Peake Pearce Pty Ltd v Georges River Council

Extension of time

1. Rule 59.10(1) of the UCPR provides that proceedings for judicial review of a decision, such as the subject proceedings, must be commenced within 3 months of the date of the decision. In this case, the relevant decision was the granting of the Modification and proceedings should have been commenced within 3 months of 2 June 2018.
2. However, r 59.10(2) of the UCPR gives the Court power to exercise a discretion, at any time, to extend the time for commencing proceedings. In considering whether to extend time the Court is required to take into account the matters identified in r 59.10(3) which is in the following terms: (3) In considering whether to extend time under subrule (2), the court should take account of such factors as are relevant in the circumstances of the particular case, including the following - (a) any particular interest of the plaintiff in challenging the decision, (b) possible prejudice to other persons caused by the passage of time, if the relief were to be granted, including but not limited to prejudice to parties to the proceedings, (c) the time at which the plaintiff became or, by exercising reasonable diligence, should have become aware of the decision, (d) any relevant public interest.
3. The Applicant adduced evidence through its representative, Mr Issa, relating to the circumstances of the contract for purchase of the Land together with the date upon which it became aware of the Modification. It also attested that it sought and obtained legal advice on the validity of the Modification prior to the settlement of the sale of the Land.
4. The Applicant submits that the discretion would be exercised in its favour in these proceedings, notwithstanding the length of time from the date on which the proceedings should have been commenced, as: 1. Peake Pearce, as the owner of the Land, has an obvious commercial interest in maintaining the Development Consent DA2016/0366, being a consent for a residential flat building containing 25 units with basement carparking, and which, but for MOD2018/0027, would continue in force; 2. When the Council granted MOD2018/0027 on 2 June 2018 and for the 12 months following, the Applicant was not the owner of the Land. The Applicant did not become the owner of the Land until 19 May 2023; 3. Although there has been some passage of time since the Modification was made, upon becoming owner of the Land, the Applicant has exercised reasonable diligence in bringing these proceedings. On 22 May 2023, it authorised its solicitor, Mr Michael Mantei to send to the Council a draft summons it proposed to file challenging the validity of MOD2018/0027 and requesting a response within 14 days as to whether the Council considered there was any reason why the Applicant was not entitled to the relief sought. By email dated 2 June 2023, the Council did not dispute the invalidity of the deferred commencement conditions, however, it did question the form of the relief sought. The Summons was filed on 7 June 2023. Despite its previous resistance to the form of orders sought, on 5 July 2023 the Council filed a submitting appearance; 4. The usual public interest in judicial review challenges of this kind is to provide certainty to the beneficiaries of development consents to be able to act on them without fear of challenge after a specified time. As the Applicant is the only person now capable of acting upon the consent and is also the challenger to the decision, that public interest consideration does not arise. The only other public interest lies in favour of strict enforcement of the legislative scheme. That favours the Applicant in this case; and 5. The Applicant has a clearly arguable case that the Modification of the consent by imposition of deferred commencement conditions and changes to the lapsing date after the consent had operated was beyond power.
5. It further noted, that whilst the Applicant became aware of the Modification and sought legal advice on the validity of the Modification prior to the date of settlement of the sale, absent awaiting the crystallisation of its interest in the Land which occurred upon settlement, the considerations required by r 59.10(3) would have operated against its interest as issues such as the prejudice to the previous landowner and its otherwise lack of a relevant interest in bringing the proceedings (notwithstanding the operation of the open standing provisions of the EP&A Act) such that it was reasonable for it to await settlement prior to commencing proceedings.
6. Once settlement occurred it acted expeditiously in bringing the proceedings. Further, upon settlement no other relevantly interested persons other than the Council would be affected by the proceedings and the Council does not actively oppose the extension of time as evidenced by its submitting appearance in the proceedings.
7. The Applicant also submitted that the relevant principles relating to the exercise of the discretion under r 59.10(3) of the UCPR were summarised by Pepper J in Wingecarribee Shire Council v Uri Turgeman trading as Uri T Design [2018] NSWLEC 146 at [33]-[34] in the following terms: 33 The principles relevant to an application for leave under r 59.10(2) of the UCPR have been stated in a number of recent decisions in this Court (Temelkovski v Wright [2016] NSWLEC 112; (2016) 218 LGERA 381; Yves Deyris v Elizabeth Jones [2017] NSWLEC 165; Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2017] NSWLEC 97; Fenwick v Woodside Properties Pty Ltd [2016] NSWLEC 104; (2016) 217 LGERA 453; Bankstown City Council v Ramahi [2015] NSWLEC 74 and Mosman Municipal Council v IPM Pty Ltd [2016] NSWLEC 26; (2016) 216 LGERA 252). 34 They may be summarised as follows: a) the applicant bears the onus of establishing why the Court should exercise its discretion to extend time in his or her favour; (b) the factors to be considered on any application for leave to extend time are not limited to those in r 59.10 of the UCPR, but include: (i) the length of the delay; (ii) the reasons for the delay (noting that the failure to seek legal advice is not a compelling explanation); and (iii) whether the applicant has a fairly arguable case; (c) the weight to be given to relevant factors will depend upon the circumstances of the particular case and will require the Court to carry out a balancing exercise; (d) the question of potential prejudice to a party caused by the delay is a significant consideration; (e) the rule of law is strengthened by provisions such as r 59.10 of the UCPR requiring the discipline of bringing proceedings within a reasonable time so that the proper business of government and the reasonable interests of third parties are not unjustly prejudiced; (f) in considering r 59.10 of the UCPR, it should be borne in mind that a claimant cannot fairly be criticised for failing to take action before he or she knew, or by exercising reasonable diligence should have known, that there was anything to take action about (Regional Express Holdings Ltd v Dubbo City Council (No 2) [2013] NSWLEC 113 at [7] and Moorebank Recyclers at [14]); (g) in considering delay in an application for extension of time the Court has frequently made a distinction as to the unreasonableness of the delay on the basis of intention. There is a difference between intentional or contumelious delay (Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 at [56], that is, delay caused by "deliberate inaction" (IPM at [82]) or "an intentional decision to delay" (Moorebank Recyclers at [52]), and delay which is merely the result of a "bona fide mistake or blunder" (Tomko at [56]), mere "oversight" (IPM at [82]), or caused by seeking to clarify rights and trying to solve the matter without litigation (Yves Deyris at [13]); and (h) there is danger in placing too much emphasis on the prospects of success. To do so invites the parties to treat the application as a dress rehearsal for the full appeal (Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 at [9]). It is not necessary, or appropriate, for the applicant to do more than demonstrate a fairly arguable case. It is not necessary nor appropriate to demonstrate in any detail the prospects of success (Tomko at [58]).
8. I accept the submissions made by the Applicant in the circumstances of this case relating to the considerations as required by r 59.10(3) of the UCPR and the general principles applicable to the exercise of the discretion pursuant to that rule. In the circumstances of this case, it is appropriate that time for the commencement of the proceedings be extended to the date on which the Summons was filed, namely 7 June 2023 and I will so order.

Validity of Modification

1. The Council imposed no Deferred Commencement Condition upon the Development Consent. However, the Council did impose a Deferred Commencement Condition upon the Modification. The question that arises for determination in these proceedings is whether the Council had the power to do so, and if not whether the grant of the Modification was invalid in that it exceeded the power conferred upon the Council.
2. The power to impose deferred commencement conditions, at the time of the grant of the Modification, was comprised in s 4.16(3) of the EP&A Act, which provided: (3) "Deferred commencement" consent A development consent may be granted subject to a condition that the consent is not to operate until the applicant satisfies the consent authority, in accordance with the regulations, as to any matter specified in the condition. Nothing in this Act prevents a person from doing such things as may be necessary to comply with the condition.
3. The Applicant submitted that the power in s 4.16(3) in terms applied only to the grant of a development consent. The relevant provisions of the EP&A Act as it relates to a modification of a development consent were as expressed in s 4.55(4) which provided: (4) The modification of a development consent in accordance with this section is taken not to be the granting of development consent under this Part, but a reference in this or any other Act to a development consent includes a reference to a development consent as so modified.
4. The Applicant submitted that on a proper construction of the power in s 4.16(3) it could not relate to a modification of a development consent as: 1. The text of s 4.16(3) of the EP&A Act refers to a "development consent" is intentionally limiting in that it is only possible to impose a deferred commencement condition upon the grant of a development consent, not upon the modification of a consent. This is further identified in the limitation of the term "development consent" as provided for in s 4.55(4); 2. Further textual support for this proposition is that the power to impose "deferred commencement" is found in s 4.16 as a specific exercise of power in granting consent to a development application, not as an exercise of the broader condition power under s 4.17. Thus, although it may be possible to impose conditions upon a modification of a consent by exercise of powers under s 4.17, the exercise of powers under s 4.16 is otherwise confined to determination of development applications; and 3. It also stands to reason as a practical matter that operative consents cannot be modified so as to become inoperative because given that modifications may occur while a consent is being carried out, it would be impossible to retrospectively make the consent inoperative. This would not only cause great inconvenience, but also result in any work lawfully having been carried out, becoming prima facie unlawful.
5. I accept the construction of the EP&A Act as contended for by the Applicant for the reasons outlined above. I am further reinforced in this conclusion by the fact that the term "development consent" is defined in s 1.4 of the EP&A Act as meaning: development consent means consent under Part 4 to carry out development and includes, unless expressly excluded, a complying development certificate.
6. The power to modify a development consent is provided for in Div 4.9 of the EP&A Act which is headed as "Post-consent provisions" and makes provision for actions where a development consent is already in force. The power to modify a development consent is not the grant of a development consent. Whilst a consent, once modified, operates as a development consent it is not either by text or context to be taken to be the grant of a development consent.
7. As a consequence, I am satisfied that in granting the Modification subject to the Deferred Commencement Condition the Council was acting beyond power.

Consequences of the Council acting beyond power

1. The Council by granting the Modification subject to the Deferred Commencement Condition modified the Development Consent in a manner that was not authorised at law. The consequence of such provision must, in the circumstances, result in the invalidity of the Modification.
2. By making the submitting appearance, the Council has not adduced any evidence or made any submissions that would suggest that such a finding should not be made in the exercise of my discretion or more generally as a matter of law.
3. On its face the Council determined that subject to the unlawfully imposed Deferred Commencement Condition, the Modification was appropriate. In circumstances where I have found that the Deferred Commencement Condition was beyond power, there are real questions that arise as to the manner in which the Council exercised the power to modify the Development Consent. Absent evidence to the contrary, the only conclusion available on the evidence before me is that the Modification, being founded on the exercise of a power not available to the Council, was beyond the power conferred upon the Council and therefore an invalid exercise of that power.
4. Whilst not all errors in the exercise of a power will render a decision invalid See Project Blue Sky In v Australian Broadcasting Authority (1998) 194 CLR 355 at [91], I am satisfied that the error identified in these proceedings is one that leads to the invalidity of the decision to grant the Modification.
5. It is apparent that the legislative intent is that a consent authority will only be empowered to modify a development consent in accordance with the power conferred by the legislation. It is a constraint going to jurisdiction.
6. The power to impose conditions upon a development consent is fundamental to the exercise of that legislative scheme and the power to impose any such conditions is a power conferred and constrained by the legislative scheme. Because of the nature of the concept of a deferred commencement, where a power of approval is granted subject to such a condition there is a prima facie assumption that the consent authority considered the satisfaction of the condition as fundamental to the grant of the consent.
7. Where a modification is approved subject to a deferred commencement condition the same prima facie assumption operates to render the whole of the modification invalid as the Court could not be satisfied that the relevant considerations that were required to be taken into account in determining the jurisdictional requirements that limit the power to modify a development consent such as those contained in s 4.55(1A)(b), have been met or that the terms of the modification would have been the same if the deferred commencement condition had not been imposed.
8. For those reasons, I am satisfied that the declaration sought by the Applicant should be made.

Consequences of declaratory relief

1. It is a well-established principle that a development consent including a development consent that has been modified is valid unless it is declared invalid by the Court: Coalcliff Community Association Inc v Minister for Urban Affairs and Planning (1999) 106 LGERA 243 at [83]. The beneficiary of a development consent including where modified is generally able to rely on it.
2. In this case, by making the declaration sought, the Development Consent remains unaffected and therefore continues in operation as if it had not been modified. I do not consider it necessary to make any consequential orders upon the making of such a declaration as there is no apparent risk on the evidence that notwithstanding the making of the declaration a person would propose to act upon the Development Consent as purportedly modified. In this case, the Applicant is the owner of the Land and the person that has the power to control the undertaking of development on its land. I am therefore not satisfied that there is any real or threatened breach of the EP&A Act that would require injunctive relief of that type.
3. The Council has an obligation to maintain a register of development consents: cl 240 of the Environmental Planning and Assessment Regulation 2020 (NSW). As the Modification has been declared invalid it is incumbent upon the Council to effect whatever administrative actions are required to reflect the consequences of this declaration including to amend its register of development consents to reflect the Development Consent in its original unmodified form being the relevant development consent that relates to the Land. In light of this obligation being provided for in the statutory regime I do not consider it necessary in the circumstances of this case to make orders requiring the Council to fulfil this statutory function as I have no evidence that would permit a finding that the Council is likely to act otherwise than in accordance with its statutory obligations.

Costs

1. In proceedings such as the present the usual order in relation to costs is that the successful party, in this case the Applicant, would be entitled to have its costs met by the Council. The Council reserved its position in relation to costs in the submitting appearance and has not made any submissions on the question of costs. Accordingly, it is appropriate that I reserve costs to enable the Council to consider these reasons and for the parties to consider if an agreement can be reached as to costs or whether submissions as to costs are required to enable me to consider an appropriate order for costs.

Conclusion and orders

1. For the foregoing reasons, I find that an order extending time for the commencement of the proceedings should be made and that the decision of the Council to modify the Development Consent was an invalid exercise of its power and that the declaration sought by the Applicant should be made.
2. The Court orders that: 1. Pursuant to r 59.10(2) of the Uniform Civil Procedure Rules 2005 (NSW) that time to commence proceedings specified in r 59.10(1) be extended to 7 June 2023.
3. The Court declares that: 1. The modification of the Development Consent DA2016/0366 granted by the Respondent on 2 June 2018 to alter the stormwater drainage design for an approved residential flat building containing 25 units with basement carparking at lots 289, 290 and 291 of DP 36537 at 18-20 Peake Parade and 2 Pearce Avenue Peakhurst (MOD2018/0027) was invalid and of no effect.
4. The Court directs that: 1. The costs of the proceedings are reserved; 2. The matter is listed for mention on the question of costs at 9.15am on 15 September 2023. Should the parties agree to an appropriate order for costs the parties have liberty to forward consent short minutes to my Associate to be made in Chambers; and 3. The exhibits are to be returned upon the final determination of the costs of the proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 August 2023