2. The first respondent failed to notify occupiers of properties which adjoin the subject land whom, in its opinion, will be affected by the amended development proposal in breach of its policy.

3. The applicants had a reasonable or legitimate expectation that they would be given notice of any further amendments, any decision to grant development consent and any decision not to contest the class 1 proceedings as a result of cl 28(1), the policy of the first respondent, the conduct of the first respondent in having given previous notice, the invitation to give evidence on behalf of the first respondent in the class 1 proceedings and an indication by a councillor of the first respondent that no action would be taken to decide the development application during the Christmas New Year recess.

4. The applicants were denied natural justice or procedural fairness by the failure to give notice of the amendments.

5. That the grant of development consent was unlawful in that the first respondent purported to grant consent to the fourth respondent whereas the applicant for development consent was the second respondent and without any motion to grant consent being put or carried by the first respondent or the Mayor under delegated authority.

6. That the purported determination of the development application was manifestly unreasonable by failing to comply in significant respects with the relevant DCP, the significant detrimental effect on the privacy of the residents of adjoining buildings, the loss of trees and an error in the depiction of the proposed building on plans submitted.

7. That the opinion and decision of the first respondent that adjoining owners will not be affected or will not have the enjoyment of their properties affected and that the amendments do not give rise to any further significant detrimental amenity considerations in addition to the amenity considerations arising in the earlier plans, were manifestly unreasonable.

8. That the respondents are estopped and precluded from asserting or contending that the owners of strata units in the building on the adjoining property will not have the enjoyment of their properties affected or that the further amendments do not give rise to any further significant detrimental amenity considerations in addition to the amenity considerations arising in the original plans, as amended.

It must be understood, when considering this issue, that it is not the function of the Court, on the judicial review of an administrative decision, to overturn the decision solely on the basis of the Court's preference to a different result when the question is such that reasonable minds may come to different conclusions and the administrative decision made falls within a reasonable range (see Mason J in Minister for Aboriginal Affairs & Anor v Peko-Wallsend Limited & Ors [1986] HCA 40; (1986) 162 CLR 24 at 47-48). It is not for the Court on review to determine the weight to be given to matters which are required to be taken into account, although a decision may be found to be manifestly unreasonable if the evidence discloses that the decision maker failed to give adequate weight to a relevant factor, took into account an irrelevant matter or assigned excessive weight to a relevant factor of little importance. In Associated Provincial Picture Houses Limited v Wednesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223, Lord Greene MR said that the ground of review of manifest unreasonableness would only be made out if it was shown that the decision was so unreasonable that no reasonable person could have come to it. This expression of the test is now well accepted.

Mr Miller QC contends, on behalf of the applicants, that the extent of non-compliance of the amended proposal with the relevant DCP was massive and that it was "unbelievably, grossly outrageous" for the council, in those circumstances, when taken together with the significant detrimental effect on the privacy of the residents of adjoining buildings, the loss of trees and the error in the plans, to grant consent.

Mr Michael Neustein, a consultant town planner and architect retained by the applicants and who had prepared a statement of evidence for the purpose of the class 1 proceedings in support of the council's case for refusal of the development application, explained that, in his opinion, the further amended plans lodged with council on 22 December 1995 do not comply with the DCP in that, given the level of set backs proposed between the development and the existing building at 29 - 31 Waratah Street, the proposal exceeds the DCP maximum allowable height by 5.5 metres or approximately 1.5 storeys. In his opinion this is a significant departure from the standard. The set back of the building itself, according to Mr Neustein, complies with the requirements of the DCP up to the second level above the ground floor except in the area of the stairwell. The set back of the main part of the building above the second level contravenes the DCP by up to 1.6 metres while the stairwell intrudes up to 4.2 metres. The non-compliance with the DCP was, in some respects, reduced by the amendments made in the December plans. He recognised the amendments made by the December plans were, in some part, a response to the objections made by the residents of 29 - 31 Waratah Street. Although the floor area of level 4 was reduced by the deletion of two units and providing only for one large penthouse unit, Mr Neustein explained that, in his opinion, the December plans will have a detrimental effect on the occupants of 29 - 31 Waratah Street due principally to an increased lack of privacy as a result of the significantly larger balconies which facilitate the capacity for overlooking and more intensive use by the occupants. The November plans provided for a minor area of balcony for the two units at the top level. Both were orientated to the north which is the opposite direction to the neighbouring property.

The report by Mr Melim dealt with objections that significant trees will be lost. Notwithstanding the loss of the trees he expressed the opinion that perimeter landscaping will replace existing vegetation. The Court does not have the benefit of detailed evidence of the proposed landscaping and accordingly is not able to determine whether the effect of landscaping will be as Mr Melim expects, or otherwise.

The first applicant, who claimed some expertise in the property development and building industry which gave him an alleged capacity to understand architectural plans, demonstrated errors he perceived in the depiction of the proposed building in one of the drawings, a sightline analysis, lodged with the November plans. The second respondent, who was responsible for the preparation of the plans, explained the purpose of the drawing criticised by Mr Wise. Mr Sgammotta pointed out that the section used for the purpose of the sightline analysis had been taken in a line perpendicular to the southern boundary whereas an overlay prepared by Mr Wise to demonstrate the claimed error had assumed that the section had been taken in a line perpendicular to the northern boundary. The northern and southern boundaries are not parallel. In any event Mr Sgammotta claimed that the true relationship between the proposed building and the existing residential flat building at 29 - 31 Waratah Street was as shown in the ground floor plan and site plan, and the north, east and west elevations whereas the sightline analysis had been prepared for another purpose. The Court has not been satisfied that there was any significant error in the plans submitted to council. At least not to the extent that any person reading the plans would have been misled about the relationship between the two buildings.

Even accepting there were real issues arising in regard to the detrimental effect on the residents of adjoining buildings for consideration under s 90 of the Environmental Planning and Assessment Act (the EPA Act), the Court has not been satisfied that the proposal is such that the council could not have given a consent. There could be no question, on the facts before the council, that it was bound to reach a conclusion to refuse the consent. It was bound to take account of the DCP under s 90 and the Court accepts that, as a matter of policy, it applied its provisions. Nevertheless it was not obliged to enforce strict compliance with all the requirements of the DCP.

However, the applicants have not confined the argument in regard to manifest unreasonableness to the determination itself. They also argue that the opinion and decision of the council that adjoining owners will not be affected by the development and further, the opinion and decision of the council that those owners will not have the enjoyment of their properties affected, were each manifestly unreasonable. They also allege that the opinion and decision of the council, reflected in the actions of Mr Melim, that the amendments made to the plans in December did not give rise to any further significant detrimental amenity consideration in addition to the amenity considerations arising from the plans lodged in November was manifestly unreasonable.

The evidence does not support the first contention for two reasons. Firstly, it is clear from the report prepared by Mr Melim on 22 December 1995 that he recognised that there would be an effect on the use, enjoyment and amenity of the adjoining residential building to the south. Secondly, the general tenor of the report was to assess the degree and extent of affectation and the steps that should or could be taken to ameliorate that impact.

However the report makes no reference to a consideration of whether further notification should have been given to those persons previously notified either of the intention to grant consent conditionally upon modifications being made to the building design or in accordance with the plans lodged with the council on 22 December 1995. I have already referred to the evidence of Mr Melim in respect of the opinion he formed in respect of any further significant detrimental amenity considerations arising from the December plans. This opinion was formed in pursuance of council's practice to re-notify adjoining owners and occupiers of amendments to a development application if, in the council's opinion, the amendments give rise to any such considerations in addition to those arising from the initial proposal.

The evidence of Mr Neustein and a perusal of the plans demonstrate an obvious potential for overlooking the adjoining property to the south from the balconies on the top level of the proposed building to an extent well beyond that which existed before the amendments were made. The design of the balconies for the two units proposed on level 4 in the November plans was such that they were orientated to the north away from the adjoining building at the rear, and in the case of the eastern balcony, there was a wall at the southern extremity. The two balconies proposed for the large single unit on level 4 in the December plans are of significantly greater dimension having capacity for the accommodation of a large number of people in contrast to the previous design thereby facilitating significant opportunity for overlooking to the south. All of this should have been self-evident to Mr Melim and the council from the plans. Although he did come to a different conclusion, the Court does not accept that his decision that the December plans did not give rise to any further significant detrimental amenity considerations was one which any reasonable authority could have come to.

That being the case, the failure to notify the persons likely to enjoy the benefit of the further consideration, deprived them of the opportunity to make further submissions. The purpose of the practice of council to re-notify adjoining owners and occupiers of amendments to a development application if they give rise to further significant detrimental amenity considerations is to ensure that a potential objector can consider whether a new or further reasonable objection should be made. This is not a case where the Court can be confident that any objector would not reasonably be expected to object further following the amendments. The changes brought about by the December amendments raised new substantive issues in the context of the total re-design of the top level of the building.

The changes made in December did not have the result that what was approved on 5 January 1996 was not the same proposed development as that about which notice was given in July and November 1995. Neither cl 28 of the LEP nor the Manual of Procedure required re-notification in the circumstances which prevailed in December 1995.

DENIAL OF PROCEDURAL FAIRNESS OR NATURAL JUSTICE

The action by council in notifying the amended proposal in November gave rise to a legitimate and reasonable expectation that potential objectors would be given the opportunity to consider and make comments in respect of any further submitted plans that made significant amendments to the proposal previously notified (see Kioa & Ors v West & Anor [1985] HCA 81; (1985) 159 CLR 550; Nelson & Ors v Burwood Municipal Council & Anor (1991) 75 LGRA 39; Porter & Anor v Hornsby Shire Council (1989) 69 LGRA 101; Hardi v Woollahra Municipal Council & Anor (unreported 40196 of 1987 Cripps J 17 December 1987); Rapid Transport Pty Limited v Sutherland Shire Council (1987) 62 LGRA 88).

The expectation did not arise from the provisions of cl 28 or the Manual of Procedure but from the actions of council itself. The fact that the potential objectors had already been given a fair and ample opportunity to comment on the plans is not to the point. The objectors had been consulted when significant changes were made previously and they were entitled to expect that this procedure would be maintained. Whether the changes in December were brought about by the manner in which council itself approved the application or by a formal application for amendment does not matter if the effect was to create a situation where matters not previously considered, and likely to be the subject of reasonable objections, were raised. The critical question is whether the council had a duty to act fairly by notifying the December changes in the circumstances.

The consequence of the changes brought about by the response to the without prejudice offer made on 18 December 1995 was to raise a number of new considerations which had not been previously addressed by even the council, let alone those persons who had objected at the invitation of the council.

By proceeding to determine the application on the basis of the further amended plans without notifying persons likely to give consideration to the obvious potential for further significant detrimental amenity impacts, the council was in breach of its duty to act fairly in the circumstances (Kioa v West p 550).

The Court rejects the submission on behalf of the applicants which suggests that an alleged indication that no action would be taken to determine the application during the recess by a councillor was in any way binding on the council. Firstly, the evidence is not conclusive and expressly denied by the councillor. Secondly, she cannot be regarded as having the authority to give any relevant undertaking on behalf of the council as its delegate or otherwise. Her opinion as to what the council might or might not do did not create any obligation upon the council.

Just because the council had taken steps to have Mr Neustein prepare a statement of evidence and its solicitors had interviewed residents of the adjoining property in contemplation of them giving evidence in the class 1 proceedings, did not create any legitimate or reasonable expectation that the council would not, in the meantime, grant development consent. The EPA Act by s 96 expressly provides unconditionally for this eventuality.

The applicants' claim is that the council is estopped from denying that the enjoyment of properties in 29 - 31 Waratah Street will be affected or that the amendments made in December give rise to any further significant detrimental amenity considerations. There is no evidence which could lead the Court to conclude that any person relied upon an assumption as to the present, past or future opinion of the council in determining the application. It has never been the council's position that there will be no effect on the amenity of the occupiers of the adjoining property.

Although Mr Melim formed the view that it was not necessary to give further notification because, in his opinion, the December plans do not give rise to any further significant detrimental amenity considerations in addition to those amenity considerations arising from the initial proposal, there is no evidence that he induced any person to assume that he held or would continue to hold the contrary view.

THE FAILURE TO LAWFULLY GRANT DEVELOPMENT CONSENT

It is not necessary to finally resolve this question having regard to the findings already made in favour of the applicants.

The issue raised relates to whether the purported determination of the development application by granting consent to the fourth respondent, who was not the person who made the application, somehow amounted to a failure to comply with the statutory requirement for notification of the consent. Although the Court is aware that the second respondent was the applicant in the class 1 proceedings, the actual relationship between the second and fourth respondent has not been fully explained. Mr Sgammotta gave evidence to the effect that he had an indirect pecuniary interest in the outcome of the application beyond that of a consulting architect. The question was first raised during the hearing of an interlocutory application. I suspect that it arose mainly as a consequence of exchanges between counsel and the Court. Subsequently, and before the final hearing, a further notification addressed to the second respondent was issued by council. There is no utility in making a determination of the lawful effect of the notification to the fourth respondent in the light of the subsequent notification to the second respondent.

The underlying basis for the Court setting aside the decision to grant development consent is such that this is not an appropriate case for the exercise of the Court's discretion not to make any orders. It is a matter of considerable public importance that councils discharge their duty and obligation to be fair and reasonable to all parties interested in a development application whether they be supporters or objectors or other persons likely to be adversely affected by the outcome of the determination.

The Court does not accept that any future determination by council will inevitably achieve the same result. With the benefit of further submissions from those who respond to notification of the amended plans, the decision might be entirely different. There is no inevitability about the full council or another delegate unconditionally adopting the decision by the Mayor on 5 January 1996.

The issues raised by the amendment to the plans in December are significant enough to create the potential for persons who object to the proposal in that form to raise a wide range of matters in submissions.

The Court is not prepared to exercise its discretion in favour of the respondents.

The applicants are entitled to a declaration that the development consent granted on 5 January 1996 was made contrary to the law and a consequential order restraining the persons entitled to act on it from doing so.

1. A declaration that the determination of an application to demolish a boarding house and erect a five storey residential flat building with 10 x 2 bedroom units and ground level carparking at 27 Waratah Street, Rushcutters Bay by granting consent subject to conditions under delegated authority by the Mayor of the first respondent on 5 January 1996 is void and of no effect.

2. The second, third, fourth and fifth respondents be restrained from carrying out development in accordance with the development consent.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 18 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGEMENT HEREIN OF THE HONOURABLE JUSTICE R N TALBOT