Randwick City Council v Belle Living Pty Ltd

ship v Li (2013) 249 CLR 332; [2013] HCA 18 Minister for Immigration v EFX17 (2021) 271 CLR 112; [2021] HCA 9 MZAPC v Minister for Immigration and Border Protection (2021) 273 CLR 506; [2021] HCA 17 One.Tel Ltd v Australian Communications Authority (2001) 110 FCR 125; [2001] FCA 54 O'Reilly v State Bank of Victoria Commissioners (1983) 153 CLR 1 Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc (1994) 181 CLR 404; [1994] HCA 54 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Putland v The Queen (2004) 218 CLR 174; [2004] HCA 8 Randwick City Council v Belle Living Pty Ltd [2023] NSWLEC 63 Rennie Golledge Pty Limited v Ballard (2012) 82 NSWLR 231; [2012] NSWCA 376 Riley v Commonwealth (1985) 159 CLR 1 at 12; [1985] HCA 82 Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5 Ross v Lane Cove Council (2014) 86 NSWLR 34; [2014] NSWCA 50 Singh v Lynch (2020) 103 NSWLR 568; [2020] NSWCA 152 Taylor v Owners - Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 Tweed Business and Residents Focus Group Inc v Northern Region Joint Regional Planning Panel [2012] NSWLEC 166 Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 Wollondilly Shire Council v Kennedy [2023] NSWLEC 53 Texts Cited: D Pearce, Statutory Interpretation in Australia (9th ed, 2019, LexisNexis Butterworths) P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Thomson Reuters (Professional) Australia Limited) New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 12 August 2008 New South Wales Legislative Council, Parliamentary Debates (Hansard), 18 October 2017 Category: Principal judgment Parties: Randwick City Council (Applicant) Belle Living Pty Ltd (First Respondent) Abdul Hammoud (Second Respondent) Representation: Counsel: J Lazarus SC with M Harker (Applicant) M Wright SC with M Yu (First Respondent) Solicitors: Lindsay Taylor Lawyers (Applicant) Boskovitz Lawyers (First Respondent) File Number(s): 2023/185778 Publication restriction: Nil

JUDGMENT Introduction Outcome Background Issues for determination Council's challenge to the CDC Belle Living's challenge Relevant legislation Challenge to the validity of the CDC: Construction of the expression "draft heritage item" in cl 1.5 of the Codes SEPP (Ground 1 of the summons; Ground 1 of the cross-summons) Conclusion in relation to the construction of "draft heritage item" in cl 1.5 of the Codes SEPP Challenge to the validity of the CDC: the question of discretion First respondent's cross-summons: alleged failure to join necessary parties Alleged invalidity of cl 1.5 of the Codes SEPP to the extent that it purports to define "draft heritage item" (Ground 1 of the cross-summons) Unreasonableness and issue estoppel (Ground 2 of the cross-summons) Unreasonableness on the part of Council in asserting that the 3 Berwick Street property is a "draft heritage item" Unreasonableness and issue estoppel: the IHO judgment of Dickson C dated 7 June 2023 Non-compliance with the gateway determination (Ground 3 of the cross-summons) Condition 1 of the gateway determination Condition 2(a) of the gateway determination Whether failure to comply with conditions of the gateway determination prevents the instrument from being made The 3 Berwick Street property and the dwelling house on it are not capable of being a "draft heritage item" (Ground 4 of the cross-summons) Conclusion Orders

Introduction

1. By summons filed on 9 June 2023 (the summons), the applicant/first cross-respondent Randwick City Council (Council) sought interlocutory and final relief. The interlocutory hearing was before me on 9 and 13 June 2023, and I delivered judgment on 13 June 2023. [1]
2. The proceedings concern a dwelling located at 3 Berwick Street, Coogee NSW 2034 (the 3 Berwick Street property). The first respondent/cross-applicant Belle Living Pty Ltd (Belle Living) is the owner of the 3 Berwick Street property. On 7 June 2023, the second respondent, Abdul Hammoud of Certicorp Pty Ltd, issued complying development certificate CCDC-3BER/2022 (the CDC) approving the demolition of all structures at the location "Lot B DP 313214, 3 BERWICK STREET, COOGEE NSW 2034", subject to conditions. The second respondent has filed a submitting appearance.
3. The final relief sought by Council is in the following terms: Final relief 5. A declaration that Complying Development Certificate CCDC-3BER/2022 is invalid. 6. A declaration that, in breach of s 9.37 of the Environmental Planning and Assessment Act 1979, the First Respondent failed to comply with the development control order issued to it by Randwick City Council on 9 June 2023 requiring the cessation of all demolition works at 3 Berwick Street, Coogee. 7. A declaration that, in breach of s 4.2 of the Environmental Planning and Assessment Act 1979, the First Respondent has carried out unauthorised works being the partial demolition of the dwelling at 3 Berwick Street, Coogee. 8. An order that the First Respondent is restrained from, a. by itself, or by its employees, contractors, servants, or other agents, b. carrying out demolition work to the dwelling house and dental surgery located at 3 Berwick Street, Randwick, being Lot B DP 313214, unless and until such time as it obtains the grant of a development consent permitting that work. …
4. On 16 June 2023, the first respondent filed a cross-summons seeking relief in the following terms (the cross-summons): 1. A declaration that the complying development certificate CCDC-3BER/2022 issued by the Second Respondent on 7 June 2023 is valid. 2. A declaration that the property at 3 Berwick Street Coogee NSW 2034 (being Lot B in DP 313214) (the Property) is not a heritage item in the Randwick Local Environment Plan 2012 (RLEP 2012). 3. A declaration that the Property is not a heritage item as defined in cl.1.5 of the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (Codes SEPP). 4. A declaration that cl.1.5 of the Codes SEPP is invalid to the extent that it purports to define the term 'draft heritage item'. 5. In the alternative to Prayer 4, a declaration that the Property is not a "draft heritage item" as that term is defined in cl.1.5 of the Codes SEPP. 6. A declaration that the Applicant/First Cross Respondent (the Council) has failed to comply with the conditions of the Gateway Determination made on 2 March 2023 (the Gateway Determination). 7. An injunction restraining the Council by itself or by its employees, contractors, servants or other agents, from further progressing the Draft Randwick Planning Proposal entitled 'Planning Proposal Local Heritage Item - Nos 1 and 3 Berwick Street, Coogee (April 2023)' (the Draft Planning Proposal) created for the purpose of amending the RLEP 2012 to list the Property and 1 Berwick Street, Coogee as local heritage items, until such time that all of the conditions in the Gateway Determination are met. …

Outcome

1. I have determined to make the orders and declarations sought by Council in its summons filed on 9 June 2023. Accordingly, I have also determined to dismiss Belle Living's cross-summons. My orders are set out below at [168]. In summary, my reasons for so deciding are as follows: 1. Notwithstanding that the words "a building, work, archaeological site, tree, place or aboriginal object identified as a heritage item" in the definition of "draft heritage item" in cl 1.5 of the Codes SEPP are encompassed within the definition of "heritage item" in cl 1.5 of the Codes SEPP, having regard to cll 1.17A and 1.18 of the Codes SEPP (which stipulate respectively requirements for complying development for all environmental planning instruments, and general requirements for complying development under the SEPP, and which refer respectively to "a heritage item" and "a draft heritage item"), a "draft heritage item" must be something other than a heritage item identified in an environmental planning instrument. The reference in the definition of "draft heritage item" to the identification of the item in a local environmental plan that has been the subject of community consultation can only be construed purposively, and in context, to include a planning proposal that has been the subject of community consultation, but not made. This construction is one which affords interim protection to an item whilst its status as a "heritage item" has not been fully determined. It is necessary to construe the Codes SEPP as a whole, including by having regard to the numerous separate references throughout the SEPP to "heritage item" and "draft heritage item". Consequently, the 3 Berwick Street property is a "draft heritage item" within the meaning of cl.1.5 of the Codes SEPP. 2. The 3 Berwick Street property is the subject of a planning proposal which has been the subject of a gateway determination and public exhibition (referred to herein as the second planning proposal), and is a "draft heritage item" within the meaning of cl 1.5 of the Codes SEPP. Accordingly, the CDC purports to authorise the carrying out of development, namely demolition, for which the CDC was not authorised to be issued. In the exercise of my discretion under s 4.31 of the EPA Act, I will make a declaration that the CDC is invalid. 3. There was no unreasonableness on the part of Council in "asserting" that the 3 Berwick Street property is a "draft heritage item" and in "persisting" with amendments to the RLEP to include the 3 Berwick Street property as a local heritage item. Nor would Council be prevented from doing so by reason of an issue estoppel arising from findings of fact made by a commissioner of the Court in Class 1 proceedings. 4. Any failures on the part of Council to observe the requirements of condition 1 of the gateway determination in relation to the content of the second planning proposal, as well as the minimum public exhibition period prescribed in condition 2(a) of the gateway determination are not such as to render the second planning proposal invalid.

Background

1. The parties filed a Statement of Agreed Facts (SOAF) from which the background set out below in part derives, as well as from a consideration of documents in a two volume agreed bundle of documents.
2. The 3 Berwick Street property is currently occupied by a single-storey inter-war bungalow constructed in or about 1923. The bungalow is located on the southern side of Berwick Street and sits above street level, following the topography of the site that slopes down to the north. The bungalow has sandstone foundations, with a garage opening to the subfloor area. The bungalow is divided into two sections. There is a two-bedroom dwelling at the rear of the property accessed from a separate entrance at the rear. That dwelling is presently tenanted. At the front of the bungalow is a separate section now vacant and formerly used as a dental practice. It is accessed via stairs in the front yard. The two sections share the same roof, the same external walls, and the same plumbing and other services, but are separated by an internal partition wall.
3. In January 2020, Council invited the Randwick community to nominate sites and places of potential heritage value as part of its comprehensive planning proposal to amend the RLEP (the first planning proposal).
4. Council was conducting a review of heritage items and heritage conservation areas (HCAs) in the residential parts of the area of Council. The heritage review was to be conducted by "an independent, professional heritage consultant in line with heritage significance criteria established by Heritage NSW". The consultation was open from 29 January 2020 to 26 February 2020. Council received approximately 281 nominations in response to the invitation. Council commissioned Extent Heritage Advisors (Extent) to prepare a comprehensive heritage review and assessment of the significance of those potential heritage items nominated by the local community for inclusion in Schedule 5 to the RLEP.
5. As at about June 2020, the 3 Berwick Street property and the neighbouring property at 5 Berwick Street, Coogee (the 5 Berwick Street property) were owned by Berwick Holdings Pty Ltd.
6. On about 30 June 2020, Georgia McKenzie, architect, lodged development application DA/303/2020 in relation to the 3 Berwick Street property and the 5 Berwick Street property for "Demolition of two existing buildings and structures; excavation below ground level for one level of basement car parking; construction of a three storey residential flat building, comprising 6 apartments, 10 car parking spaces and 717.9sqm of GFA; site landscaping; vehicular access via Berwick Street and augmentation of services infrastructure and utilities" (the 2020 development application).

Council's challenge to the CDC

1. The sole ground in Council's summons is that: The CDC purports to approve development, being demolition, which is not complying development. (Ground 1 of the summons).
2. The particulars to that ground are that: a. A certifier may issue a complying development certificate only in relation to development identified as 'complying development' in an environmental planning certificate: EPA Act, ss 4.2(5), 4.25. b. Pursuant to cl 1.18 of the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008, development is not complying development if it is proposed to be carried out on land that comprises, or on which there is, a draft heritage item. c. The dwelling at 3 Berwick Street is the subject of a planning proposal to be listed as a heritage item under the Randwick Local Environmental Plan 2012. d. The planning proposal has been the subject of: i. a Gateway Determination under s 3.34 of the EPA Act, and ii. public exhibition. e. In the premises: i. the dwelling is a draft heritage item; and ii. its demolition is therefore not complying development. f. In the premises, and pursuant to s 4.31 of the Environmental Planning and Assessment Act 1979, the complying development certificate is invalid.
3. Council identified the "fundamental issue" in the proceedings as whether the 3 Berwick Street property is a "draft heritage item". If the Court finds that the 3 Berwick Street property is a "draft heritage item", Council contended that it follows that: 1. the development pursuant to the CDC is not complying development as it is proposed to be carried out on land that comprises or on which there is a draft heritage item, and the CDC ought be declared invalid pursuant to s 4.31 of the EPA Act; and 2. demolition works cannot be carried out at the 3 Berwick Street property as exempt development pursuant to cl 2.25 of the Codes SEPP.

Belle Living's challenge

1. In its cross-summons, Belle Living raised the following four grounds: 1. Clause 1.5 of the Codes SEPP is invalid to the extent that it purports to define the term "draft heritage item" (Ground 1 of the cross-summons). 2. Council has acted unreasonably in proceedings to amend the RLEP to list the 3 Berwick Street property as a local heritage item (Ground 2 of the cross-summons). 3. Council cannot lawfully progress the second planning proposal prepared for the purpose of amending the RLEP to list the 3 Berwick Street and 1 Berwick Street properties as local heritage items due to Council's failure to comply with conditions of the gateway determination made on 2 March 2023 pursuant to s 3.34 of the EPA Act (Ground 3 of the cross-summons). 4. Further, and in the alternative, neither the 3 Berwick Street property nor the dwelling house erected on it is capable of falling within the definition of "draft heritage item" in cl 1.5 of the Codes SEPP (Ground 4 of the cross-summons).

Relevant legislation

1. The applicable legislative provisions at all relevant times are as follows.
2. In relation to gateway determinations, s 3.34 of the EPA Act relevantly provides: 3.34 Gateway determination (1) After preparing a planning proposal, the planning proposal authority may forward it to the Minister. (2) After a review of the planning proposal, the Minister is to determine the following - (a) whether the matter should proceed (with or without variation), (b) whether the matter should be resubmitted for any reason (including for further studies or other information, or for the revision of the planning proposal), (c) the minimum period of public exhibition of the planning proposal (or a determination that no such public exhibition is required because of the minor nature of the proposal), Note - Under Schedule 1, the mandatory period of public exhibition is 28 days if a determination is not made under paragraph (c). (d) any consultation required with State or Commonwealth public authorities that will or may be adversely affected by the proposed instrument, (e) whether a public hearing is to be held into the matter by the Independent Planning Commission or other specified person or body, (f) the times within which the various stages of the procedure for the making of the proposed instrument are to be completed, (g) if the planning proposal authority is a council - whether the council is authorised to make the proposed instrument and any conditions the council is required to comply with before the instrument is made. (3) A determination of the community consultation requirements includes a determination under section 3.22 (or other provision of this Act) that the matter does not require community consultation. … (8) A failure to comply with a requirement of a determination under this section in relation to a proposed instrument does not prevent the instrument from being made or invalidate the instrument once it is made. However, if community consultation is required under Schedule 1, the instrument is not to be made unless the community has been given an opportunity to make submissions and the submissions have been considered under that Schedule.
3. In relation to the making of local environmental plans, s 3.36 of the EPA Act relevantly provides: 3.36 Making of local environmental plan by local plan-making authority (1) The Planning Secretary is to make arrangements for the drafting of any required local environmental plan to give effect to the final proposals of the planning proposal authority. The Planning Secretary is to consult the planning proposal authority, in accordance with the regulations, on the terms of any such draft instrument. (2) The local plan-making authority may, following completion of community consultation - (a) make a local environmental plan (with or without variation of the proposals submitted by the planning proposal authority) in the terms the local plan-making authority considers appropriate, or (b) decide not to make the proposed local environmental plan. …

Challenge to the validity of the CDC: Construction of the expression "draft heritage item" in cl 1.5 of the Codes SEPP (Ground 1 of the summons; Ground 1 of the cross-summons)

1. The parties agreed (uncontroversially) that all local environmental plans are environmental planning instruments, [4] and that most are subject to community consultation before they are made. It was agreed that the literal meaning of the words "a building, work, archaeological site, tree, place or aboriginal object identified as a heritage item" in the definition of "draft heritage item" in cl 1.5 of the Codes SEPP is wholly encompassed within the definition of "heritage item" in cl 1.5.
2. In Ground 1 of its summons, Council contended that the CDC issued in relation to the 3 Berwick Street property is invalid on the basis that the property is a "draft heritage item" as defined in cl 1.5 of the Codes SEPP. The construction of the expression "draft heritage item" in cl 1.5 of also arises in Ground 1 of Belle Living's cross-summons in which Belle Living contends that cl 1.5 is invalid to the extent that it purports to define a "draft heritage item". I proceed to consider the issue raised in Council's summons and in Ground 1 of Belle Living's cross-summons in relation to the construction of the expression "draft heritage item" in cl 1.5 of the Codes SEPP.
3. Council submitted that in the context of cl 1.17A of the Codes SEPP which makes reference to "heritage item", "a draft heritage item must be something other than a heritage item in an environmental planning instrument". Otherwise, "there would be no need to include the additional specification in cl 1.18 of the Codes SEPP" in relation to "draft heritage item". Council said that applying the literal meaning of the definition of "draft heritage item" would render redundant the "clear drafting decision made in cll 1.17A and 1.18". It would also make redundant the numerous separate references (submitted by Council to be in the number of 60) throughout the Codes SEPP to "draft heritage item".
4. Council submitted that the "relevant definition" must be interpreted in the context in which it appears in the SEPP. [5] In that exercise, the ordinary meaning of the words can also influence their construction. [6] The word that distinguishes a heritage item from a draft heritage item, namely "draft", cannot be ignored. Council submitted that "draft" typically means a preliminary or proposed version of something. The only preliminary identification of a heritage item that is subject to community consultation is its identification in a planning proposal. Once an amendment to the local environmental plan (LEP) is effected, it ceases to be a "draft".

Conclusion in relation to the construction of "draft heritage item" in cl 1.5 of the Codes SEPP

1. In relation to the construction of the expression "draft heritage item" in cl 1.5 of the Codes SEPP, I find as follows: 1. Notwithstanding that the words "a building work, archaeological site, tree, place or aboriginal object identified as a heritage item" are encompassed within the definition of "draft heritage item" in cl 1.5 of the Codes SEPP, to give the two expressions - "heritage item" and "draft heritage item" - the same meaning would be to render redundant the separate definition of "draft heritage item" in the same clause of the SEPP. Having regard to cl 1.17A of the Codes SEPP, a draft heritage item must be something other than a heritage item identified in an environmental planning instrument. There would otherwise be no need to include the additional specifications in cl 1.18(1)(c3) of the Codes SEPP in relation to the general requirements for complying development under the SEPP "on land that comprises, or on which there is, a draft heritage item". The approach contended for by Belle Living would also render otiose the numerous separate references throughout the Codes SEPP to "heritage item" and "draft heritage item". [29] It is necessary to construe the Codes SEPP as a whole. 2. The construction advanced by Council is one which gives work to do to the adjective "draft" in the definition of "draft heritage item", and affords interim protection to an item whilst its status as a heritage item has not been fully determined. The adjective "draft" plainly connotes something which is proposed or preliminary in nature, but not yet finalised. 3. The reference in the definition of "draft heritage item" to the identification of the item in "a local environmental plan that has been subject to community consultation" can only be construed purposively, and in context, to include a planning proposal that has been the subject of community consultation, but not made. 4. It is true, as submitted by Belle Living, that the definition of "draft heritage item" in cl 1.5 of the Codes SEPP is required to be read conformably with post-2017 amendments to the EPA Act and the LEP making process. The second reading speeches for both the 2008 Amendment Act and 2017 Amendment Act confirm that in introducing the relevant amendments, Parliament intended to prioritise community consultation in the LEP making process. However, that intention provides no particular assistance in resolving the construction issue here. The construction advanced by Council is one which gives effect to the purpose of cl 1.18 to ensure that to be complying development for the purposes of the SEPP, the development must "not be carried out on land that comprises, or on which there is, a draft heritage item". 5. The construction of the definition of "draft heritage item" in cl 1.5 contended for by Council by reading "local environmental plan" to include "planning proposal" is not one which is unduly strained. That is because, construed purposively, in context and having regard to the legislative history set out at [90] to [93] above, the reference in the definition of "draft heritage item" to a local environmental plan must be taken to include a planning proposal. 6. It is true that the expressio unius principle has been frequently applied as an aid to construction. [30] However, it has also been said that it is one upon which it is "dangerous to rely", [31] and which is to be applied with "extreme caution". [32] In applying the principle, it is relevant to consider that extensive amendment to the Act in question (the EPA Act) may increase the risk of provisions being inconsistent unintentionally. [33] Ultimately, I conclude that the expression unius principle has no present application in circumstances in which the expressions "heritage item" and "draft heritage item" are separately defined. Even if the principle were to apply, the two definitions in cl 1.5 are in different terms, evincing an intention that they be construed differently.

Challenge to the validity of the CDC: the question of discretion

1. I have determined that the 3 Berwick Street property is the subject of a planning proposal that has been the subject of a gateway determination and public exhibition (my findings in relation to which are at [158] and [163] below), and is a "draft heritage item" within the meaning of cl 1.5 of the Codes SEPP. The CDC purports to authorise the carrying out of development, namely demolition, for which the CDC was not authorised to be issued.
2. It arises then to consider the Court's discretion in s 4.31 of the EPA Act to declare that the CDC is invalid. Section 4.31 provides that: Without limiting the powers of the Court under section 9.46(1), the Court may by order under that section declare that a complying development certificate is invalid…
3. In Wollondilly Shire Council v Kennedy, [34] Pain J held that the Court's power under s 4.31 to declare a CDC invalid is "relatively unconstrained". Her Honour said at [88]-[90] (references omitted): 88. The determination which the Court may make under s 4.31 is analogous in some respects to deciding a jurisdictional fact although it is not expressed as consideration of a matter relevant to the exercise of jurisdiction by a certifier. While the Court is not deciding a matter of fact essential to the exercise of statutory jurisdiction, it is determining for itself whether the development which a CDC purports to authorise is development for which a CDC was authorised to be issued. This includes consideration and determination of the matters in s 4.28(3) which is headed Evaluation. 89. When determining matters of fact which go to the exercise of jurisdiction, the Court is not confined to the material which was before the original decision maker… Such an approach to evidence has resonance in the different context of s 4.31 as I discuss next. 90. Given the width of the statutory language in s 4.31 which refers to the present tense 'is' it appears open to the Court to receive material relevant to the question of authorisation up to the time the Court makes a decision. The Court is not necessarily limited to what was before a certifier given the breadth of its evaluative task under s 4.31. Material produced and events which occurred after a CDC was issued may be considered to undertake such an evaluation in my view…
4. In Warringah Shire Council v Sedevcic, [35] Kirby P referred to the public interest in ensuring compliance with the law and the maintenance of the integrity of the planning system. That includes ensuring that CDCs are authorised to be issued and are issued within power.

First respondent's cross-summons: alleged failure to join necessary parties

1. As at the hearing before me on 4 and 5 July 2023, Council had not yet decided, following completion of community consultation, whether or not to make an amendment to Schedule 5 to the RLEP to list the 3 Berwick Street property as a heritage item. In Ground 2 of the cross-summons, Belle Living contends that Council acted unreasonably in "proceeding" to amend the RLEP to list the 3 Berwick Street property as a local heritage item. Grounds 3 and 4 of the cross-summons allege that Council had not complied with the conditions of the gateway determination in relation to the second planning proposal such that Council ought not be permitted to continue progressing the second planning proposal until it complies with those conditions.
2. In response to the cross-summons, Council submitted that the relief sought in prayers 4, 6 and 7 of the cross-summons ought not be granted in circumstances where neither the Minister nor the owner of the neighbouring 1 Berwick Street property had been joined as a party.
3. Rule 59.3 of the Uniform Civil Procedure Rules 2005 (UCPR) provides in relation to commencement and parties as follows: 59.3 Commencement and parties (1) Judicial review proceedings are to be commenced by summons. (2) If a decision to be reviewed arose in the course of a dispute between parties, each party who is interested in maintaining the decision must be joined as a defendant. (3) If the proceedings seek to prohibit, injunct or mandate a step that has not been taken, each body or person who may be directly affected by the relief sought must be joined as a defendant. (4) The body or person responsible for a decision to be reviewed must be joined as a defendant, but not as the first defendant unless there is no other defendant.
4. Belle Living submitted that neither the Minister nor the owner of the 1 Berwick Street property is a necessary party within the meaning of r 59.3 for the following reasons: 1. The decision to be reviewed is that of the second respondent, Mr Abdul Hammoud, to issue the CDC on 7 June 2023. The second respondent had been joined as a party for the purpose of r 59.3(4) and entered a submitting appearance. The only other party interested in maintaining the decision made by the second respondent is Belle Living, already a party for the purpose of r 59.3(2). 2. There is no decision of the Minister being reviewed so as to make the Minister a necessary party for the purpose of r 59.3(4). The relief specified in prayer 4 of the cross-summons (namely a declaration that cl 1.5 of the Codes SEPP is invalid to the extent that it purports to define the term "draft heritage item") and the issue raised in Ground 1 of the cross-summons both involve a question of statutory construction arising from the ground raised in Council's summons challenging the validity of the CDC and its claim that the 3 Berwick Street property falls within the definition of "draft heritage item" in cl 1.5 of the Codes SEPP. 3. The relief sought in prayers 6 and 7 of the summons and the issues raised in Grounds 3 and 4 of the cross-summons only arise from the ground raised in Council's summons challenging the validity of the CDC and Council's claim that the 3 Berwick Street property is a "draft heritage item". Neither the determination of those issues nor the grant of the relief sought in prayers 6 or 7 of the cross-summons would have a direct impact on the owner of the 1 Berwick Street property so as to make them a necessary party for the purpose of r 59.3(3). 4. To join the owner of the 1 Berwick Street property and the Minister would unnecessarily lengthen and delay the proceedings in circumstances where there is an active contradictor to the case advanced by Belle Living in the form of Council. [36] That would be contrary to ss 56(1) and 59 of the Civil Procedure Act 2005 (NSW) (CPA). 5. To the extent that the proceedings might raise issues of broader interest to the Minister and the owner of the 1 Berwick Street property, Belle Living had made both aware of the existence of the issues raised in the proceedings.

Alleged invalidity of cl 1.5 of the Codes SEPP to the extent that it purports to define "draft heritage item" (Ground 1 of the cross-summons)

1. I have dealt with Ground 1 of Belle Living's cross-summons at [76] to [101] above, together with my consideration of Ground 1 of Council's summons which also raises the definition of "draft heritage item" in s 1.5 of the Codes SEPP. I refer to and repeat my reasons and findings there.

Unreasonableness and issue estoppel (Ground 2 of the cross-summons)

Unreasonableness on the part of Council in asserting that the 3 Berwick Street property is a "draft heritage item"

1. In relation to Ground 2 of its cross-summons, Belle Living submitted that there is a presumption that statutory powers, including the power to make delegated legislation, will be exercised reasonably, referring to the decision of Nettle and Gordon JJ in Minister for Immigration and Border Protection v SZVFW (SZVFW). [38] Unreasonableness, Belle living submitted, referring to the decision of Hayne, Kiefel and Bell JJ in Minister for Immigration and citizenship v Li (Li), [39] is a conclusion which may apply to a decision or a course of conduct by a public authority that lacks an evident or intelligible justification. A finding of legal unreasonableness does not require a finding that a decision or course of conduct is irrational. [40] In SZVFW at [59], Gageler J described the concept of reasonableness as being "inherently sensitive to context" and incapable of being "reduced to a formulary".
2. Belle Living submitted that in "asserting" that the 3 Berwick Street property is a "draft heritage item" and in "persisting" with amendments to the RLEP to list the 3 Berwick Street property as a local heritage item, Council acted unreasonably for the following reasons: 1. Council had considered the 3 Berwick Street property for local heritage listing, along with the 5 Berwick Street property, as part of a previous comprehensive proposal to amend the RLEP in 2020-2021. 2. In October 2020, both the 3 Berwick Street property and the 5 Berwick Street property were referred by Council to Extent for assessment of their heritage significance. On 2 December 2020, Extent provided Council with the Extent report recommending that the 3 Berwick Street property does not meet, and that the 5 Berwick Street property does meet, the threshold for local listing as a heritage item in Schedule 5 to the RLEP. On 6 April 2021, the RLPP adopted the recommendations in the Extent report. 3. On 25 May 2021, Council considered the Extent report and Extent heritage study and recommended that 57 properties be listed as local heritage items. The 3 Berwick Street property was not one of the 57 properties recommended for listing. Council considered the advice provided by the RLPP, and accepted the advice in the Extent report and the Extent heritage study that the 3 Berwick Street property does not meet the threshold for listing as an item of local heritage. 4. Between 25 May 2021 and 27 September 2022, there was a "16-month period of inaction". On 27 September 2022, Council moved an urgent motion to investigate the 3 Berwick Street property for heritage significance and, potentially, to list the property as a heritage item. Council issued a request for quotation for a heritage assessment of the 3 Berwick Street property on 12 October 2022, and commissioned the Danis report which was dated 13 October 2022. On 14 October 2022, Council received notice from the second respondent pursuant to s 134 of the EPA Regulation of the application for the CDC. On the same day, 14 October 2022, the IHO was made by Council pursuant to s 25 of the Heritage Act in relation to the 3 Berwick Street property.

Unreasonableness and issue estoppel: the IHO judgment of Dickson C dated 7 June 2023

1. Further, Belle Living submitted that regardless of whether Council's conduct at an earlier point in time gave rise to unreasonableness, it would now be unreasonable for Council to list the 3 Berwick Street property as a local heritage item following the delivery of the IHO judgment on 7 June 2023. That was because issue estoppel would operate to preclude raising in subsequent proceedings an ultimate issue of fact or law necessarily resolved as a step in reaching the determination made in the IHO judgment. [53] Belle Living submitted that Council was precluded from "raising issues relating to whether the [p]roperty is or is likely to be a heritage item in subsequent proceedings".
2. In the IHO judgment, after considering expert evidence adduced and submissions made by both parties, Dickson C found at [47] to [55] that the 3 Berwick Street property did "not meet the threshold for local heritage significance", and that there would be "no further inquiry or investigation to be carried out" after which the 3 Berwick Street property might likely be found to be of heritage significance.
3. Council submitted that the decision to revoke an IHO in a Class 1 merit appeal, much like the determination of a development application, involves the exercise of administrative, not judicial power. The legal quality of the planning proposal and whether the 3 Berwick Street property constitutes a draft heritage item could not have been "finally and conclusively established" for the purpose of establishing an issue estoppel as a commissioner hearing a merit appeal is not exercising judicial power to determine particular rights and obligations. In Benmill Pty Ltd v North Sydney Council (No 2) (Benmill), [54] Robson J said at [64]: 64. Adopting the above analysis, I consider that the finding of the Commissioner, which was made incidentally as a step in the process of exercising a discretionary administrative function (being the determination of a merit appeal), cannot be construed as having exercised judicial power to finally adjudicate a dispute concerning the existing rights and obligations of the parties in relation to the 2007 Consent and the 2016 Consent. And at [65], Robson J said: 65. Although the Commissioner found that the use permitted by the 2007 Consent and the 2016 Consent was for a "building identification sign", the "legal quality of that fact" cannot be said to have been "finally and conclusively established" for the purposes of establishing an issue estoppel, as the Commissioner hearing a merit appeal was not exercising the requisite judicial power to determine those particular rights and obligations: Blair v Curran at 532 (citing Lord Shaw in Hoystead v Commissioner of Taxation (1925) 37 CLR 290; [1926] AC 155). As a consequence, subject to Benmill's submissions in relation to abuse of process discussed below, the parties therefore cannot be precluded from relitigating the dispute concerning their existing rights and obligations.

Non-compliance with the gateway determination (Ground 3 of the cross-summons)

1. Ground 3 of the cross-summons raises compliance with a number of conditions in the gateway determination. The relevant conditions are set out above at [39] to [40]. Belle Living contended that by failing to comply with those conditions of the gateway determination, Council could not lawfully progress the second planning proposal.

Condition 1 of the gateway determination

1. Belle Living contended that Council failed to comply with condition 1 of the gateway determination in relation to the second planning proposal as follows: 1. Contrary to condition 1(c), the second planning proposal did not include an assessment of heritage significance setting out the listing criteria in the NSW Heritage guidelines (see above at [43]), and explaining how the 3 Berwick Street property satisfied the relevant criteria. Rather, the author of the document "simply ticked boxes against the inclusion criteria", and "the mere inclusion of the document [did] not demonstrate any active intellectual engagement with the relevant heritage assessment criteria". [57] This "formulaic response did nothing to address the substance of condition 1(c) of the gateway determination". 2. Contrary to condition 1(d), there was no update to the heritage inventory sheets for the 3 Berwick Street property after they were prepared as part of the Danis report dated 13 October 2022 (see above at [28]). The inclusion-exclusion guideline checklist was silent as to whether the 3 Berwick Street property had any research potential for the purposes of satisfying criterion (e) of the NSW Heritage guidelines. 3. Contrary to condition 1(e), notwithstanding that Belle Living made a submission to Council on 23 April 2023 identifying the shortcomings in the comparative analysis attached to the second planning proposal, there was no update to the second planning proposal before it was publicly exhibited to include a comparative analysis justifying any finding that the 3 Berwick Street property satisfied criteria (f) rarity and (g) representativeness. The only heritage assessment in the second planning proposal was the Danis report. The comparative analysis in the Danis report only compared the 3 Berwick Street property with a selective range of buildings within the suburb of Coogee, rather than within the wider Randwick Local Government Area [58] which, Belle Living submitted "had the effect of unfairly limiting the sample and artificially inflating the alleged rarity" of the 3 Berwick Street property. 4. Contrary to condition 1(g), there was no update of the discussion in the second planning proposal in relation to the Codes SEPP to clarify that certain exempt development provisions in the Codes SEPP apply to heritage items. Belle Living submitted that members of the community who make submissions on proposals such as the second planning proposal "do not necessarily have legal or planning expertise". Merely to state that "the heritage listing of these properties will reduce the scope of applicability" of the Codes SEPP "did not explain to the community, let alone clarify, what if any exempt development provisions apply to heritage items or what the content of these provisions entail". 5. Contrary to condition 1(i), no information was provided to address the relevant provisions of the 2022-2023 Randwick Community Strategic Plan titled "A sense of community" dated May 2022 (the RCSP) relating to the protection of local heritage. The relevant parts of the RCSP and the omissions in respect of it in the second planning proposal were set out in Belle Living's correspondence to Council dated 23 April 2023. The RCSP also provided for a community consultation period of 28 days for Council plans and strategies. Given that Council appeared to accept that it had not complied with the requirement imposed by condition 1(i), it was for Council to satisfy the Court that its non-compliance with the period for community consultation was immaterial to the outcome of the community consultation process. 6. Contrary to condition 1(j), no additional discussion or assessment of the 3 Berwick Street property was undertaken in the second planning proposal after the gateway determination was made on 2 March 2023. The latter part of condition 1(j) required Council to "rectify any omission". Read fairly, Belle Living submitted, the reference to "omission" was directed to the omissions specified in condition 1 of the gateway determination, including those which remain unaddressed in condition 1 (c), (d), (e), (g) and (i). As those matters had not been addressed in the manner contemplated by the gateway determination, Council could not be said to have complied or substantially complied with condition 1(j).

Condition 2(a) of the gateway determination

1. In relation to condition 2(a) of the gateway determination, Belle Living contended that the second planning proposal was only exhibited for 19 working days, instead of the minimum 20 working days required under this condition due to it having been placed on exhibition on the Anzac Day public holiday. The failure of Council to observe the minimum public exhibition period prescribed in condition 2(a), Belle Living submitted, resulted in the second planning proposal being publicly exhibited for 72 hours less than it ought to have been (such calculation including an additional weekend). Belle Living submitted that "there was a realistic possibility that additional submissions for or against the proposal would have been received by Council from the community during that additional period, had it complied with the requirement imposed by Condition 2(a)".
2. Community consultation is defined in the Codes SEPP as "consultation with the community under cl 4 of Schedule 1 to the Act". Clause 4 of Schedule 1 provides that the minimum public exhibition period where, as here, the gateway determination specifies a period, is "the period so specified" (see above at [75]).
3. Council submitted that consultation need only occur "under" cl 4 of Schedule 1, rather than "in accordance with" the clause. The term "under" most commonly takes the meaning of "in pursuance of", "under the authority of", "having the source of", or "drawing legal efficacy from". [59] Council submitted, and I find, that: 1. on 13 December 2022, Council resolved to: exhibit the draft Planning Proposal following 'Gateway Determination' in accordance with conditions of the Gateway Determination and bring back a report to Council detailing the results of the community consultation for final consideration by Council'; 1. after the gateway determination was made by the Minister, there was exhibited to it the second planning proposal; 2. on 16 April 2023, Council notified Belle Living that exhibition was occurring in compliance with the condition of the gateway determination that required community consultation; and 3. Council placed on exhibition the gateway determination together with the second planning proposal.
4. Further, Council submitted that "the authority and power to exhibit" was the gateway determination, its resolution of 13 December 2022 being contingent upon that determination. Irrespective of whether there was strict compliance with the time period(s) specified in cl 4 of Schedule 1 to the EPA Act, the second planning proposal was subject to community consultation "under" cl 4 of Schedule 1. In any event, exhibition for a period of 19 working days was sufficient to discharge Council's public exhibition obligations under the gateway determination. The EPA Act does not impose a standard of absolute compliance with minimum time periods for consultation.

Whether failure to comply with conditions of the gateway determination prevents the instrument from being made

1. Moreover, and in any event, to the extent that there was a failure on the part of Council fully to comply with conditions or aspects of conditions of the gateway determination, s 3.34(8) of the EPA Act (extracted at [65] above) provides that any such failure "does not prevent the instrument from being made or invalidate the instrument once it is made".
2. Section 3.34(8) evinces an intention that a failure to comply with community consultation requirements is not such as to render the instrument, once made, invalid. I accept Council's submission that s 3.34(8) "acknowledges that there may be non-compliances with requirements for community consultation, provided the community has not been deprived of procedural fairness." As the Court observed in Boydtown Pty Ltd v Minister for Planning and Public Spaces [64] at [192]: … the effect of s 56(8) (now s 3.34(8)) of the EPA Act is that a failure to comply with a requirement of a gateway determination under s 56 does not prevent the instrument from being made, or invalidate the instrument.
3. In De Angelis Sackville AJA (at [107]) (with whom Macfarlan and Gleeson JJA agreed) said in relation to the former s 56(8), now s 3.34(8) of the EPA Act, and a failure by a relevant planning authority to comply fully with community consultation requirements: 107. In my view, the drafting of s 56(8) reflects awareness of the tendency of courts to regard public notification requirements in relation to planning decisions as preconditions to the valid exercise of power. The drafter has been careful not to make the validity of an instrument dependent on strict compliance with requirements imposed, not by statute or subordinate legislative instruments, but by reference to relatively informal Departmental documents. The second sentence of s 56(8) recognises that a failure by a relevant planning authority to comply fully with community consultation requirements will not necessarily have any material effect on the opportunity for interested persons to make submissions on the planning proposal. Understood in this way, s 56(8) is consistent with the statutory objective of providing "increased opportunity for public involvement and participation" in the planning process. The provision attempts to ensure that there is a genuine opportunity for interested persons to make submission on a planning proposal, but it does so without employing the blunt mechanism of invalidity for every breach of community consultation requirements, no matter how inconsequential the breach.

The 3 Berwick Street property and the dwelling house on it are not capable of being a "draft heritage item" (Ground 4 of the cross-summons)

1. In the alternative to Grounds 1 to 3 of its cross-summons, in Ground 4 Belle Living alleges that neither the property at 3 Berwick Street nor the dwelling on it is capable of being a "draft heritage item" as defined in cl 1.5 of the Codes SEPP. In relation to Ground 4, Belle Living submitted that it presently has a CDC granting approval for the demolition of all structures on the 3 Berwick Street property. The only asserted basis for invalidity of the CDC was that the property and/or the dwelling house on it is a "draft heritage item".
2. Further, Belle Living submitted: 1. The definition of "draft heritage item" in cl 1.5 of the Codes SEPP provides that any such item must be identified in a "local environmental plan that has been subject to community consultation". Clause 1.5 of the Codes SEPP defines "community consultation" as: 1. consultation with the community under cl 4 of Schedule 1 to the EPA Act; or 2. public exhibition under s 66 of the Act, as in force on 30 June 2009. 1. Clause 4(a) of Schedule 1 provides for minimum public exhibition periods for LEPs subject to a gateway determination: "if the gateway determination for the proposal specifies a period of public exhibition - the period so specified". Read together, the definitions of "draft heritage item" and "community consultation" in cl 1.5 of the Codes SEPP do not contemplate an item falling within the definition of "draft heritage item" unless it has been the subject of community consultation in compliance with cl 4 of Schedule 1 to the EPA Act. The "clear language" adopted in the definition of "draft heritage item" in cl 1.5 of the Codes SEPP "evince[s] a legislative intention that the minimum public exhibition periods provided for in cl 4 of Schedule 1 to the EPA Act be observed". Those words, it was submitted, "leave no room for the operation of any doctrine of 'substantial compliance' with the requirements of the minimum public exhibition periods provided for in cl 4 of Schedule 1 to the EPA Act". 1. Even if the concept of "substantial compliance" applies to the question of compliance with the requirement of community consultation in the definition of "draft heritage item" in cl 1.5 of the Codes SEPP, as well as with s 3.34 of and cl 4 of Schedule 1 to the EPA Act, the observations made by the Court of Appeal in De Angelis at [15], [104] and [107] "suggest that the scope of its application must be viewed through the lens of the objects of the EPA Act". Relevantly, s 1.3(j) of the EPA Act provides that the objects of the Act include "to provide increased opportunity for community participation in environmental planning and assessment"; 2. as submitted in relation to Ground 3 of Belle Living's cross-summons, Council did not comply with the minimum period of 20 working days specified in condition 2(a) of the gateway determination in relation to the public exhibition of the second planning proposal, resulting in a reduction in the time the public had to make submissions concerning the proposal by a period of some three days or 72 hours. For Council to assert that there was substantial compliance with the minimum public exhibition period such that it could amend the RLEP to list the 3 Berwick Street property as a local heritage item without remedying such deficiency "would run contrary to the objects of the EPA Act set out in s 1.3(j)".

Conclusion

1. Council has been successful on its summons, and Belle Living unsuccessful on the grounds raised in its cross-summons. I have summarised my reasons at [6] above. It follows that I will make an order that Belle Living pay Council's costs of the proceedings.

Orders

1. I make the following orders and declarations: 1. A declaration that Complying Development Certificate CCDC-3BER/2022, issued pursuant to s 4.28(6) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) by the second respondent, Abdul Hammoud of Certicorp Pty Ltd, on 7 June 2023 to the first respondent Belle Living Pty Ltd in relation to the property at 3 Berwick Street, Randwick NSW 2031, being Lot B DP 313214, is invalid. 2. A declaration that in breach of s 9.37 of the EPA Act, the first respondent failed to comply with the development control order given by the applicant Randwick City Council on 9 June 2023 pursuant to s 9.34 of the EPA Act and order no 4 in the table to Part 1 of Schedule 5 to the EPA Act requiring the cessation of all demolition works at 3 Berwick Street, Randwick NSW 2031, being Lot B DP 313214. 3. A declaration that in breach of s 4.2 of the EPA Act, the first respondent has carried out unauthorised works, being the partial demolition of the dwelling at 3 Berwick Street, Randwick NSW 2031, being Lot B DP 313214. 4. An order that the first respondent is restrained from: 1. by itself, or by its employees, contractors, servants, or other agents, 2. carrying out demolition work to the dwelling house and dental surgery located at 3 Berwick Street, Randwick NSW 2031, being Lot B DP 313214, unless and until such time as it obtains the grant of a development consent permitting that work. 1. An order dismissing the first respondent's cross-summons filed on 16 June 2023. 2. The first respondent to pay the applicant's costs of these proceedings.

Endnotes

1. Randwick City Council v Belle Living Pty Ltd [2023] NSWLEC 63 (Pritchard J).
2. Belle Living Pty Ltd v Randwick City Council [2023] NSWLEC 1282 (Dickson C).
3. Randwick City Council v Belle Living Pty Ltd [2023] NSWLEC 63 (Pritchard J).
4. EPA Act s 1.4 (definition of environmental planning instrument), s 3.13 (making of environmental planning instruments).
5. Kelly v R (2004) 218 CLR 216; [2004] HCA 12 at [103] (McHugh J).
6. Rennie Golledge Pty Limited v Ballard (2012) 82 NSWLR 231; [2012] NSWCA 376 at [129] (Campbell JA).
7. Environmental Planning and Assessment Amendment Act 2008 Sch1 item [11].
8. P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Thomson Reuters (Professional) Australia Limited) (Herzfeld and Prince) at [24.50].
9. Herzfeld and Prince at [24.50].
10. (1929) 42 CLR 481 at 512-513; [1929] HCA 41 (Isaacs J).
11. Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69]-[70] (McHugh, Gummow, Kirby and Hayne JJ) (Project Blue Sky).
12. Doyle's Farm Produce Pty Ltd v Murray Darling Basin Authority (No 2) (2021) 106 NSWLR 41; [2021] NSWCA 246 at [70] (Leeming JA, Bathurst CJ and Bell P agreeing).
13. Pearce at [4.43].
14. Project Blue Sky at [71] (McHugh, Gummow, Kirby, and Hayne JJ), citing Commonwealth v Baume (1905) 2 CLR 405 at 414 (Griffith CJ); at 419 (O'Connor J); [1905] HCA 11.
15. Day v Harness Racing New South Wales (2014) 88 NSWLR 594; [2014] NSWCA 423 at [77] (Leeming JA, McColl and Macfarlan JJA agreeing).
16. (1994) 181 CLR 404 at 419; [1994] HCA 54 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ).
17. Federal Commissioner of Taxation v Auctus Resources Pty Ltd (2021) 284 FCR 294; [2021] FCAFC 39 at [68]-[69] (Thawley J, McKerracher and Davies JJ agreeing); Singh v Lynch (2020) 103 NSWLR 568; [2020] NSWCA 152 at [97]-[131] (Leeming JA).
18. New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 12 August 2008 at 7695.
19. New South Wales Legislative Council, Parliamentary Debates (Hansard), 18 October 2017 at 70.
20. (2014) 253 CLR 531; [2014] HCA 9 (French CJ, Crennan and Bell JJ).