Environment and Planning - Environmental planning - Planning schemes and instruments - Tasmania - Amendments to planning schemes - Modification of draft amendment - Procedural fairness - Modification proposed after period for public representations and final report by council.

Botany Bay Council v Minister for Transport and Regional Development [1996] FCA 1507; (1996) 137 ALR 281, distinguished.

Attorney-General: Director of Public Prosecutions

Judgment Number: [2007] TASSC 42

1 This is an application pursuant to the Judicial Review Act 2000 in relation to an amendment to the King Island Planning Scheme 1995 ("the planning scheme"). The amendment was made by the respondent ("the RPDC") with a view to making the planning scheme consistent with the State Policy on the Protection of Agricultural Land 2000 ("the state policy"). One of the provisions in the amendment came as a surprise to the applicant ("the council"). It contends that the RPDC owed it a common law duty of procedural fairness, and that the RPDC breached that duty by amending the planning scheme without giving it an opportunity to make submissions about the provision in question. The provision concerns the power of the council to give subdivision approval for the excision from rural properties of residential lots with houses already constructed on them. About 10 to 15 houses on King Island are potentially affected by this litigation.

2 The state policy was made pursuant to the State Policies and Projects Act 1993. Many of its provisions are concerned with "prime agricultural land", but that term is defined in the state policy to refer to land of such high quality that there is no such land on King Island. The only relevant provision in the state policy is Principle 5, which reads as follows:

"All agricultural land is a valuable resource for Tasmania. The protection of other than prime agricultural land from conversion to non-agricultural use will be determined through planning schemes."

3 On 17 May 2005 an officer of the RPDC wrote to the council strongly suggesting that the council initiate an amendment to the planning scheme to address inconsistencies between the scheme and the state policy. The council was informed that the RPDC had resolved that, unless the council confirmed within 14 days of the date of the letter that it would initiate an amendment, the RPDC would amend the planning scheme itself, pursuant to the State Policies and Projects Act, s13(3). The council was told that, if the RPDC did that, the amendment would be in the terms of an attachment to a report that was enclosed with the letter.

4 The council decided to initiate its own amendment in accordance with the Land Use Planning and Approvals Act 1993 ("the LUPA Act"). A draft amendment was prepared. On 14 June 2005 the council certified that draft amendment in accordance with the LUPA Act, s35(1). The draft amendment imposed restrictions on subdivisions in the Rural Zone, and also provided for exceptions to those restrictions. One of the exceptions, in a proposed new clause 3.10.5(c), provided for the council to have a discretion to approve a subdivision for the excision from a property in the Rural Zone of a single lot for residential purposes, subject to certain provisos. One of those provisos, in the proposed new clause 3.10.5(c)(i), read as follows:

"The dwelling exists at the time of this amendment coming into effect".

5 The council exhibited and advertised the draft amendment as required by s38. No member of the public made representations pursuant to s39(1). The council forwarded a report to the RPDC pursuant to s39(2) on 27 July 2005. It did not make any recommendations as to the content of the draft amendment at that time.

6 As a general rule, if any public representations are received in relation to a draft amendment, the RPDC is required to hold a public hearing pursuant to s40(2). Because no public representations were made in relation to the draft amendment, the RPDC had no statutory obligation to hold a hearing. It did not hold one.

7 Following the receipt of the council's s39(2) report, the RPDC was able to take a number of different courses. Under s41(b), it could have rejected the draft amendment. Under s41(a) it could have required the council either to modify the draft amendment, or to alter it to a substantial degree. Under s41(ab), it had the power to do either of those things itself. It chose to act under s41(ab). It made some changes to the draft amendment, without reference to the council. In particular, it changed the provision in question, the proposed clause 3.10.5(c)(i), to read as follows:

8 Apparently the RPDC subsequently satisfied itself that the draft amendment, as modified, was in order, and gave its approval to the draft amendment, pursuant to s42(1). The chairperson of the RPDC signed the draft amendment pursuant to s42(3)(a)(i) on 5 August 2005. The RPDC specified that it was to come into operation on that day.

9 Had clause 3.10.5(c)(i) not been modified by the RPDC, the council would have had the power to permit subdivisions excising from properties in the Rural Zone houses constructed during the period from 7 October 2000 to 5 August 2005 inclusive. Because of the RPDC's modification of the draft amendment, it has no such power in relation to houses constructed in that zone during that period. Apparently there are about 10 to 15 such houses. The date chosen by the RPDC, 6 October 2000, was the date when the state policy came into operation. One of its officers recommended the modification to adopt that date on the basis that it provided "a more appropriate date to measure the acceptability of a house excision".

10 The council has applied for the review of the decision of the RPDC to make the amendment to the planning scheme on 5 August 2005. It contends that the RPDC breached the rules of natural justice by modifying the proposed clause 3.10.5(c) without affording an opportunity to comment or make representations to the council or to any other persons whose rights or interests were likely to be affected by the modification. The RPDC chose not to take any part in these proceedings. The Attorney-General intervened in the proceedings pursuant to the Judicial Review Act, s39, so as to act as a contradictor, and was represented by counsel at the hearing.

11 When the RPDC holds a hearing, it is obliged to observe the rules of natural justice: Resource Planning and Development Commission Act 1997 ("the RPDC Act"), s10(1)(b)(v). Since it did not hold a hearing in relation to this draft amendment, it did not have a statutory obligation to afford procedural fairness to anyone. The council contends that it had a common law obligation to afford procedural fairness to it, and to others, when considering whether to modify the draft amendment. The Attorney-General contends that it had no such obligation.

12 The RPDC is a statutory authority that makes administrative decisions which affect rights, interests and legitimate expectations. It must therefore owe those whose rights, interests and legitimate expectations may be affected by its decisions a duty of procedural fairness, unless the relevant legislation manifests a contrary intention: Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 584; Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 at 598. There is nothing in the RPDC Act or the LUPA Act to suggest that the RPDC is obliged to observe the rules of natural justice only when it has a statutory obligation to do so. Thus, in my view, when it holds a hearing, it has a common law obligation to observe the rules of natural justice before and after the hearing: R v Resource Planning and Development Commission; ex parte Dorney (No 2) [2003] TASSC 69; (2003) 12 Tas R 69 at 106. The question in this case is whether its common law obligation to observe the rules of natural justice extended so far as to require it to afford the council an opportunity to make submissions when it was considering the modification of the draft amendment.

13 The Attorney-General contends that the RPDC did not owe the council any duty to observe the rules of natural justice because the council did not have any rights, interests or legitimate expectations of such a nature as to give rise to such a duty. The council contends that it was owed such a duty, because of its statutory role in relation to the planning scheme, and because the conduct of the RPDC in its communications with the council concerning the draft amendment gave rise to a legitimate expectation that it would be consulted before the making of any material modification.

14 Every council is a "planning authority" for the purpose of the LUPA Act: s3(1). Under that Act, councils have significant roles in the making, amendment and enforcement of planning schemes. The making of a new planning scheme involves a council in preparing a draft, exhibiting and advertising it, considering public representations, and reporting to the RPDC: ss22 to 26. Councils have similar roles when they initiate amendments to planning schemes: ss35 to 39. Councils make discretionary decisions as to development control: ss50 to 58A. Councils are obliged to ensure that planning schemes are complied with, failing which they can be prosecuted and fined: s63A. One of the functions of every council is "to provide for the peace, order and good government of the municipal area": Local Government Act 1993, s20(1)(c). Another function is "to represent and promote the interests of the community": s20(1)(b). The effect of the modification of the draft amendment was to reduce the council's powers as a planning authority. Had clause 3.10.5(c) not been modified, the council would have had the power to approve subdivisions excising single residential lots from the 10 to 15 properties affected by this litigation. The effect of the modification has been to deny the council that power in respect of those properties. In that way, and to that degree, its rights and interests have been affected by the decision under review.

15 When the draft amendment was exhibited and advertised by the council in mid-2005, there was no reason for anyone to think that any prohibition or restriction would be imposed in respect of houses that had been built after 6 October 2000. If that had been suggested, the owners of some such houses might well have made representations suggesting that such a prohibition or restriction was inappropriate. Questions might have been raised as to whether such a restriction was necessary or appropriate in order to protect non-prime agricultural land from conversion to non-agricultural uses. It might have been argued that there was already appropriate protection for agricultural land in the planning scheme since clause 3.10.3(a), which applied to the Rural Zone, provided as follows:

"In considering any application for a use or development, Council must be satisfied that the development or use:

i) will not unreasonably fetter the use of the subject lot for agricultural purposes through the conversion of existing or potential agricultural land to non-agricultural uses; and

ii) will not unreasonably fetter the agricultural use of any adjoining lot in the Zone."

16 The rights and interests of the owners of houses in the Rural Zone constructed after 6 October 2000 were affected by the modification of the draft amendment. Although those landowners had the right to make representations when the draft amendment was exhibited and advertised, they had no reason to think that they needed to do so. The modification was something unexpected for them. I think it must follow that, once the RPDC considered making the modification, its common law obligation of procedural fairness required it to notify those owners and to give them an opportunity to make submissions about the modification. There is authority for the proposition that, when a proposal that "could not reasonably have been foreseen" or is "radically new and unexpected" emerges during a planning appeal process, or in the course of the process of amending a planning scheme, those whose rights and interests might be affected by that proposal should be afforded an opportunity to respond to it: Ronaki Pty Ltd v Number One Town and Country Planning Appeal Board [1977] 2 NZLR 174 at 182; R v Resource Planning and Development Commission; ex parte Dorney (No 2) (supra) at 113. In my view, given the facts of this case, this was another situation in which the emergence of a proposal that was not reasonably foreseeable made it necessary for individuals whose rights and interests were likely to be affected to be given an opportunity to respond to the proposal.

17 Counsel for the Attorney-General submitted that the RPDC did not owe the council any duty to afford it an opportunity to make submissions as to the modification; that the council had no right to be heard by the RPDC as to the modification; and that the modification was not sufficiently radical or unexpected for the council to be offered an opportunity to be heard. He relied on the judgment of Lehane J in Botany Bay City Council v Minister for Transport and Regional Development [1996] FCA 1507; (1996) 137 ALR 281. The applicant in that case was aggrieved by a ministerial decision to reopen a runway at Sydney (Kingsford Smith) Airport because of the impact of resulting aircraft noise on many people resident in its municipality. It was also aggrieved by a decision of the Minister for the Environment to grant certain exemptions in connection with the reopening of the runway. It argued that it was owed duties of procedural fairness, requiring it to be afforded an opportunity to be heard prior to the impugned decisions being made. Lehane J held that there had been no denial of procedural fairness, on the basis that, if a decision affects the interests of the public at large, or of a section of the public at large, rather than the interests of particular individuals, usually no particular individual or body will be able to claim an entitlement to procedural fairness.

18 I think that case is distinguishable. The modification to the draft amendment did not affect the rights and interests of the public at large, or those of a section of the public at large. It affected the rights and interests of the council and of a small and identifiable group of landowners. The decision to modify the draft amendment may well have had a substantial impact on the values of some or all of the affected properties, and it reduced the powers of the council to approve subdivisions. The impact on the rights and interests of landowners was probably greater than the impact on the rights and interests of the council. However I think the impact on the rights and interests of not just the landowners, but also the council, was material. I think it must follow that the RPDC denied the council, as well as the affected landowners, natural justice by amending the planning scheme without first having afforded an opportunity for submissions as to the modification of the proposed clause 3.10.5(c).

19 Having reached that conclusion, I need not consider the council's contentions as to whether the RPDC's conduct resulted in it having a legitimate expectation of procedural fairness.

20 Under the Judicial Review Act, s27(1)(a), this Court has the power to quash or set aside either a decision or a part of a decision. The amendment to the planning scheme that took effect on 5 August 2005 contained various uncontroversial provisions that have now been in operation for nearly two years. I therefore think it would be preferable to set aside only clause 3.10.5(c)(i). That would result in there being no proviso limiting the operation of clause 3.10.5(c) by reference to the dates when houses were constructed. As a consequence, it would be appropriate to refer the matter back to the RPDC for further consideration, with appropriate directions.

21 My orders are therefore as follows:

1 That part of the decision of the respondent made on 5 August 2005 to amend the King Island Planning Scheme 1995 be quashed, namely that part of the decision whereby the respondent decided to insert into that planning scheme clause 3.10.5(c)(i) reading "the house existed as at 6 October 2000".

2 That the matter of the wording of clause 3.10.5(c)(i) be referred to the respondent for further consideration, subject to a direction that it afford procedural fairness to the applicant and to those landowners whose rights, interests and legitimate expectations are likely to be affected by any decision that it considers making.