Skouteris v Auburn City Council and Anor

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223; Centro Properties Limited v Hurstville City Council & Anor (2004) 135 LGERA 257; Clifford & Anor v Wyong Shire Council (1996) 89 LGERA 240; Currey v Sutherland Shire Council & Ors (1998) 100 LGERA 365; Franklins Limited v Penrith City Council & Anor [1999] NSWCA 134; CASES CITED: Houlton & Anor v Woollahra Municipal Council & Ors [1998] NSWLEC 188; Manly Council v Hortis & Anor (2001) 113 LGERA 321; Parramatta City Council & Anor v Hale & Ors (1982) 47 LGRA 319; Schroders Australia Property Management Ltd v Shoalhaven City Council & Anor [2001] NSWCA 74; Somerville v Dalby & Ors (1990) 69 LGRA 422

APPLICANTS J Jagot SOLICITORS Andresakis & Associates

FIRST RESPONDENT LEGAL REPRESENTATIVES: Peter Jackson (solicitor) SOLICITORS Pike Pike & Fenwick SECOND RESPONDENT Joe Nasr (solicitor) SOLICITORS CPC Lawyers

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

CON SKOUTERIS and CHRISTINE SKOUTERIS Applicants

JUDGMENT Facts 1 Cowdroy J: By Development Application No 218/04 ("the D/A") the second respondent sought development consent for the development of lot E in DP 412598 being land known as 36B Regent Street, Regent's Park ("the land"). The development comprised the demolition of existing improvements and the construction of a single storey building to be used for the purpose of a child care centre between the hours of 7 am and 6 pm weekdays, together with associated incidental works.

2 The land is affected by the provisions of the Auburn Local Environmental Plan 2000 ("the LEP") and pursuant thereto is zoned Residential 2(a) - Residential (Low Density) Zone. Within such zone the development of child care centres is permissible with consent. "Child care centre" is defined in Schedule 1 to the LEP as:- … a building or place used for educating, minding or caring for children, catering for six or more children, but does not include an educational establishment.

3 On 21 July 2004 the first respondent ("the Council") granted development consent ("the consent") to the D/A pursuant to s 81(1)(a) of the Environmental Planning and Assessment Act 1979 ("the EP&A Act").

4 The applicant challenges the validity of the consent upon the grounds that the Council failed to form the requisite opinion required by the LEP prior to the grant of consent and failed to consider likely noise impacts of the development and upon the ground that the decision to grant consent was manifestly unreasonable.

5 The applicant submits that the Council, as a condition precedent to the grant of consent, was required to satisfy itself that the requirements of cl 14 of the LEP ("cl 14") were met. Such clause provides:-

14 General restrictions on development in residential zones

Consent may be granted for development on land within Zone No 2(a), 2(b) or 2(c) only if, in the opinion of the consent authority, it is compatible with the existing and likely future character and amenity of nearby properties in terms of: (a) its scale, bulk, height, siting and landscaping, and (b) its operation, and (c) traffic generation and car parking, and (d) noise, dust, light and odour nuisance, and (e) privacy, and (f) stormwater drainage, and (g) hours of operation, and (h) overshadowing.

6 The applicant submits that the formation of an opinion under cl 14 was fundamental to the exercise of its power and that mere consideration of the issues raised by cl 14 as part of the general merits consideration is insufficient.

7 The applicant submits that the report prepared by Council's town planner ("the Report") for the Council meeting held on 21 July 2004 at which the D/A was considered makes no reference to cl 14. The Report referred to two clauses of the LEP, namely cl 11 and cl 48, which were also mandatory preconditions to the exercise by Council of its power to grant consent the D/A, but omitted any reference to cl 14. No other document forming part of the assessment refers to cl 14. The applicant submits that there is no evidence that Council ever formed the opinion required by cl 14 when it determined to grant the consent.

8 As a second ground the applicant submits that the Council failed to consider the likely noise impacts of the development on the adjoining residential properties which are owned by the applicant.

9 As a third ground, the applicant submits that the decision to grant consent was manifestly unreasonable in the absence of an acoustic assessment of the proposed use. The applicant submits that the Council should have requested submission of an acoustic report prior to making its decision to grant consent in view of the observations contained in the report that some adverse impacts from noise would result from the development. The applicant relies upon Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223.

10 The Statement of Environmental Effects lodged in support of the D/A stated:- No acoustic testing has been carried out at this stage.

It is considered that the proposed development will not create any significant noise problems for the adjoining properties.

11 The applicant submits that Council could not have rationally formed the opinion that the development was compatible with the surrounding properties in the absence of an acoustic assessment. It further submits that to grant approval on the apparent assumption that a condition (condition 89) required an acoustic assessment to be lodged and implemented after consent had been granted was manifestly unreasonable.

12 The Council acknowledges that cl 14 establishes a subjective precondition. Council agrees that it may only grant consent if it believes that each of the matters referred to in cl 14 is satisfied.

13 Council submits that although the Report does not refer to cl 14, such fact does not establish that Council has not formed the necessary opinion. The Council submits that documentary evidence relating to each of the subject matters referred to in cl 14 establishes that Council paid regard to them in its consideration of the D/A.

14 In answer to the applicant's challenge that the Council did not consider the impact of noise from the development, the Council relies upon the consideration of the D/A as evidenced by its documentation.

15 In answer to the applicant's challenge that the decision was manifestly unreasonable because of the failure to require an acoustic report, the Council submits that it had a discretion to determine whether such a report was necessary. Following due consideration the Council made the decision that such report was not required.

16 A bundle of documents (Exhibit B) contains all of the Council's records relating to the D/A and to Council's decision to grant the consent including the Report. The Report does not refer to cl 14, but the records establish that each of the subject matters referred to in cl 14 was considered by Council's town planner in the formulation of his Report.

17 Significantly the Report drew the Council's attention to all relevant statutory controls except for cl 14. Having observed that there were no State Policies affecting the land, the Report referred to the operation of the LEP. Under the heading "Local Environmental Planning Instruments", the Report drew Council's attention to the zoning of the land and to the constraints on the permissibility of the use. Clause 11(c) of the LEP provides:- c) to permit appropriate uses in the zone that compliment [sic] the residential nature and function of the zone. The Report considered the requirements of such clause.

18 The report also referred to cl 48 of the LEP in the following terms:- Clause 48 of ALEP 2000 [the LEP] states that consent can not be granted to development within the Residential 2(a) zone if the consent authority considers that the development will prevent the surrounding lots from being developed in accordance with the LEP. The development of the subject site for the purpose of a child care centre will not restrict the development potential of adjoining properties. On this basis the development is satisfactory in regard to clause 48 of the LEP. Thereafter, the Report considered non-statutory controls relating to the land and considered the merit issues of the development including the likely environmental, social or economic impacts.

19 The Report inter alia concluded:- The proposal [sic: proposed] development is appropriately located within the 2(a) zone under the relevant provisions of Auburn Local Environmental Plan 2000. The proposal is consistent with all statutory and non-statutory controls applying to the development. Non-compliances with Council's controls have been discussed in the body of this report. The development is considered to perform adequately in terms of its relationship to its surrounding built and natural environment, particularly having regard to impacts on adjoining properties.

20 Clause 14, which was not referred to in the Report, required Council to satisfy itself that the development was compatible with nearby properties as a prerequisite to the grant of a consent. Such clause prevented Council from granting development consent unless Council formed the opinion that the development is "compatible with the existing and likely future character and amenity of nearby properties" in respect of each of the items referred to in subparagraphs (a)-(h) inclusive.

21 In Clifford & Anor v Wyong Shire Council (1996) 89 LGERA 240 Council granted consent to itself in respect of a development which exceeded the height limit contained in its Local Environmental Plan. Pursuant to a clause of such plan, Council could consent to such a development provided it was satisfied that certain criteria had been met. Stein J held (at 249) that it was mandatory for Council to be satisfied that each of the requirements had been satisfied before the development became permissible.

22 In Currey v Sutherland Shire Council & Ors (1998) 100 LGERA 365 the Court of Appeal considered the effect of the provisions of an LEP which prohibited Council from consenting to a development of land within a foreshore building line unless it was satisfied with respect to certain criteria. The clause, known as cl 19, had been referred to in a Council officer's report. The trial judge observed that such reference could give rise to the presumption that the clause was within the general knowledge of the Councillors, and accordingly that Council must have been aware of its provisions.

23 Stein JA rejected such finding, concluding (at 375):- Was it enough that the officer's report contained a reference to cl 19 and the foreshore building line? In my opinion, it was not. Without some elucidation of the relevance of cl 19 to the application and the need to consider the existing two-storey boatshed in the context of cl 19(5) and (6), the bare reference to cl 19 was capable of misleading the Council in its required task. This is principally because the report failed to refer to the prohibition in cl 19(5).

24 At 374, Stein J observed that:- It is important to note … that the consideration of cl 19(5), and its exception in cl 19(6), comes before any merit considerations under s 90 are weighed: see Clifford v Wyong Shire Council (at 249, 251-252) .

25 Clifford and Currey were considered by the Court of Appeal in Franklins Limited v Penrith City Council & Anor [1999] NSWCA 134. In that decision the Court considered the validity of a development approval for a warehouse in circumstances where an Interim Development Order (clause 32(2) prohibited consent unless Council was satisfied that certain criteria had been met. The Court found that the presumption of regularity and Council's general knowledge (see Parramatta City Council & Anor v Hale & Ors (1982) 47 LGRA 319 at 346 and Somerville v Dalby & Ors (1990) 69 LGRA 422 at 429) had no application when the issue of power to grant development consent was in question. Stein JA said at [28]:- In my opinion, the presumption of regularity has no place in a case such as this. What is here involved is a question of power. If the precondition in cl 32(2) was not satisfied, then Council had no power to grant consent. The existence of the mental state of satisfaction is an 'essential condition' or preliminary to the exercise of the power, Craig v South Australia (1995) 184 CLR 163 at 179 and Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8 per Spigelman CJ at paras 42 and 94. See also Centro Properties Limited v Hurstville City Council & Anor (2004) 135 LGERA 257.

26 Stein JA referred to the fact that the inference that the council did not possess the requisite satisfaction might be more readily drawn where no council officer or member of the council was called. His Honour concluded that where the report to council failed to refer to the relevant clause and to the requirement, the inference should be drawn, namely that council did not form the requisite opinion.

27 Each of the above authorities was again considered by the Court of Appeal in Manly Council v Hortis & Anor (2001) 113 LGERA 321. In this decision the Court considered a council's development approval granted under its Local Environmental Plan which contained provisions prohibiting development unless council was satisfied that the development would not have a detrimental effect on the amenity of a Foreshore Scenic Protection Area. The relevant provisions were not referred to in the minutes of the council's meeting nor in the material before council at that meeting and there was no direct evidence that the council had considered either of the two relevant provisions. No witness was called to confirm that either clause had been considered by council.

28 At 334 the Court said:- Both Currey and Franklins … demonstrate that an inference that a consent authority considered a specific precondition to its power to grant a development consent will not normally be derived from material which demonstrates no more than that the consent authority was aware of the issues which were relevant to its decision whether or not to grant consent if it had power to do so.

29 The Council relied upon Schroders Australia Property Management Ltd v Shoalhaven City Council & Anor [2001] NSWCA 74. In this decision the applicant challenged a development consent upon the ground that Council had failed properly to form an opinion that the development was consistent with the objectives of the zone. It was claimed that Council had accepted counsel's advice and had failed independently to apply its collegiate mind to the issues. The issue for consideration had been the subject of discussion and submissions to the Council and had been the subject of detailed comment from the parties' consultants as well as legal advice. The Court of Appeal upheld Pearlman J's finding that the inference could be drawn that Council had formed the appropriate opinion.

30 Schroders is directed to the question whether council applied its collective mind independently when making its decision to grant consent. It does not deal with the specific issues considered by the Court in Hortis, Currey and Franklins, namely whether the council had applied its collective mind at all to the mandatory precondition. Accordingly, little assistance is to be gained from Schroders in respect of the issues currently under consideration

31 In the present proceedings no oral evidence has been adduced from any Council officer nor member of the Council to confirm that in its decision-making process Council was specifically made aware that cl 14 of the LEP operated as a prohibition on development unless Council was satisfied that each of its requirements were met. The Council relies upon the fact that the subject matters contained in cl 14 were considered in the Report. However, such consideration is consistent merely with the Council's review of the merits of the application. Nowhere is it apparent that Council ever addressed the question whether it had formed the opinion required by cl 14. There is no evidence that Council was aware of the real effect of cl 14, namely that it operated as a prohibition of development subject to satisfaction of each of the enumerated subject matters.

32 Since cl 14 operates as a mandatory precondition, Council was required to form its opinion on this question. The answer to this question would determine whether merit issues were then to be considered (see Stein JA in Currey at 374). The Court is satisfied that the principles referred to in Hortis, Currey and Franklins apply. In the present circumstances, the Court draws the inference that the Council did not specifically form the opinion required by cl 14 and the Court finds that the question of power, as distinct from merit considerations, was overlooked. It follows that the consent was made beyond the Council's power and is therefore invalid.

33 The applicants also challenge the validity of the consent upon the ground that Council failed to consider the likely impact of noise upon the environment as required s 79C(1)(b) of the EP&A Act.

34 The bundle of documents incorporates objections which refer to the loss of acoustic privacy and noise from vehicles using the driveway and children at the centre. Such objections were before the Council at the time it granted consent and it can be inferred that the Council had cognisance of them: see Houlton & Anor v Woollahra Municipal Council & Ors [1998] NSWLEC 188.

35 The Report specifically considers the impact of the operation of the child care centre, particularly its hours of operation and the traffic movements associated with such use. The Report also considered the location of the development which is set back from adjoining residential properties, having access to the street by a shared driveway and having a rear boundary to the Bankstown-Lidcombe railway line.

36 The Report acknowledges that noise will result from the childcare centre and states:- The use of the site as a child care centre accommodating 39 children will result in some adverse impacts from noise from children playing in the rear yard, however it needs to be recognised that the zone does permit child care centres to be located in a residential area … The application has not been supported by an acoustic report however it is considered that the use of the site for this purpose will not result in adverse amenity or noise impacts. Irrespective of this condition 10 [to the consent] imposes hours of operation, condition 12 imposes limits on the number of children and condition 89 requires submission of an acoustic report and implementation of any measures recommended by that report.

37 It is apparent that the author of the Report considered that the restrictions referred to in conditions 10 and 12, combined with condition 89, would prove to be an adequate safeguard for any noise impact. However, condition 89 does not address the impact of the development upon adjoining properties, but rather the impact of noise from the adjoining railway upon the amenity of the proposed centre. Condition 89 to the consent provides:- 89. Rail Estate - Acoustic Report

Prior to the release of the Construction Certificate, a qualified acoustic consultant shall prepare a report identifying the appropriate noise and vibration criteria and the means by which these criteria will be met. During construction, all acoustic treatments nominated in the acoustic report and other project documentation shall be implemented. Prior to the release of the Occupation Certificate, a measurement report from a qualified acoustic consultant shall be submitted, demonstrating compliance with the noise criteria.

Reason :- to ensure the requirements of Rail Estate are met.

38 Although condition 89 was directed to the effect of noise upon the centre, condition 14 of the consent, which was not referred to in the Report, deals explicitly with noise generated from the child care centre. It provides:- 14. Noise

a) Transmission of offensive noise to any place of different occupancy. b) A sound pressure level at any affected premises that exceeds the background (LA90) noise level in the absence of the noise under consideration by more than 5 dB(A). The source noise level shall be assessed as an LA10, 15 min and adjusted in accordance with EPA guidelines for tonality, frequency weighting, impulsive characteristics, fluctuations and temporal content. c) A sound pressure level at any affected premises that exceeds the recommended planning levels outlined in the NSW EPA Guidelines;

39 Despite the fact that condition 89 was wrongly referred to, in view of the objections to the development on the ground of noise impact, and of the inclusion of condition 14, the Court is not satisfied that the Council failed to consider the impact of noise.

40 The Report recognised the potential for "some adverse impacts from noise" however such observation does not lead to the conclusion that the submission of an acoustic report was essential. Council was entitled to conclude that the noise from the proposed development would not lead to unreasonable noise impact. Council retained a discretion whether to require the submission of an acoustic report prior the grant of consent. Accordingly, the Court finds that there is insufficient evidence to establish Wednesbury unreasonableness in the Council's decision to grant consent and rejects this challenge to the validity of the consent.

41 The Court makes the following declaration and orders:- 1. A declaration that development consent 218/04 granted by the first respondent to the second respondent for the proposed development of a child care centre at 36B Regent Street, Regent's Park is invalid and of no effect.

2. An order that the second respondent, its servants and agents be and the same are hereby restrained from carrying out any development in reliance upon development consent 218/04.

3. Unless an application is made within 21 days for a different order, the first respondent pay the applicant's costs of these proceedings.

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