PARTIES: NORTH SYDNEY COUNCIL V MICHAEL STANDLEY & ASSOCIATES PTY LIMITED

Local Government - modification of development consent - "substantially the same development" - exercise of discretion under s102(3A) - Sections 90 and 102, Environmental Planning and Assessment Act 1979.

Local Government - modification of development consent - "substantially the same development" - power to grant conditional approval - exercise of discretion under s102(3A) - Sections 90 and 102, Environmental Planning and Assessment Act 1979

Local Government - modification of development consent in breach of applicable development standard - State Environmental Planning Policy No 1 - Cl. 19, North Sydney Local Environment Plan

On 10 March 1992 the appellant granted development consent to the respondent for the erection of an 18 storey building at 70-72 Alfred Street Milsons Point. The building was to contain 430 square metres of retail space, 56 residential units and basement parking for 56 cars. Thence followed a series of modifications to the original consent, each effected pursuant to s102 of the Environmental Planning and Assessment Act 1979 ("the Act"). Each modification was approved by the appellant, with the exception of the last. As the appellant failed to determine this application within 40 days, the respondent appealed to the Land and Environment Court.

Lloyd J allowed the appeal and granted consent to the application for modification. He held that, in determining under s102(1)(a) whether the development to which the consent as modified is substantially the same development, the consent authority must have regard to the development consent as currently modified, whether such current modification is by one or a succession of previous modifications under the section. He further held that the appellant had power to approve an application under s102 notwithstanding that the application involved a development which breached a development standard. His Honour then addressed s102(3A), concluding that the application should be approved on its merits.

(1) In undertaking an inquiry under s 102(1)(a) as to whether the development to which the consent, as modified, relates is "substantially the same development", the consent authority must have regard to the consent upon which the applicant is entitled to rely, namely the development consent as currently modified, whether such modification is by one or a succession of previous modifications under the section.

Vacik Pty Ltd v Penrith City Council (Land and Environment Court, Stein J, unreported, 24 February 1992), approved.

(2) (By Mason P, Sheppard AJA concurring; Stein JA contra) When a consent authority exercises its discretion under s102(3A), it is required to consider the totality of the development as proposed for modification and to take into consideration such of the matters referred to in s90 as are of relevance to that development.

The Uniting Church in Australia NSW v Woollahra Council (Land and Environment Court, Stein J, unreported, 25 May 1995); Crawley v Sydney City Council (Land and Environment Court, Bignold J, unreported, 4 October 1995), not followed.

(3) A modification application may be approved notwithstanding the development would be in breach of an applicable development standard were it the subject of an original development application.

Lido Real Estate Pty Ltd v Woollahra Council (Land and Environment Court, Talbot J, unreported, 11 August 1997), approved.

MASON P: Section 102 of the Environmental Planning and Assessment Act 1979 ("the Act") enables a consent authority to modify a development consent if certain conditions are satisfied. This appeal concerns the extent of that power and the manner in which it is to be exercised. In particular there is dispute as to:-

1. the correct reference point for determining whether the development to which the consent, as modified, relates is "substantially the same development" where there are successive modifications;

2. the extent of the obligation under subsection (3A) to take into consideration such of the matters referred to in s90 as are relevant to the development the subject of the application; and

3. whether the consent authority may modify a consent that (as modified) authorises development that is prohibited at the time of modification; and (in that connection) whether State Environmental Planning Policy No 1 ("SEPP 1") regulates the procedure for doing so.

Part 4 of the Act (ss 75-109B) deals with environmental planning control. The provisions relevant to this appeal are:

s76(1) ....

(2) Subject to this Act, where an environmental planning instrument provides that development specified therein may not be carried out except with consent under this Act being obtained therefor, a person shall not carry out that development on land to which that provision applies unless:

(a) that consent has been obtained and is in force under this Act, and

(b) the development is carried out in accordance with the provisions of any conditions subject to which that consent was granted and of that instrument.

(3) Subject to this Act, where an environmental planning instrument provides that development specified therein is prohibited, a person shall not carry out that development on land to which that provision applies.

Sections 77ff prescribe the procedure for making and processing development applications. Additional procedures are required for applications respecting designated development (ss84ff).

Section 90 provides that:

(1) In determining a development application, a consent authority shall take into consideration such of the following matters as are relevant to the development the subject of that development application:

Section 91 provides that:

(1) A development application shall be determined by:

(a) the granting of consent to that application, either unconditionally or subject to conditions, or

Section 93 stipulates the date from which a consent operates. A consent will lapse in accordance with s99.

Section 102 which is central to this appeal deals with modification of consents. It provides:

(1) Upon application being made in the prescribed form by the applicant or any other person entitled to act upon the consent, a consent authority which has granted development consent under this Division may modify the consent where:

(a) it is satisfied that the development to which the consent as modified relates is substantially the same development ,

(b) it is satisfied that no prejudice will be caused to any person who objected to the development application the subject of that consent, and

(c) it has consulted with the relevant Minister or public authority in respect of a condition referred to in section 82 (1) and that Minister or authority has not, within 21 days after being consulted, objected to the modification of that consent.

(1A) In the case of a development consent referred to in section 93(4) that is the result of an appeal, a copy of such an application is to be lodged by the applicant with the council of the relevant area or with such other person as may be prescribed by the regulations.

(1B) An application under this section must be accompanied by the fee as prescribed by the regulations.

(2) A development consent shall not be modified under this section where it relates to designated development or development which is required to be notified as if it were designated development , unless notice has been given, in accordance with the regulations, to the persons (if any) who made submissions under section 87 in relation to the application for the consent, and the consent authority shall consider any further submissions made by any of those persons within the prescribed period.

(3) Where the development consent referred to in subsection (1) is a consent referred to in section 93 (4) or 101 (9) (b), the Court or the Minister, as the case may be, shall be deemed for the purposes of this section to be the consent authority.

(3A) In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 90 as are of relevance to the development the subject of the application.

(4) Modification of a development consent in accordance with this section shall not be construed as the granting of development consent under this Division but a reference in this or any other Act to a development consent shall be a reference to the development consent so modified.

(5) A person making an application under subsection (1), and dissatisfied with the determination of the application or the failure of the consent authority to determine the application within 40 days of the application being made, may, except where the application is made in relation to a consent granted by the Minister under section 101, or except as may otherwise be provided by this section, appeal to the Court , and the Court may determine the appeal.

(5A) Nothing in subsection (5) enables an appeal to be made against the determination of, or the failure to determine, an application to modify a development consent , being a development consent granted by the Court .

(6) Nothing in this Act prevents the making and determination of a development application where the development to which the application relates is the subject of a development consent, and the foregoing provisions of this subsection apply whether or not that consent could be modified under this section.

SUCCESSIVE MODIFICATIONS TO A DEVELOPMENT CONSENT

On 10 March 1992 the appellant granted development consent ("the original consent") for the erection of an 18 storey building at 70-72 Alfred Street Milsons Point. The consent was granted to the respondent. The building was to contain 430 square metres of retail space, 56 residential units and basement parking for 56 cars.

Thence followed a series of modifications to the original consent, each effected pursuant to s102. With the exception of the last modification, which is the order under appeal, each modification was approved by the appellant council.

The first modification, approved in 1993, involved the widening of a lane along the southern boundary of the site and a reduction in the contribution required under s94 as a condition of the original consent.

On 11 April 1994 the appellant approved a further application for modification of the consent to provide an additional two storeys resulting in a building of 20 storeys; an additional 12 units resulting in 68 units; and an additional 7 car parking spaces. On 6 June 1994 the appellant approved a further application for modification which allowed a total of 73 car parking spaces. The 1994 modifications have been referred to at the "Winring scheme".

On 29 August 1997 the respondent applied for a further modification for the purpose of what has been referred to as the "Grandview scheme". Under the Grandview scheme there will remain 20 storeys; the number of residential units would be reduced from 68 to 67, although the mix and internal arrangement of those units has been changed; the total floor space would be increased by about 800 square metres, representing a 5.18% increase over the Winring scheme; and the "gross floor area" being the floor space excluding balconies, service areas, car parking etc would increase about 14% over the Winring scheme. Other changes would include changes to the configuration of car spaces and ramping, the deletion of certain lifts, a reduction in the amount of retail and commercial floor space, a change in the facade and profile of the building and other alterations.

This application was not determined within 40 days. Pursuant to s102(5) the respondent appealed to the Land and Environment Court.

LLOYD J GRANTS CONSENT TO THE LATEST MODIFICATION

Lloyd J was first asked to determine a preliminary question of law, relating to the reference point involved in the inquiry directed by s102(1)(a). He held that, in determining whether under s102(1)(a) the development to which the consent as modified is substantially the same development, the consent authority must have regard to the consent upon which the applicant is entitled to rely, namely the development consent as currently modified, whether such current modification is by one or a succession of previous modifications under the section. In reaching this view, he followed Nibbe v North Sydney Council (2 September 1994, unreported, Bignold J).

Turning to the merits of the application before him, Lloyd J considered whether the development as proposed to be modified was substantially the same development as the Winring scheme, ie the consent granted in 1992 as modified by the 1994 modifications to that consent. This factual issue was resolved in favour of the applicant before him, the respondent in this appeal.

During the hearing in the court below the question arose as to the power of the relevant consent authority to approve an application under s102 where the modified development sought to be approved is in breach of an applicable development standard. In the instant case, cl 19 of the North Sydney Local Environmental Plan, 1989 ("the LEP") effectively prohibited a building in the relevant area that exceeded 18 storeys. The original consent had complied with this requirement. The Winring scheme did not, but the council purported to exercise power under SEPP 1 when approving the 1994 modification application that pushed the height from 18 to 20 storeys. Lloyd J held that the Court (and by implication any consent authority) had power to approve an application under s102 notwithstanding that the application involved a development which breached a development standard. In taking this stance he followed earlier decisions of the Land and Environment Court: see Houlton v Woollahra Council (30 July 1997, unreported, Bignold J) and Lido Real Estate Pty Ltd & Anor v Woollahra Council (11 August 1997, unreported, Talbot J).

Having thus concluded that he had power to approve the application before him, and having concluded that s102(1)(a) had been satisfied, Lloyd J addressed the remaining requirements of s102. He noted that no evidence had been called to demonstrate that any prejudice would be caused to any person who had objected to the original development application. (We were informed in the appeal that there had been no such objectors.) Accordingly s102(1)(b) was satisfied. Section 102(1)(c) was not relevant in the present case.

His Honour then addressed s102(3A). He concluded that the application should be approved on its merits. His manner of approaching subsection (3A) is challenged in the appeal to this Court.

Lloyd J allowed the appeal and granted consent to the application for the Grandview scheme modification. From these orders the appellant appeals to this Court. The appeal is limited to questions of law: Land and Environment Court Act 1979, s57(1).

THE REFERENCE POINT IN S102(1)(a): "SUBSTANTIALLY THE SAME" AS WHAT?

The appellant submits that the correct approach to be taken under s102(1)(a) is for the consent authority to compare the proposed modified development with the development as originally approved on the site. Intervening modification approvals are therefore to be disregarded at this stage of the s102 process.

The challenge to Lloyd J's interpretation invokes purposive and textual arguments. The purposive argument contends that the learned trial judge's approach would permit a developer, by a succession of s102 applications, to achieve approval for a development which is manifestly different from the development the subject of the original application, without compliance with the procedures involved in an original development application. The remarks of Cripps J in Wellfare v Sutherland Shire Council (1983) 49 LGRA 395 at 398 referable to successive applications touching designated development are invoked by way of analogy. As an instance of the mischief of permitting this "creep factor" we were given the example of 10 successive modifications whereby an approved 10 storey building progressed by degrees to an approved 20 storey building that was manifestly different from the building originally approved. Implicit in this argument is the contention that the full environmental impacts of successive modifications are not considered with the same attention as an original development application. This raises the issue of the scope of the s90 assessment envisaged by subsection (3A), a topic to which I shall return. The "creep factor" problem was said to be further exacerbated by the absence of a consent authority's power to consent conditionally to a modification: cf Benalup Holdings Pty Ltd v Lismore City Council (1993) 81 LGERA 257.

The textual arguments invoked by the appellant are two-fold:-

(i) Section 102(1)(b) requires the consent authority to address the issue of prejudice to persons who objected to "the development application the subject of that consent". This necessarily refers to the original consent, because a modification application is not a development application (cf s4) and because no provision is made in s102 for objectors. The use of the expression "that consent" in s102(1)(b) colours the phrase "the consent as modified" in para (a), indicating that it means the original consent as modified. It would be unusual to find the same word used in different senses within the one section.

(ii) Section 102(4) is invoked. It is submitted that this subsection means that, for the purposes of Part 4, Division 1 (hence for the purposes of s102) a reference to a development consent does not include a reference to the consent as modified.

In my view Lloyd J was correct to reject the appellant's arguments on this point. It is common ground that s102 permits more than one modification application with respect to the same original consent: see Interpretation Act 1987, s8(b). A modified consent must of necessity be different in some respect to its predecessor. But once modification has occurred, the developer's obligation is to comply with the terms of the modified consent; see s76(2)(a), read with the concluding portion of s102(4). It would be no answer to a prosecution for a breach of s76(2) to prove that a superseded original consent had been followed to the letter. Likewise with a modified consent that is further modified. This being so, it is clear that "the consent" that may be modified in exercise of the power conferred by s102 is the (modified) consent as it stands at the time of the modification application. The appellant did not dispute this, although it was argued that the words "may modify the consent", appearing before para (a), are to be read as if they said "may (further) modify the original consent". In my view this is a very forced reading of the provision which does not do justice to the concession that there may be multiple modifications, nor to the essential meaning of the verb "modify". In this context that word means "to alter without radical transformation" (Sydney City Council v Ilenace Pty Ltd [1984] 3 NSWLR 414 at 421). It makes no sense to speak of modifying something which is not current. For these reasons, the natural reading of the words "modify the consent" is modify the consent in its form current at the time of the modification application. This reading gains reinforcement from the reference in the opening words of s102(1) to "the applicant or any person entitled to act upon the consent". The consent upon which a person is entitled to rely is the consent as modified.

The appellant's textual argument based on s102(1)(b) misconstrues that paragraph. It may readily be accepted that the persons whose prejudice is to be taken into account are those who objected to the application that led to the original consent. But that merely identifies a closed class of objectors. It does not bring about the effect that the words "the same development" in s102(1)(a) are qualified by the words "as approved in the original consent".

The appellant's textual argument referring to subsection (4) also misconstrues that subsection. The first portion of the subsection merely ensures that the act of the consent authority in approving a modification is not to be construed as the granting of an application for the purposes of some or all of the many provisions framed by reference to such act: cf ss 77A(1), 78(1), 80(2), 81(1), 82(1), 83, 91(1)(a), 91AA(1), 93(1), 94(1), 96(4), 98(1), 99(1), 103(8), 104A, 109A(1)(b). (This has significance for a further argument and I shall return to it.)

The answer to the appellant's purposive argument based upon fear of the consequences of the "creep factor" lies in both understanding and acceptance of the power of modification granted in plain terms by the legislature. That power is intended to be exercised in an appropriate case. When first enacted, s102 reversed the earlier understanding of the law which held that a development application could not be recalled or varied after issuance: see Kirribilli Ex-Service Club Ltd v North Sydney Municipal Council (1964) 11 LGRA 76 at 79-80; Benalup Holdings Pty Ltd v Lismore City Council (1993) 81 LGERA 257 at 259. The original form of s102, enacted in 1979, confined the power of modification to "details of the consent", but the words "details of" were removed in 1985 in response to the majority decision in Sydney City Council v Ilenace Pty Ltd (supra). This amendment was obviously intended to enlarge the power to some degree. The meaning of "substantially the same development" is discussed by Stein J in Vacik Pty Ltd v Penrith City Council (Land and Environment Court, Stein J, unreported, 24 February 1992) in terms with which I respectfully agree.

Parliament has therefore made it plain that a consent is not set in concrete. It has chosen to facilitate the modification of consents, conscious that such modifications may involve beneficial cost savings and/or improvements to amenity. The consent authority can withhold its approval for unsuitable applications even if the threshold of subsection (1) is passed.

I agree with Bignold J in Houlton v Woollahra Council (unreported, 30 July 1997) who (at p5) described the power conferred by s102 as "beneficial and facultative". The risk of abuse is circumscribed by a number of factors. Paras (a), (b) and (c) of subsection (1) provide narrow gateways through which those who invoke the power must first proceed. Subsections (1A) and (2) ensure that proper notice is given to persons having a proper interest in the modified development. And there is nothing to stop public consultation by a council if it thinks that this would aid it in its decision-making referable to modification. Finally, subsection (3A), coupled with the consent authority's discretion to withhold consent, tend to ensure that modifications will not be "enterprised, nor taken in hand, unadvisedly, lightly or wantonly". Naturally some modifications will be controversial, but decision-making under this Act is no stranger to controversy.

For these reasons Lloyd J was correct in his ruling as to the reference point of the inquiry under s102(1)(a).

One further reason advanced by the appellant in support of a narrower construction to s102(1A) was the incapacity of a consent authority to approve a modification application other than unconditionally. In Benalup Holdings Stein J held that a consent authority exercising the discretion under s102 does not have power to modify a development consent other than in the terms applied for by the applicant unless with the consent of the applicant. Neither party to the present appeal challenged the correctness of this decision, although the appellant contended that a close analysis of Benalup reveals that it is authority for the narrower proposition that a consent authority may not make a modification subject to conditions other than those touching those aspects of the development actually modified.

I find it unnecessary to resolve this issue in the present appeal. However, I must not be taken to be approving Benalup. I would wish to reserve the point whether as a general principle the power to approve conditionally needs to be conferred expressly where there is a true discretion. In Southern Pacific Co v Olympian Co [1922] USSC 167; 260 US 205, 208 (1922) Sutherland J, delivering the opinion of the Supreme Court of the United States, said that "The power to approve implies the power to disapprove and the power to disapprove necessarily includes the lesser power to condition an approval". See also Johns v Australian Securities Commission [1993] HCA 56; (1993) 178 CLR 408 at 428-9, 469-70. Cf R v Windsor Licensing Justices ex parte Hodes [1983] 1 WLR 685. It is true that s102 does not contain a provision similar to that found elsewhere which expressly arms the Court with power to approve conditionally: see eg ss79(1), 91(1), 92(4) and 101(8). However, given the dangers of applying the expressio unius maxim, this may be insufficient to displace any general principle concerning the conditional exercise of discretionary powers. Of course, any conditions must be reasonably capable of being regarded as related to the purpose for which the discretion is being exercised: Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council [1970] HCA 42; (1970) 123 CLR 490 at 499-500; Johns at 469-70.

THE PROPER APPROACH TO THE DISCRETION: S102(3A)

The appellant next contends that Lloyd J erred in his approach to the exercise of discretion under the section. Subsection (3A) provides:

(3A) In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 90 as are of relevance to the development the subject of the application.

In argument before Lloyd J, senior counsel for the North Sydney Council (Mr Austin QC) had submitted that the s90 assessment required by subsection (3A) extends to the entirety of the development the subject of the (modification) application.[1] The learned judge indicated arguendo that he regarded the s90 assessment as limited to the differences between what is currently approved and what is proposed in the modification application.[2] Care always needs to be taken before a judicial utterance made in the course of argument is treated as indicative of the judge's final views. Senior counsel for the appellant (Mr McLelland QC) accepted this. Nevertheless he submitted that the way in which Lloyd J approached the subsection (3A) issue in his judgment indicated that his Honour did not give full effect to the dictates of the subsection. It was submitted that the judge had effectively started with the assumption that the impacts of the Winring scheme must be satisfactory, proceeding from this basis to assess only the impacts of the differences between the proposed development and the approved Winring scheme.

Two issues therefore arise. First, the scope of the assessment dictated by subsection (3A); secondly, whether Lloyd J gave proper effect to it.

The respondent submitted that s102(3A) cannot mean that the whole of the original development is opened up for reassessment under s90. This submission appears to adopt the prevailing view of the subsection in the Land and Environment Court: see The Uniting Church in Australia NSW v Woollahra Council (Stein J, unreported, 25 May 1995); Crawley v Sydney City Council (Bignold J, unreported, 4 October 1995).

In my respectful view, subsection (3A) is not so confined. The critical words are "such of the matters referred to in section 90 as are of relevance to the development the subject of the application" (emphasis added). Had the subsection used the word "modification" in place of the word "development" then it would have been quite different. But, with respect to those who see it otherwise, I find this to be a very plain subsection. The consent authority is directed to consider any s90 matter relevant to the whole development as modified. This is the plain meaning of the provision, and it offers a principled way for limiting the dangers of the "creep factor" to which reference has already been made.

The contrary argument seems to treat the existing consent, whether original or modified, as if there were some issue estoppel with respect to those portions which are not directly affected by the modification application. But there is no justification for such a cramped approach, which is capable of producing an unrealistic and potentially unreasonable outcome. A consent authority is not to be equated with an administrative tribunal deciding a dispute inter partes (cf Lambidis v Commissioner of Police (1995) 37 NSWLR 320). In my view the respondent's approach to s102(3A) is cramped because of the textual and contextual reasons offered in the previous paragraph. And it is unrealistic and potentially unreasonable because a particular development may have to be viewed as a whole before its impact upon the amenity of a neighbourhood can possibly be gauged. For example, a modification which introduces greater usage of a high rise development may necessitate additional lift facilities. It would be unrealistic to consider the modification if hamstrung by the existing consent's provision for lifts. A fortiori if Benalup is correctly decided and if it stands for the broader of the two propositions for which it is said to be authority. It is true that the consent authority might choose to reject the proposed modification, but a purposive approach to the power suggests that it should not do so unless and until its full impact is viewed against the backdrop of all relevant s90 factors. The same point can be demonstrated by reference to the potential evils of the "creep factor" argument raised earlier in a different context. The construction of subsection (3A) which I have espoused offers a principled way of addressing the situation presented by successive modifications that gradually increase the height of a building in a way that is substantial when the original approval is compared with the development embodied in the latest modification proposal. In my view the consent authority is permitted, indeed bound, to assess the environmental impact of the cumulative effect of prior modifications when addressing the latest modification application. In doing so, it does not need to first stop and satisfy itself that the s90 factors touch the development to the extent that it is modified.

Ultimately the main reason advanced by senior counsel for the respondent in favour of the narrower approach to subsection (3A) was the fear that a consent authority such as a council or minister, might use the opportunity of a modification application to repent of an earlier decision in the light of a political change of will. But I see nothing wrong with this, given (a) the developer's right to rely on its existing consent rather than seeking modification, (b) the obvious function of political input into the planning processes through decision-making by elected councils and representative ministers and (c) the developer's right of appeal to the Land and Environment Court conferred by subsection (5).

For these reasons I would hold that a consent authority is required to consider the totality of the development as proposed for modification and to take into consideration such of the matters referred to in s90 as are of relevance to that development.

This leaves the difficult question of determining whether Lloyd J fettered himself in the exercise of the power.

The appellant submits that the learned judge assumed that the impacts of the previously approved development (ie the Winring scheme) were satisfactory, and that he confined his assessment pursuant to subsection (3A) to the impacts of the differences between the Winring and Grandview schemes. The critical passage from the judgment should be set out:

It then becomes necessary to consider the effect of subs (3A) of s102, which requires the consent authority to take into consideration such of the matters referred to in s90 as are of relevance to the development, the subject of the application.

Since the present proposal is substantially the same development as the approved development the impact of the present proposal also remains substantially the same as the approved development. It follows that a consideration of the various matters referred to in s90 of the Act will, in this case, result in the same decision which led to the granting of consent to the approved development. For example, the impact of the height, bulk and scale of the proposed development is substantially the same as the approved development.

Professor Webber stated that the development would be a relatively minor intrusion into the Milsons Point skyline and as such is unlikely to have any significant adverse impact as far as the regional environment of the harbour is concerned. Professor Quarry also stated that the proposal is visually compatible with the context within which it sits. For the same reasons the proposal is satisfactory as regards the provisions of Sydney Regional Environmental Plan No 23 - Sydney and Middle Harbours, relating to the visual prominence of the site. Similarly, since the podium of the proposal is the same as the approved development, it follows that it is satisfactory when considered against the podium height requirements of North Sydney Development Control Plan No 21.

As to wind impact, there is evidence which shows that the proposed development will have the same or less impact on Alfred Street and Glen Street. On the question of over-shadowing, the respondent's assessment officer has reported that the level of over-shadowing as a result of the proposed development is substantially the same as the over-shadowing from the approved development. In particular, the assessment officer reported that the proposed level of over-shadowing is considered satisfactory and would not unreasonably affect any adjoining site, including Bradfield Park.

Mr Austin does not contend that any other head of consideration under s90 is of relevance to this application. There being no head of consideration compelling a refusal of the application, it follows that the application should be approved.

In my view this does not disclose the error assigned. I read the second paragraph as stating propositions of fact, namely the similarity of impact of the Grandview scheme to the Winring scheme. (These had been addressed in detail in the earlier part of the judgment dealing with the "substantially the same development" issue.) The second paragraph does not suggest that the judge regarded himself as bound to disregard the common elements of the two schemes in his assessment pursuant to subsection (3A). His Honour then addressed the merits of the particular changes in accordance with s90 criteria.

The Court has not been referred to any passage in argument before Lloyd J where the Council suggested that it had erred when granting the original consent or approving the modifications in the Winring scheme. It follows that the practical issue facing Lloyd J was one of applying any relevant s90 factor to the development as proposed to be modified, but in the context of attention being focused upon the impact of the modifications. His Honour was entitled to rely upon the litigant parties to direct his attention to those matters said to be "of relevance" (cf s101 (3A)). The last paragraph of the passage I have quoted shows that he did no more or less than that.

CAN A PROHIBITED DEVELOPMENT BE MODIFIED? IF SO HOW?

When the modifications embodied in the Winring scheme were proposed to council in 1994, one modification involved the breach of a development standard applicable to the site. This was the proposed increase of height from 18 to 20 storeys, a matter prohibited by cl 19 of the LEP. That prohibition had been in place from before the time of the original consent.

SEPP 1 offers a procedure whereby a developer may overcome prohibitions and limitations imposed by "development standards" (a term defined in s4 of the Act). Clause 3 of SEPP 1 states the objective of the Policy in the following terms:

3. This Policy provides flexibility in the application of planning controls operating by virtue of development standards in circumstances where strict compliance with those standards would, in any particular case, be unreasonable or unnecessary or tend to hinder the attainment of the objects specified in section 5(a)(i) and (ii) of the Act.

The Policy applies to the State (cl 4) and prevails over any inconsistency between it and any other environmental planning instrument, wherever made (cl 5). The key provisions are clauses 6 and 7 which provide:

6. Where development could, but for any development standard, be carried out under the Act (either with or without the necessity for consent under the Act being obtained therefor) the person intending to carry out that development may make a development application in respect of that development, supported by a written objection that compliance with that development standard is unreasonable or unnecessary in the circumstances of the case, and specifying the grounds of that objection.

7. Where the consent authority is satisfied that the objection is well founded and is also of the opinion that granting of consent to that development application is consistent with the aims of the Policy as set out in clause 3, it may, with the concurrence of the Director, grant consent to that development application notwithstanding the development standard the subject of the objection referred to in clause 6.

The relationship between SEPP 1 and s102 has been addressed in decisions of the Land and Environment Court. Before mentioning them, I observe that the contexts in which the issue may arise may vary. Take the following examples:

(1) A development may contravene a development standard at the outset. The development application is accompanied by an objection under cl 6 of SEPP 1. The original application is consented to, pursuant to cl 7. There is a later application for modification pursuant to s102.

(2) A development may comply with all development standards at its inception. However those standards are later amended in a way that would preclude an identical original development application. Subsequently there is a s102 application.

(3) A development may be in category (2) except that the development standards are amended after an initial s102 modification but prior to a subsequent application under that section.

In 1994 the Council relied upon s102 as the source of power. Its right to approve the Winring scheme has not been challenged. However, the Council raised before Lloyd J the issue of his power to approve an application under s102 which is in breach of an applicable development standard. The issues confronting Lloyd J as consent authority were twofold. Could an application under s102 be approved for a development "in breach of" an applicable development standard? And is an objection under State Environmental Planning Policy No 1 ("SEPP 1") available as a means of achieving modification in such circumstances? Lloyd J answered the first question "Yes", and the second "No". In doing so, he followed Lido Real Estate Pty Ltd v Woollahra Council (Land and Environment Court, Talbot J, unreported, 11 August 1997). In Lido Real Estate Talbot J had followed Houlton v Woollahra Municipal Council (Land and Environment Court, Bignold J, unreported, 30 July 1997) in which Bignold J held that the power of modification exists even though the relevant planning law has been changed between the original grant of consent and the making of the application for modification.

The appellant Council submits that Lido Real Estate was wrongly decided and that Lloyd J erred in following it. It relies on s76(3) of the Act (set out above), together with s102(3A) in its application to s90(1)(a)(i) (which requires a consent authority to take into account the provisions of any environmental planning instrument). It is pointed out that SEPP 1 provides a mechanism for approval, subject to the lodgment of a development application. Alternatively, it is submitted that cl 6 of SEPP 1 is capable of adaptation to a modification application pursuant to s102: cf Haywood & Bakker Pty Ltd v North Sydney Municipal Council (Land and Environment Court, Bignold J, unreported, 30 June 1992) where Bignold J (at pp8-9) stated that:

"It is clear that it is the objection that is the pith and substance of cll 6 and 7 and `the development application' is clearly procedural, auxiliary and incidental. In these circumstances for reasons of context and purposes, the reference to a `development application' is not confined to a development application as defined by the EPA Act."

In my view these submissions should be rejected. Section 102(4) is emphatic in stipulating that modifications of a development consent in accordance with the section shall not be construed as the granting of development consent under the Division. This cuts the ground from under the argument seeking to invoke Haywood v Bakker by analogy. (Haywood v Bakker was not a s102 case, but one in which a building approval was equated with a development application for the purpose of SEPP 1.) Not only does s102(4) spurn SEPP 1, but s76(3) reinforces the situation. It provides:

(3) Subject to this Act, where an environmental planning instrument provides that development specified therein is prohibited, a person shall not carry out that development on land to which that provision applies.

I see no reason why the opening words "Subject to this Act" are not sufficient to ensure this result, because they allow s102 to operate according to its terms, thereby lifting the prima facie prohibitory operation of the balance of the subsection. See also Valhalla Cinemas Pty Ltd v Leichhardt Municipal Council (1986) 60 LGRA 240 at 246. This is the case in relation to the three examples I have given above.

Does this mean that the development standard counts for nothing? Not at all. If it was in place when the original development application was lodged (example 1), then it will prevail unless overcome by a duly processed objection under SEPP 1. If it was introduced prior to the modification application in question (examples (2) and (3)), then s102(3A) as I have construed it will require the consent authority addressing the modification application to take it into consideration because of s90(1)(a)(i). It is true that the need for the Director's concurrence which cl 7 of SEPP 1 would require if the consent authority were the Council is sidestepped, but that is simply the result of the Act prevailing over SEPP 1 itself.

In my view Lido Real Estate was correctly decided and Lloyd J was correct in the answers he gave to the two issues stemming from cl 19 of the LEP. Section 102 is a free-standing provision. A modification application may be approved notwithstanding the development would be in breach of an applicable development standard were it the subject of an original development application. And s102(3A) controls the way in which the consent authority takes into account the development standards found in any environmental planning instrument.

STEIN JA: I have had the benefit of reading the draft judgment of Mason P and agree in all but one respect.

In particular, I agree with the President's analysis of s 102(1)(a) of the Environmental Planning and Assessment Act 1979 (the Act)[3] in rejecting the submission of the appellant council that the decision-maker is required to compare the proposed modified development with that originally approved. The construction adopted by Mason P accords with my appreciation of how the provision was intended to operate. In Vacik Pty Ltd v Penrith City Council[4] I posed the question:

Is the proposed modified development substantially the same development as that in the development consent (as already amended)?

In my opinion `substantially' when used in the section means essentially or materially or having the same essence. The applicant for modification bears the onus of showing that the modified development is substantially the same, see Seaforth Services Pty. Ltd. v Byron Shire Council (No. 2) ((1991) 72 LGRA 44) and C.S.R. v Wingecarribee Shire Council (No. 2) (Unreported 17 December 1991).

The description of the power conferred by s 102 of the Act as `beneficial and facultative' in Houlton v Woollahra Council[5] also accords with my understanding of the provision. As Mason P demonstrates, the section provides ample protections from abuse of power.

The judgment of Mason P has raised the issue of the breadth of my decision in Benalup Holdings Pty Ltd v Lismore City Council.6 I accept that the question of whether there is implied in the power to refuse a modification, a power to conditionally approve, should be reserved for another day.

The issue upon which I differ from Mason P is the proper approach to the application of s 102(3A) of the Act. This provision was inserted in 1992. It followed earlier decisions in the Land and Environment Court to the effect that relevant s 90 considerations had to be taken into consideration when determining modification applications. The amendment confirmed this approach and was passed, as I understand it, for more abundant caution and to make it plain to decision-makers their responsibility in assessing such applications.

Mason P has concluded that ss(3A) directs the decision-maker to consider any

s 90 matter relevant to the whole development as modified. His Honour accepts that this may give a consent authority the opportunity to reverse an earlier decision in the light of a change in political will.

In Benalup[7] I noted that the discretion in s 102 was confined by ss(1)(a), (b) and (c) of s 102 `together with the s 90 heads of consideration of relevance to the development the subject of the modification application (subs (3A))'. In Uniting Church in Australia (NSW) v Woollahra Council[8] I opined that ss(3A) did not mean that the whole of the original development is opened up to reassessment under s 90. This has been the prevailing view in the Land and Environment Court.

It is clear that ss(3A) requires the decision-maker to address the s 90 heads of consideration relevant to the modification application. That is the application before the consent authority. To the extent that the application seeks to modify the previously approved development, s 90 must be applied. But where the modification has no impact on any aspect of the already approved development, s 90 considerations have no role to play.

Let me illustrate the matter by using the President's example of a modification which introduced greater usage of lifts in a high-rise building. The need for additional lift facilities would, in my opinion, undoubtedly arise for consideration under ss(3A). The modification application would seek to increase the population of the high-rise building and any consequence of the amendment, such as the need for additional lift facilities, would have to be assessed under the relevant s 90 head. Another illustration would be whether the increase in population necessitated consideration of the adequacy of on-site parking. On the other hand, there would be aspects of the development which may be quite unaffected by the amendment. For example, the landscaping and the bulk, size, shape and external appearance of the development. An increase in the population of the building may have no impact on these issues, which will remain the same and unaltered by the modification.

One of the reasons why I favour the narrower construction of ss (3A) is the need for a degree of certainty in project development. A broader construction would mean that a minor and perhaps beneficial (for the environment) modification application could open up the whole of the development for a complete re-assessment under s 90. This could happen on successive minor amendment applications. This would be inconvenient to say the least. I do not think that this was the intention of the legislature when it inserted ss (3A) in s 102 in 1992.

It seems to me that it may be no answer to say that the developer can fall back on the original development consent. This may not be in the interests of objectors or in the general public interest. For example, an amendment may seek to address, in a positive and beneficial fashion, an adverse impact on neighbours which was apparent when the original consent was granted. If the whole of the original consent may be revisited on such a modification application, then not only will certainty be eroded but developers will be less likely to make amendment applications which seek to improve environmental amenity and satisfy objections by affected persons.

It follows from what I have said that it is my opinion that the correct approach to ss (3A) is to assess the impact and effect of the modification on that already approved and take into account any s 90 considerations relevant to that effect or impact. Lloyd J approached the issue correctly.

On some occasions the cumulative effect of impacts will have to be assessed under the relevant s 90 heads of consideration. This will depend upon the modification application and its implications for the development.

As a consequence of my opinion on the correct approach to ss(3A) I do not see that Lloyd J fettered his exercise of the power. Indeed, as Mason P demonstrates, his Honour did address all of the relevant s 90 considerations arising under ss(3A).

I agree with what Mason P has said regarding the issue of whether a modification application can involve a breach of development standard. In my opinion, Lido Real Estate Pty Ltd v Woollahra Council[9] was correctly decided and Lloyd J was right to follow it.

As a result I conclude that the appeal should be dismissed with costs.

SHEPPARD AJA: In this matter I have had the advantage of reading the judgment to be delivered by Mason P. I am in agreement with his Honour's reasons and conclusions including his remarks concerning s.102(3A) of the Environmental Planning and Assessment Act 1979 . I agree in the orders which the other members of the Court propose.

[3] Section 102 has been amended by the Environmental Planning and Assessment Amendment

Act 1997 No. 152. It has not commenced to operate although it may be noted that the new

s 96 differs from s 102 in a number of respects, in particular it omits s 102(1)(b)

[4] Land and Environment Court, Unreported, 24 February 1992

[5] Land and Environment Court, Unreported, 30 July 1997

6 (1993) 81 LGERA 257

[8] Land and Environment Court, Unreported, 25 May 1995

[9] Land and Environment Court, Unreported, 11 August 1997