risk in the area. Furthermore, the setting aside of the notice in no way inhibits the council or this court on appeal considering any applications made hereafter: Elmoos v. Sutherland Shire Council.

The present appeals before this Court invoke the comprehensive jurisdiction vested in this Court to deal concurrently with the Applicants' building certificate appeal and their development appeal in a co-ordinated and consistent manner of the Applicants seeking first the issue of a building certificate in respect of the building and then the grant of development consent for the prospective use of that building. As I understand the Applicants' case, it is to the effect that unless the building certificate appeal results in the issue of the building certificate, the development appeal would not succeed. This is to recognise at the same time both (i) the indissoluble link between both appeals and (ii) the Court's comprehensive jurisdiction to determine those appeals in a consistent and complete manner.

The foregoing discussion of fundamental principles raised in the competing arguments enables me now to fairly summarily determine the questions of law that have been raised by the Council.

Question 1 which is concerned with the legal effect of the issue of a building certificate, asks whether it renders "lawful the construction of the building".

The answer to this question must be found in the express terms of s 149E. It is clear that those terms do not refer to the "lawfulness" of the erection of the building. Rather, they express legal effects of the issue of a building certificate in respect of a building that may have been unlawfully erected. In respect of such an unlawfully erected building, s 149E does not declare its erection to be lawful. Rather, it prescribes certain forms of legal immunity (by no means complete or absolute) in respect of such a building. I do not think it desirable or necessary to look beyond the legal effect prescribed by s 149E. In the present factual context, it is sufficient to say, that if a building certificate is issued, that fact, and the statutorily defined legal immunity applicable to the building, would obviously become relevant factors in the determination of the Applicants' development application for the prospective use of the building. In particular, their relevance is that the consent authority determining the development application can proceed on the basis that the building has the benefit of the building certificate and that benefit is founded on the legal immunities conferred upon the building by s 149E of the EP&A Act.

In passing, I should note that the legal immunities conferred by s 149E of the EP&A Act are not so extensive as was the effect of a certificate issued under s 317A of the Local Government Act at the time of the decision of the Full Court of the Supreme Court of NSW in Hayes v. Cable (1961) 7LGRA 341 where the Court at 350 expressed the following conclusions based upon s 317A(4):

Its effect is to declare ex post facto that the structure complies with the Act and Ordinances and need not be rectified. No penalty can be exacted. This means that the breaches of the Act are declared to have no legal consequence. The right to order demolition is taken away and as a corollary the rights and obligations of each of the parties as to his part in the building contract, are, if in danger of being vitiated, at least restored. The protection of a purchaser under sub-s. (4) is not the only purpose of the section. It protects the owner against the liability to demolish or reconstruct.

Question 2 is a related question asking whether development consent can be granted to the use of building the erection of which has been declared to be unlawful.

This question is, I think, unintentionally too broadly stated. For present purposes, what needs to be factored into the question is the assumption that a building certificate has been issued. With that assumption factored into the question, it should be answered affirmatively for the same reasons that have induced the affirmative answer to question 1.

Question 3 is also a related question, but it factors in the possibility of a person (other than the Council) seeking the demolition of the building. Again, this question is to be understood on the assumption that a building certificate has been issued in respect of the building. The Council's question recognises the legal possibility that flows, as a matter of necessary implication from the expressly limited scope and nature of the legal immunity conferred by s149E of the EP&A Act, of some person (other than the Council) having standing to seek to enforce the planning laws by seeking the demolition of the building, on the basis that it was originally unlawfully erected.

The theoretical possibility of some person (other than the Council) seeking the demolition of the building (by instituting appropriate proceedings in this Court) must be acknowledged, although in the event of the present appeals succeeding, the probability of such proceedings being instituted would appear to be highly remote.

In any event, the theoretical possibility of such proceedings being taken by a person (other than the Council) provides no legal justification for the Council's contention that such a possibility creates an absence of power to grant development consent. In my judgment, the Council's argument is unsound. However, to the extent that the Council has argued that the possibility of such proceedings being taken, would expose the Council to some risk of liability in negligence if it granted development consent, again (without speculating on the viability of any such negligence action) the practical answer would be for the Council to require the Applicants to provide as a condition of development consent an appropriate release and indemnity in respect of any such theoretical liability in negligence.

Question 4 enumerates a wide list of factors that may be relevant to the application of s 79C(1)(e) of the EP&A Act in the determination of the development appeal. Section 79C(1)(e) requires the consent authority, in determining a development application, to take into consideration "the public interest" where that is "relevant" to the development application. Clearly, "the public interest" is relevant to the determination of the development application and clearly, some of the enumerated matters are relevant to "the public interest".

However, equally clearly s 79C(1)(e) does not have any preclusive effect and accordingly, the question obviously must be answered in the negative.

As with my answer to Question 4 raised by the Council in the building certificate appeal, what I have said about some of the factors being relevant to "the public interest" must be understood in the light of my reasons for judgment, dealing with the principal arguments advanced by the Council.

The parties invited the Court to deal with both questions, (numbered 4 in each of the appeals) "globally" rather than by reference to the individual factors that have been specified in the questions. I have been content to deal with the questions "globally". However, the reasons that I have given in rejecting the Council's principal arguments advanced in respect of both appeals, carry the obvious consequence that not all of the specified factors are relevant matters to the determination of each appeal.

For all of the foregoing reasons, the questions are answered as follows:

Question 1 In the event that a building certificate is issued pursuant to Environmental Planning and Assessment Act , s.149D does that certificate have the effect of making lawful the construction of the building?

Answer No. The effect of the issue of the building certificate is that prescribed by s 149E of the EP&A Act.

Question 2 Can the Council grant consent to the use of the building the construction of which has been declared to be unlawful?

Question 3 Can the Council grant consent to the use of a building the demolition or removal of which can be sought by any other person?

Question 4 Does Environmental Planning and Assessment Act, s.79C(1)(e) preclude the giving of consent in this case in the light of: a. the objectives of the EPA Act? b. public policy regarding the orderly enforcement of a public duty? c. the obligation of the Council to uphold the decision of the Court? d. the finality of decisions of the Land and Environment Court? e. the fact that a certificate issued under s.149D does not regularise a building declared to be unlawful? f. The entitlement of any other person to bring proceedings for the demolition or removal of the unlawful building? g. the obligation not to sanction an illegality? h. the precedential effect? i. the present need for development consent for the erection of the building under the legislation? j. any other matters, and, if so, what? k. whether the fact that there has been no public notification or advertising of any application for the erection unlawfully of a building is relevant to whether or not there should be approval for the use of the building?

For all the foregoing reasons, I make the following orders:
In proceedings No 20033 of 1999, the questions of law are answered as follows:

Question 1 - Answer: No Question 2 - Answer: Yes Question 3 - Answer: Yes Question 4 - Answer: Yes but subject to the reasons for judgment 2. In proceedings No 10170 of 1999, the questions of law are answered as follows:

Question 1 - Answer: No Question 2 - Answer: Yes Question 3 - Answer: Yes Question 4 - Answer: No 3. Stand both proceedings over for mention on 5 July 1999.

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.

(1998) 101 LGERA 255

At a glance

Court

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Judgment (161 paragraphs)

Cases Cited (5)

Cited By (11)