Marvan Properties Pty Limited and Another v Randwick City Council

Austcorp No. 459 Pty Ltd v Baulkham Hills Shire Council [2003] NSWLEC 318 (28 November 2003), unreported; Baulkham Hills Shire Council v Austcorp No. 459 Pty Limited [2003] NSWLEC 399 (10 December 2003), unreported; Breckenridge v Drummoyne Municipal Council (1936) 13 LGR 76 ; CASES CITED: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; Steelbond (Sydney) Pty Ltd v Marrickville Municipal Council (1994) 82 LGERA 192 ; Tennyson Textile Mills Pty Ltd v Ryde Municipal Council (1952) 18 LGR 231

APPLICANT Mr M C Fraser (Barrister) SOLICITORS Surry Partners LEGAL REPRESENTATIVES:

RESPONDENT Mr A J J Thompson (Barrister) SOLICITORS Bowen & Gerathy

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

11434 of 2004 Marvan Properties Pty Limited and Another v Randwick City Council

JUDGMENT 1 Talbot J: These class one proceedings are an appeal against the refusal of the respondent Council to issue a Construction Certificate to the applicant in respect of building works at the property known as 48 Kennedy Street, Kingsford. 2 The Court has agreed to determine the following preliminary question of law as a separate issue because the outcome of the appeal can be otherwise resolved depending upon the answer to the question. Whether the council may lawfully issue a Construction Certificate pursuant to s. 109F of the Environmental Planning and Assessment Act 1979 after the work has been carried out in the circumstances that pertain in this case. 3 For the purpose of determining the preliminary question of law the parties have agreed on the following facts:-

1. The Applicants are the registered proprietors of a property at 48 Kennedy Street, Kingsford known as Lot B in Deposited Plan 393535 as tenants in common (the property).
2. On 2 September 2003, the Respondent granted consent to a development application numbered by the Respondent 03/00190/GE (DC) to the Applicants' town planners, Redmane Pty Limited. The DC was for alterations and additions to an existing apartment building including a new ground floor apartment, new rear parking and landscaping, cement rendering of building and strata subdivision.
3. On 27 January 2004, the Applicants were issued a Construction Certificate number 04/891-1 in respect of footings and underpinning and construction of rear car park by the McKenzie Group Consulting.
4. On 2 February 2004, the Applicants appointed McKenzie Group Consulting as the Principal Certifying Authority (PCA).
5. Between 2 February 2004 and August 2004, the works the subject of the DC were carried out.
6. Prior to carrying out the balance of the Works, namely, for conversion of the existing laundry into a ground floor apartment, alterations to the stairwell, and cement rendering of the building the Applicants did not obtain a Construction Certificate for that work.
7. On 4 August 2004, the Respondent issued a Building Certificate in respect of the Property pursuant to s.149D of the Environmental Planning and Assessment Act 1979 and assigned it number BC-68/2004 (BC).
8. On or about 8 October 2004 the Applicants made application to the PCA for an Occupation Certificate (OC).
9. On 8 October 2004, the PCA declined to issue the OC.
10. On 22 October 2004, the Applicants made application to the Respondent for a construction certificate which was assigned Construction Certificate Application No. CC-672/2004.
11. On 4 November 2004, the Respondent refused to issue a Construction Certificate for the balance of the works. 4 It is the Council's primary contention that the whole of the scheme contained within the Environmental Planning and Assessment Act 1979 ("the EP&A Act") in relation to the certification of development is directed to the necessity for obtaining approval for work certified in a construction certificate before the work is commenced. Conversely the applicants submit that a construction certificate is not a certificate with respect to the building constructed in consequence of the plans and specifications, rather it is a certificate only in respect of the plans and specifications. 5 Before dealing with the respective arguments of the parties it will be necessary to identify and comprehend the effect of the statutory provisions recently introduced to the EP&A Act and as subsequently amended. However prior to doing that it is also pertinent to be reminded of the effect of earlier legislation in relation to obtaining permission to erect a building firstly under the Local Government Act 1919 ("the LG Act 1919") and secondly under the Local Government Act 1993 ("the LG Act 1993"). 6 Under LG Act 1919 section 311(1) provided as follows:-

(1) A building shall not be erected unless the approval of the council is obtained therefor beforehand. … 7 The longstanding authority in relation to the effect of the this section is the judgment of Sugerman J in Tennyson Textile Mills Pty Ltd v Ryde Municipal Council (1952) 18 LGR 231 at 232 as follows:- In so far as the appeals relate to building approval under Pt XI of the Local Government Act 1919-1951 the Court can make no order. The appellant has chosen to do the whole of the work included in two of the applications, and a considerable portion of that included in the third, notwithstanding the absence of approval. The Council's approval must be obtained "beforehand" (s.311). The Court's decision is to be deemed the final decision of the Council (s.341(3)), which can only be a decision given "beforehand". The whole scheme of the Act is directed to the necessity for obtaining approval before work is commenced. The work here in question was done in contravention of Part XI and, more particularly, of s.311, and nothing can be done by this Court to affect that situation or its consequences. 8 After the LG Act 1919 was repealed, section 68 of the LG Act 1993 specified that a person may carry out an activity specified in the Table "only with the prior approval of the council". The Table to section 68 when first introduced included the activity of "Erect a building." 9 In Steelbond (Sydney) Pty Ltd v Marrickville Municipal Council (1994) 82 LGERA 192 at 195 I adopted the reasoning in Tennyson Textiles to determine the effect of section 68 as follows:- Consistently with the reasoning in Tennyson Textiles there is no power to grant an approval pursuant to Chapter 7 which would have the effect of overcoming a breach of s.68 already committed. That reasoning which concluded that the court lacked jurisdiction to determine an application for a building permit for the erection of a building which has already been erected can be applied to an application made under the new Act. The wording of s 78 confirms that conclusion by referring to the applicant as a person seeking to carry out the activity. That is to say that the application is directed only towards the prospect of doing or carrying out the subject activity.

10 The reference to the erection of a building in the Table to section 68 of the LG Act 1993 was omitted when the amendments were made to the EP&A Act to introduce the concept of a construction certificate. The current legislation 11 Part 4A - Certification of Development, was inserted in the EP&A Act by Act No.152, 1997, which commenced on 1 July 1998. 12 Section 109C identifies the certificates that may be issued for the purposes of Part 4A as follows:- (a) a compliance certificate, (b) a construction certificate, (c) an occupation certificate, (d) a subdivision certificate.

13 A construction certificate is identified as "being a certificate to the effect that work completed in accordance with specified plans and specifications will comply with the requirements of the regulations referred to in section 81A(5)." 14 Section 81A(5) provides that "the regulations may make provision concerning the issue of certificates for the erection of buildings and subdivision of land." The relevant regulations are contained in Part 8 of the Environmental Planning and Assessment Regulation 2000 ('the EP&A Regulation"). Division 2 of Part 8 of the Regulation, clauses 139 to 148, deal specifically with construction certificates. 15 Section 81A(2) of the EP&A Act relevantly provides:- The erection of a building in accordance with a development consent must not be commenced until: (a) a construction certificate for the building work has been issued…

16 Section 109F directs that a construction certificate must not be issued "with respect to the plans and specifications for any building work" unless the certifying authority is satisfied that the requirements of the regulations referred to in section 81A(5) have been complied with and any long service levy payable has been paid. 17 Clauses 139 to 148 of the EP&A Regulation generally relate to the form of the application for a construction certificate and the issue of the construction certificate. An application for a construction certificate may be withdrawn (cl 139A). Additional information may be required by the certifying authority pursuant to cl 141. There are special provisions relating to fire protection and structural capacity in clauses 143 and 144 and for residential flat development in cl 143A. 18 Clause 145 prohibits the issue of a construction certificate for building work unless the certifying authority is satisfied of the following matters:- (a1) that the plans and specifications for the building include such matters as each relevant BASIX certificate requires, (a) that the design and construction of the building (as depicted in the plans and specifications and as described in any other information furnished to the certifying authority under clause 140) are not inconsistent with the development consent, (b) that the proposed building (not being a temporary building) will comply with the relevant requirements of the Building Code of Australia (as in force at the time the application for the construction certificate was made). 19 Furthermore clause 146 prevents a certifying authority from issuing a construction certificate for building work under a development consent unless it is satisfied that each of the following have been complied with:- (a) each condition or agreement requiring the provision of security before work is carried out in accordance with the consent (as referred to in section 80A(6) of the Act), (b) each condition requiring the payment of a monetary contribution before work is carried out in accordance with the consent (as referred to in section 94 or 94A) of the Act), (c) each other condition of the development consent that must be complied with before a construction certificates may be issued in relation to the building work or subdivision work,

20 Apart from formal matters clause 147 requires that a construction certificate must contain a statement to the effect that "work completed in accordance with documentation accompanying the application for the certificate (with such modifications verified by the certifying authority as may be shown on that documentation) will comply with the requirements of the Regulation as are referred to in section 81A(5) of the Act." 21 Pursuant to clause 148 a person who has made an application for a construction certificate and a person having the benefit of a construction certificate may apply to modify "the development" the subject of the application or certificate. I pause here to question whether a person having the benefit of a construction certificate will necessarily always be a person entitled to make an application under section 96 to modify a development consent. Clause 148 should therefore be construed as applying to an application to modify a construction certificate although it purports to apply the provisions of Division 2 to an application to "modify development" in the same way as it applies to the original application. Perhaps the answer to the possible ambiguity (which I do not have to resolve in this case) lies in section 80(12) of the EP&A Act that describes the effect of issuing a construction certificate as follows:- (12) If a consent authority or an accredited certifier issues a construction certificate, the construction certificate and any approved plans and specifications issued with respect to that construction certificate, together with any variations to the construction certificate or plans and specifications that are effected in accordance with this Act or the regulations, are taken to form part of the relevant development consent (other than for the purposes of section 96). 22 Finally section 109H prohibits the issue of an interim occupation certificate or a final occupation certificate to authorise a person to commence occupation or use of a new building unless the certifying authority is satisfied, in the case of building erected pursuant to a development consent, that a construction certificate has been issued " with respect to the plans and specifications for the building."

23 Section 109M provides that a person must not commence occupation or use of the whole or any part of a new building (which includes an altered portion of, or an extension to, an existing building) unless an occupation certificate has been issued in relation to the building or part. 24 It will be apparent from the above outline of the legislative scheme that the difficulty for the present applicant is that, having commenced and effectively completed the building work without the benefit of a construction certificate, it cannot now obtain an occupation certificate if the Council's argument is correct, namely, that a construction certificate can only be issued prior to commencement of the relevant work. 25 Other difficulties for the applicant may arise out of section 109E(3)(a) and (d) and clause 162A of the Regulation, notwithstanding the issue of a construction certificate. Pursuant to section 109E(3) a principal certifying authority for building work to be carried out on a site is required to be satisfied, inter alia:- (a) that a construction certificate or complying development certificate has been issued for such of the building work or subdivision work as requires development consent and over which the principal certifying authority has control, before the work commences on the site, and (d) that building work or subdivision work on the site has been inspected by the principal certifying authority or another certifying authority on such occasions (if any) as are prescribed by the regulations and on such other occasions as may be required by the principal certifying authority, before the principal certifying authority issues an occupation certificate or subdivision certificate for the building or work, and …

26 Clause 162A of the Regulation (introduced in 2003) specifies the occasions on which building work must be inspected for the purposes of section 109E(3)(d) of the Act, according to the class of the building under construction. 27 The provisions in Part 8 of the EP&A Act relating to the application for and the issue of building certificates only apply to protect an owner from an order requiring the building to be repaired, demolished, added to or rebuilt. The present applicant has already obtained a building certificate. However a building certificate is not capable of authorising occupation of a building contrary to section 109M of the Act. Comparison of the legislative schemes 28 The schemes under the LG Act 1919 and the LG Act 1993 incorporated an application for an approval to erect a building and the obtaining of that approval beforehand or, latterly, prior to carrying out of the activity. 29 The contrasting scheme under the current legislation involves a system of certification following an approval by development consent where a development application is required. There is no specific temporal provision in relation to the issue of a construction certificate except in so far as section 81A(2) provides that the erection of a building in accordance with a development consent must not be commenced until a construction certificate for the building has been issued. Nevertheless, there is an element of future performance contemplated by the description of a construction certificate in section 109C as being a certificate to the effect that work completed in accordance with specified plans and specifications will comply with the requirements of the regulations. However there is sufficient tolerance in the use of the words in section 109C for me to accept a construction that allows for the certificate to operate solely on the basis of what is shown in the plans and specifications rather than by reference to, or by inspection of work already commenced at the date the certificate is issued. The current scheme 30 Although it is not expected that work will commence prior to the issue of a construction certificate, in my view it does no violence to the overall scheme if a certifier subsequently expresses a view that if work is completed in accordance with the plans and specifications, whenever it is done, will comply with the requirements of the Regulation. In my opinion clauses 145 and 146 of the Regulation and other clauses relating to satisfaction prior to the issue of the construction certificate take the matter no further in this respect, except in so far as they must be complied with before a construction certificate can be issued. 31 The certification of the plans and specifications lends no efficacy to the actual works, unless ultimately the work can be shown to be a reflection of the plans and specifications. I do not agree with the argument put by Mr Thompson, on behalf of the Council, that the application for a construction certificate is not merely an application for approval of the plans and specifications, but is an application for the approval of the erection of a building (see Breckenridge v Drummoyne Municipal Council (1936) 13 LGR 76 at 78). The applicable scheme in 1936 when Breckenridge was decided can be readily distinguished from the present on the basis referred to above. There is nothing that I can find in the EP&A Act or the EP&A Regulation that justifies the characterisation of an application for a construction certificate as an application for an approval to erect a building. The issue of a construction certificate is a pre-condition to the lawful commencement of the building work but it operates only to verify that if work is completed in accordance with the plans and specifications it will comply with the relevant regulations. 32 The problems for the applicant foreshadowed by Mr Thompson, and touched on by me earlier, in relation to the potential difficulty in achieving compliance with the requirements for the issue of an occupation certificate as a consequence of amendments made to the EP&A Act and EP&A Regulation in 2003 by the Environmental Planning and Assessment Amendment (Quality of Construction) Act 2003, that introduced a strict regime for inspections during the course of construction as well as other related measures, do not arise as an impediment to the issue of a construction certificate, except perhaps in matters of discretion and merit depending upon the particular circumstances. Whether any condition attached to the construction certificate can be satisfied or if in the circumstances an occupation certificate can be issued in due course does not arise for determination in these proceedings. 33 The overall purpose of the provisions in respect of the issue of a construction certificate is to ensure that if a building is erected in accordance with presented plans and specifications it will comply with the regulations. That object of the Act is nevertheless promoted even if building work commences before the certificate is issued. (Section 33 Interpretation Act 1987 and Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355). The certification pays no regard to what has actually physically occurred, lawfully or not. 34 The requirement that the certifying authority must be satisfied that a construction certificate has been issued "with respect to the plans and specifications" pursuant to section 109H suggests that the drafter of the legislation intended that the subject of a construction certificate should be the plans and specifications. Furthermore, it would be anomalous if the plans and specifications were otherwise capable of being certified as contemplated by section 109C, yet the issue of a construction certificate could not occur because some nominal work had already taken place thereby precluding the later issue of an occupation certificate that the builder might, in other circumstances, quite reasonably be entitled to expect. The checks and balances applicable to the issue of an occupation certificate act as the ultimate control against unlawful or poor quality workmanship. 35 I have concluded, for the above reasons, that a construction certificate may be lawfully issued pursuant to section 109F of the EP&A Act notwithstanding that the work has been commenced. This conclusion does not absolve the applicant from any civil or criminal sanction that may arise as a consequence of a breach of section 81A(2) that prohibits commencement of the erection of a building until a construction certificate for the building work has been issued. Nor does it any way legitimise work carried out otherwise than in accordance with the EP&A Act and the EP&A Regulation. 36 My conclusion accords with a tentative view expressed by the Chief Judge in Austcorp No. 459 Pty Ltd v Baulkham Hills Shire Council [2003] NSWLEC 318 (28 November 2003), unreported. His Honour decided it was not appropriate to finally resolve the question at that stage of the class 1 proceedings and expressly refused to deal with it in class 4 proceedings between the same parties (Baulkham Hills Shire Council v Austcorp No. 459 Pty Limited [2003] NSWLEC 399 (10 December 2003), unreported. The answer to the preliminary question 37 I answer "yes" to the question whether the Council may lawfully issue a Construction Certificate pursuant to s 109F of the EP&A Act after the work has been carried out in circumstances that pertain in this case. Costs 38 The question of costs has not been argued. However I propose to make some observations to assist the parties in relation to the issue. 39 The Council has raised a question that needed to be resolved having regard to the arguable ambiguity and conflict arising out of the novel provisions in respect of the certification of development. It is an important issue the determination of which obviously has significant ramifications extending beyond the circumstances of this case.

40 Although the applicant is technically in default of its obligation under the Act, by reason of the commencement of the erection of the subject building without the issue of a construction certificate, it has nevertheless succeeded in persuading the Court that a certificate may be issued. 41 In the circumstances of the case, and on balance, it is prima facie fair and reasonable that each party pay their own costs in respect of the determination of the preliminary issue. I propose to make an order to that effect subject to the filing and service of a notice of motion by either party seeking a contrary order within seven days. 42 The exhibits may be returned.

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