Mid Western Community Action Group Inc v Mid-Western Regional Council & Stockland Development Pty Limited

Land and Environment Court (NSW)|2007-07-01|Before: Jagot J, Mr P

CITATION : Mid Western Community Action Group Inc v Mid-Western Regional Council & Stockland Development Pty Limited [2007] NSWLEC 411

APPLICANT Mid Western Community Action Group Incorporated

PARTIES : FIRST RESPONDENT Mid-Western Regional Council

KEY ISSUES: Judicial Review :- development consent - whether development consent lacked finality - whether development consent left open the possibility of a significantly different development - deferred commencement conditions - whether consent granted in breach of requirements of local environmental plan - whether consent granted in breach of obligations of procedural fairness - whether condition relating to planning agreement was invalid - discretion - availability of order for conditional validity of consent

Environmental Planning and Assessment Act 1979 LEGISLATION CITED: Land and Environment Court Act 1979 Environmental Planning and Assessment Regulation 2000 Mudgee Local Environmental Plan 1998

AGC (Advances) Ltd v Roads and Traffic Authority of NSW (1993) 30 NSWLR 391; Alcoa Australia Rolled Products Pty Ltd v Weston Aluminium Pty Ltd (2006) 148 LGERA 439 ; Centro Properties Ltd v Hurstville City Council and Another (2004) 135 LGERA 257; Darling Casino Ltd v New South Wales Casino Control Authority (1997) 191 CLR 602 ; F Hannan Pty Ltd v Electricity Commission of New South Wales (No 3) (1985) 66 LGRA 306 ; House of Peace Pty Limited v Bankstown City Council (2000) 48 NSWLR 498; Kindimindi Investments Pty Ltd v Lane Cove Council & Anor (2006) 143 LGERA 277 ; Kindimindi Investments Pty Ltd v Lane Cove Council & Anor (2007) 150 LGERA 333 ; CASES CITED: Lesnewski v Mosman Municipal Council (2005) 138 LGERA 207; Minister for Local Government and Another v South Sydney City Council (2002) 55 NSWLR 381; Mison v Randwick Municipal (1991) 23 NSWLR 734 ; Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355 ; Sydney City Council v Ilenace Pty Ltd (1984) 3 NSWLR 414; Vanmeld Pty Ltd v Fairfield City Council 1999 46 NSWLR 78; Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335; Weal v Bathurst City Council & Anor (2000) 111 LGERA 181; Westfield Management Limited v Perpetual Trustee Company Limited & Anor [2006] NSWCA 245; Winn v Director-General of National Parks and Wildlife and Others (2001) 130 LGERA 508

APPLICANT Mr S B Austin QC with Mr S Balafoutis SOLICITORS Bartier Perry

FIRST RESPONDENT LEGAL REPRESENTATIVES: Mr P Clay SOLICITORS McIntosh McPhillamy & Co

SECOND RESPONDENT Mr C W McEwen SC with Dr S Berveling SOLICITORS Corrs Chambers Westgarth

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

MID WESTERN COMMUNITY ACTION GROUP INC Applicant

MID-WESTERN REGIONAL COUNCIL First Respondent

STOCKLAND DEVELOPMENT PTY LIMITED Second Respondent

1 On 21 December 2006 the Mid-Western Regional Council (the Council) granted development consent to development application DA0164/2007 for proposed development described as a shopping centre including supermarket, department store, specialty shops and underground car park on land at Mortimer, Church and Clarke Streets, Mudgee. Stockland Development Pty Ltd (Stockland) is the beneficiary of that consent. On 12 March 2007 the Mid-Western Community Action Group Inc (the Action Group) commenced these proceedings seeking a declaration that the development consent is void and of no effect.

2 The Action Group relied on the following grounds: (1) The Council granted the consent subject to conditions imposed under s 80(3) of the Environmental Planning and Assessment Act 1979 (the EPA Act). Section 80(3) allows development consent to be granted subject to a condition that the consent is not to operate until the applicant satisfies the consent authority as to any matter specified in the condition. Conditions 4 and 5 were imposed in purported reliance on s 80(3) but left open the possibility of a significantly different development. Construed in context, they required the development to be redesigned in a manner unknown at the time the Council purported to grant the consent. Accordingly, the consent "lacked finality" and was "uncertain".

(2) By imposing conditions 4 and 5, the Council could not satisfy its obligations under cll 27(3) and (4) of the Mudgee Local Environmental Plan 1998 (the LEP). Those provisions precluded the Council from granting consent unless it made an assessment of (a) "the extent to which the carrying out of the development in accordance with the consent would affect the historic, social, architectural or aesthetic significance of the Church Street and Market Street streetscape and any heritage items in that vicinity", and (b) "the style, size, proportion and position of the building, including openings for windows and doors, the pitch and form of the roof and the colour, texture, style and type of finish of the materials to be used on the exterior of the building." (3) The Council, in granting the consent, failed to notify adjoining owners of any amendment to the development application. Insofar as the consent may require the development to be carried out in accordance with amended plans the grant of the consent breached s 79A(2) of the EPA Act and denied the adjoining owners procedural fairness. This claim operated in the alternative to the grounds above as, properly construed, the consent did not authorise the development to be carried out in accordance with amended plans, but left the design of the development for future consideration.

(4) In granting the consent, the Council imposed condition 15 for the payment of monetary contributions in accordance with a planning agreement. However, the agreement submitted on behalf of Stockland was not a planning agreement within the meaning of the EPA Act (s 93F), as it did not provide that the contributions were to be used for or applied towards a public purpose.

3 The respondents denied the Action Group's claims. Stockland also contended that if any claim were upheld, relief would not be granted in the exercise of the Court's discretion as the Council had notified its satisfaction with the deferred commencement conditions on 21 June 2007 in accordance with cl 95(5) of the Environmental Planning and Assessment Regulation 2000 (the EPA Regulation). This notification removed any potential for a significantly different development. The related Council documents demonstrated the Council's assessment of the final form of the development under cll 27(3) and (4) of the LEP. Both the Council and Stockland contended that, if any claim were upheld, the Court would craft orders under s 25B of the Land and Environment Court Act 1979 (the LEC Act) enabling the consent to be validated. The Action Group accepted that an order under s 25B could be made, but submitted the Court would not make any such order in the exercise of its discretion.

5 In September 2006 Stockland submitted a development application to the Council relating to land at Church and Mortimer Streets, Mudgee. The application proposed to demolish existing shops and construct a new shopping centre containing approximately 8900sqm of retail space including a Coles supermarket of 3500sqm, a Target Country store of 1800m, 3600sqm of other retail and basement parking. A statement of environmental effects and numerous other reports, including a statement of heritage impact and architectural drawings, accompanied the development application.

6 The Council's Development Control Plan - Notifications Policy provides that when an application is lodged the Council is to use the policy to "determine what notification requirements must be undertaken". The policy contains two requirements relevant to the application - "new commercial building adjacent to residential premises" and "new commercial building in Business 3(a) zone". The requirements for the former are more onerous. They consist of an exhibition period of 14 days and written notice to adjoining owners. The Action Group does not claim any failure to comply with the policy in respect of the application as lodged.

7 The development site is within the "Streetscape Protection Area" established by cl 27 of the LEP. Clauses 27 provides: (1) In this clause, Streetscape Protection Area means all land fronting or within 100 metres of: (a) Church Street, between Short Street and Gladstone Street, Mudgee, or (b) Market Street, between Lewis Street and Court Street, Mudgee. (2) A person must not, on land within the Streetscape Protection Area, demolish, extend or alter a building or work, including but not limited to any external changes such as painting or cement rendering, or erect a building, or subdivide land within that area, except with the consent of the Council. (3) The Council must not grant consent to a development application made in pursuance of subclause (2) unless it has made an assessment of the extent to which the carrying out of the development in accordance with the consent would affect the historic, social, architectural or aesthetic significance of the Church Street and Market Street streetscape and any heritage items in that vicinity.

(4) The Council must not grant consent to an application made in pursuance of subclause (2), being an application for consent to erect a new building or to alter the exterior of an existing building, unless the Council has made an assessment of the style, size, proportion and position of the building, including openings for windows and doors, the pitch and form of the roof and the colour, texture, style and type of finish of the materials to be used on the exterior of the building.

8 The application was the subject of a report to the Council's Planning and Development Committee on 14 December 2006. As the application related, in part, to land owned by the Council, the Council obtained an independent assessment. The business paper included a report from the Council's Group Manager Planning and Development attaching the independent assessment report. The independent assessment report considered the design of the development unsatisfactory in terms of cl 27 of the LEP and the Mortimer Precinct Development Control Plan. It recommended that the Council defer determining the development application to enable it to be modified. The suggested modifications included amending the design of the development in accordance with the comments in the report and staging the development so that a maximum of 25 specialty shops would be available until 2012. The report of the Council's Group Manager Planning and Development presented the Council with options but concluded that the recommendation in the independent assessment report should be adopted. The Council's Planning and Development Committee adopted the recommendation.

9 On 18 December 2006 Stockland submitted a letter to the Council addressing the Council's resolution of 14 December 2006. The letter, in part, said: We refer to agenda item 4 of the Special Meeting of the Planning and Development Committee of Mid-Western Regional Council of 14 December 2006. The recommendation in item 4 was for deferment of the Stockland Development Application so six (6) separate items could be addressed by the applicant, Stockland. We address these issues as follows:

Stage the development so that a maximum of 25 specialty shops will be available to the year 2012 and a maximum of 30 specialty shops after 2012. Currently 3,070 square metres of specialty space is proposed in the development….

Stockland is willing to open the specialty retail space across two stages. The first stage of the development would include the majors and mini-major space and 2470sqm of specialty space. Stage 1 would also include all basement and on grade carparking. The remaining 600sqm of specialty space would be deferred until 2012, opening 4 years after opening of the first stage. The attached plans show an aerial of the two stages with the building to Church Street being deferred and used as temporary carparking until 2012.

Amend the design of the development in line with comments provided in the independent assessment report. Following our meeting with Council's heritage advisor on 13 December the plans have been redesigned. The revised roof design, additional awnings to the Church Street elevation, reduced entry statement on Church St and planned architectural embellishment to the entry of the basement carpark and external wall of the mini-major tenancy achieve the intention of both the Mortimer St DCP and the Heritage advisor's aim of presenting a building which appears to have a reduced scale and an appearance of several smaller buildings. While the revised design achieves the goals of the DCP, the final finishes including brick selection and colours are yet to be resolved to the satisfaction of Council. To that end Stockland proposes engaging a Heritage Architect to assist in the final finishes selection and façade design. We propose these components be resolved and approved by Council prior to the DA becoming operative.

Provide an updated Heritage Impact Assessment Given the extensive involvement of Council's Heritage advisor it has now been agreed that an updated report from Musecape is not required.

10 The attached plans consisted of three sheets. The first sheet (DA-08) depicts amended west (Church Street) and north (Mortimer Street) elevations. The second sheet is an aerial photomontage showing the development absent the specialty shops adjacent to Clarke Street and extending to Church Street. This area is shown as containing parking. The third sheet is an aerial photomontage showing the development with the specialty shops adjacent to Clarke Street and extending to Church Street. The Council did not notify these plans, which is the basis for the Action Group's allegations of breach of s 79A(2) of the EPA Act and denial of procedural fairness.

11 The application was referred to the Council on 20 December 2006. The Council was shown a PowerPoint presentation about the development. The presentation included various representations of the development with comments overlaid such as "could present as 2 separate buildings with open arcade", "no variance in upper floor detailing", "impact of large roof", "incompatible design element" and "lack of articulation". The presentation included the two elevations and aerial photomontages submitted on 18 December 2006. It also included information from the Mortimer Precinct DCP such as the principles and guidelines from the DCP about "scale, form and height" and "articulation and façade composition" as well as indicative elevations from the DCP. The first and last sheets of the presentation are a series of propositions against which marks have been placed. The first version of the sheet headed "conclusions" has a tick against "statutory planning", a cross against "urban design" and question marks against "noise" and "economic and social impact". The last sheet, also headed "conclusions", has a tick against all items.

12 The report of the Council's Group Manager Planning and Development for the meeting on 20 December 2006 annexed a supplementary independent assessment report. The supplementary independent assessment report observed that Stockland had responded to the Council's resolution of 14 December 2006 by letter dated 18 December 2006 and that "with the exception of a couple of minor issues" the outstanding matters had been resolved. The report continued: 1. ECONOMIC IMPACT AND PROPOSED STAGING OF DEVELOPMENT This condition stated: Stage the development so that a maximum of 25 specialty shops will be available to the year 2012. Stocklands have advised that they are generally agreeable to this condition. In this regard there is part of the shopping centre that will have frontage onto Church Street. This part of the building contains approximately 600sqm of floor area, which would contain approximately 6 shops based on one specialty shop per 100sqm. It is considered that this issue has now been satisfactorily addressed. All that is required is a condition confirming these arrangements. 2. DESIGN ISSUES AND MORTIMER PRECINCT DCP The applicant has addressed issues related to the impacts of the roof following meetings with Councils Heritage Advisor and independent consultants. In this regard the bulk and scale of the roof has been broken up so that it can now reflect a number of attached buildings. However there are still concerns over the façade of the development. Consequently Stocklands have offered to engage a "Heritage Architect" (ie an architect registered with the Heritage Office) to undertake the detailed design of the façade or external sections of the development. This is considered an acceptable outcome provided the final design is approved by Council. It is proposed that this issue be the subject of a deferred commencement consent condition.

13 The supplementary independent assessment report concluded: CONCLUSION

Those issues which resulted in the deferral of the development application at last weeks Planning and Development Committee meeting have been now addressed and Council is now in a position where it can determine the application. Notably the applicant has agreed to stage the development as required and engaged a suitably qualified heritage architect to finalise the external design and finishes to the development so that it is in keeping with the character of the Mudgee town centre.

14 The covering report of the Council's Group Manager Planning and Development again contained options for the Council but concluded, "staff concurred with the recommendation for approval as a deferred commencement". The Council adopted the recommendation. The consent issued on 21 December 2006. The consent contained two schedules of conditions, consistent with the Council's resolution. Schedule 1 sets out the deferred commencement conditions required to be satisfied before the consent became operative. Schedule 2 sets out all other conditions. Conditions 4 and 5 are in Schedule 1: 4. That the external design of the development be finalised by a recognised architect with qualifications and experience in heritage and conservation. The design is to satisfy the design criteria outlined in the Mortimer Precinct DCP and is to be submitted to and approved by Council. Details to be provided to Council shall include final design, materials and colours including a materials sample board.

Final plans are to be prepared and submitted to Council for approval illustrating a Stage 1 development that reduces the total floor area by 600sqm and ensures that there are no more than 25 specialty shops until 2012. The revised plans shall include site plan, floor plans, elevations and cross sections.

15 Condition 6, in Schedule 2, provides: 6. The proposed development being carried out strictly in accordance with the details set out on the amended plans, on the Application form, and the submitted Statement of Environmental Effects (as revised), except as otherwise provided by the conditions of this consent. There were no plans stamped approved by the Council on 21 December 2006.

16 Condition 15 provides: 15. Monetary contributions for the proposed development are to be paid to Council in accordance with the submitted Voluntary Planning Agreement. This agreement is to be finalised and signed by the Mid-Western Regional Council prior to the issuing of the Construction Certificate application.

17 On 17 May 2007, about five months after the consent was granted, Stockland submitted information to the Council to satisfy the deferred commencement conditions. This included a full set of architectural drawings and a heritage report. The Council referred that information to the independent assessor. On 6 June 2007 the Council's Group Manager Planning and Development submitted a report to the Council annexing a further independent assessment report and recommending that it be adopted. The independent assessment report considered amended architectural drawings (submitted following discussions about heritage issues after the consent was granted) and concluded that they satisfied deferred commencement conditions 4 and 5. As the other deferred commencement conditions were also satisfied the report recommended that the Council issue the operational consent. The Council so resolved. Another supplementary report and independent assessment report were submitted to the Council on 20 June 2007. These asked the Council to note that the 6 June 2007 report had included consideration of cll 27(3) and (4) of the LEP and provided details of this assessment.

18 On 21 June 2007 the Council issued a notice (cl 95(5) of the EPA Regulation) to the effect that the deferred commencement conditions of the consent were satisfied and the consent became operative from 20 June 2007.

Grounds 1 and 2 ("lack of finality" and cll 27(3) and (4) of LEP)

19 The Action Group submitted that cll 27(3) and (4) of the LEP disclosed that the design of buildings within the Streetscape Protection Area was of fundamental importance. Deferred commencement conditions 4 and 5 demonstrated that the Council was not satisfied the proposed development was appropriate. The conditions left open the possibility of development with a significantly different design from that identified in the development application. The submissions were developed as follows: (1) Properly construed, condition 4 meant that the consent left open all aspects of the external design of the development. For example, the Mortimer Precinct DCP contemplated that most of the development site would be a car park. The DCP contained numerous provisions relating to design with which the development could not comply absent significant revisions. It was impossible to ascertain from condition 4 which "design criteria outlined" in the DCP were intended to be relevant for the purposes of the condition.

(2) Condition 5 exacerbated the uncertainty created by condition 4. The condition failed to identify where the 600sqm of floor space was to be removed from. It failed to identify whether the floor space was to be removed from the supermarket, the department store, specialty shops or otherwise. The requirement for a site plan, floor plans, elevations and cross sections demonstrated the absence of finality of the consent.

(3) Condition 6 was of no assistance to the respondents. There were no "amended plans" before the Council when it determined the development application. The two elevations and conceptual photomontages lodged on 18 December 2006 do not fulfil that description. If anything, condition 6 is referring to the amended plans to be submitted in the future pursuant to conditions 4 and 5. There was also no "submitted Statement of Environmental Effects (as revised)". The letter of 18 December 2006 does not answer that description. The letter did not purport to revise or even mention the statement of environmental effects. In any event, the words after the comma "except as otherwise provided by the conditions of this consent" made condition 6 subject to conditions 4 and 5. Importantly, the Council did not issue any stamped approved plans with the consent on 21 December 2006. (4) Whether a consent leaves open the possibility of a significantly different development involves a judgment about which minds may differ. However, in this case cll 27(3) and (4) of the LEP put the external design of the development at the heart of the assessment process. The consent leaves the entire question of the design of the development unresolved. (5) Section 80A(4) of the EPA Act does not answer the claims. The section enables consent to be granted subject to a condition expressed in a manner that identifies (a) one or more express outcomes or objectives that the development or a specified part or aspect of the development must achieve, and (b) clear criteria against which achievement of the outcome or objective must be assessed. Any "outcomes" that this development was to achieve were fundamentally uncertain and the "criteria" anything but clear. (6) As the Council failed to resolve the design of the development when it granted consent, the Council also necessarily failed to discharge its assessment obligations under cll 27(3) and (4) of the LEP. Those obligations required assessment of the development in accordance with the consent, which was left at large by the consent as granted. Consistent with the decision in Weal v Bathurst City Council & Anor (2000) 111 LGERA 181, the facility to grant consents on a deferred commencement basis did not remove the obligations of the Council to understand the "state of affairs" ( Weal at [94]) that it stipulated as the basis for the grant of consent. The Council could not discharge that obligation in this case.

20 The Council and Stockland submitted: (1) Conditions 4 and 5 had to be construed in the context of the whole consent, including condition 6.

(2) When it determined the application, the Council had before it the whole of the development application as lodged, the complete architectural drawings as lodged, Stockland's letter of 18 December 2006 and attachments and the PowerPoint presentation described above. The Council was undoubtedly assessing the development as modified on 18 December 2006. The words "as revised" in condition 6 mean as revised by the letter of 18 December 2006. Accordingly, the letter of 18 December 2006 and its attachments are incorporated by reference in the consent. (3) The decision in Kindimindi Investments Pty Ltd v Lane Cove Council & Anor (2006) 143 LGERA 277 ( Kindimindi No 1) establishes that there is no requirement for absolute finality in the grant of consent. Section 80A(4) of the EPA Act supports conditions 4 and 5 as does s 80A(1)(g), which enables conditions to be imposed which modify "details of the development the subject of the development application". (4) Conditions 4 and 5 are not relevantly different from those held to be valid in Kindimindi No 1 . When construed in the context of the letter of 18 December 2006, it is clear that the extent of "revision" or "finalisation" of the plans authorised by conditions 4 and 5 was constrained. As to condition 4, the letter of 18 December 2006 discloses that the only relevant design criteria in the Mortimer Precinct DCP are those criteria relating to façade design in terms of final finishes, brick selection and colours. As to condition 5, the letter of 18 December 2006 discloses that the 600sqm reduction in floor space is to be achieved by deferring construction of the extension to the Church Street frontage until 2012. So constrained, there is no possibility of a significantly different development. The words after the comma "except as otherwise provided by the conditions of this consent" are an issue, but do not speak against this construction of the whole consent in context. (5) Clauses 27(3) and (4) of the LEP required an assessment of the matters specified in those provisions. An assessment does not require an outcome to be determined. The Council clearly considered those clauses when it determined the development application on 20 December 2006. Prescribing the outcome required to be achieved by condition was an assessment for the purposes of cll 27(3) and (4) of the LEP. The provisions of the LEP cannot confine the available powers to impose conditions under s 80A(4) and s 80A(1)(g) of the EPA Act.

21 In Kindimindi No 1, Basten JA (with whom Handley JA and Hunt AJA agreed) identified three (potentially overlapping) circumstances said to constitute a lack of finality in the grant of consent. First, imposing a condition that has the effect of significantly altering the development in respect of which the application was made. Secondly, imposing a condition leaving open the possibility that the development as approved may be significantly different from the development in respect of which the application was made. Thirdly, imposing a condition which is final in that it does not foreshadow any further judgment, but in terms that are imprecise and uncertain (at [24], [27], [54] and [57]). Basten JA observed that the addition of s 80A into the EPA Act (since Mison v Randwick Municipal (1991) 23 NSWLR 734 and other pre 1997 decisions) meant that claims of lack of finality and uncertainty are primarily to be answered by reference to the terms of this provision. The apparent purpose of s 80A(4) is to "allow a condition to require a variation of a proposal where the intended result is sufficiently identified, but the means of achieving it are left to the proponent" (at [59]). The section is permissive and should not be applied "in a mechanical way involving the separate identification of an outcome or objective and the criteria against which the achievement of that outcome or objective can be assessed" (at [57] and [58]). Basten JA decided that the terms of the impugned conditions in that case, although characterised by a certain lack of precision, could not be seen as significantly affecting the development (at [54]) and did not need to satisfy s 80A(4) to be within power (at [60]).

22 In other words, in Kindimindi No 1 the consent answered the description of a "consent to the application" as required by s 80(1)(a) of the EPA Act. This description was preferred by Spigelman CJ to "lack of finality" or "uncertainty", which risked diverting attention from the specific requirements of the EPA Act (Winn v Director-General of National Parks and Wildlife and Others (2001) 130 LGERA 508 at [11] - [19], [34]. See also Stein JA at [206] - [211]). Kindimindi No 1 discloses that the question whether a consent granted after the 1997 amendments to the EPA Act answers the statutory description in s 80(1)(a) must be determined having regard to the suite of statutory powers to impose conditions, including those in s 80A(1)(g) and s 80A(4). Within the context of those powers, a consent must nevertheless answer the relevant statutory description of a "consent to the application" as required by s 80(1)(a).

23 The Court of Appeal considered the appropriate approach to construction of development consents in Westfield Management Limited v Perpetual Trustee Company Limited & Anor [2006] NSWCA 245. In so doing, the Court emphasised the need to construe conditions to achieve validity and avoid uncertainty if possible (at [40] - [41], referring to the submissions at [33] - [36]). This development consent should be approached with these principles in mind. The Court also emphasised (at [41]) that another "principle to be kept in mind in construing the condition is that a development consent is a document in rem, so that communications between the parties do not form part of the matrix relevant to construction", citing House of Peace Pty Limited v Bankstown City Council (2000) 48 NSWLR 498 at [23] and [27]. Basten JA made a similar observation in Alcoa Australia Rolled Products Pty Ltd v Weston Aluminium Pty Ltd (2006) 148 LGERA 439 at [35], referring to House of Peace at [37] as follows: The search is not for what the Council actually intended or what, if it had been interrogated about various possibilities, it would have said it intended. As an instrument having the characteristics referred to by Else-Mitchell J and Stephen J in the passages cited at par [23], it must speak according to its written terms, construed in context but having regard to its enduring function.

24 Although allegations of "lack of finality" may overlap with those of failure to consider or breach of an instrument, material relevant to the latter claims may extend beyond the consent and other documents incorporated by express reference or necessary implication. For example, reports to the Council will be relevant to a claimed failure of consideration but will rarely fall within the accepted principles of reference for construing consents. It is also relevant that the Action Group challenges the validity of the consent, not an individual condition. The consent must be construed as a whole before the claims of "lack of finality" and breach of the LEP may be determined. With this in mind, I propose to deal first with the meaning of the conditions in context, secondly with the alleged "lack of finality" and thirdly with the alleged breach of cll 27(3) and (4).

25 Conditions 4 and 5 contemplate the preparation and approval of additional information and plans. They assume the existence of a proposed development of a particular design, floor area and number of specialty shops. Absent that assumption, there could be no external design to be "finalised" (condition 4), no non-final plans to be made "final", no floor area to be "reduced" and no specialty shops that exceeded 25 in number (condition 5). The "proposed development" referred to in condition 6 is the shopping centre, generally as described on the first page of the consent. Condition 6, in terms, operates "except as otherwise provided by the conditions of this consent". Conditions 4 and 5 are other conditions of the consent, but that does not mean that condition 6 has no work to do. Condition 6 requires the proposed development to be carried out strictly in accordance with the details in the nominated documents except as otherwise provided by the conditions of the consent. The relevant details are those set out "on the amended plans, [and] on the Application form, and the submitted Statement of Environmental Effects (as revised)".

26 The reference to the application form is uncontroversial. It is the development application form of five pages. The reference to "the amended plans" is potentially ambiguous. The Action Group submitted that there were no amended plans other than those foreshadowed in conditions 4 and 5. The Council submitted that there were amended plans, being those submitted on 18 December 2006; the fact that they were incomplete and in part conceptual did not change their character as amended plans. I accept the Council's submission. Construed in context "the amended plans" in condition 6 should be understood as the plans submitted on 18 December 2006. The condition is dealing with documents in existence further identifying the "proposed development". There were documents capable of falling within the generic description "plans" amending the development submitted on 18 December 2006. While the reference lacks precision, it is not incapable of being given meaning. The plans submitted on 18 December 2006 are expressly incorporated by reference in the consent. The development must be carried out strictly in accordance with those plans except as otherwise provided by the conditions of consent.

27 The reference to "the submitted Statement of Environmental Effects (as revised)" is also ambiguous and more difficult to construe. The Council said that the condition did not concern a revised statement of environmental effects (no such document had been submitted), but the statement of environmental effects as revised by a subsequent document. The only document satisfying this description, submitted the Council, was the 18 December 2006 letter from Stockland to the Council. The words in brackets are a form of ellipsis or contraction. Accordingly, the consent required the development to be carried out in accordance with the submitted statement of environmental effects (or the details therein) as revised by the letter submitted on 18 December 2006.

28 Conditions 4 and 5, according to the Council's submission, must be construed in the context of this letter and its attachments. The letter identified that all aspects of the redesign of the development complied with the Mortimer Precinct DCP and the requirements of the "Council's heritage advisor" other than the "final finishes including brick selection and colour" and the "façade design". For these reasons, when condition 4 referred to finalising the external design and the design satisfying the design criteria in the Mortimer Precinct DCP, the only elements of design left unresolved were limited to the façade design in terms of final finishes including brick selection and colour. Hence, the design criteria in the Mortimer Precinct DCP relating to those limited issues were relevant and all other design criteria irrelevant. The design criteria in the Mortimer Precinct DCP satisfying this description were clear according to the Council - namely, the 2nd and 4th dot points on p 18 (relating to designs compatible with and sympathetic to heritage items), the 4th, 5th and parts of the 8th dot points on p 20 (enhance and maintain the established streetscape, emphasise horizontal form and provide visual treatment to minimise building bulk) and all but the 3rd, 4th, 7th and 12th dot points on p 22 (relating to numerous design objectives).

29 The Action Group submitted that the Council's invitation to trawl through the Council's files in an attempt to identify some revision to the statement of environmental effects was contrary to established principle with respect to construing consents (see [23] above) and should be rejected. The letter of 18 December 2006 was not incorporated within the consent by express words or necessary implication. In any event, the letter did not mention the statement of environmental effects or purport to revise it. If, contrary to this submission, the letter was incorporated in the consent by implication, then the Action Group said it did not assist the respondents. The subjective states of mind of Stockland and the Council were immaterial. The consent must be construed objectively. Condition 6 operates subject to conditions 4 and 5. By condition 4 the Council deferred the entire question of the external design of the development. Condition 4 referred to the design criteria in the Mortimer Precinct DCP at large. The DCP contained numerous provisions capable of satisfying that description and giving vastly different developments. According to the Action Group, nothing in the conditions limited the relevant design criteria to those selected by the Council after the event.

30 The Council's submissions on construction do not adequately confront the language of the conditions. If the 18 December 2006 letter is incorporated within the consent by condition 6, the words "except as otherwise provided by the conditions of this consent" nevertheless qualify everything that precedes them. Hence, while the Council's approach was for condition 6 to qualify conditions 4 and 5, it is clear that conditions 4 and 5 (amongst others) in fact qualify condition 6. The function of condition 6 was to identify the details constraining the carrying out of the proposed development (albeit subject to the other consent conditions). Stockland's representations about the state of mind of the Council's heritage advisor say nothing about those details, just as many representations in the statement of environmental effects are immaterial to the carrying out of the development. To take but one example, the statement of environmental effects says the development will increase price competition between retail stores to the benefit of consumers (p 19). If the development does not have that consequence, could Stockland be in breach of s 76A(1)(b) of the EPA Act? I would answer no because condition 6 operates to identify the development and how it is to be carried out. The condition should not be construed as incorporating various people's beliefs about the benefits or impacts of the development or about its performance measured against Council policies merely because they happen to appear in the documents referred to in the condition. Any other approach would create substantial difficulties for the operation of the EPA Act (see, by analogy, the observations in AGC (Advances) Ltd v Roads and Traffic Authority of NSW (1993) 30 NSWLR 391 at 395-396 about environmental impact statements).

31 The letter of 18 December 2006 contains limited information revising the statement of environmental effects about the development and how it is to be carried out. The information about staging and the attached plans form part of the relevant revision. The representations about the heritage advisor's state of mind and Stockland's beliefs about the design of the development do not. When condition 6 is properly construed, these representations are not incorporated as part of the consent. In any event, there is no reason to construe the consent on the assumption (implicit within the Council's submissions) that the Council accepted and endorsed the representations made by Stockland in the letter of 18 December 2006 about the state of mind of the Council's heritage advisor. Conditions 4 and 5 belie any such assumption. Accordingly, although I accept the Council's submission that the words "as revised" in condition 6 are an elliptical reference to the 18 December 2006 letter, that does not lead to the construction of the consent for which the Council contends.

32 What then does the consent mean and are any of the alleged sources of invalidity made out? As I have said, condition 6 identifies the "proposed development". The "proposed development" is the development described under that heading on the first page of the consent. This proposed development is to be carried out strictly in accordance with the details of certain documents, but subject to the other conditions of the consent.

33 Condition 5 requires revised plans (site plan, floor plans, elevations and cross sections) to be approved showing 600sqm of floor space deferred from the development until 2012 so that until that date there are no more than 25 specialty shops. It is reasonably clear from the text of this condition that the 600sqm of floor space to be deferred is 600sqm of specialty shop floor space. Although imprecise, the condition can be given meaning. Read with condition 6 and the reference in that condition to the amended plans it is reasonably clear that the part of the development to be deferred is the extension of the specialty shops to the Church Street frontage. So construed, the condition is not modifying the development, at least in any permanent sense. It is requiring only that a nominated part of the development be deferred until a later date. I am satisfied that the condition is within the scope of s 80A(1)(g) and s 80A(4) of the EPA Act. If regard may also be had to the letter of 18 December 2006 insofar as it contains details relating to the carrying out of the development (as I consider to be the case), this construction is unarguable. Either way, condition 5 was within power. Accordingly, condition 5 cannot found the claimed lack of finality or failure to consider cll 27(3) and (4) of the LEP. The fact that condition 4 also affects the development does not make condition 5 an independent source of any invalidity of the consent.

34 Condition 4 gives rise to more difficult issues than condition 5, particularly in the face of cll 27(3) and (4) of the LEP. The tasks of identifying an "important aspect of the development", whether the consent leaves open the possibility of a "significantly different development" and whether the intended result of a condition is "sufficiently identified", involves an "evaluative judgment" (Kindimindi No 1 at [28], [54] and [59]). Condition 4 requires the external design of the development (that is, the proposed development) to be finalised by a person with particular qualifications and experience. It requires the external design as finalised by that person to satisfy provisions of the Mortimer Precinct DCP containing design criteria relevant to the external design of the development. It requires information to be submitted and approved being the "final design" and a materials sample board with materials and colours. This design as approved will be the "final design" of the development.

35 Although a mechanical approach to s 80A(4) must be avoided, the relevant outcomes, objectives or criteria in the condition are inescapably expressed by reference to the external design criteria of the Mortimer Precinct DCP at large. Nothing in the condition or the consent construed as a whole further limits the relevant inquiry. The provisions relating to external design are scattered throughout the DCP. They range from simple matters such as choice of materials, choice of colours and patterning the façade (p 22) to building elements and the pattern of built form, such as cornices, verandahs and balconies, active retail frontages at ground level, external open space areas and pedestrian protection (for example, pp 18, 22-23). Despite the Council's best efforts in its submissions, the consent provides no objectively ascertainable basis to select or exclude any provision of the DCP containing external design criteria in preference to another. The criteria are so broad ranging and contain so many possible and potentially conflicting combinations and options that the consent necessarily leaves open the possibility of a significantly different development from the "proposed development".

36 Accordingly, condition 4, properly construed, is not concerned with modifying "details" of the development as authorised by s 80A(1)(g) of the EPA Act (and see, by analogy, Sydney City Council v Ilenace Pty Ltd (1984) 3 NSWLR 414 at 421-422). Nor does it sufficiently identify the intended result of some variation of the development as authorised by s 80A(4). The condition is different from those considered in Kindimindi No 1. The impugned conditions in that case related to two identified elements of the building (the eastern end of the roof and the open sections of the car park). The first condition required the roof to be less visible from a nominated location, with this intended result to be achieved by one of two nominated methods (split or set back the eastern end). The second condition required the open section of the car park to be enclosed, with the facades to provide visual relief and interest. Here, whatever the subjective intention of the Council about limiting the further design resolution to the façade design in terms of materials colours and finishes, the consent leaves the external design of the development as a whole to be resolved and requires the resolution to satisfy a myriad of potentially conflicting design criteria in the Mortimer Precinct DCP. For these reasons, the Council's resolution of 20 December 2006 did not at law determine the development application by granting consent in accordance with s 80(1) of the EPA Act.

37 I consider that cll 27(3) and (4) of the LEP support this conclusion and provide an independent basis for finding that the consent was granted in breach of the Council's obligations under the EPA Act. Clause 27(2) identifies the development requiring consent in the streetscape protection area established by cl 27(1). Consent is required for external changes to an existing building such as painting or cement rendering and to erect a new building. All development applications made "in pursuance of subclause (2)" trigger the application of subclauses (3) and (4). It was common ground that those clauses applied to this application. Both clauses required the Council to make an assessment of nominated matters. In cl 27(3) the required assessment is of the extent to which the carrying out of the development in accordance with the consent would affect the nominated matters (including the aesthetic significance of the relevant streetscapes). In cl 27(4) the required assessment is of nominated aspects of "the building" which, construed in context, must be the building erected in accordance with the consent. The relevant aspects of the building include the colour, texture, style and type of finish of the materials to be used on the exterior of the building.

38 The Council clearly considered cll 27(3) and (4) when it determined to grant the consent. However, this conclusion does not answer the question whether the consent was granted in breach of the substantive requirements of those clauses. To satisfy these provisions, the nominated assessments must in fact be carried out. I accept that the imposition of conditions relating to aspects of the design of a development does not preclude compliance with cll 27(3) and (4). To the contrary, conditions may form part of the assessment and demonstrate compliance with the provisions. However, to discharge the assessment obligations imposed by the provisions, one way or another, the Council had to be able to identify (or sufficiently identify) the development to be carried out and the building to be erected in accordance with the consent. I am satisfied the Council could not do so because it left the external design of the development for later resolution. The reference in condition 4 to the design criteria in the Mortimer Precinct DCP cannot constitute an assessment for the purposes of cll 27(3) and (4). The provisions require an assessment of the particular development and building. Properly construed, this consent did not enable the Council to identify the development to be carried out and the building to be erected in accordance with the consent. Accordingly, the Council could not have carried out the assessment required by cll 27(3) and (4) of the LEP because the consent it granted deferred resolution of the external design of the development.

39 The Council's submission that cll 27(3) and (4) cannot qualify s 80A(1)(g) and s 80A(4) is misdirected. Those sections relate to the power to impose conditions as part of the determination of the application under s 80. The obligations imposed by cll 27(3) and (4) operate through s 76A(1) and s 79C(1)(a)(i) of the EPA Act. Absent the assessment under cll 27(3) and (4), the Council must not grant consent. The assessment did not occur. Accordingly, I am satisfied that the consent was granted in breach of cll 27(3) and (4) of the LEP and, thus, in breach of s 76A(1) and s 79C(1)(a)(i) of the EPA Act.

40 The statutory source of obligation to notify the development application was s 79A(1) of the EPA Act and the DCP - Notifications Policy. This DCP required the development application as lodged to be notified. The Council did so. The DCP contains no provisions requiring an amended development application to be notified. I do not accept the Action Group's submissions about the original notification being misleading and thus not a notification at all by reason of the amended plans. Lodging amended plans did not make the original notification misleading. In order to make good its claim, the Action Group had to identify an obligation on the Council to notify the amended plans. Section 79A(1) and the DCP are not the source of any such obligation.

41 The Action Group also alleged a denial of procedural fairness generally (thus, presumably, invoking breach of a common law obligation independent of s 79A(1) of the EPA Act). A DCP relating to development applications was described as setting out "the "declared procedure" adopted by the Council and represented to the public as being the procedure it will follow with respect to the notification to neighbouring land owners of the making of a development application" in Lesnewski v Mosman Municipal Council (2005) 138 LGERA 207 at [63] citing Darling Casino Ltd v New South Wales Casino Control Authority (1997) 191 CLR 602 at 609. In Minister for Local Government and Another v South Sydney City Council (2002) 55 NSLWR 381 at [15], Spigelman CJ observed that the "existence, scope and content of the duty to afford procedural fairness requires careful consideration of the statutory power". In Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78, the majority decided that the statutory scheme exhaustively prescribed the council's procedural fairness obligations (per Meagher and Powell JJA at [179] - [182] and [190] respectively), although Vanmeld concerned the making of local environmental plans embodying Council policy rather than a specific development control decision. For present purposes, it is sufficient to observe that the Action Group did not claim that the Council represented some procedure other than that in its DCP would be followed. It did not identify evidence supporting an inference of any legitimate expectation that the amended plans would be notified.

42 For these reasons, I am not satisfied that the consent was granted in breach of s 79A(1) of the EPA Act or any common law obligation of procedural fairness (assuming that s 79A(1) is not an exhaustive statement of the Council's obligations).

43 Condition 15 required monetary contributions to be paid in accordance with the submitted voluntary planning agreement. The submitted agreement identified itself in terms as a planning agreement governed by Div 6 of Pt 4 of the EPA Act, ss 93F to 93L. Those provisions radically alter the capacity of councils to impose conditions dealing with monetary contributions. The provisions enable a developer to offer to enter into an agreement with a consent authority "under which the developer is required to dedicate land free of cost, pay a monetary contribution, or provide any other material public benefit, or any combination of them, to be used for or applied towards a public purpose" (s 93F(1)). A "public purpose" is broadly defined, including by reference to public amenities and public services familiar from s 94 (s 93F(2)). Section 93F(3) identifies the things with which a planning agreement must deal. Section 93F(4) ensures that the restrictions otherwise applying to monetary contributions do not apply, as such an agreement is not invalid only because there is no connection between the development and the "the object of expenditure of any money required to be paid by the provision". Although a consent authority cannot refuse to grant consent because a planning agreement has not been offered (s 93I(2)), it can impose a condition on a consent requiring a planning agreement "that is in the terms of an offer made by the developer" (s 93I(3)). Condition 15 is such a condition in substance (but not in form).

44 The Action Group makes no complaint about the form of the condition, but says the planning agreement does not provide for the contribution to be used or applied for a public purpose or, more specifically, nominated public purposes and is thus not a planning agreement at law. Clauses 8.1 and 5.6 of the planning agreement, construed in context, undermine that submission. They provide for the contributions to be used for projects benefiting the community of the local government area in a context where the Council and Stockland expressly accepted that the agreement was governed by ss 93F to 93L of the EPA Act. Section 93F(3) sets out the required content of a planning agreement. In contrast to the detailed provisions in the EPA Regulation regulating monetary contributions under s 94, s 93F does not require a specific public purpose to be identified. The agreement provides a mechanism for public purposes to be identified and requires the Council to apply the money towards those purposes. That is sufficient to ensure the agreement (in fact, draft agreement) meets the statutory description. Even if it did not and condition 15 was invalid, questions of severance would arise. However, as the parties did not address that issue, I will say no more.

Consequences of breach - discretion and s 25B order

45 Leaving aside the questions of discretion and s 25B of the LEC Act, I am satisfied the breaches of the EPA Act found above would lead to invalidity of the consent, having regard to the principles discussed in Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355 at [91]. Stockland submitted that the events occurring after the consent would render any declaration of invalidity futile in the context of the objects of the EPA Act. Any possibility of a significantly different development had been removed by the Council's acceptance of the information lodged by Stockland in 2007 and issuing of the notice under cl 95(5) of the EPA Regulation. Moreover, in so doing, the Council had clearly considered the required matters in cll 27(3) and (4) of the LEP. No relevant benefit would be secured by declaring the consent invalid. Hence, the Court should decline to make any order under s 124 of the EPA Act (F Hannan Pty Ltd v Electricity Commission of New South Wales (No 3) (1985) 66 LGRA 306 and Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335). I consider the Action Group's submissions a complete answer to these propositions. Deciding whether a deferred commencement condition has been satisfied or not is a different function from determining whether to grant consent to a development application. Consent authorities achieve the objects of the EPA Act by discharging their obligations in accordance with ss 76, 76A, 76B and s 79C. Although it acted in good faith with the intention of discharging its statutory obligations, the Council failed to do so in important respects. The breaches of the EPA Act were neither trivial nor technical. It would be inappropriate to accept Stockland's submissions on discretion for these reasons.

46 Section 25B is different. The Court is obliged to consider making such an order instead of declaring a consent invalid (s 25E of the LEC Act). In Kindimindi Investments Pty Ltd v Lane Cove Council & Anor (2007) 150 LGERA 333 (Kindimindi No 2) the Court of Appeal held that the provisions are not limited to invalidity arising from preliminary steps. Although Hodgson JA referred to the provisions as being intended to allow rectification of "technical breaches" (at [21]), Tobias JA considered the provisions capable of relating to a failure to consider any one or more of the matters in s 79C(1) of the EPA Act (at [32] and [36]). Tobias JA also placed weight on s 103 of the EPA Act as supporting the width of these provisions. Section 103 enables the consent authority to revoke a development consent to which s 25B applies whether or not the terms of the Court's order have been complied with (at [37]). This approach is supported by s 25C of the LEC Act enabling the Court, amongst other things, to declare that a consent has been validly regranted.

47 Despite the Action Group's submissions that discretion should not be exercised in favour of an order under s 25B, there is no principled reason operating against making such an order having regard to Kindimindi No 2. The breaches are different from those arising in Centro Properties Ltd v Hurstville City Council and Anor (2004) 135 LGERA 257, where the Court declined to make an order under s 25B. In this case I consider that, in all the circumstances, an order should be made if possible. If not possible, it would follow from my conclusions above that the consent should be declared invalid.

48 The remaining question is whether a satisfactory order can be formulated. Stockland submitted a proposed order, but I do not consider it satisfactory. My preliminary view is that a satisfactory order would need to suspend the operation of the current consent pending compliance with terms under which the Council was required to assess the development as now proposed to be carried out against cll 27(3) and (4) of the LEP and, in so doing, to take into account any other relevant matter under s 79C(1) of the EPA Act and decide whether to revoke or regrant the consent with or without alterations. Further, at present, I can see no reason in principle not to require the development as proposed to be renotified as part of this process, having regard to the objects of the EPA Act to encourage public participation (s 5(c)).

49 I have found that the consent granted was not a consent within the meaning of s 80(1)(a) of the EPA Act and was purported to be granted in breach of cll 27(3) and (4) of the LEP and, hence, in breach of ss 76A(1) and 79C(1)(a)(i) of the EPA Act. I have not accepted Stockland's submissions on discretion, but have concluded that if satisfactory orders under s 25B of the LEC Act can be crafted, then such orders should be made, failing which I should declare the consent invalid.

50 Subject to the parties submitting to the contrary, I propose to direct the respondents to file and serve their suggested orders under s 25B of the LEC Act within 7 days, the applicant to file and serve any submissions relating to those proposed orders within a further 7 days and for the proceedings to be listed for a short hearing on any such orders at 9.00am within 7 days thereafter.

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.

(2006) 148 LGERA 439

(2004) 135 LGERA 257

(2006) 143 LGERA 277

(2007) 150 LGERA 333

(2005) 138 LGERA 207

(2000) 111 LGERA 181

(2001) 130 LGERA 508

At a glance

Court

Decision date

Before

Source

Judgment (78 paragraphs)

Parties

Cases Cited (17)