Jazabas Pty Ltd - v - Botany Bay City Council

On 12 August 1998 Jazabas commenced proceedings against the Council in the Federal Court of Australia claiming damages. On 16 September 1998 the Federal Court ordered that those proceedings be transferred to the Supreme Court of New South Wales, Construction List. In October 1998 Jazabas filed Points of Claim in those proceedings. Following a request for and the furnishing of particulars, the Council filed Amended Points of Defence in those proceedings. On 2 December 1998 the Council filed the present Notice of Motion for an extension of time to appeal against the decision of the Commissioner.

The nature of the Supreme Court action appears to arise out of representations made to Jazabas in connection with its purchase of the property, particularly as to the content of two certificates issued under s 149 of the Environmental Planning & Assessment Act , the granting by the Council of development consent for the proposed development, breaches of the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987, and negligence.

The main factors which govern the discretion of the Court to allow an extension of time within which to appeal are the length of the delay, the reason for the delay, whether there is an arguable case and the extent of any prejudice suffered ( Jackamarra v Krakouer (1998) HCA 27, 72 ALJR 819). It is clear that no prejudice would be suffered in the present case if the application to extend the time were granted. Neither party opposes the application. Indeed, there appear to be positive benefits to both parties if the time were extended and the appeal were to be successful. The Council would minimise any damages for which it may be liable in the Supreme Court action and Jazabas would, presumably, obtain the building approval which it seeks. Although the length of delay is considerable, the reasons for it are set out in the sequence of events which I have described. In particular the Federal Court proceedings by Jazabas against the Council were commenced on 12 August 1998, well after the expiry of the time for instituting an appeal. The transfer of those proceedings to the Supreme Court occurred well after that time. The other interlocutory steps in the Supreme Court again occurred well after that time. In the interim there had also been a change of solicitor for the Council. As to whether there is an arguable case, I have noted that the parties fully argued the appeal itself and it is to the merits of the appeal that I now turn.

The principal submission relied upon by Mr M H Tobias QC, who with Mr A E Galasso, appears for the Council, is that the Commissioner erred in law in that he took into consideration and decided the case on an irrelevant consideration. That irrelevant consideration is said to be the 1985 Risk Assessment Study for the Botany/Randwick Industrial Complex and Port Botany undertaken by the Department of Environment & Planning (which I shall call "the study"). The study also formed the basis of the expert evidence upon which the Commissioner relied, so that it is also submitted that the expert evidence was similarly irrelevant.

This submission requires a consideration of the relevant legislation which applied to the application for building approval in this case. It should be noted that changes were made to the relevant legislation effective on and from 1 July 1998. Since the application for building approval in the present case was made before that date, however, the case falls to be considered under the legislation which applied at the time when the application was made.

Section 68 of the Local Government Act provides that a person may carry out an activity specified in the table to that section only with the prior approval of the Council. One of the activities specified in the table was the erection of a building. Section 75 provides for the making of an application to the Council for an approval. Section 89 provides for the matters to be taken into consideration in determining an application. Section 176 provides for an appeal by an applicant to this Court. An appeal to the Court is a hearing de novo (s 39(2)(3), Land & Environment Court Act ). Accordingly, on the hearing and determination of the appeal the Court must exercise the same functions and discretions as the Council had in respect of the subject matter of the appeal. It may be stated as a general proposition that an appellate tribunal is not, in the absence of express provision, invested with power to do that which the subordinate tribunal could not have done ( Parramatta City Council v Palmyra Freeholds Pty Ltd (1974) 2 NSWLR 83 at 87, per Reynolds JA, with whom Moffitt P and Samuels JA agreed). It follows that on the hearing and determination of the appeal the Commissioner was bound to observe the relevant provision of the Local Government Act , which in this case is s 89.

Section 89 of the Local Government Act , in the form it took until amended by Act No 94 of 1997, provided as follows:

(1) In determining an application, the council: (a) must not approve the application if the activity or the carrying out of the activity for which approval is sought would not comply with the requirements of any relevant regulation; and

(b) must take into consideration any criteria in a local policy adopted under Part 3 by the council which are relevant to the subject-matter of the application. (2) If no such requirements are prescribed and no such criteria are adopted, the council in determining an application is to take into consideration all matters relevant to the application and is to seek to give effect to the applicant's objectives to the extent to which they are compatible with the public interest.

(3) Without limiting subsection (2), in considering the public interest the matters the council is to consider include: (a) protection of the environment; and

(b) protection of public health, safety and convenience; and

(c) any items of cultural and heritage significance which might be affected.

The amendments effected by Act No 94 of 1997 are not relevant to this appeal.

In the present case, requirements were specified in a relevant regulation (the Local Government (Approvals) Regulation 1993, Part 2) and a local policy had been adopted by the Council under Part 3 of the Act ("Policy for Building Works - City of Botany Bay"). Accordingly, in determining the appeal the Commissioner was required by s 89(1) to take into consideration the requirements of the Regulation and any relevant criteria in the local policy. It is only where no such requirements are prescribed and no such criteria are adopted that subsections (2) and (3) of s 89 apply.

In Woollahra Muncipal Council v Andriotakis (Court of Appeal, 23 December 1998, unreported) one of the questions was whether the Council could take into account the heritage significance of a building which was the subject of an application for approval to demolish. Sheller JA (with whom Priestley JA agreed) said (at 11):

I do not think that when an application for approval came before a Council under Div 3 of Pt 1 of Ch 7 of the Local Government Act the criteria the Council might take into consideration were at large. No doubt with a view to certainty, the matters for consideration were set out in s 89 and were to be found either in the Act itself or in relevant regulations, if any, or in a local policy adopted under Pt 3 of Ch 7 by the Council after public scrutiny. This meant in the present case that the heritage significance of the building was a consideration for the Council to take into account only if such a criterion was to be found in the terms of s 89, the regulations or an operative Local Approvals Policy.

( Section 89 is within Division 7 of Pt 1 of Ch 3 of the Act.)

In the same case Sheppard AJA (at 22) emphasised the word " and " in s 89 to underline the fact that the provisions of paragraph (a) and (b) of subsection (1) and the provisions of subsection (2) are expressed conjunctively, not disjunctively.

At the relevant time in the present case the relevant regulation was the Local Government (Approvals) Regulation 1993 ("the Regulation"). Because of the existence of the Regulation, subsections (2) and (3) of s 89 did not apply to the determination of the application for approval. Those subsections only became relevant when no requirement of any relevant regulation are presecribed and no criteria in a local policy are adopted (reading the word "and" conjunctively, not disjunctively). Thus, even if no criteria in a local policy had been adopted, the fact that requirements are prescribed in a relevant regulation means that subsections (2) and (3) do not apply.

Clause 12(1) of the Regulation prescribed the matters which the Council must take into consideration in determining an application for approval to erect a building. Subclause (2) prescribed additional matters which the Council must take into consideration if consent under the Environmental Planning & Assessment Act was not required. None of the matters prescribed under subclause (2) are relevant in this case because consent under the Environmental Planning & Assessment Act was required and has been granted.

None of the considerations described in clause 12(1) of the Regulation relate to the impact of matters external to the site upon the proposed building or upon the occupants of the proposed building. Two considerations relate to matters which do not arise from the erection of the proposed buildings themselves, being paragraphs (l) and (m):

(l) whether the site is subject to flooding or tidal inundation;

(m) whether the site is or probably will be subject to subsidence or slip .

These considerations are to be contrasted with those applying to the determination of a development application under the Environmental Planning & Assessment Act . At the relevant time, s 90 of that Act included the following as relevant considerations:

(g) whether the land to which that development application relates is unsuitable for that development by reason of its being, or being likely to be, subject to flooding, tidal inundation, subsidence, slip or bushfire or to any other risk ,

The matters upon which the Commissioner decided to dismiss the appeal were thus appropriate matters for consideration on an application for development consent under the Environmental Planning & Assessment Act . Since the matters for consideration on an application for an approval for the erection of a building are confined by, in this case, s 89(1) of the Local Government Act and by clause 12 of the regulation, it follows that the Commissioner took into account an irrelevant consideration. As Sheller JA stated in Woollahra Municipal Council v Andriotakis , the criteria the Council might take into consideration are not at large and are to be found in the Local Government Act itself or in relevant regulations or in a local policy adopted under Pt 3 of Ch 7 by the Council after public scrutiny. If the matters which the Council might take into consideration are so confined, then so too are the criteria which the Commissioner may take into consideration on an appeal under s 176 of the Act ( Parramatta City Council v Palmyra Freeholds Pty Ltd ). In considering the study and the evidence relating thereto and in determining the case on that material the Commissioner committed an error of law.

Mr Tobias QC made a further submission that the Commissioner committed an error of law in making the following finding:

Consequently, having considered the evidence of the respondent council which as I have said is unrefuted and having considered the submissions in relation to this matter, I cannot do anything other than dismiss the appeal .

Mr Tobias submits that this finding suggests that the Commissioner was of the view that he had no option other than to refuse the application. There was, however, a basis upon which the Commissioner could have declined to give overriding consideration to the study and the associated evidence. The study contained recommendations ( inter alia ) for reviewing and updating safety measures which would contribute to overall risk reduction at the existing industrial facilities, a recommendation that provisions in planning instruments which permit an increase in existing residential dwelling density within a defined area should be reviewed, and its recommendations relating to land use control and planning could be readily implemented as part of a regional environmental plan for Botany Bay currently being finalised or alternatively in a separate regional environmental plan. The study was prepared in 1985. The relevant local environmental plan, the Botany Local Environmental Plan 1995 was made by the Minister on 18 June 1995. Neither the local environmental plan, nor any regional environmental plan, has taken up the recommendations contained in the study. The subject land is within Zone No 2(b) (Residential "B") under the local environmental plan, which zoning permits residential flat buildings with the consent of the Council. There is one clause in the local environmental plan, clause 13, which requires the Council to take into consideration external impacts upon a development. That clause requires the Council to take into consideration, in areas affected by aircraft noise, the guidelines provided in Australian Standard 2021. There is no provision in the local environmental plan relating to other external hazards, neither is there any such provision in any regional environmental plan applying to the land. Mr Tobias submits that it would appear that the Minister, advised by his department, has decided not to adopt or implement the recommendations of the study. The conclusion, it is submitted, is that since the recommendations of the study have not been implemented, despite the opportunity afforded for doing so, then it seems that the Minister as advised by his department must have been of a contrary view to those recommendations.

There is some force in Mr Tobias' submission. Although I do not accept the conclusion which Mr Tobias urges, the matters described above suggest that it was at least open to the Commissioner to depart from the findings of the study. That is to say, the Commissioner appears to have fettered his discretion by holding that he could not do anything other than dismiss the appeal. I am not inclined, however, to construe the Commissioner's words as amounting to a fetter on the exercise of his discretion. Where the appeal is confined to a question of law it is undesirable that the Court should examine too narrowly the words used in the decision, at least unless those words are central to the decision ( Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 at 368, per Kirby P, with whom McHugh JA agreed). The Commissioner may have been doing no more than expressing a conclusion based upon his consideration of the whole of the evidence and the submissions in the case, rather than fettering his discretion in the manner suggested. In view of my determination of the principal ground of appeal relied upon, however, I do not need to finally determine the additional ground.

It follows that it is appropriate to extend the time within which to institute the appeal and the appeal must be allowed. The proceedings must be remitted to the Commissioner for determination in accordance with the law (as set out in paragraphs 11-20 above). The parties agree that there should be no order for the cost of this appeal.

1. The time within which the appeal may be instituted is extended to today.

3. The decision and orders of the Commissioner made on 23 April 1998 are set aside.

4. The proceedings are remitted to the Commissioner to be determined by him according to law.

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.