Kindimindi Investments Pty Limited v Lane Cove Council & Anor

Construction and Interpretation :- remedial and beneficial provision to be read as widely as its language permits

KEY ISSUES: Development Application: - error in granting development consent - failure of council to carry out a planning function

Development Consent: - validity - suspending operation of consent - specification of terms for validating the consent

LEGISLATION CITED: Land and Environment Court Act 1979 Pt 3, Div 3 ss 25A, 25B, 25C, 25D and 25E

Australian Agricultural Company v Federated Engine-Drivers and Firemen's Association of Australia (1913) 17 CLR 261; Centro Properties v Hurstville Council (2004) 135 LGERA 257; Centro Properties Ltd v Warringah Council (No.2) (2003) 132 LGERA 45; Glowpace Pty Ltd v South Sydney City Council (2000) 111 LGERA 84; Kindimindi Investments Pty Limited v Lane Cove Council & Anor [2005] NSWLEC 398; CASES CITED: Kindimindi Investments Pty Limited v Lane Cove Council & Anor [2006] NSWLEC 17; Kindimindi Investments Pty Limited v Lane Cove Council & Anor [2006] NSWCA 23; Mison v Randwick Municipal Council (1991) 23 NSWLR 734; Michael Realty v Carr [1975] 2 NSWLR 812; Noble v Cowra Shire Council (2001) 114 LGERA 440; Woolworths v Wyong [ 2005] NSWLEC 607; WRF Properties Pty Ltd v Armidale Dumaresq Council & Anor [2003] NSWLEC 223

APPLICANT: I J Hemmings SOLICITORS: Hones Lawyers

FIRST RESPONDENT: LEGAL REPRESENTATIVES: M G Craig QC SOLICITORS: Wilshire Webb

SECOND RESPONDENT: J A Ayling SC Mallesons Stephen Jaques SOLICITORS

JUDGMENT:

• 9 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

KINDIMINDI INVESTMENTS PTY LIMITED V LANE COVE COUNCIL & ANOR [2006] NSWLEC 399

EX TEMPORE JUDGMENT 1 HIS HONOUR: This matter has had a long history, and if I were to reserve judgment it may be some time before a judgment can be delivered. I therefore propose to deliver a judgment ex tempore. It may not be as complete as one would wish, but I think it is in the interests of the parties that there should be some finality to this litigation. 2 The applicant, Kindimindi Investments Pty Ltd, which I shall call "Kindimindi", has brought proceedings against Lane Cove Council and a developer, Fabcot Pty Ltd, which I shall call "Fabcot", claiming that a development consent granted by the council to Fabcot is void. The proceedings were heard by Cowdroy J over six days and, in a reserved judgment, his Honour dismissed the claim: see Kindimindi Investments Pty Limited v Lane Cove Council & Anor [2005] NSWLEC 398. Subsequently Cowdroy J made an order that Kindimindi pay Fabcot's costs: see Kindimindi Investments Pty Limited v Lane Cove Council & Anor [2006] NSWLEC 17. 3 Kindimindi appealed. The Court of Appeal upheld the appeal and made the following orders: (1). Appeal upheld and the decision of the Land and Environment Court set aside;

(2). Remit matter to the Land and Environment Court for further consideration according to law, including as to the costs of the original hearing and any further hearing;

(3). Order the respondents to pay fifty per cent of the costs of the appellant of the appeal; and

(4). If either of the respondents is eligible for a certificate under the Suitors Fund Act give leave to it to make application in chambers for such a certificate within fourteen days of the date of this judgment.

See Kindimindi Investments Pty Limited v Lane Cove Council & Anor [2006] NSWCA 23 at par [106]. 4 The matter now comes before me pursuant to Order (2) made by the Court of Appeal. Both the council and Fabcot seek orders under s 25B of the Land and Environment Court Act 1979, which I shall call the "Court Act", suspending the operation of the consent and specifying the terms, compliance with which will validate the consent. 5 Kindimindi contends, however, that the Court does not have the power to do what the council and Fabcot now ask. That is, it contends that s 25B and the whole of Div 3 of Pt 3 of the Court Act, which includes s 25B, is not available in the present case. It contends that the Court should declare the development consent invalid. 6 The questions for determination are, therefore, whether Div 3 of Pt 3, that is ss 25A to 25E of the Court Act apply in this case, and if so, whether the Court should exercise its discretion thereunder. 7 Kindimindi raised five grounds of alleged invalidity of the consent, all of which were dismissed by Cowdroy J. On the appeal Kindimindi reiterated the various grounds which had been raised unsuccessfully before Cowdroy J: see the Court of Appeal's judgment, par [4]. It was successful in the Court of Appeal on only one ground, namely a constructive failure by the council to properly give effect to its decision by way of an appropriate condition relating to the impact of the proposed development on a nearby property, Lane Cove Public School. 8 The proposed development, to be known as "Lane Cove Library and Market Square" or "Lane Cove Plaza", is a mixed-use development comprising retail space, commercial office space, residential units, a library extension and a car park. It is located in Austin Street, directly opposite Lane Cove Public School. The council clearly considered the potential impact of the development on the public school and a number of conditions were imposed tending to ameliorate any adverse impact: see the Court of Appeal's judgment, par [85]. 9 One particular measure with respect to pedestrian safety was not included in the conditions of consent, but rather in a deed between the council and Fabcot relating to the construction of a school drop-off facility. However, the terms of the deed imposed no legal obligation on Fabcot to construct the drop-off facility without the approval of the school or the Department of Education. As I understand it, the proposed drop-off facility would involve relocating and constructing a new secondary entrance, steps and paving to the school. 10 The Court of Appeal found that the council considered the drop-off facility a necessary part of the proposed development in order to ameliorate what had been identified as a significant adverse impact on a major neighbouring facility. The Court of Appeal further held that the council's requirement was not properly contained in a private deed alone. The council's error was in failing to impose this requirement pursuant to its statutory powers as a consent authority by way of a condition of consent. There was thus a constructive failure by the council to exercise its power to achieve the intended decision. The separate agreement with the developer outside the development as approved was not an available alternative to the imposition of a condition: see generally the Court of Appeal judgment, pars [98] to [104]. 11 The relevant provisions in Div 3 of Pt 3 of the Court Act are ss 25A to 25E and are as follows: 25A Application of Division (1) This Division applies to: (a) a development consent granted, or purporting to be granted, under the Environmental Planning and Assessment Act 1979 : (i) by the Minister, and (ii) whether before or after the commencement of this subsection, and (b) a development consent granted, or purporting to be granted, under the Environmental Planning and Assessment Act 1979 : (i) by any other consent authority, and (ii) in respect of a development application made on or after the commencement of this subsection. (2) This Division extends to invalidity arising from any steps preliminary to the granting of a development consent to which this Division applies, whether those steps were taken, or should have been taken, by the Minister or any other consent authority, or by any other person or body. (3) In particular, this Division extends to invalidity arising from non-compliance with requirements declared to be mandatory requirements under section 102 of the Environmental Planning and Assessment Act 1979 . (4) A reference in this Division to the Minister is a reference to the Minister responsible for the administration of the Environmental Planning and Assessment Act 1979 . 25B Orders for conditional validity of development consents (1) The Court may, instead of declaring or determining that a development consent to which this Division applies is invalid, whether in whole or in part, make an order: (a) suspending the operation of the consent in whole or in part, and (b) specifying terms compliance with which will validate the consent (whether without alterations or on being regranted with alterations). (2) Terms may include (without limitation): (a) terms requiring the carrying out again of steps already carried out, or (b) terms requiring the carrying out of steps not already commenced or carried out, or (c) terms requiring acts, matters or things to be done or omitted that are different from acts, matters or things required to be done or omitted by or under this Act or any other Act. 25C Orders for validity of development consents (1) On application by the Minister or any other consent authority for an order under this subsection on the grounds that the terms specified under section 25B have been substantially complied with and that it is not proposed that the relevant development consent be regranted with alterations, the Court may make an order: (a) declaring that the terms have been substantially complied with, and (b) declaring that the consent is valid, and (c) revoking the order of suspension. (2) On application by the Minister or any other consent authority for an order under this subsection on the ground that the terms specified under section 25B have been substantially complied with and that the development consent has been regranted with alterations as referred to in section 103 of the Environmental Planning and Assessment Act 1979 , the Court may make an order: (a) declaring that the terms have been complied with, and (b) declaring that the development consent has been validly regranted, and (c) declaring that the suspended development consent has been revoked, and (d) revoking the order of suspension. 25D Power to grant another development consent Nothing in this Division prevents the grant of another development consent in relation to the same matter, during or after the period of suspension, pursuant to a development application duly made. 25E Duty of Court It is the duty of the Court to consider making an order under this Division instead of declaring or determining that a development consent to which this Division applies is invalid, whether in whole or in part. 12 Mr I J Hemmings, appearing for Kindimindi, submits that Div 3 of Pt 3 of the Court Act only applies to "invalidity arising from any steps preliminary to the granting of development consent" - see 25A(2) - and the error in this case is not an error in some preliminary step, but rather a failure by the council to carry out a planning function under the Environmental Planning and Assessment Act 1979. Reliance is placed upon a number of judgments of this Court, in particular the judgment of Pearlman J in Glowpace Pty Ltd v South Sydney City Council (2000) 111 LGERA 84, the judgment of Pain J in Centro Properties Ltd v Warringah Council (No.2) (2003) 132 LGERA 45 and other cases to which I shall presently refer. 13 In Glowpace the development consent was found to be invalid for two reasons. There had been a failure by the council to notify the development application in contravention of its notification policy and the development consent was itself neither final nor certain because the precise location of the development was not determined. The latter constituted a breach of the Mison principle - Mison v Randwick Municipal Council (1991) 23 NSWLR 734. Pearlman J held that the lack of finality and certainty was not a step preliminary to the granting of a development consent in terms of s 25A(2) and accordingly Div 3 of Pt 3 of the Court Act did not apply. In so holding Pearlman J said that Div 3 of the Court Act is "confined by s 25A(2)". 14 The difficulty with this decision is that her Honour does not explain the difference between her finding that Div 3 of Pt 3 is confined by s 25A(2) and the actual words in s 25A: This division extends to invalidity arising from any steps preliminary to the granting of development consent to which this Division applies … 15 Her Honour appears to read the word "extends" as a word of limitation rather than its natural meaning, namely a word of extension. The verb "extend" is, as Mr M G Craig QC for the council points out, the very antithesis of a word of limitation. My attention has been drawn to the Macquarie Dictionary definition of the word "extend" and the relevant meaning there is "to enlarge the scope of or make more comprehensive, as operations or influence". 16 In the present case it is appropriate to have regard to what s 25A actually says. Subsection (1) says that this division applies to a development consent. A development consent is the notice of determination which is issued by the consent authority. Prima facie, therefore, this division applies to a development consent and is not limited in any way. Subsection (2) then goes on to provide words of extension, that is extending its application to not only the notice of determination but also to invalidity arising from any step preliminary to the granting of development consent. This is the plain meaning of the two provisions. Subsection (3) further extends its application to invalidity arising from non-compliance with requirements declared to be mandatory requirements under s 102 of the Environmental Planning and Assessment Act 1979. The context supports a meaning which is contrary to that adopted by her Honour in Glowpace. 17 There were other cases which followed Glowpace, but which seemed to proceed on the basis that Glowpace was correctly decided. Thus, in Centro Properties Ltd v Warringah Council Pain J followed Glowpace and so saw no reason to disagree with what Pearlman J had held, namely that s 25A(2) confines the application of Div 3 of Pt 3 so that it does not apply to matters which are not steps preliminary to the grant of development consent. Pain J's adoption of Pearlman J's judgment in Glowpace was made without any real discussion of the conflict between Pearlman J's finding and the plain words of s 25A(2). 18 In WRF Properties Pty Ltd v Armidale Dumaresq Council & Anor [2003] NSWLEC 223 Talbot J applied s 25B to cure an invalid condition of consent. His Honour, however, did not discuss the Glowpace decision and simply applied the subsection, apparently relying upon its plain meaning. 19 In Noble v Cowra Shire Council (2001) 114 LGERA 440 Pearlman J followed her earlier decision in Glowpace, although in that case deciding that she would not as a matter of discretion be willing to make an order of s 25B(2). It would therefore follow that her observations are obiter, in particular her statement that orders of the nature sought have no effect upon a development consent. 20 In Woolworths v Wyong [2005] NSWLEC 607 Pain J applied s 25B where the council had failed to consider an acoustic impact of a proposed development. What her Honour found in that case was that the council had failed to consider the acoustic impacts of a development application relating to the twenty-four-hour operation of a proposed supermarket on neighbouring residential properties. Her Honour thought it appropriate to characterise that omission as a step preliminary to the grant of consent, namely being failure to obtain a noise report in relation to the impacts of the night-time operation of the supermarket. 21 In Centro Properties v Hurstville Council (2004) 135 LGERA 257 McClellan J considered the application of s 25B(2) of the Court Act. His Honour held that because the particular error in that case could not be considered in isolation from other likely impacts of the proposal it would be improper to apply s 25B. It would appear that if the particular error was one which could be considered in isolation from the other impacts of the proposal then his Honour may have been prepared to entertain an application for an order under s 25B. 22 The clear conclusion to which I have come is that the original decision in Glowpace was wrongly decided and the cases which follow and applied it subsequently were therefore also wrongly decided and should not be followed. It is true, as Mr Hemmings says, that there is a principle of judicial comity. I need only refer to Michael Realty v Carr [1975] 2 NSWLR 812, where Holland J said (at 820): There is no rule of law which binds a judge to abide by the decision of a judge of coordinate jurisdiction, but a judge at first instance will, as a matter of judicial comity, usually follow the decision of another judge at first instance in the same jurisdiction unless convinced that the judgment was wrong. 23 I am convinced that Pearlman J's judgment in limiting the operation of Div 3 of Pt 3 of the Court Act in Glowpace was wrongly decided and I am therefore free to depart from it. It must be remembered that this is a remedial and beneficial provision and so must be read as widely as its language permits. 24 Reference was also made by Mr Craig QC to the judgment of Isaacs J in Australian Agricultural Company v Federated Engine-Drivers and Firemen's Association of Australia (1913) 17 CLR 261 at 278: If then we find the law to be plainly in conflict with what we or any of our predecessors erroneously thought it to be we have, as I conceive, no right to choose between giving effect to the law and maintaining an incorrect interpretation. It is not, in my opinion, better that the Court should be persistently wrong than it should be ultimately right. 25 In the present case the error of the council amounts to a discrete matter of a technical nature which can be considered in isolation from other matters. As I have said before, this was a simple failure to impose a condition to give effect to the council's intention. This is an appropriate case for the application of s 25B and I do so. 26 The formal orders of the Court are, therefore, the orders set out in the draft minute of the order filed by the council's solicitors, namely, orders 1, 2, 3, 4, 5, and I change 5(c) to the words "any adjoining properties or properties across the road from any drop-off facilities in Austin Street". The matter is stood over to the Registrar's callover on 16 August 2006 at 9:15 am. Liberty to any party to apply on two days' notice.

I hereby certify that the preceding 26 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.

In the Land and Environment Court of New South Wales No. 40405 of 2005 The Court orders pursuant to section 25B(1) of the Land and Environment Court Act 1979 ("the Act"), that:

1. The whole of development consent D246/04 dated 22 December 2004 issued by the first respondent ("the consent") is suspended until further order under section 25C of the Act. KINDIMINDI PTY LIMITED 2. Orders 3-5 specify the terms of a re-grant of the consent with alterations, compliance with which will validate the consent. Applicant 3. The alteration to the consent to be considered by the first respondent is the imposition of a condition or conditions requiring the construction (at an appropriate time in the construction of the development) of a suitable school drop-off facility in Austin Street for the Lane Cove Public School. 4. The second respondent is to prepare plans and details for drop-off facilities along Austin Street. These may or may not include land outside the development application land, including the Department of Education land. The first respondent is not required to consider any drop-off facility if it is not supported by expert traffic engineering evidence that identifies relevant school vehicular and pedestrian impacts from the development and concludes that these impacts are reasonably addressed by the particular school drop-off facility. 5. Prior to the relevant drop-off facilities being considered by the first respondent in accordance with these orders, there is to be public notification of the options to be considered for a period of fourteen (14) days. The notification is to include: - a. To the Principle of Lane Cove Public School, b. To Mr Ken Olah, School Education Director NSW Department of Education & Training (or the person holding this position). c. Any adjoining properties or properties across the road from any of the drop-off facilities in Austin Street, d. The applicant (c/o the applicant solicitors).

LANE COVE COUNCIL The Court orders that: First Respondent 6. The matter is stood over to the Registry call-over at 9.15am, 16 August 2006. 7. Liberty for any party to apply on 2 days notice is granted. FABCOT PTY LIMITED Ordered: 9 May 2006 Second Respondent By the Court

Susan Dixon Order Registrar

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.