Victorian Civil and Administrative Tribunal|2003-04-14|Before: Mr J

Sewells Finance Ltd v Colac Otway SC [2003] VCAT 423 (14 April 2003)

Application for a declaration under Section 149A Planning and Environment Act, extension of permit, Section 69, meaning of "ask", whether request for extension of permit or council's grant of extension of permit implied by conduct, date from which amended permit runs.

Wednesday 4 and Thursday 5 December 2002, and Thursday 30 January 2003

For the Responsible Authority: Mr W Nelson, Solicitor of Harwood Andrews Lawyers.

Mr A Williams and Mr S Williams: Mr C Laffey, Consultant Planner.

Respondents/Objectors: Mr A Buchanan, Mr I Williamson and

For the Applicant for Review/ Mr S Molesworth QC, instructed by Sewells

Mr Moleswworth called Mr T Chakir, Consultant Planner, as an expert witness of Day 2.

1. Application P1818/2002 is an application for a declaration under Section 149A of the Planning and Environment Act 1987 ("Act") brought by Sewells Finance Limited.

(a) Permit No. PPA/065/98, which was issued on 4 May 1998, is still current and so has not expired by reason of the operation of either Condition 30 of the said Permit or Section 63(3)(b) of the said Act.

(b) The expiry date of Permit No. PPA/065/98 was effectively extended on each of the occasions upon which the Responsible Authority issued an Amended Permit in relation to the original Permit, that is on the 17 August 1999, 26 April 2000, 27 September 2000, 1 and 2 November 2000.

(c) On the basis that Permit No PPA/065/98 is still an operative permit, the Responsible Authority can lawfully amend the said permit pursuant to Section 73 of the Act or otherwise amend or deal with it as the law may permit.

(d) The Responsible Authority by issuing Amendment Permits in relation to permit PPA/065/98 subsequent to the 4 May 2000 and otherwise dealing with the Applicant and its predecessor-in-title in a manner which treated the subject use and development as being valid and continuing is estopped from now denying the legitimacy of the Applicant's planning permits.

3. The reasons for the Applicant making the application are:

"(a) On 4 May 1998 Planning Permit PPA/065/98 was issued to Apollo Gateway Pty Ltd for the use and development of land at 155-161 Great Ocean Road Apollo Bay. The proposed development was and is known as the Apollo Gateway Project.

(b) Finance was provided to the then developer by Sewells Finance Limited, the Applicant herein, pursuant to a registered mortgage. Due to the developer failing to meet its obligations under the Mortgage, Sewells Finance Limited took over the development as mortgagee-in-possession. For all practical purposes the Applicant is now the developer and permit holder and is desirous of completing the development.

(c) The Responsible Authority is the responsible planning authority for the Colac Otway Planning Scheme which regulates the use and development of land within the Shire including the subject site and so has been responsible for the issuing of all planing permits in relation to the site.

(d) There were (or are) two planning permits authorizing the subject development: the initial Planning Permit PPA/065/98 issued on the 4 May 1998 and amended on five occasions up to and including an Amendment Permit issued on 2 November 2000 and a second primary permit PPA/007/2000 issued on the 4 October 2000 ("Permit Two").

(e) After having issued five Amendment Permits in relation to Permit PPA/065/98 and having issued Permit Two, the Responsible Authority formed the view that planning permission for the development had in fact expired on 4 May 2000. This expiry date was identified due to the wording of Condition 30 in the Permit which states that: "If the development authorized by this permit is not completed within two (2) years this permit shall expire, unless an extension of time is approved by the Responsible Authority. The written request for an extension of time must be received before 3 months have elapsed after the date of expiry."

(f) The subject development has not been completed. If the subject Permit has expired, then the Applicant is obliged to reapply for planning permission and the subject to public processes of advertising and objection. Strictly, current development works ought cease resulting in potential breaches in building contracts. Further, obtaining permission for amendments to allow simple variations to the current development (a number of which are required) is also precluded.

(g) There is no formal statutory requirement which prescribes the manner in which a soon-to-expire or recently expired permit is to be extended. In these circumstances, it is submitted that on the five occasions when the Permit PPA/065/98 was amended and a new amended permit issued, each amended permit was an instrument by which the life of the original permit was extended (contrary to the position reached by the Responsible Authority).

(h) On each of the five occasions an amendment to Permit PPA/065/98 was approved, the Responsible Authority issued a complete and fully revised permit with all the conditions found in Permit PPA?065/98 recited again and the new changes incorporated. On each occasion the wording of Condition 30 was repeated: "If the development authorized by this permit is not completed within two (2) years this permit shall expire, unless an extension of time is approved by the Responsible Authority. The written request for an extension of time must be received before 3 months have elapsed after the date of expire". Given that each Amendment Permit authorized revised development, the expiry time-limit was tied to the date of each amendment permit so when the condition refers to "this permit" it was actually referring to the amended permit - two years from the date of each amended permit.

(i) This interpretation is supported by the way the Responsible Authority treated the development and its planning permits. In the context of Permit PPA/065/98 allegedly expiring on 4 May 2000, after issuing an amended permit within time on 17 August 1999 and then again on the 26 April 2000 within time, the Responsible Authority purported to issue three further amendments on 27 September 2000, 1st November 2000 and 2nd November 2000. Permit Two would have also been granted after the expiry of Permit PPA/065/98. Together with contemporaneous correspondence and discussions the nature of which assumed current and continuing approval of the subject development, the Responsible Authority's conduct in issuing these permits supports the legitimacy and rationale of the interpretation of expiry sought to be confirmed by declaration.

(j) As a consequence of the Responsible Authority's conduct, the Applicant and its predecessor-in-title acted on the basis of such "assurances" and so entered into contracts, incurred considerable financial liabilities and generally proceeded with the development. The principles of estoppel ought apply to prevent the Responsible Authority from changing its position."

4. This application and application for review P1816/2002 ("the Application for Review") were heard together. The Application for Review under Section 79 of the Act was brought by the Applicant for review of the failure of the Colac Otway Shire Council ("Council") to grant a permit within the prescribed time for the as-built development on the subject land with proposed alterations and extensions.

5. The matter was originally listed before Senior Member Sharkey, a planning member, who heard the parties on whether the Tribunal should include a presidential member or a member who is a legal practitioner to hear this application. The Tribunal was then reconstituted to include myself, who presided, and the hearing of both applications continued before us. This application is determined solely by me as a member who is a legal practitioner as required by Section 149A.

6. Mr Laffey represented Mr A Williams and Mr S Williams. Council's Practice Note 2 letter in the Application for Review provided a list of objectors which included both. However the Council had not advised the Applicant that they were objectors and notice of the applications or of the hearings was not served on them and neither had lodged a statement of grounds.

7. Mr Laffey applied for Mr A Williams and Mr S Williams to be joined as parties. Mr A Williams was present at the hearing. Mr Laffey advised Mr S Williams was overseas, and foreshadowed that if his clients were to be joined as parties he would request an adjournment as he had only just been instructed. However he said that if the Tribunal granted him leave to make a written submission following the hearing, he would not pursue the request for an adjournment.

8. Mr Nelson for the Council raised no objection to those parties being joined, on the basis that the hearing would proceed with an opportunity for a written submission at a later date.

9. Mr Molesworth raised concerns about Mr A Williams and Mr S Williams becoming parties due to their involvement with the original permit for the development. Mr Molesworth conceded that Mr S Williams as the owner of the adjoining land, 161 Great Ocean Road, had a material interest in the matter and was therefore entitled to be joined as a party, but he maintained his reservations as to Mr A Williams, but subsequently lowered his position on the application for joinder to being neutral. There was no objections to the joinder by the other Respondents.

10. Accordingly orders were made that Mr A Williams and Mr S Williams be joined as parties to this application.

11. Directions for filing and serving of supplementary written submissions following Day 2 were made and were satisfied and further directions dated Friday 7 January 2003 including setting the matter down for further hearing on Thursday 30 January 2003 were made.

12. On Day 3 the parties said they did not wish to make any further submissions about the Application for Review. Mr Laffey indicated that he represented Mr A Williams and Mr S Williams only on that application and requested that he be excused and we excused him accordingly.

13. On Day 3 we advised that we had decided to allow the Application for Review to grant a permit, and separate reasons and directions have been given on that matter.

14. The hearing proceeded on this declaration application and evidence was given by Mr S Williams. Mr Tweedy made submissions on behalf of the Williams and Mr Molesworth made further submissions on behalf of the Applicant in relation to the declaration application.

15. The essential nub of the dispute is that permit 065/98, seemingly in error described the land subject to the permit as 155-159 Great Ocean Road but the endorsed plans provided for car parking on 161 Great Ocean Road.

16. The Applicant, Sewells Finance Limited, is a mortgagee in possession and stated it only holds security over 155-159 Great Ocean Road, but not over 161 Great Ocean Road, which is in separate ownership from the mortgagor, and owned by Mr S Williams.

17. The Application for Review made by the Applicant as mortgagee in possession seeks approval for works on that land to complete the development commenced under the authority of the initial permit together with some additional alterations and extensions and without relying on 161 Great Ocean Road for car parking.

18. Permit PPA/065/98 was issued on 4 May 1998 and allowed the use and development of the land for 6 residential units, café, bus lounge, and to develop the land for 8 shops and associated car parking and to carry out a 16 lot subdivision.

19. Condition 30, which remains the same in the permit as amended on each occasion reads:

"30. If the development authorised by this permit is not completed within two years this permit shall expire, unless an extension of time is approved by the Responsible Authority. The written request for an extension of time must be received before 3 months have elapsed after the date of expiry."

20. The permit was then amended four times. Set out below is a table describing the amendments.

Condition 5 - Maximum Height of tower increased to 8.5m

Included Lots 1 + 3 in address, referred to 8 shops and approved endorsed plans and strategy.

* another application for permit which the Council failed to decide and which was taken to the Tribunal and was then abandoned;

* Permit PPA/305/99 issued on 10 April 2000 authorising subdivision of 161 Great Ocean Road into Lots 1 and 3;

* Permit 007/2000 was issued on 4 October 2000 allowing the development and use of the land as a commercial retail and accommodation development of 4 shops, 17 motel units and a 3 level car park for 64 cars, and

* an application for subdivision of part of the land.

22. Each amendment of the permit listed at the bottom of each page the date issued and the date of each amendment, and, at the end sets out notes of the amendments.

23. The notes show the third amendment introduced the concept of stages, notes 6, 7 and 8 described stages 1, 2 and 3 by reference to drawing numbers and descriptions, and note 9 referred to the provision of an unconditional bond or bank guarantee in favour of the Shire for the carrying out of outstanding works.

24. Mr Nelson supported the grant of the applications. His submission included an analysis as follows:

"After having issued five Amendment Permits in relation to Permit PPA/065/98 and having issued Permit Two, the Responsible Authority then formed the view that planning permission for the development had in fact expired on 4 May 2000. This expiry date was identified due to the wording of Condition 30 in the Permit which states that: "If the development authorized by this permit is not completed within two (2) years this permit shall expire, unless an extension of time is approved by the Responsible Authority. The written request for an extension of time must be received before 3 months have elapsed after the date of expiry.

The subject development has not been completed. If the subject Permit has expired, then the Applicant is obliged to reapply for planning permission and be subjected to public processes of advertising and objection. As a precaution and as a means of providing a further path to resolving all issues, this is exactly what, the Applicant has done: the "third application" which is the subject of the Section 79 Failure Appeal, being P1816/2002. Strictly, all current development works ought have ceased resulting in potential breaches in building contracts. In fact, all major works did stop. Further, obtaining permission for amendments to allow simple variations to the current development (a number of which are required) pursuant to Section 72 is also precluded.

Extensions of the 'life' of permits are allowed by operation of Section 69 of the Act. The statutory provision provides that:

(1) Before the permit expires or within three months afterwards, the owner or the occupier of the land to which it applies may ask the responsible authority for an extension of time."

(2) The responsible authority may extend the time within which the use or development or any stage of it is to be started or the development or any stage of its is to be completed.

There is no formal statutory requirement which prescribes the manner in which a soon-to-expire or recently expired permit is to be extended. In fact, the very language of Section 69 implies an acceptance of informality: note the words may ask as distinct form the formality throughout the rest of the Act with standard applications - compare, for instance, the language in Section 47 with respect to ordinary applications for permit. Accordingly, the step that may lead to the extension of a permit may be somewhat informal: one would normally expect a written request, but it is conceivable an application might be made orally to relevant Council officers. There is no provision in the legislation that is contrary to this approach. In these circumstances, it is submitted that on the five occasions when the permit PPA/065/98 was amended and a new amended permit issued, each amended permit was an instrument by which the life of the original permit was extended (contrary to the position reached by the Responsible Authority at the time of its "change of heart").

On each of the five occasions an amendment of Permit PPA/065/98 was approved, the Responsible Authority issued a complete and fully revised permit with all the conditions found in Permit PPA/065/98 recited again and the new changes incorporated. On each occasion the wording of Condition 30 was repeated: "If the development authorized by this permit is not completed within two (2) years this permit shall expire, unless an extension of time is approved by the Responsible Authority. The written request for an extension of time must be received before 3 months have elapsed after the date of expiry". Given that each Amendment Permit authorized revised development, the expiry time-limit was tied to the date of each amendment permit so when the condition refers to "this permit" it was actually referring to the amended permit - two years for the date of each amended permit.

A different wording of each Condition 30 would have indicated, with less ambiguity, the alternative interpretation. It is instructive to consider how the oft-repeated Condition 30 might have been alternatively drafted in order to remove ambiguity. The alternative and less ambiguous wording would have been" "If the development authorized by this permit is not completed within two (2) years of the issue date of the original permit being 4 May 1998 then this permit shall expire, unless an extension of time is approved by the Responsible Authority". The absence of such words in Condition 30, in my submission, entitles the Applicant to argue that Permit One did not expire in 2000 but rather that the relevant expiry date is two years after the issue date of the last valid amendment permit - being the 2 November 2002. On this basis, pursuant to Section 69, the Applicant has three months from the 2nd November within which to obtain its permit extension."

25. On Day 1 and 2 Mr Molesworth made submissions in relation to the declaration application and the extension of the permits and the significant extract from his submission is as follows:

"The Council's files have been searched in vain looking for some indications of one or more applications for extension of time - but there was nothing of relevance on the files. In fact, the Council files may have been cleaned-up as there are so few notes of any kind about any topic. Such a fact entitles the Applicant to rely upon the "face of the record". It is submitted that the only documentary material the "face of the record" - upon which the Tribunal can rely is a succession of amended permits, all containing Condition 30. That can be interpreted as confirmation that the Council thought Permit One had not expired. Further, the succession of correspondence to and from Council reinforces this impression of a continuity of the planning permission. The Applicant relies on the fact that there is no contrary material in existence in any Council file. Accordingly, the Tribunal would be justified in concluding that the original permit was in fact extended a number of times - if for no other reason that there is a total absence of any contradicting documentary material in existence.

This interpretation is supported by the way the Responsible Authority treated the development and its planning permits. In short, the "actions" and "words" of the Council speak loudly in favour of the Applicant's position. In the context of Permit PPA/065/98 allegedly expiring on 4 May 2000, after issuing an amended permit within time on 17 August 1999 and then again on the 26 April 2000 within time, the Responsible Authority purported to issue three further amendments on 27 September 2000, 1st November 2000 and 2nd November 2000 respectively. If the Permit One had expired in May 2000, then the three latter amendments could not have been lawfully made. Permit Two would have also been granted after the expiry of Permit PPA/065/98. Together with contemporaneous correspondence and discussions the nature of which assumed current and continuing approval of the subject development, the Responsible Authority's conduct in issuing these permits supports the legitimacy and rationale of the interpretation of "non-expiry" sought to be confirmed by declaration.

As a consequence of the Responsible Authority's conduct, the Applicant and its predecessor- in-title (the original developer) acted on the basis of such "assurances" and so entered into contracts, incurred considerable financial liabilities and generally proceeded with the development. The principles of estoppel ought have applied to prevent the Responsible Authority from changing its position. Now that the Responsible Authority is supportive of this application for the declarations as sought it is unnecessary to exhaustively explore the legal principles of estoppel. In the light of these circumstances, it is appropriate for the Tribunal to note the Responsible Authority's consent to the declarations being made and then accept that the preferred course is to actually make the declarations as sought."

26. On Day 3 Mr Tweedy appeared for Mr A Williams and Mr S Williams in respect of the declaration application and indicated that his client opposed the making of the declarations and contended that the permit had expired.

27. He adduced evidence from Mr Allen Williams. The Objectors made no submissions in relation to the declaration proceedings.

28. Mr Williams' evidence was that he was at the relevant times and is now a Director of the permit applicant company and had executive responsibility for the development. Whilst he had attended Council's officers with his architects and other consultants and had negotiated the amendments to the permits, he did not make or authorise anyone to make an application for an extension of the life of the permits.

29. On 5 October 2000 he made the request to extend the permits because he had been reminded by his solicitors to do so and he realised he had failed to do so before, after a discussion with Mr VanTils of the Council.

30. In cross examination he agreed that he had architects, surveyors and consultants such as Mr Mike Ferrey, Town Planning Consultant, who reported to him, but he did not necessarily attend or was involved in their meetings and discussions with Council. He agreed that on the 4 August 2000 which was the last day for extension of the permit, that discussions were proceeding with the Council about amendment of the Stage 1 permit and as well as Stage 2 and at that time and that then and later he and Council's officers were acting on the basis that the permit had been extended.

31. He agreed that in the August 2000 discussions shortly prior to the formal date for expiry of the permit they were discussing works which it was not possible to complete in the time remaining. In answer to the question "is it inconceivable that Council would grant an amendment to a permit in relation to the tower 8 days before the expiry date of the permit?" he answered that it would have been his wish and expectation that all permissions were valid up till the times when the financiers acted, and that Council and he had acted on the basis that the existing permits were valid and had been amended a number of times.

"1. There is no evidence upon which it could be concluded or inferred that any request was made, or any material submitted in support of any request for an extension prior to 4 August 2002.

2. There is evidence that no such request was made. Mr Williams will give sworn evidence that he made no such request, nor authorised any person to make any request for an extension, until 5 October 2000 at the prompting of Sewells.

3. The extension request of 5 October 2000 supports the above conclusion. Note the reference to a "proper request". Why could this request be found and not any of the others that the applicant claims were made.

4. The Responsible Authority is in a position to produce evidence to support the proposition that a request was made, granted and considered-either by documents or viva voce evidence. The absence of such evidence is not evidence of Council files being "cleaned up". Rather it is evidence that no such documents exist.

5. Third parties have a right to challenge extensions of time granted by Responsible Authorities as to their validity in law.

See: Horsfall v Campaspe Shire Council 9 VPR 20

6. Assessment as to legal validity requires careful consideration of the reasons for a decision with a view to determine whether the Responsible Authority, for example took into account a relevant consideration, or failed to take into account a relevant consideration.

7. The Tribunal cannot accept that valid extensions of the permit were made in circumstances where there is no evidence before it as to the grounds upon which the supposed extensions were granted by the Responsible Authority. A valid extension cannot be made without the Responsible Authority turning its mind to relevant matters. There is no basis upon which these supposed decisions can be scrutinised because there is no evidence of those decisions, or the reasons for making them. The decisions cannot be scrutinised because (even assuming they were made) no one knows when, how and why they were made.

8. An applicant for an extension of time is obliged to "advance some reason or material in support of the grant of an extension. An extension should not be granted simply because a request to extend has been made". It would not be sufficient to conclude that a request was made, unless that request was accompanied by proper material.

9. Accordingly, the submission that an application to amend a permit should be assumed to carry with it by implication some sort of informal application to extend the life of the permit cannot be correct.

10. The submissions made in paragraph 7.1 of the submissions in reply of Mr Molesworth QC are clearly incorrect. There has only ever been one permit, namely permit PPA/065/98. an amended permit is not a new permit. Clause 30 of the permit has never been amended. Accordingly, clause 30 must mean what it meant at the time the permit was issued. In other words, the 2 year life of the permit starts to run from the date of issue of the permit, 4 May 1998."

33. Mr Molesworth criticised Mr Tweedie's approach as unrealistic and that Condition 30 never required amendment as the wording should be read so that the two years ran from the date of the amendment. He agreed there is no paper trail for the extensions but submitted Section 69 is sufficiently flexible in its terms to invite a degree of informality which could be evidenced by acts of conduct by the parties. In this case he said that the only way in which sense could be made of the amendments to the permit was to imply that the conduct of the parties constituted and implied request for extension under Section 69.

34. The later correspondence making the specific request for amendment did not negate any such implication as the conduct of the application varied from officer to officer and Mr VanTils may have had a different approach from his predecessors. To imply a request to extend as part of the amendments and an application of Clause 30 to that effect is a natural explanation of the conduct of the parties particularly as both the permit applicants and the Council were of the unanimous view that the amendments contemplated construction works that could not possibly be completed within the formal two years of the initial life of the permit.

35. The submission of Mr Molesworth and Mr Nelson come down to the proposition that Section 69(1) contemplates that a request for an extension of time may be implied by conduct and that the grant of an extension of time may also be implied by conduct.

36. The use of the word "ask" in Section 69(1) connotes no degree of formality and I agree that asking for an extension of time may be implied from conduct or the circumstances of the case.

37. Leaving aside Mr Williams' evidence, the circumstances of the case may on one view be possibly consistent with the Council, its officers the permit applicant and its consultants all proceeding on the basis that the permits remained in force or were extended, particularly in the light of the evidence that shortly before the expiry date, negotiations were proceeding for amendments to the permit which involved works which could not conceivably be completed before the last day or which an extension could be applied for.

38. However the evidence of Mr Williams is not challenged, and despite the potential for conflict of interest between the interests of him, by son and the Applicant, his credit has not been impugned. The only express evidence on the issue is that the permit applicant company did not make a request under Section 69(1) for extension of the permit nor authorise anyone else to do so, and with an absence of specific intention to ask for an extension it is difficult to imply a request. The fact that the parties proceeded on the basis that everything remained in order is not sufficient as it is equally an indication of forgetful or careless administration as it might be of an implied request.

39. Further the grant by a Responsible Authority of an extension of time in my view requires a conscious act by it, and there is no evidence of any such act, except the later amendments, and the same considerations apply.

40. I do not accept the argument that there is an implicit amendment of the period of the permit by Clause 30 being left unamended, and that with each amendment it is read from the amendment date. In the initial permit its clear meaning was that the two years ran from the date of the issue of the permit, and there is nothing in the evidence apart from the general assumption that everything is in order, to indicate an intention by the Council that the permit is to read as lasting for two years from the amendment date. All the other amendments were recorded in the Notes to the amended permits, and that an extension of the life of the permit was not, indicates to me that it was not contemplated.

41. I find that the permit has not been extended pursuant to Section 69 and has expired.

Sewells Finance Ltd v Colac Otway SC [2003] VCAT 423

At a glance

Court

Decision date

Before

Source

Judgment (90 paragraphs)

Sewells Finance Ltd v Colac Otway SC [2003] VCAT 423 (14 April 2003)

Parties