Madss Properties No 2 Pty Ltd ATF Newtown Property Trust (No 2) v Blacktown City Council

The grounds of appeal

1. The grounds set out in the Company's Summons commencing the s 56A appeal are in the following terms: 1 The Commissioner erred at law by misconstruing cl 29 of the State Environmental Planning Policy (Affordable Rental Housing) 2009 (SEPP) in finding that the private open space was required to meet the requirements of cl 29 of the SEPP; 2 The Commissioner erred at law in failing to provide reasons for dismissing the appeal, in particular by failing to explain how or in what manner or to what extent the Commissioner did not consider that the development did exhibit design excellence in accordance with cl 7.7 of the Blacktown Local Environmental Plan 2015 (BLEP); 3 The Commissioner erred in law by misconstruing cl 7.7 of the BLEP and thereby failed to consider design excellence in the manner required by the clause; 4 The Commissioner denied the Applicant procedural fairness by dismissing the appeal on the basis that the private open space designated for the use of the on-site manager does not meet the requirements of the SEPP and that the development did not exhibit design excellence as required by the BLEP.

The relevant planning provisions

1. First, it is to be observed that the application to the Council for the proposed development relied on the facultative and beneficial terms of State Environmental Planning Policy (Affordable Rental Housing) 2009 (the SEPP), as it applied at the date of the lodgement of the Company's application with the Council.
2. Although there have subsequently been amendments to the SEPP, as the Commissioner noted in his judgment at [15], the savings provisions associated with the making of those amendments preserved, relevantly, applications made and not yet finally determined (whether on appeal or otherwise) prior to those amendments coming into effect.
3. Although a number of provisions of the SEPP were engaged for the purposes of the hearing before the Commissioner, only one of them provided a basis for one of the elements of the Commissioner's rejection of the proposed development. This provision provided a specific basis for an adverse finding, as set out in the Commissioner's decision and is later set out and discussed in my addressing of appeal Grounds 1 and 4.
4. In addition, one of the provisions of the Blacktown Local Environmental Plan 2015 (the BLEP) also requires consideration. This provision is also later set out and discussed in my addressing of appeal Grounds 2 to 4.

The Commissioner's conclusion and orders

1. The Commissioner's orders disposing of the appeal were in the following terms: 1. The Applicant is granted leave to amend the development application and rely on the amended plans in Exhibit A; 2. The appeal is dismissed; 3. Development application DA 16-05368, as amended, for the demolition of existing dwellings and structures on the subject land; construction of a 2-storey residential building; 15 boarding rooms; on-site manager's room; common room and associated car parking and landscaping is refused; and 4. The exhibits are returned, except Exhibits A, C and 1.
2. It is to be observed that, as noted at [24] of the Commissioner's decision, leave was granted to rely on further amended plans. This granting of leave by the Commissioner provided the basis for order (1) in his disposition of the proceedings.
3. It is also to be observed that, at [77], the Commissioner set out two reasons why he had concluded that the proposed development could not be approved. These reasons were: 1. The private open space designated for the use of the on-site manager does not meet the requirements of cl 29(2)(d)(ii) of the SEPP; and 2. The Court cannot be satisfied that the design of the proposed development exhibits design excellence as required by cl 7.7(3) of the BLEP.

The hearing of the s 56A appeal

1. The appeal concerning the Commissioner's decision was heard on 13 August 2019. The Company was represented on the appeal by Mr P Clay SC leading Ms L Nurpuri of counsel. The Council was represented by Ms A Pearman of counsel. Both Mr Clay and Ms Pearman had appeared for their respective parties at the hearing before the Commissioner.
2. For the purposes of the appeal, there is limited disagreement between the parties. Essentially, agreement extends to the grounds of appeal as having been made out but does not extend to what should be the consequence of the appeal being upheld.
3. This agreement, however, does not bind me and I am required to consider and determine each of the four grounds.
4. Although the Council accepts that the appeal should be upheld and the matter remitted for further hearing, the Council does not accept the proposition advanced on behalf of the Company that that should be on the basis of an exclusionary remitter precluding Horton C from fresh consideration of the matter. In this context, as I understood Ms Pearman's oral and written submissions, the Council does accept that there has been a denial of procedural fairness to the Company but submits that this did not operate in a fashion that would mandate the remitter being an exclusionary one.
5. Finally, the Council proposes that it should have a certificate pursuant to s 6(1AA) of the Suitors' Fund Act 1951 (the Suitors' Fund Act) with respect to costs incurred on the appeal under the circumstances, as it was the Council's position that it was without fault and had not, in any way, contributed to the errors by the Commissioner which provided the basis for this appeal.

The orders disposing of the appeal

1. As I indicated to Mr Clay during the course of the hearing, although the Summons sought the setting aside of the entirety of the Commissioner's orders, it did not seem to me to be appropriate to set aside the first of his orders, that being the order that permitted the Company to rely on amended plans, as those plans had not been objected to by the Council and were agreed to be responsive to a number of matters pressed by the Council as contentions in the merit proceedings.
2. As a consequence, although I have determined that the appeal should be upheld, my orders will be confined, in an operative fashion, to the setting aside of orders (2) and (3) made by the Commissioner on 19 March 2019.
3. I have also concluded that it is appropriate that the remitter be an exclusionary one.
4. Finally, I have concluded that it would be appropriate to make the order sought by the Council concerning a certificate pursuant to the Suitors' Fund Act.
5. My reasons for reaching each of these conclusions are set out below.

Introduction

1. Ground 1 is in the following terms: 1 The Commissioner erred at law by misconstruing cl 29 of the State Environmental Planning Policy (Affordable Rental Housing) 2009 (SEPP) in finding that the private open space was required to meet the requirements of cl 29 of the SEPP
2. As earlier noted, Ground 1 arises from the Commissioner's consideration of relevant provisions of the SEPP, this being the environmental planning instrument relied upon by the Company for the purposes of seeking consent for that proposal. As the development proposal is a boarding house, Pt 2, Div 3 of the SEPP sets out the range of matters requiring to be considered in the assessment of such an application.
3. Amongst the matters there set out are those contained in cl 29 Standards that cannot be used to refuse consent.
4. The relevant element with which Ground 1 is concerned is that which is contained in cl 29(2)(d)(ii), a provision in the following terms: 29 Standards that cannot be used to refuse consent (1) … (2) A consent authority must not refuse consent to development to which this Division applies on any of the following grounds: (a) … (b) … (c) … (d) private open space if at least the following private open space areas are provided (other than the front setback area): (i) … (ii) if accommodation is provided on site for a boarding house manager - one area of at least 8 square metres with a minimum dimension of 2.5 metres is provided adjacent to that accommodation,

The Commissioner's decision concerning the SEPP provision

1. Although there was, initially, some disagreement between the parties concerning the location of the communal open space for this proposed development (arising, in part, as a consequence of the site being a corner allotment), this was resolved by an agreement that the Newton Road aspect of the proposal should be regarded as its primary street frontage for the purposes of cl 29(2)(d) of the SEPP. Thus, the location of the proposed communal open space (being located in the setback on the Allawah Street frontage side of the site) was acceptable as it was not to be regarded as being in the front setback.
2. However, as the manager's private open space was proposed to be in the front setback from Newton Road, the Commissioner needed to determine if this location was acceptable.
3. The Commissioner dealt with the manager's private open space in his decision, being the element which now forms the basis of Ground 1 of the appeal concerning the acceptability, or otherwise, of this proposed private open space for the resident manager.
4. The Commissioner's consideration of this topic is at [49] to [51] and is in the following terms: 49 I agree with the applicant that it is acceptable and desirable for the calculation of the area of private open space to include a reasonable allowance for soft landscaping that complements, and does not limit, its intended use. The area to the east, in my view, complies with the numerical requirement in cl 29(2)(d)(i) of the SEPP. 50 Clause 29(2)(d) expressly states that private open space should be provided "(other than the front setback area)". I accept and agree with the applicant that the front setback area can be considered to be Newton Road, and that Allawah Street may be considered a side setback. While I accept that it may require a broad view of the term 'private' for private open space to be located adjacent to a public footpath, I am satisfied that the location of the private open space to the east - and in the vicinity of the street tree which contributes to a sense of enclosure in this location, and with the benefit of associated landscape - is not inconsistent with the SEPP. 51 However in accepting that the Newton Road frontage is a 'front setback area' for the purposes of cl 29(2)(d), it follows then that the private open space for the on-site manager is not permitted by the SEPP where it is shown in Exhibit C.
5. The outcome of the Commissioner's reasoning process set out above was the incorporation in his conclusion, at 77, that: 77 … (1) The private open space designated for the use of the on-site manager does not meet the requirements of cl 29(2)(d)(ii) of the SEPP

The dimensions of the proposed private open space for the manager

1. The Council also accepted that the dimensions of the private open space proposed for the manager, as shown on the plans before the Commissioner for determination, satisfy the minimum dimensions set out in cl 29(2)(d)(ii) of the SEPP. An extract of the relevant plan was before me (Court Book, Tab 7).

Consideration of Ground 1

1. As earlier noted, the parties agree that the Commissioner has misconstrued the obligation that fell on him, pursuant to cl 29(2)(d)(ii) of the SEPP, requiring his consideration of the adequacy of both the dimensions and location of the private open space for the manager's unit in this proposed development.
2. Contrary to the position adopted by the Commissioner (that he was mandated to reject the proposal, as this private open space was not permitted to be in the front setback to Newton Road), the parties accept that what was required was an assessment of whether or not that location was acceptable as a matter of merit and that there was no prohibiting effect engaged on a proper reading of the provision.
3. I accept that the agreed position of the parties concerning Ground 1 is correct. A proper reading of cl 29(2)(d)(ii) of the SEPP makes it clear that such issues as might arise for consideration relating to the private open space for the manager's unit are ones for discretionary merit assessment, given that the dimensions of it are compliant.
4. What cl 29(2)(d)(ii) of the SEPP does is to make it clear that dimensionally compliant private open space for a boarding house manager cannot be used as a basis to refuse the development, if that private space is not in the front setback area of the proposed development.
5. This position is confirmed by the terms of cl 29(4) of the SEPP, a provision in the following terms: (4) A consent authority may consent to development to which this Division applies whether or not the development complies with the standards set out in subclause (1) or (2).
6. As was put in the written submissions on behalf the Company, if the position which had been adopted by the Commissioner was correct, the above immediately set out provision would have had no work to do. This is clearly contrary to the broad scheme operating in cl 29 of the SEPP.
7. When the private open space for the manager of a proposed boarding house is dimensionally compliant but is in the front setback of the proposed development, the consent authority (in this case the Commissioner standing in the shoes the Council) is required to undertake a merit assessment of that private open space. That merit assessment will result in a conclusion as to whether or not that proposed dimensionally compliant open space is acceptable, but the provision in the SEPP does not mandate any outcome for such an assessment process.
8. In this instance, the question of whether or not the proposed location is acceptable is one not addressed as to its merits by the Commissioner.

Conclusion on Ground 1

1. The parties have agreed, and I am separately satisfied, that Ground 1 has been made out.

Introduction

1. Grounds 2 and 3 are in the following terms: 1 The Commissioner erred at law in failing to provide reasons for dismissing the appeal, in particular by failing to explain how or in what manner or to what extent the Commissioner did not consider that the development did exhibit design excellence in accordance with cl 7.7 of the Blacktown Local Environmental Plan 2015 (BLEP); 2 The Commissioner erred in law by misconstruing cl 7.7 of the BLEP and thereby failed to consider design excellence in the manner required by the clause
2. As can be seen from their terms, Grounds 2 and 3 are appropriate to be considered together.

The terms of cl 7.7 of the BLEP

1. It is, convenient, to set out in its entirety the terms of cl 7.7 of the BLEP. This provision reads: 7.7 Design excellence (1) The objective of this clause is to ensure that development exhibits design excellence that contributes to the natural, cultural, visual and built character values of Blacktown. (2) This clause applies to land identified as "Design excellence" on the Design Excellence Map. (3) Development consent must not be granted to development to which this clause applies unless the consent authority considers that the development exhibits design excellence. (4) In considering whether the development exhibits design excellence, the consent authority must have regard to the following matters: (a) whether a high standard of architectural design, materials and detailing appropriate to the building type and location will be achieved, (b) whether the form and external appearance of the development will improve the quality and amenity of the public domain, (c) whether the development detrimentally impacts on view corridors, (d) whether the development detrimentally impacts on any land protected by solar access controls established in the Blacktown Development Control Plan, (e) the requirements of the Blacktown Development Control Plan, (f) how the development addresses the following matters: (i) the suitability of the land for development, (ii) existing and proposed uses and use mix, (iii) heritage issues and streetscape constraints, (iv) the relationship of the development with other development (existing or proposed) on the same site or on neighbouring sites in terms of separation, setbacks, amenity and urban form, (v) bulk, massing and modulation of buildings, (vi) street frontage heights, (vii) environmental impacts such as sustainable design, overshadowing, wind and reflectivity, (viii) the achievement of the principles of ecologically sustainable development, (ix) pedestrian, cycle, vehicular and service access and circulation requirements, (x) the impact on, and any proposed improvements to, the public domain. (5) In this clause: Blacktown Development Control Plan means the Blacktown Development Control Plan 2006, as in force on the commencement of this Plan.

The relevant portions of the Commissioner's decision

1. It is appropriate to commence by setting out the initial discussion of the Commissioner concerning cl 7.7 of the BLEP. This is contained in his decision at [62] to [69]. These paragraphs read: Design Excellence 62 The experts agree that some of the requirements found in cl 7.7 Design Excellence of the BLEP are satisfied. However, it is for the Court, in exercising its function as consent authority on appeal, to be satisfied that the development exhibits design excellence by having regard to all of those matters identified at cl 7.7(4). 63 As stated earlier, the experts initially addressed the criteria set out in cl 7.7(4) in their Joint Expert Report. However, as not all aspects were directly addressed, the experts were invited to provide a supplementary Joint Expert Report in Exhibit 4 to assist the Court, and which formed the basis of their evidence. 64 Clause 7.7(4)(a) requires a consent authority to have regard to: Whether a high standard of architectural design, materials and detailing appropriate to the building type and location will be achieved. 65 The supplementary Joint Expert Report (Ex 4) records that: "The planners agree that the architectural design, materials and detailing is appropriate for a boarding house. The planners also agree that the design, materials and detailing is typical of a contemporary style of residential development that one would expect to see in the local area as a result of a development of a lot." 66 To paraphrase the evidence before the Court, the experts agree that the design, materials and detailing is typical (my emphasis) of a contemporary development that one would expect to see as a result of redevelopment in the area. I now consider whether the evidence before the Court in relation to cl 7.7(4)(a) is sufficient to satisfy the Court that the development exhibits design excellence, pursuant to cl 7.7(3). 67 The Applicant submits that the 'high standard' required by cl 7.7(4)(a) must be read in context with the qualifying terms that follow: 'appropriate to the building type and location'. The Applicant proposes that the 'high standard' may be influenced by whether a subject site was located on, or distant from, a main road, for example. Mr Wood made the distinction that the 'high standard' to which the BLEP referred should not be held to the same standard as in "the eastern suburbs", but that is appropriate to the Blacktown area. In short, the Applicant submits that the 'high standard' referred to in cl 7.7(4)(a) must consider that the proposed development is a boarding house in the Blacktown area, and located on Newton Road. 68 The experts were again asked whether the proposed development addressed the 'high standard' referred to in cl 7.7(4)(a). Mr Apps stated that the proposed development did not meet this test, and that more could be done to meet a high standard of architectural design, including modifications to the roof, and improved articulation of the form through the use of materials. Mr Wood stated that the proposed development did meet the high standard when viewed in the context of being appropriate to a boarding house building type in the area. 69 I note that the Statement of Environmental Effects, contained in the Class 1 application, and prepared by Think Planners Pty Ltd provides a summary of requirements of the BLEP in table form. Reference to the requirements of cl 7.7 of the BLEP asserts that the development complies with the following statement: "The site is located within the Design Excellence area under the Blacktown Local Environment[al] Plan 2015, and the site is compliant with the requirements, by providing a very attractive building when viewed from both Newton Road and Allawah Street, that does not detract from the existing streetscape."
2. It is to be observed, in this context, that the second sentence in [62] sufficiently accurately paraphrases the requirement of cl 7.7(3) concerning the matters in cl 7.7(4) to which he was required to have regard.
3. Although the list of matters in cl 7.7(4)(a) to (f) is not exhaustive, nothing turns on that point for the purposes of this appeal.
4. It is also appropriate to note that, as recorded in [63] of the Commissioner's decision, the planning expert for the Applicant, Mr Wood, and the planning expert for the Council, Mr Apps, prepared a Supplementary Joint Expert Report (which became Exhibit 4 before the Commissioner) addressing all of the elements in cl 7.7(4). These comprised all the matters to which the Commissioner was required to have regard by virtue of cl 7.7(3) before reaching any conclusion as to whether or not the development exhibited design excellence. It will be necessary to address the terms of this joint report (Appeal Book, Tab 6) later in this decision.
5. Having set out the matters recited above in his decision, the Commissioner then turned to setting out his findings on this topic. He did so at [70] to [72] of his decision. These paragraphs are in the following terms: Finding 70 Clause 7.7(3) is a precondition to consent. It requires the Court to form an opinion, before granting development consent, as to whether "the proposed development exhibits design excellence". 71 In my view, it is reasonable to expect that a provision in the BLEP titled Design Excellence seeks excellence in design, which is intended to be understood by reference to the criterion set out in cl 7.7(4). As the previous LEP did not contain a provision related to design excellence, it was not a test formerly imposed on the design of developments in the local area prior to the adoption of the current BLEP in 2015. For this reason, the Court is not assisted by reference to whether the design of the proposed development, in the view of the expert's, may be typical to development in the area from the period prior to the adoption of the BLEP. 72 The Court was referred to the Design Excellence map contained in the BLEP at Sheet DEX_014 which defines an area in which development must exhibit design excellence, by regard being had to cl 7.7(4)(a)-(f)(i)-(x). It follows then that a development outside of the area illustrated on the Design Excellence map is not required to exhibit design excellence as defined by the BLEP. For this reason, in my view, the Court must be satisfied that the design of the proposed development performs to a higher level than what is typical of a contemporary style of residential development that one would expect to see as a result of a development of a lot, unless it is typical of similar developments within the area described by the Design Excellence map that have also satisfied the criteria set out in cl 7.7(4)(a)-(f)(i)-(x).
6. Finally, for completeness, as I have earlier recorded, the Commissioner set out, in his conclusion at 77, that the proposed development could not be approved because: (2) The Court cannot be satisfied that the design of the proposed development exhibits design excellence as required by cl 7.7(3) of the BLEP.

The Supplementary Joint Planners' Report

1. I have earlier noted that Mr Wood and Mr Apps undertook additional joint expert conferencing in order to prepare a Supplementary Joint Expert Report addressing the various matters set out in cl 7.7(4) of the BLEP. This document, one of some five pages, set out in tabular form the position of the two experts with respect to each of the 15 elements comprising the list of matters to which regard was required to be had for the purposes of making the cl 7.7(3) determination (although, as earlier noted, the list in cl 7.7(4) is not exhaustive, the experts apparently treated it as such).
2. With respect to those 15 matters, the experts were in agreement that, with respect to 11 of the matters, the proposed development complied with that element of cl 7.7(4).
3. With respect to two of the listed matters (cl 7.7(4)(f)(iii) and (iv)), there was partial agreement and partial disagreement. This arose because, in each instance, these provisions were multifaceted. It is unnecessary to set out the precise nature of the elements about which the experts were agreed and those about which they were in disagreement.
4. There was disagreement between the experts as to whether or not the proposed development satisfied cl 7.7(4)(f)(v).
5. Finally, although cl 7.7(4)(f)(x) is in singular terms, there was partial agreement and partial disagreement as to whether or not the proposed development satisfied this provision. Again, it is unnecessary to set out the extent of agreement and extent of disagreement between the experts on this point. It is sufficient to note the fact that there was partial agreement but also partial disagreement on this point.

Introduction

1. In my consideration of Grounds 2 and 3, it is necessary to undertake an analysis of how the Commissioner has actually approached cl 7.7 of the BLEP, as well as to explain how he was required to approach that provision.

The test posed by cl 7.7(3) of the BLEP

1. The two elements of cl 7.7(3) and (4) operate together in a fashion that mandated the Commissioner to answer the question posed by cl 7.7 (3) (Did the design of the proposed development display design excellence?) after considering each of the 15 matters arising from the various elements contained in cl 7.7(4) as a minimum position of analysis.
2. As I have earlier noted, the list in cl 7.7(4) is not exhaustive but there is nothing in the provisions of the BLEP that requires the Commissioner to go beyond those listed factors. If he had been of the opinion that there were other factors potentially engaged for his consideration as to whether or not the development proposal exhibited design excellence, he would have been free to address them in his decision, provided he had given the parties notice of such a matter of potential concern; afforded them the opportunity to address him about it; and provided, in his reasons for decision, an explanation as to why he considered that any additional factor was relevant and what conclusion he had reached with respect to it (the Court Act, s 38; The Presbyterian Church (New South Wales) Property Trust v Woollahra Municipal Council [2015] NSWLEC 47 at [16] to [28]). No fault would arise had this been what the Commissioner had undertaken.
3. However, there are two aspects of what the Commissioner did do that warrant further consideration.
4. The first of these arises from the Commissioner's analysis under the heading Findings at [70] to [72] of his decision. As I have earlier noted, the Commissioner had requested the parties' planning experts to undertake a further joint conferencing process in order to have them address, in terms, each of the elements called up by cl 7.7(4) of the BLEP. As also earlier noted, those experts produced such a report and the broad nature of the outcome of that analysis has been set out by me above at [43] to [47].
5. Subject to what I discuss in the next section concerning cl 7.7(4)(a), it would usually be necessary for the Commissioner to engage with the evidence of those experts concerning each of the elements to which he was required to have regard by virtue of cl 7.7(4). Whilst his consideration of those factors, where the experts were in agreement, would not have required extensive analysis (unless the Commissioner disagreed with the conclusion the experts had reached), nonetheless, he was required to address each of the agreed matters and express a view on the experts' position and his reason for adopting that view.
6. Where there was disagreement between the planning witnesses, the Commissioner needed to engage with that disagreement; reach a conclusion as to what was the appropriate resolution of that disagreement; and explain why he had reached that conclusion.
7. Having undertaken that process with respect to the matters set out in cl 7.7(4), the Commissioner would then need to reach his conclusion, in light of all of that material, as to how the question posed by cl 7.7(3) was to be answered. This would have required weighing his various conclusions concerning the various elements in cl 7.7(4) in order to reach an overall answer to the question posed by cl 7.7(3). He would have needed to give sufficient reasoning in support of that conclusion to enable the parties (particularly whichever party was unsuccessful on that point) to understand why he had made that determination.
8. It is to be observed that it is not appropriate, in appeal proceedings such as these, to undertake a fine-toothed comb analysis of the Commissioner's decision, with an eye attuned to finding errors (Brimbella Pty Ltd v Mosman Municipal Council (1993) 79 LGERA 367), and I have not done so in this instance.

The Commissioner's specific consideration of cl 7.7(4)(a)

1. As can be seen from extracts of the Commissioner's decision as earlier set out, he commenced his analysis, at [64], of what was required by cl 7.7(3), by analysing how the planning experts' joint supplementary report had addressed cl 7.7(4)(a).
2. It was open to him, had he concluded that the proposed development was so egregiously inconsistent with the requirement as to: (a) whether a high standard of architectural design, materials and detailing appropriate to the building type and location will be achieved, that this defect was such as to warrant a conclusion that, pursuant to cl 7.7(3), the project did not exhibit design excellence and that, taken together, the other matters called up for consideration by cl 7.7(4), if all positive for the Company, could not have counter-balanced that opinion - thus requiring him to refuse the proposal on this basis alone.
3. It is reasonably open to infer that that may have been what he did at [70] to [72].
4. If in fact he intended to do so, however, he was obliged to give sufficient reason for this inferred conclusion to enable the parties to understand the basis for that conclusion. He did not do so. This is particularly the position when, as noted by the Commissioner, in [68] of his decision, there was disagreement between the experts on this point.

The requirement to give sufficient reasons

1. In Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd [1983] 3 NSWLR 378, Mahoney JA explained, at page 386, the general basis of the necessity of decision-makers, including primary decision-makers to give reasons. His Honour said: But, subject to matters such as these, the basis of the decision of a trial judge or of an intermediate court of appeal should be made apparent. This does not mean that the reasons given need be elaborate: an elaborate argument may not require an elaborate answer. Reasons need to be given only so far as is necessary to indicate to the parties why the decision was made to allow them to exercise such rights as may be available to them in respect of it.
2. In Soulemezis v Dudley (Holdings) Pty Ltd [1987] 10 NSWLR 247, McHugh JA (as his Honour then was), at page 280G to 281B, expanded on the comments of Mahoney JA, saying: Moreover, I agree with the statement by Mahoney JA in Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd (at 386) that the extent of the duty to give reasons is related "to the function to be served by the giving of reasons". Thus more elaborate reasons are required where legislation gives a right of appeal against a decision than where no appeal lies. In the first class of case, unless the basis of the decision is properly articulated, the losing party may be effectively deprived of his right of appeal. In a case where a right of appeal is given only in respect of a question of law, different considerations apply from the case where there is a full appeal. An ultimate finding of fact, which is not subject to appeal and which is in no way dependent upon the application of a legal standard, can be treated less elaborately than an issue involving a question of law or mixed fact and law. If no right of appeal is given against findings of fact, a failure to state the basis of even a crucial finding of fact, if it involves no legal standard, will only constitute an error of law if the failure can be characterised as a breach of the principle that justice must be seen to be done. …
3. These obligations fall on Commissioners (see, for example, Preston CJ in Hall v O'Brien [2015] NSWLEC 200). Such reasons do not need to be extensive but do need to be sufficient for the parties to understand the basis for the conclusion expressed.
4. To the extent that the Commissioner may have been relying on what he considered to be a significant breach of cl 7.7(4)(a) of the BLEP to warrant refusal of the proposal, his decision does not explain why he might have reached that conclusion (if that is what he intended to conclude). If that was not his intention, the discussion contained in [70] to [72] simply does not address the various matters to which he was required to have regard, by cl 7.7(4), for the purposes of answering the question he was obliged to address by cl 7.7(3).
5. Whichever is the correct position, it is clear that the Commissioner has not adequately articulated any reason why he has reached that conclusion set out in [77)(2) of his decision.

Conclusion on Grounds 2 and 3

1. The parties have agreed, and I am separately satisfied, that Grounds 2 and 3 have been made out.

Introduction

1. Ground 4 is in the following terms: 4 The Commissioner denied the Applicant procedural fairness by dismissing the appeal on the basis that the private open space designated for the use of the on-site manager does not meet the requirements of the SEPP and that the development did not exhibit design excellence as required by the BLEP.
2. As can be seen, this ground asserts that the Commissioner denied the Company procedural fairness on two separate bases. The first of those concerned his consideration of the manager's private open-space area and the second is whether or not the development should be regarded as exhibiting design excellence as required by cl 7.7(3) of the BLEP.
3. These two matters require separate consideration, despite the parties' agreement that the ground has been made out.

Introduction

1. There is no doubt that a failure to accord procedural fairness can provide, if established, a basis to uphold an appeal pursuant to s 56A of the Court Act. It is also trite that the procedural freedoms in s 38(1) of the Court Act as to informality and the ability of a Commissioner to inform him or herself as the Commissioner sees fit do not set aside the obligation to afford the parties to any merit proceedings procedural fairness during the conduct of those proceedings.
2. As the submissions for the Company note (and a reading of the transcript of the hearing before the Commissioner (in evidence at Court Book, Tab 3) discloses), the matters relating, first, to private open space for the proposed development (whether as the communal open space or for the on-site manager being irrelevant) and, second, whether the proposed development satisfied the design excellence test in cl7.7(3) of the BLEP, were the matters which took up the majority of the oral evidence and submissions before the Commissioner.

The manager's proposed private open space

1. The first element of this ground is that the Commissioner denied the parties procedural fairness with respect to cl 29(2)(d)(ii) of the SEPP.
2. First, it is appropriate to note that a reading of the transcript of the concurrent evidence given by Mr Wood and Mr Apps discloses that the Commissioner imposed no constraint on the discussion of this private open-space issue within the broad framework of the planning evidence that was being given.
3. Second, Mr Clay's submissions to the Commissioner commence on page 42 of the transcript at line 16 and run until the conclusion of page 47. In the transcript (at page 42, lines 16 to 23), Mr Clay enumerated the matters which he proposed to address during his closing submissions to the Commissioner. It is unnecessary to set them out, but they did not include addressing the private open space for the proposed on-site manager.
4. Ms Pearman's closing submissions commenced at the beginning of page 49 of the transcript and concluded at page 54, line 15. Mr Clay's submissions in reply commenced at page 54, line 19 and concluded, substantively, at page 55, line 9 of the transcript. There was then a discussion about progression with conditions and the request earlier noted from Ms Pearman that the parties be provided an opportunity to give further material to the Commissioner concerning cl 7.7 of the BLEP.
5. Ms Pearman's submissions concerning open space appear to have been confined to the communal open space rather than that proposed for the on‑site manager. However (Transcript, page 53, lines 29 to 33), Ms Pearman submitted: My submission, Commissioner, the SEPP is not met, so that whilst the SEPP doesn't dictate that one must refuse if the private open space provision is not entirely met, Commissioner, in my submission, it is open to you to refuse on the basis of private open space should you wish to do so.
6. Clearly, implicit in this is the acknowledgement of the correct test mandating a merit assessment of such private open space issues as were in contention in the proceedings. At no point (that I am able to find in the transcript) did the Commissioner put to the parties the position that he adopted in his decision that he was mandated to refuse the proposal if, relevantly, the private open space for the manager was to be in the front setback to Newton Road.
7. The imposition of a test (albeit one not founded on a proper reading of the SEPP provision), and not giving the parties notice that this was a matter of concern to him and permitting them to address him on it (particularly when, as set out above, Ms Pearman had articulated the correct position), constitutes a denial of procedural fairness to the parties on this element of Ground 4.

Design excellence

1. The second element of this ground is that the Commissioner denied the parties procedural fairness with respect to the question posed by cl 7.7(3) of the BLEP.
2. During the hearing of this appeal, my attention was drawn to a short element toward the end of the transcript of the hearing before the Commissioner (Transcript, page 55, line 50 to page 56, line 14) where Ms Pearman sought the Commissioner's agreement to provide some additional material (albeit on a comparatively narrow aspect, being, effectively, the matters canvassed by the Commissioner in [71] and [72] of his decision). Ms Pearman requested that material could either be supplied by the parties in writing to the Commissioner or there could be a short additional hearing the following morning. It is clear, from what followed that request, that the Commissioner did not embrace either of these suggestions. Shortly thereafter, the Commissioner reserved his decision without further input from the parties.
3. This, in itself, provides a basis for concluding that, on that question, the Commissioner did deny the parties procedural fairness.

Conclusion on Ground 4

1. The parties have agreed that Ground 4 has been made out and I am satisfied that this is correct with respect to the two aspects raised. However, as discussed below on the issue of the nature of the necessary remitter, the potential effect differs for each of these failures.

The terms of the remitter

1. In the event that the appeal was to be upheld (particularly Ground 4), Mr Clay submitted that an exclusionary remitter order should be made so that the matter would not be further determined by Horton C.
2. Relevant matters concerning whether or not an exclusionary remitter was required were addressed by Tobias JA in Baulkham Hills Shire Council v Basemount Pty Ltd [2003] NSWCA 189; (2003) 126 LGERA 339 where his Honour said: … It should not be assumed that merely because a Commissioner's decision is set aside on a s 56A appeal on the ground of error of law that it necessarily follows that any re-hearing and re-determination of the appeal should be by a Commissioner other than the Commissioner from whose decision the appeal was brought. There are many errors of law which would not require an exclusionary order under s 56A(2)(b). Thus if a Commissioner has mistaken the law and asked himself or herself the wrong question, there may be no reason why the appeal should not be remitted to that Commissioner to be determined by him or her in accordance with law. Again, where the error only involves the misconstruction of a statutory provision or the like there may be no reason why the Court as originally constituted cannot apply the facts as found by it to the law as declared on the appeal. In such cases the Commissioner's earlier decision may have been based on a false issue or be otherwise severable so that there will have been no pre-judgment on the real issue.
3. Further, as Preston CJ explained in in Tricon Services Group Pty Limited v Manly Council (No 2) [2011] NSWLEC 253, the question of whether or not the appealed-from decision would give rise to a reasonable apprehension of bias requires to be considered. His Honour observed, at [80]: 80 In my view, Tricon has not established, according to these principles, a case in the present circumstances for an exclusionary remitter. It is not enough that the Commissioner has erred in his decision on a question of law, being the construction and application of the height controls in the Business Zone DCP; the Commissioner needs to have acted in such a way as to give rise to a reasonable apprehension of bias or a reasonable apprehension of prejudgment of the merit issues which would be required to be determined afresh on the remitter: Baulkham Hills Shire Council v Basemount Pty Ltd at [23]; Castle Constructions Pty Ltd v North Sydney Council at [83]-[85]. I do not find on the facts and circumstances of this case, including the nature of the errors, that the commissioner has acted in such a way, including by his findings and conclusions in his reasons for judgment, as would give rise to a reasonable apprehension of bias or prejudgment. Accordingly, the usual remitter to the Commissioner should be made.
4. The test is whether a fair-minded lay observer might reasonably apprehend that the Commissioner might not bring an impartial mind to the resolution of the same issues on the rehearing of the matter: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 (Ebner) at [7].
5. In Initial Action Pty Ltd v Woollahra Municipal Council [2018] NSWLEC 118, Preston CJ considered whether, in the context of the outcome of that successful s 56A appeal concerning a Commissioner's decision, an exclusionary remitter was warranted. He concluded, at [141], that that Commissioner had expressed an opinion in terms that offended Ebner because there was a real and not remote possibility that that Commissioner might not bring an impartial mind to the resolution of the issues. This, his Honour observed, required no prediction about how the Commissioner would in fact approach the matter.
6. In this instance, there is a distinction to be drawn between the two aspects of the Commissioner's decision about which complaint was laid in Ground 4. The first (concerning cl 29(2)(d)(ii) of the SEPP) did not involve any possible basis for an Ebner complaint. It could not provide any basis for requiring an exclusionary remitter.
7. However, the second aspect of Ground 4 (concerning cl 7.7 of the BLEP) did involve matters where the Commissioner had expressed sufficiently strong opinions (either by inference or directly) so that there would be a reasonable apprehension that the Commissioner would not bring an open mind to his further consideration of those matters, if the further hearing was remitted to him.
8. I therefore consider that it is appropriate, in light of that circumstance, to make an exclusionary remitter order.

Costs

1. In relation to costs, the parties accepted that the usual order for costs on a s 56A appeal should apply, namely, that costs should follow the event.
2. However, the Council proposed that it was appropriate for it to have a certificate under the Suitors' Fund Act so as to indemnify it to the consequences of the necessary costs order that follows from the result of this appeal. This, it was put by Ms Pearman, was appropriate because the Council's conduct of the appeal had not led to the errors leading to the setting aside of the Commissioner's decision.
3. I am satisfied that this position articulated on behalf of the Council does provide an appropriate basis for the making of such an order.

Orders

1. It follows that the orders of the Court are: 1. The appeal is upheld; 2. The decision and orders (2) and (3) of Commissioner Horton of 19 March 2019 are set aside; 3. The proceedings are remitted to a Commissioner or Commissioners (other than Commissioner Horton) to be determined in accordance with these reasons for judgment; 4. The Respondent is to pay the Applicant's costs of the appeal but is to have a certificate pursuant to s 6(1AA) of the Suitors' Fund Act 1951 if so qualified; and 5. The matter is listed at 9.00 am on 5 September 2019 before the Registrar for directions.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 September 2019