SunnyCove Management Ltd v Stonnington CC [2006] VCAT 1705

1 In P1650/2006 the application for a declaration pursuant to section 149B of the Planning and Environment Act 1987 that the advertising of planning permit application No 0353/06 to adjoining owners and occupiers of the land pursuant to section 52(1)(a) of the Act is unreasonable and unnecessary, is refused.

2 In P1659/2006 the decision of the responsible authority is set aside. The Tribunal directs that no notice of planning permit application No 0353/06 to any other persons pursuant to section 52(1)(d) of the Planning and Environment Act 1987 is required.

1 These proceedings involve the issue of whether notice should be given of an application to use an approved residential development for the purpose of residential village.

2 A permit has been issued[1] that allows development of a 12 storey building for 113 dwellings (the 'development permit'). The building will include facilities for the use of residents such as a communal dining room, a communal business centre, lounge, gym and other recreation facilities. The permit was issued at the direction of the Tribunal following a keenly contested hearing over 5 days in 2003.[2] Because the land is located in a Residential 1 Zone under the Stonnington Planning Scheme, no permit is required to use the land for dwellings. A permit was only required for development.

3 The building authorised by the development permit has not yet been constructed. The land owner now wishes to use the building for the purpose of a residential village rather than separately owned dwellings. The definition of a residential village in clause 74 of the planning scheme is:

Land, in one ownership, containing a number of dwellings, used to provide permanent accommodation and which includes communal, recreation, or medical facilities for residents of the village.

4 Residential village is a section 2 use in the Residential 1 Zone. In support of the planning permit application to use the building approved by planning permit No 0633/02 for the purpose of a residential village, the applicant says:

The current application simply seeks approval to use this approved building for the purpose of a Residential Village.

The approved building is intended to be held in one ownership and will be administered by a management company. The management company will then lease each of the dwellings for the purpose of providing permanent accommodation. As a result, the intended use of the building could be classified as being a 'Residential Village' rather than dwellings.

Importantly, the only real distinction between the use of the land pursuant to the existing permit and the proposed use, is the nature of the proposed ownership arrangement.

The land is included in the Residential 1 Zone under the provisions of the Stonnington Planning Scheme. 'Dwelling' is an as-of-right use in the zone whilst 'Residential Village' [nested under Accommodation] is a permit required use. A separate permit is sought to avoid any confusion as to the classification of the use. It is proposed that the development of the land will be carried out pursuant to the existing permit.

The proposal will not cause material detriment to any person because it provides for no external alterations to the approved building and no amendments to the nature of the proposed use of the dwellings, communal areas and car parking. It simply provides an opportunity for the dwellings to be held in one ownership and to be leased by a management company. On this basis we believe that it is unnecessary for notice of the application to be given to any person.

5 Council has decided that it considers advertising of the permit application is necessary under both section 52(1)(a) and section 52(1)(d) of the Planning and Environment Act 1987. Two applications have been lodged with the Tribunal concerning this decision:

•

P1659/2006 is an application under section 78(a) of the Act for review of the requirement by the responsible authority to give notice under section 52(1)(d).

•

P1650/2006 is an application for declaration under section 149B of the Act that the advertising of planning permit application No 0353/06 to adjoining owners and occupiers of the land pursuant to section 52(1)(a) of the Act is unreasonable and unnecessary.

6 Separate applications have been made because different tests apply to decisions about notice under sections 52(1)(a) and (d), and there is no right of review provided in respect of a requirement to give notice under section 52(1)(a). Section 78(a) only provides an opportunity for a permit applicant to apply to the Tribunal for a review of a requirement by the responsible authority to give notice under section 52(1)(d). Thus the only way in which a permit applicant can challenge a decision by a responsible authority to require notice under section 52(1)(a) is to seek a declaration under section 149B that the decision was unreasonable and unnecessary. To succeed in such a case, an applicant must establish what is known as Wednesbury[3] unreasonableness, namely that the decision was so unreasonable that no reasonable person (or responsible authority) could have come to it.

7 The relevant provisions under which notice has been required are as follows.

(1) Unless the responsible authority requires the applicant to give notice, the responsible authority must give notice of an application in a prescribed form

(a) to the owners (except persons entitled to be registered under the Transfer of Land Act 1958 as proprietor of an estate in fee simple) and occupiers of allotments or lots adjoining the land to which the application applies unless the responsible authority is satisfied that the grant of the permit would not cause material detriment to any person; and

(d) to any other persons, if the responsible authority considers that the grant of the permit may cause material detriment to them.

8 I have highlighted the words in each subsection which give rise to the different tests. In section 52(1)(a) the responsible authority must be satisfied about a negative proposition, namely that the grant of the permit would not cause material detriment to any person, whereas in subsection (d) the responsible authority must consider a positive proposition, namely that the grant of the permit may cause material detriment to other persons.

9 The applicant submitted that the council had not identified any detriment, let alone any material detriment, that was likely to be suffered by any person as a consequence of the different ownership arrangement resulting from the use of the land as a residential village held in one ownership as compared to its use as separately owned dwellings. Ms Brennan argued that, if anything, the fact that the building is in single ownership and managed by a single entity may result in benefits to surrounding owners and occupiers of land, rather than causing them any detriment.

10 Before making its decision, the council sought legal advice. It formed the opinion that it was not satisfied that the grant of the permit would not cause any material detriment to any person. Council relies upon the following matters as having the potential to cause material detriment:

•

The fact that the two uses are defined differently - dwelling and residential village - and that the residential village use will be operated commercially.

•

The high level of interest generated by the previous planning permit application for development and the length of time that has elapsed since the permit was granted, which may mean that new people have moved into the area and will have an interest in how the land is used.

•

Lack of evidence at this stage as to how the residential village will operate compared to use of the land for dwellings.

•

The possibility that different planning policies might apply to the use of land for a residential village compared to its use for dwellings.

11 The Tribunal considered the operation of section 52(1)(a) in some detail in the case of Ellul & Ors v Shire of Melton[4] where it said:

In looking at Section 52(1) there are differences between paragraphs (a) and (d). Paragraph (a) imposes on the Responsible Authority a requirement to give notice to the owners and occupiers of allotments adjoining the land to which the application applies unless the Responsible Authority is satisfied that the grant of the permit would not cause material detriment to any person. As the Tribunal said in Jesson v City of Frankston and Virtanen (P88/1525) 1 AATR 314 at 318;

"This seems to be a fairly narrow exception. It is not easy for a Responsible Authority or anyone else to be confident that it had realised and foreseen all possible ways in which a detriment might be caused. One cannot assess what one has not seen or foreseen. To look at a proposal and conclude that one cannot foresee that it would cause detriment is not enough to justify not giving notice. It appears to be necessary to consider the possibility of detriments that are not immediately apparent. The Responsible Authority has to be positively satisfied of a negative proposition ie that material detriment will not be caused to any person. "When in doubt, do" must be the rule of thumb in relation to the requirement to give notice under Section 52(1)(a)."

This obligation was also looked at by the Tribunal in Partland v City of St Kilda and K A Reed (Group) Pty Ltd (P88/2854, 3 AATR 166) where it was said on page 175.

"For the purposes of Section 52(1)(a) the officer should not have been so concerned to list and weigh all the benefits. His proper concern was with possible detriments. If notice was not to be given of the application he had to be "satisfied that the grant of the permit would not cause material detriment to any person. If there were 20 major advantages to be achieved by allowing the proposal but one or two minor yet material detriments to any person, then notice must be given. In fact it is enough if there could be a minor but material detriment to one person. A possible detriment may be far outweighed by other considerations but that is to be judged after notice has been given and in the light of any objection, when the Responsible Authority comes to consider whether a permit should be granted or not."

The Tribunal does not believe that the detriment referred to in Section 52(1) must be substantial. It must be real, as distinct from being fanciful, but it may in fact be only minor. However, it is not for the Responsible Authority at this stage to exercise its judgment about the weight to be accorded to such detriment. If any material detriment is perceived then notice must be given. In this case such detriment was perceived, although it was felt to be outweighed by other matters or able to be overcome, and therefore notice should have been given.

12 The requirement to give notice to affected persons is a fundamental aspect of the planning framework established by the Planning and Environment Act 1987. Section 4(2)(i) states that the objectives of the planning framework established by the Act are:

(i) to ensure that those affected by proposals for the use, development or protection of land or changes in planning policy or requirements receive appropriate notice;

13 The way in which section 52 is structured reinforces the principle of giving appropriate notice to affected people. It draws a distinction between notice to adjoining owners and occupiers, which will usually happen as a matter of course and in respect of which there is no appeal, and notice to other persons, for which there is a right of review.

14 The right of review provided by section 78(a) in respect of notice to "other persons" enables a review on the merits of whether the grant of a permit may cause material detriment. In such a review, it is open to an applicant to argue that there will be no material detriment caused by the grant of a permit.

15 However, to challenge a requirement under section 52(1)(a), the applicant is effectively challenging the validity of the decision by the responsible authority on the basis that it was a decision that no reasonable responsible authority could have made. As Mason J said in Minister for Aboriginal Affairs v Peko-Wallsend Limited[5]:

The limited role of a court viewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits in the exercise of that discretion, and a decision made within those boundaries cannot be impugned.

16 In Sweetvale Pty Ltd v Minister for Planning[6] Justice Morris said:

[25] The hurdle faced by a person alleging that a planning permit decision was not open is a high one, not only for the reasons articulated by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Limited, but also because planning decisions are so broadly based that it will be very difficult to say that no responsible authority, acting rationally, could have made the decision in question. Indeed, the difficulties facing a person seeking to judicially review a planning permit decision is one of the fundamental reasons why parliaments throughout Australia have provided for review of planning permit decisions on the merits. This is particularly so in Victoria, which can rightly claim to have the broadest and most accessible system of planning review on the merits in the country.

17 Justice Morris amplified this statement about the difficulties faced in challenging the type of decision made by the responsible authority under section 52(1)(a) in the case of Baarmutha Residents Association Inc v Indigo SC[7] when he said:

[24] The next contention advanced by the applicants was that the decision of the responsible authority to approve the development plan was unreasonable. I emphasise the limited scope of this ground of legal challenge. In Sweetvale Pty Ltd v Minister for Planning [2004] VCAT 38 at [25] I stated that the hurdle facing a person alleging that a planning permit decision is not open is a high one. More recently, when sitting in the Supreme Court of Victoria in East Melbourne Group Inc v Minister for Planning [2005] VSC 242, I emphasised that when a challenge is based upon unreasonableness it is necessary to understand that an applicant must do more than show that the decision is one which is a poor decision or a decision which is not to be preferred in all the circumstances. Rather this ground of invalidity is reserved for "decisions that, looked at objectively, are so devoid of any plausible justification that no reasonable body of persons could have reached them".

NOTICE UNDER SECTION 52(1)(D) - REVIEW

18 I will deal first with the application under section 78(a). In this context I consider that the Council must establish how the grant of the permit may cause material detriment to other persons. It is not enough for the responsible authority to speculate that there might be some potential for unspecified material detriment. The Council must be able to identify what material detriment may be caused to other people.

19 I do not consider that any of the matters raised by Council constitute "material detriment" in terms of being a real and identifiable detriment. I am not persuaded that the difference in ownership pattern - single ownership in the case of residential village, multiple ownership in the case of dwellings - alone gives rise to any likelihood of material detriment to other persons that would justify notice beyond what is provided for by section 52(1)(a). Therefore, in my view there is no reason why notice of the permit application needs to be given under section 51(1)(d).

NOTICE UNDER SECTION 52(1)(A) - DECLARATION

20 However, the case involving notice under section 52(1)(a) is different for two reasons. First, in deciding whether the council's decision was manifestly unreasonable, I am not reviewing the merits of the council's decision and deciding whether this is a good decision and one that I would make upon review. Rather, I am deciding whether the decision was so unreasonable that no reasonable council could have come to it.

21 Second, under section 52(1)(a) the council must be satisfied about a negative proposition. It must be confident that it had realised and foreseen all possible ways in which a detriment might be caused.[8] This is much more difficult to establish than the test under section 52(1)(d).

22 In my view, this is a case where the caution administered by Justice Morris in Baarmutha Residents Association Inc v Indigo SC[9] is relevant. I am not required to agree with the Council's decision that the grant of a permit would not cause material detriment to any person. Rather, I must consider whether this was a view that no reasonable responsible authority could form.

23 In the circumstances of this case, I consider it would have been reasonable for the council to decide not to give notice under section 52(1)(a). But I am equally satisfied that it was open to the Council to decide that there may be potential detriment caused by the grant of the permit, even though it was difficult to speculate what that might be, and it was therefore in keeping with the spirit of the Act that notice should be given to adjoining owners and occupiers, especially in light of the previous level of interest in the development. The Council's ultimate decision regarding the permit application may be that there will be no material detriment caused by the grant of a permit to any person. Alternatively, it may decide that any detriment is outweighed by benefits or is so insubstantial as not to justify refusal of a permit. However, that is a decision to be made later after any notice has been given and people have been given an opportunity to consider how they may be affected. It is wrong to confuse the decision about whether to grant a permit with the decision about whether to be satisfied that there is no potential to cause any detriment to any person.

24 I regard the objective of the planning framework set out in section 4(2)(i) of the Planning and Environment Act, coupled with the non-reviewable requirement in section 52(1)(a) to give notice to adjoining owners and occupiers, as establishing a presumption that notice will generally be given to adjoining owners and occupiers. This requirement to give notice is a fundamental tenet of the Act. It is left in the hands of the responsible authority to decide those circumstances when notice will not be required. The consequences of failing to give notice can be serious and may give rise to an application under section 87 to cancel or amend a permit. Therefore, if a responsible authority has turned its mind to the question of whether notice is required, which the council did in this case (even getting a legal opinion), and has decided that it is not satisfied that the grant of the permit would not cause material detriment to any person, it would take very persuasive evidence that this was a manifestly unreasonable decision rather than just an ultra-cautious decision. There is no such evidence here.

25 I have therefore reached the conclusion that the Council's decision under section 52(1)(a) to require notice to be given to adjoining owners and occupiers was a decision that a reasonable responsible authority acting reasonably could have reached. I am not prepared to make the declaration under section 149B that the applicant seeks.

26 The practical outcome of my decisions is that notice should be given under section 52(1)(a) of the Act to the owners and occupiers of adjoining land but that additional notice to any other persons is not required under section 52(1)(d).

[1] Planning Permit No 0633/02 (amended)

[2] Australian Horizons (Vic) Pty Ltd v Stonnington CC [2003] VCAT 2044

[3] Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223 the decision is

[4] 3 AATR 179 at 186-188

[5] [1986] HCA 40; (1985) 162 CLR 24 at 40-41

[6] [2004] VCAT 38

[7] [2005] VCAT 1521

[8] See Jason v City of Frankston 1AATR 314, at 318