Randwick Municipal Council v Pacific-Seven Pty Limited

The respondent had lodged a development application on 25 March 1985 seeking to erect a convenience food store with self-service petrol facilities open 24 hours a day. In granting its consent the Council imposed a number of conditions including Condition No. 4 which provides, "Council reserves the right to restrict the hours of operation should any nuisance occur". The consent was notified to the respondent on 18 June 1985. No appeal was lodged in respect of any condition of the consent.

The Council claims that a nuisance has occurred by the operation of the premises after 11.00 p.m. and before 7.00 a.m. Accordingly, it notified the respondent in early 1988 that it had resolved "in accordance with Council's development approval granted at its meeting held on 11 June 1985.... to restrict the hours of operation of premises known as 1 Meagher Avenue, South Maroubra, to 7.00 a.m. to 11.00 p.m. daily". The Council alleges that the respondent has failed to comply and continues to fail to comply with the restricted hours.

The preliminary point concerns the respondent's claim that Condition No. 4 in the development consent notified by letter of 18 June 1985 is void and of no effect and severable from the consent. The Council maintains the validity of the condition. Alternatively, in the event that the condition is invalid, the Council submits that the condition cannot be severed from the consent and the whole consent is therefore void. I am informed by the parties that s.104A of the Environmental Planning and Assessment Act need not concern the Court since the consent in question has not been publicly notified in accordance with the requirements of the section and regulations.

In granting consent the Council had before it a report from its Chief Town Planner. The Planner recommended approval subject to conditions (including the contested condition). He stated, inter alia:-

"The proposal to operate 24 hours a day appears to be a feature of the convenience store operation and is of more concern when the site either adjoins or is located adjacent to residential properties. In this instance, the site is relatively isolated apart from the existing residential development on the south western side of Meagher Avenue. The main likely effect would be from lighting and vehicular traffic as a result of the extended trading hours. In this regard, Council has been the respondent in two Court hearings for developments involving similar operations in residential areas namely 128 Barker Street and 146 Coogee Bay Road, in both cases the Court chose not to impose a condition restricting the hours of operation. However, in this instance, I consider that it would not be unreasonable for any approval to be conditioned to the effect that Council restrict the right to limit the hours of operation should a nuisance occur.

No other planning objection is generally seen to this application."

It is the submission of Mr. Ayling on behalf of the respondent that the subject condition is invalid because it is not permitted by the regime of the Environmental Planning and Assessment Act. The granting of a development consent is intended to have an element of finality, subject to appeal rights and modification under s.102. A consent authority is not able to reserve to itself the right to impose further conditions at a later point of time. Such a purported condition is contrary to the scheme of the Act and avoids its appeal provisions.

On behalf of the Council Mr. Astill argues that the condition is valid in that it satisfies all the requirements of a valid planning condition, including reasonableness. In defending the condition he relies heavily on Fawcett Properties Ltd. v. Buckingham City Council ((1961) AC 636).

A somewhat similar situation arose in Permanent Finance Corporation Ltd. v. Brisbane City Council ((1983) 50 LGRA 317). The issue before the Supreme Court of Queensland was whether a Council could, after determination of an objector's appeal, add a further condition to the consent given prior to the appeal. Derrington J. had no difficulty holding that such a condition was ultra vires, the Council having no power to impose an additional condition at that stage. He based his reasoning partly on the mischief caused by the loss of appeal rights by the adoption of such a procedure.

In the City of Unley v. Claude Neon Ltd. ((1983) 49 LGRA 65) Wells J., sitting in the Supreme Court of South Australia, had to consider the validity of a condition of a planning permission. While the New South Wales legislation is different in form from the South Australian legislation, it is similar in principle. At page 68 of the Judgment His Honour said:-

"....it is essential to bear in mind that the granting of a consent is an act in law that is final in the disposition of the application: the consent must be either refused, or granted unconditionally, or granted subject to conditions. A condition which imparts to a consent a quality in virtue of which it ceases to be final is not one, in my judgment, that falls within the structure of the Act. A condition so annexed ought to be directed, and directed only, to circumscribing, with reasonable particularity, the acts of land use to which the authority or tribunal has given its consent, which would otherwise be unlimited in its generality and effect.

The condition impugned by the respondents, however, is not of that description. It lacks finality; it is wanting in particularity; it does not define or limit in any way the acts of land use that are permitted. It, in effect, purports to reserve the right to pronounce on these matters when the question of erecting a sign is later raised. When it will be raised is unknown (sic. and) speculative." (My emphasis)

In The Queen v. District Council of Berri ((1984) 52 LGRA 137) White J. alluded to City of Unley v. Claude Neon. He stated (at page 139):-

"It will be seen that a condition in a consent binds not only the consent-holder but all persons who later acquire the benefit thereof. Not only are all persons bound but any act in breach of condition is deemed to be without consent and may lead to criminal prosecution. The need for certainty and finality in fixing conditions is self-evident. Further, consents are public documents directly and indirectly affecting the rights and interests of a potentially wide range of parties. Consent documents including associated plans can be searched. They must not be altered or tampered with;"

Additionally, White J. emphasised the effect on legal rights of a condition such as the one under review. Mr. Ayling also relies upon certain passages in Kingsway Investments v. Kent City Council ((1971) AC 72) concerning the validity of a condition which may limit statutory rights of appeal, see particularly Lord Upjohn at pp.111-112.

In my opinion the submission of Mr. Ayling is correct. The whole scheme of Part IV of the Environmental Planning and Assessment Act leads to the conclusion that the granting of consent is intended to exhaust the issues raised by the development application. Section 91(1) specifies that a development application shall be "determined" by the granting of consent either conditionally or unconditionally, or be refused. Notice of such a determination must be given under s.92. Appeal rights are granted to applicants under s.97 and limited to a period within 12 months after the date of receipt of the s.92 notice. Where there are third party appeal rights s.98 provides that they are limited to appeals being made by objectors within 28 days after receiving notice of the determination. The applicant or any person entitled to act upon the consent may apply to modify the consent under s.102 but the modification must relate to substantially the same development and no prejudice may be caused to any objector. Section 104A ( inserted by the 1985 amendments) restricts challenges to a consent to those commenced within 3 months of the date of public notice.

The whole tenor of Part IV imparts the notion of finality of the determination by the consent authority. In Lend Lease v. Sydney City Council (Land and Environment Court Unreported 17 July 1986) Cripps J. had to consider the validity of a consent granted "subject to standard conditions". In summarising his reasons for declaring the consent void the Chief Judge had this to say:-

"In short, the very terms of the motion proposed by Alderman Bradford and passed by the Council that certain conditions be applied which would affect the substance of what the consent was for and that other matters be left as "standard conditions" indicates to me that the Council did not discharge the obligations imposed upon it on this occasion. A consent with conditions attached which may operate to significantly change the development the subject of the consent is, in my opinion, no consent in law."

I do not understand the attack on the condition to be on the basis of uncertainty. To that extent some of the passages in Fawcett Properties relied on by the Council are beside the point. It is not a question of the condition being given no meaning. The meaning is clear. It says - we reserve the right to restrict the hours of operation later on if any nuisance occurs. On its face there is no ambiguity in the words.

In my opinion the condition is ultra vires and clearly null and void. However, for reasons I will explain later I will not proceed to make a declaration of invalidity.

The issue of whether the invalid condition can be severed is not, in my view, as clear cut as the issue of invalidity of the condition. This is partly because it is difficult (at least for me) to seize upon the "true test" of severability in Kingsway Investments.

"Suppose that a planning authority purports to impose a condition which has nothing whatever to do with planning considerations but is only calculated to achieve some ulterior object thought to be in the public interest. Clearly, in my view, the condition should be severed and the permission should stand. But suppose, on the other hand, that a condition, though invalid because ultra vires or unreasonable, limits the manner in which the land can be developed, then the condition would not be severable, for if it were simply struck out the result would be that the owner could do things on his land for which he never in fact obtained permission, and that would be contrary to the intention of the statute.

A little later in his speech Lord Reid added, "I do not think that striking out the time conditions would alter the character of these permissions".

According to the speech of Lord Morris of Borth-y-Gest (at pp.102-3):-

"There might be cases where permission is granted and where some conditions, perhaps unimportant or perhaps incidental, are merely superimposed. In such cases if the conditions are held to be void the permission might be held to endure just as a tree might survive with one or two of its branches pruned or lopped off. It will be otherwise if some condition is seen to be a part, so to speak, of the structure of the permission so that if the condition is hewn away the permission falls away with it. In his judgment in Hall & Co. Ltd. v. Shoreham-by-Sea Urban District Council (1964) 1 W.L.R.240, 251-252 Willmer L.J. pointed to the contrast between a case in which one or two trivial conditions might be held to be ultra vires (where it would be difficult to justify saying that the whole permission failed) and a case in which conditions are "fundamental to the whole of the planning permission" in which case the planning permission would fail. In the same case Pearson L.J. (as he then was), differentiated, at p.261, b etween conditions which are "essential, or at least important", and those which are "trivial or at least unimportant"."

Lord Guest proceeded to deal with the question of severability although he had found the condition intra vires. At p.106-107 he stated:-

"I have not found it an easy question. It would, in my view, be a very surprising result for the law to reach, that although the planning authority had given outline planning permission which was to expire at the end of three years, unless details were approved by them within that time, yet because a time limit was ultra vires unlimited planning permission remained to be exercised at any time in futuro upon the approval of the reserved matters. This may, of course, be a result of the authorities but I should not, without considerable hesitation, reach such a conclusion. Planning permission is an animal sui generis not to be compared with licences and similar permissions. It seems to me that planning permission is entire. If a condition as to its grant flies off owing to its invalidity, the whole planning permission must go; and it is impossible to separate the outline permission without the time limit from the grant. The good part is so inextricably mixed up with the bad that the whole must go (see Pigot's Ca se (1614) 11 Co.Rep. 26b, 27b and McDonald v. McDonald (1875) L.R. 2 H.L. 482, 488-489, Lord Cairns L.C.). I agree with the observations of Hodgson L.J. (as he then was) in the Pyx Granite case (1958) 1 Q.B. 554, 579. I agree, therefore, for these reasons and also for the reasons given by my noble and learned friend, Lord Morris of Borth-y-Gest, that if the condition is invalid the invalid part cannot be separated from the permission and the whole permission must go."

Lord Upjohn (who with Lord Reid was in the minority) canvassed the issue of severability in his speech. After referring to the authorities, including Hall & Co. v. Shoreham-by-Sea U.D.C. ((1964) 1 WLR 240), he said:-

"In these two cases (clearly correctly decided on this point), however, it is of cardinal importance to note that the invalid conditions went to the root of the planning permission itself and severely restricted the permission applied for, and the observations of Hodgson and Pearson L.JJ. respectively must be read in that light."

The decision of the House of Lords in Kingsway Investments was applied in the New South Wales Court of Appeal in Parramatta City Council v. Kriticos ((1971) 1 NSWLR 140). In the leading Judgment of Asprey J.A. (with whom Holmes and Moffitt JJ.A agreed) His Honour said:-

"I am of the opinion that when the tests to which I have just referred are applied to the conditions attached to the consent here it will be seen that they relate to matters fundamental to the development or, as it has been put, to the root of the planning permission itself and restricted the permission applied for. Accordingly, in my opinion, the condition, if it were invalid, would render invalid the consent itself."

Kingsway Investments was also applied by Stephen J. (as he then was) in Spurling v. Development Underwriting ((1973) VR 1). In his opinion severance would not in any way affect the operation of the determination and "not alter the substantive intended effect of the Tribunal's determination".

To my thinking a most important decision for this case is Greek Australian Finance v. Sydney City Council ((1974) 29 LGRA 130). Holland J. felt constrained by authority to hold that a condition requiring a monetary contribution towards car parking was invalid. At pp.143-144 His Honour dealt with the question of whether the condition was severable from the Council's approval. In considering the factual situation Holland J. said:-

"I do not think that I can assume that, if it had so proceeded, the council would have approved the application or say that its rejection on that ground would have been beyond its powers.

It is not possible to say what the council's decision would have been if the applicant's offer to contribute to the Car Parking Fund had not been made because the council was never called on to consider the application on that basis. The fact by itself that no parking facilities were being offered could have been regarded by the council as decisive against the application."

"In my opinion, the correct view to take in the present case is that the condition objected to was a fundamental element of the approval which the council gave, and that in dealing with the application the council proceeded on a false basis, either as to its powers to impose the condition, or as to its expectation that the applicant would voluntarily pay the contribution required. I think it is clear that the council has never considered or approved the application simply on the basis that no car-parking space was to be provided and no contribution in lieu thereof was to be made by the applicant. On this view the condition in question cannot, in my opinion, be struck out as severable and its invalidity renders the whole approval invalid. To borrow the language of Lord Morris in Kingsway Investments (Kent) Ltd v. Kent County Council the condition was part "of the structure of the permission so that if the condition is hewn away the permission falls with it"."

In the same volume of the Local Government Reports of Australia Coulson v. Shoalhaven Shire Council is reported (at page 166). Helsham J. (sitting in the Equity Division of the New South Wales Supreme Court) held a condition of a subdivisional approval under the Local Government Act to be invalid. After referring to Kingsway Investments His Honour observed:-

"While one might be pardoned for assuming that if any valid grounds for disapproving the application exist it would not be approved, particularly in the light of the provisions of the interim development order, nevertheless I am not satisfied that the condition is so extraneous to the approval as to enable me to say that the approval is valid with the condition excised. Although there is no evidence before me it may be that the council approached the whole matter upon a false basis, namely that there was an existing right of way, and while I cannot see that if the correct position were before the council this would make any difference to its decision, nevertheless I am not satisfied that the condition is one that should be excised, leaving the approval intact. The condition is invalid, and it is open for me to declare it so. But if I do I think its invalidity renders void the approval."

When one applies the authorities to the facts in this matter a number of conclusions may be drawn. It seems apparent that the Council believed that what it was doing, in imposing Condition 4, was lawful. It obviously considered that it had the power to impose the condition recommended by its Chief Town Planner and, conformably with his advice, restrict the hours of operation later in the event of a nuisance. Indeed, this is what it purported to do in early 1988. It seems to me that the Council's consideration of the development application proceeded on a false basis. What would it have done if it had known it could not impose such a condition? Would it have granted a consent unlimited as to time? Would it have restricted the hours in the consent itself or granted a consent limited as to time to allow for a review at a later stage? Or would it have refused the application? It is impossible to know. This points up the difficulty of excision.

In my opinion the issue of the hours of operation of the development and whether they should be restricted was fundamental and went to the very root of the consent. The issue cannot be seen as unimportant or incidental. Applying the tree analogy of Lord Morris, it is not a question of losing a branch. Rather the issue goes to the structure of the consent which must fall with it. The issue of hours forms an integral part of the approval. It cannot be said that when one excises the invalid condition the consent remains of the same character as before. Further, it cannot be suggested that the condition does not relate to the development, or refers to matters antecedent or extraneous to the consent. Whichever is the "true test" of severability I am driven to the conclusion that the invalid condition cannot be severed from the consent and the whole consent must fall with it.

One further submission is made on behalf of the respondent. Mr. Ayling argues that the availability of alternative remedies in the Council supports the shearing away of the condition. He points to the Noise Control Act and ss.288 and 289(c) and (d) of the Local Government Act. However, I have some doubts about the applicability of the Noise Control Act to the problems caused by night trading of this business. Also, the powers in the Local Government Act referred to are far less satisfactory than an enforceable condition in a planning consent. Furthermore, it is difficult to see that one of the principal allegations of nuisance - the lights of the vehicles of customers - is necessarily embraced by the provisions mentioned.

Notwithstanding my findings I do not believe that I should make a declaration of invalidity of the consent at this stage. I would wish to have the benefit of any submissions the parties may desire to make before so doing. I say this because the parties may wish to consider their respective positions in the light of my findings. For example, since the respondent will have lost its consent completely it may wish to make a fresh application to the Council and have it (and any appeal) determined before any orders are made by the Court. Other possibilities may suggest themselves to the respondent. For this purpose I stand the application over for mention before me at 9.30 a.m. on 1 September 1989. Costs are reserved.

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