Peter Duffield and Associates Pty Limited v Canada Bay City Council

Land and Environment Court (NSW)|2002-08-01|Before: Bignold J, Kitto J, Mason J

The Applicant in the present case invokes the power conferred by subsection (1A) and this probably is the relevant power. However, on the only issue raised in the present case, even if the relevant power was that conferred by subsection (2) the same limitation on the modification power would necessarily be encountered: cf subsection (1A)(b) with subsection (2)(a).

Section 96(1A) relevantly provides as follows - A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if: (a) it is satisfied that the proposed modification is of minimal environmental impact, and (b) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted and before that consent as originally granted was modified (if at all) under this section, and (c) it has notified the application in accordance with:

(d) it has considered any submissions made concerning the proposed modification within any period prescribed by the regulations or provided by the development control plan, as the case may be. Subsections (1), (2) and (5) do not apply to such a modification.

Subsections (3) and (4) should also be noted. They provide as follows: (3) 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 79C (1) as are of relevance to the development the subject of the application. (4) Modification of a development consent in accordance with this section is not to be construed as the granting of development consent under this Part but a reference in this or any other Act to a development consent is a reference to the development consent so modified.

The statutory modification power conferred by either s 96(1A) or s 96(2) essentially re-enacts the repealed s 102 of the Act which section has been the subject of considerable judicial exposition, most authoritatively by the Court of Appeal in North Sydney Council v Michael Standley and Associates Pty Ltd (1998) 97LGERA 433 in the judgment of Mason P (with which Sheppard AJA concurred).

Having stated that in its context in s 102(1) the verb modify means to alter without radical transformation: see Sydney City Council v Ilenace Pty Ltd (1984) 3 NSWLR 414 at 421, Mason P, in the following passage at 439/440 discusses the scope of the statutory power of modification: When first enacted, s 102 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 (at 259). The original form of s 102, 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 . 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 (unreported, Land and Environment Court of New South Wales, Stein J, 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 subs (1) is passed. I agree with Bignold J in Houlton v Woollahra Municipal Council who (at 203) described the power conferred by s 102 as beneficial and facultative. The risk of abuse is circumscribed by a number of factors. Paragraphs (a), (b) and (c) of subs (1) provide narrow gateways through which those who invoke the power must first proceed. Subsection (1A) and subs (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, subs (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.

I should note that par (b) of s 102(1) requiring that there be no prejudice to original objectors, was not included in the re-enacted s 96(1A) and s 96(2).

His Honour's adoption of the decision of Stein J in Vacik Pty Ltd v Penrith City Council (unreported 24 February 1992) as to the meaning of substantially the same development needs to be further noted.

In Vacik, Stein J had said: Turning to the issue of s.102(1)(a). 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. D. THE COMPETING ARGUMENTS

The Council's principal argument is that the modification application if granted, would result in a change to a significant degree in the essential character of the use of the originally approved development. As originally approved, the overall development comprised 32 serviced apartments in Building A and 28 flats collectively in Buildings B and C, where "serviced apartments" and "flats" are different categories of development for the purposes of the Concord Planning Scheme Ordinance and for the purposes of the development consent. As proposed to be modified the overall development would comprise 4 serviced apartments situate on the ground floor of Building A and 56 flats collectively in Buildings A (except for the ground floor), B and C. The modified development would involve a change to the essential character of the approved building from one containing a balanced mix of residential flat and commercial premises (as originally approved) to one containing predominantly residential flats (as modified). The result is that the modified development is not substantially the same as the originally approved development.

The Applicant's competing argument is that the Court can be satisfied that the development as modified will be substantially the same as the development as originally approved for the following reasons -

(i) the development remains the same physical entity ie it comprises the same three buildings A, B and C to be erected on the same development site;

(ii) the conversion of uses of all but the ground floor of Building A from serviced apartments to flats retains the original conceptual mix of residential development, namely flats and serviced apartments (albeit in a changed ratio);

(iii) the essence of the development remains that of providing residential accommodation for occupation by residents; and

(iv) the reduction in the number of serviced apartments in the development from 32 to 4 is an alteration to the approved development without involving "a radical transformation" of it: see North Sydney Council v Michael Standley and Associates Pty Ltd (1998) 97LGERA 432 at 439 per Mason P adopting the meaning of "modify" that had been adopted by the earlier decision of the Court of Appeal in Sydney City Council v Ilenace Pty Ltd (1984) 3 NSWLR 414. E. ADJUDICATION

In the course of argument I drew attention to a matter appearing in the documentary evidence (Exhibit 4) which suggested that the proposed change of use of 28 of the 32 serviced apartments contained in Building A from serviced apartments to residential flats involved significant practical consequences quite apart from the difference involved in the separate categorisation of the proposed uses of Building A.

The matter is revealed in the Report submitted to the Council at its meeting held on 3 July 2001 assessing the development application (No 287/00) which the Council at that meeting considered by granting the development consent subject to conditions which included Condition 83 which imposed a section 94 cash contribution of $182,502.09.

According to the Report, the s 94 contribution assessed in accordance with the Council's s 94 Contributions Plan 2000 was computed as follows: Concord Section 94 Contributions Plan 2000 Should the application be approved the following contributions would be levied: 19 x 2 bdm units $148 522.24 9 x 1 bdm units $38 693.97 Serviced Apartments 2818.02m2 of gross floor area at $7 011.52 $248.81/100m2 TOTAL $194 227.73 And subtracting the amount payable for the existing dwelling at 7 Hilts Road TOTAL $11 725.44

TOTAL AMOUNT PAYABLE $182 502.29

It is to be noted that because of the differential contribution rates for residential flats and for serviced apartments fixed by the Council's Contributions Plan, the contributions for 28 flats amounted to $187, 216.21 whereas the contribution for 32 serviced apartments amounted to $7,011.52.

It follows that if the Council's s 94 Contributions Plan were now to be applied to the development as proposed to be modified at least an additional $180,000 cash contribution would be required over the amount of $182,502.29 that was imposed as a condition of the original development.

It appears that this significant matter had been entirely overlooked by the Council's planners in their report on the Applicant's modification application.

However, the matter having been raised in the course of the hearing, the Council submitted that as a matter of discretion the Court should refuse the modification application because of the significant consequences of the shortfall in the s 94 cash contribution imposed in the present case. This submission was countered by the Applicant's offer to accept a condition on the grant of the modification application requiring the payment of the difference in the s 94 cash contributions for the development as modified and the development as originally approved.

However, this latter submission overlooks the fact that a cash contribution under s 94 can only be required by way of a condition on the grant of a development consent (vide s 94(1)) which is not the case with a modification application which by force of s 96(4) is "not to be construed as the granting of development consent under this Part": cf Michael Standley at 439 per Mason P: 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, 9191)(a), 91AA(1), 93(1), 94(1), 96(4), 98(1), 99(1), 103(8), 104A, 109A(1)(b).

Accordingly, it is simply not open to the Council, or on appeal to this Court, to impose on the grant of a modification application a s 94 contribution condition, and the Applicant's willingness to submit to such a condition does not overcome the obvious lack of jurisdiction or power.

In my judgment, this very practical and significant consequence of granting the modification application provides a cogent reason, as a matter of discretion, to refuse the modification application, for it cannot be supposed that the Legislature in providing the facultative power to modify a development consent intended that that power would operate in a given case to deprive the Council, and hence its ratepayers, of the benefit of a very significant amount of cash contribution pursuant to the EP&A Act, s 94. It is to guard against such unintended results that the statutory modification power is discretionary, and the discretion in a given case may be exercised by refusing the modification application even if the "threshold" or "narrow gateway" tests are satisfied: see Michael Standley at 305 per Mason P.

Accordingly, in the exercise of discretion, I would refuse to grant the modification application. In so concluding, I am comforted by the fact that such a result will not preclude the Applicant from now seeking development consent for a change of the proposed use of the proposed Building A, since, as I have earlier noted, the relevant zoning of the development site permits, subject to development consent, development for residential flat buildings.

The foregoing conclusion means that it is not strictly necessary for me to adjudicate upon the question whether the development as modified would be substantially the same as the development as originally approved. However, for completeness, I should also express my considered view on this question.

I commence by stating an obvious corollary of my decision to refuse the modification application in the exercise of statutory discretion, namely that for the purpose of the application of EP&A Act, s 94, there is in the present case a revealed fundamental difference between development comprising residential flats and development comprising serviced apartments. That difference is in my judgment of such a magnitude as to justify the conclusion that the development as modified is not substantially the same as the development as originally approved, not only for the purposes of the application of s 94 but for the purposes of the EP&A Act generally, including s 96(1A)(b) and s 96(2)(a).

But apart from the foregoing reasoning, I am also of the opinion that the development as proposed to be modified is not substantially the same development as originally approved by virtue of the change of use proposed for Building A ie changing the use of that building from 32 serviced apartments to 4 serviced apartments and 28 residential flats.

This is because such a change, in my judgment, is one of substance or essence in terms of the character of the approved development. Whereas it may be accepted, as the Applicant has submitted, that the only difference in the present case is the proposal to convert use of 28 of the 32 serviced apartments in Building A from serviced apartments to residential flats and that difference has been held in other but similar contexts, to be confined to a difference in the requisite degree of permanence of residency normally associated with a "dwelling" or "domicile" to qualify as use as a residential flat: see North Sydney Municipal Council v Sydney Serviced Apartments Pty Ltd (1990) 21 NSWLR 532 and Vicbrow Pty Ltd v Willoughby City Council (1997) 96 LGERA 288, the intractable fact remains that in the present case, both the Concord Planning Scheme Ordinance and the development consent each categorises "serviced apartments" as "commercial premises" and "residential flats" as "residential flat buildings" where the two categories are clearly separate categories of development for planning purposes.

Separate categorisation or characterisation of developments or land uses has always been the linchpin of the statutory planning system. Although the proposition is a truism, an apt illustration of it for present purposes is provided by the Court of Appeal's decision in Warringah Shire Council v Jennings Group Limited (1992) 75 LGRA 402 where a majority of the Court held that the use of a building (built as, and obviously capable of being used as, a "dwelling-house") for the temporary purpose of an exhibition home was nonetheless development for the purposes of the defined category "commercial premises".

These separate categories of development for planning purposes are admittedly blurred by the fact that the development consent refers to the approved development in the following express terms: Demolition of existing buildings and construction of three residential flat buildings comprising a total of 32 serviced apartments and 28 units with two levels of parking

However, properly construed, the development consent is, in my opinion, for the erection of two residential flat buildings for use as residential flats and another building (also described as a residential flat building, but involving an obvious misnomer) for use as serviced apartments. The alternative and less preferred construction is that the approved development was for the erection of three residential flat buildings (as a matter of building type or category) with the use of two of these buildings as residential flats and the use of the other of such buildings as serviced apartments. On either construction, the development consent unequivocally granted consent for the use of Building A as 32 serviced apartments and not as flats.

In my judgment, the proposed change of the use of Building A means that the essential character of the approved development is qualitatively changed.

This conclusion is not averted by the fact that 4 of the approved 32 serviced apartments in Building A are to remain in the changed development. The magnitude of the change in the mix of serviced apartments and residential flats in the overall development is so substantial as to involve a qualitative change in the essential character of the approved development and not merely a quantitative change in the mix of the separate components of that development (ie residential flats and serviced apartments).

The change from an overall development comprising 32 serviced apartments and 28 residential flats (the original approval) to an overall development comprising 4 serviced apartments and 56 residential flats, involves both a qualitative and a quantitative change, in the approved development to such a significant degree, as to lead to the inevitable conclusion that the changed development is not substantially the same as the originally approved development.

Accordingly, comparing the modified development with the original development leads me to the conclusion that on both a qualitative and a quantitative reckoning or assessment, the modified development is not substantially the same as the original development. F. CONCLUSIONS AND ORDERS

For all the foregoing reasons, I have concluded that the appeal must be dismissed for two separate reasons - either because in the exercise of discretion the modification application should be refused, or because I am not satisfied that the modified development is substantially the same as the original development and therefore the "threshold" test for the exercise of the modification power, has not been satisfied.

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.

CITATION : Peter Duffield and Associates Pty Limited v Canada Bay City Council [2002] NSWLEC 168 APPLICANT: Peter Duffield and Associates Pty Limited PARTIES : RESPONDENT: Canada Bay City Council FILE NUMBER(S) : 10176 of 2002 CORAM: Bignold J KEY ISSUES: Development Consent :- modification application - change in use of approved development from serviced apartments to residential flats. LEGISLATION CITED: Environmental Planning and Assessment Act, s 96(1A) Fernance Family Holdings Pty Ltd v Newcastle City Council (2000) 110 LGERA 60; CASES CITED: Moto Ptojects (No 2) Pty Ltd v North Sydney Council (1999) 106 LGERA 298; North Sydney Council v Michael Standley and Associates Pty Ltd (1998) 97LGERA 432 DATES OF HEARING: 1 August 2002 DATE OF JUDGMENT: 09/25/2002

(1999) 106 LGERA 298

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