Land and Environment Court of New South Wales CITATION : Byron Pirola v City of Canada Bay Council [2006] NSWLEC 36 APPLICANT PARTIES : Byron Pirola RESPONDENT City of Canada Bay Council FILE NUMBER(S) : 11277 of 2005 CORAM: Jagot J Practice and Procedure :- Preliminary question in merit appeal - when appropriate KEY ISSUES: Words and phrases:- meaning of "circumstances that the principal certifying authority considers were unavoidable" Occupation certificate - failure to appoint principal certifying authority Conveyancing (Sale of Land) Regulation 2005 cl 6(1) Environmental Planning and Assessment Act 1979 Pt 4A, s 4(1), s 81A, s 109C, s 109D, s 109E , s 109H, s109K, s 109M, s 149A, Sch 6, cl 72, cl 74 LEGISLATION CITED: Environmental Planning and Assessment Amendment (Quality of Construction) Act 2003 Environmental Planning and Assessment Regulation 2000 cl 149, cl 151(1)(c)(ii), cl 162A, cl 162B, cl 162C Land and Environment Court Act 1979 s 17(d), s 39(2) Austcorp No. 459 Pty Ltd v Baulkham Hills Shire Council [2003] NSWLEC 318; Australian Gas Light Co v Valuer-General (1940) SR (NSW) 126 ; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 ; CASES CITED: Delbant Pty Limited v North Sydney Council [2005] NSWLEC 657; Fernance Family Holdings Pty Ltd v Newcastle City Council (2000) 110 LGERA 66 ; Hope v Bathurst City Council (1980) 144 CLR 1 ; Marvan Properties Pty Ltd v Randwick City Council (2005) 138 LGERA 1; Radstock Co-operative & Industrial Society v Norton-Radstock Urban District Council [1968] 1 Ch 605 DATES OF HEARING: 01/02/2006 DATE OF JUDGMENT: 02/03/2006 APPLICANT P Rigg (Solicitor) SOLICITORS LEGAL REPRESENTATIVES: Deacons RESPONDENT T O'Connor (Solicitor) SOLICITORS Houston Dearn O'Connor JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Jagot J 3 February 2006 11277 of 2005 BYRON PIROLA Applicant CITY OF CANADA BAY COUNCIL Respondent JUDGMENT 1. Jagot J: These proceedings comprise an appeal under s 109K of the Environmental Planning and Assessment Act 1979 ("the EPA Act") against the Council's refusal on 24 October 2005 to issue a final occupation certificate for buildings located on premises known as 19 and 19A Empire Avenue and 9 and 9A Freeman Place, Concord ("the premises"). The parties have raised three questions of law for preliminary determination. The questions are as follows: 1. Whether section 109E(3)(d) of the Environmental Planning and Assessment Act 1979 prohibits the Council from granting a final occupation certificate if the requirements of cll 162A, 162B and 162C of the Environmental Planning and Assessment Regulations have not been met. 2. Whether in view of the terms of section 109D(2) of the Environmental Planning and Assessment Act 1979 Council can issue an occupation certificate for a new building where no principal certifying authority was appointed for the erection of the building. 3. If the answer to question 2 is in the negative, does this Honourable Court lack jurisdiction to hear this appeal? Background 2. The parties have tendered a statement of agreed facts and a bundle of documents. Relevantly, development consent was granted on 19 March 2003 for the demolition of an existing dwelling on the premises and the erection of four aged care apartments each of two storeys. The buildings are classified pursuant to the Building Code of Australia as classes 2, 10a and 10b. 3. The existing dwelling was demolished between August and October 2003. The erection of the new aged care apartments commenced in or about October 2003 and continued until September 2004 when it became known to the Council that the building works were being carried out absent a construction certificate having been obtained as required by s 81A(2)(a) of the EPA Act. Thereafter, it also became clear that a principal certifying authority for the building work had not been appointed as required by s 81A(2)(b) of the EPA Act. 4. Subsequently, on 10 December 2004, the Council did issue a construction certificate, but its scope was limited to the construction of timber frame pergolas and the installation of garage doors. 5. On 15 December 2004, the Council issued a building certificate for the whole of the buildings on the premises pursuant to s 149A of the EPA Act. The Council also granted development consent for the strata subdivision of the buildings on 31 January 2005. The construction of the buildings was completed in or about February 2005. The application for the final occupation certificate was lodged on 8 September 2005. 6. The Council, which has otherwise sought to facilitate the completion of the development, determined that it was not able to issue the final occupation certificate by reason of s 109H(1B) of the EPA Act which provides that an occupation certificate must not be issued unless any preconditions to the issue of the certificate that are specified in a development consent have been met. In the appeal proceedings, as shown by the terms of the points of law which it has framed, the Council relies upon the provisions of s 109E(3)(d) and s 109D(2) of the EPA Act and cll 162A, 162B and 162C of the Environmental Planning and Assessment Regulation 2000 ("the Regulations"). 7. After the points of law had been raised, on 27 January 2006, the applicant's solicitors forwarded to the Council a letter stating that the applicant appointed the Council as the principal certifying authority. The Legislation 8. Pursuant to s 81A(2) of the EPA Act, the erection of a building in accordance with a development consent must not be commenced until a construction certificate for the building work has been issued by the consent authority, the Council (if the Council is not the consent authority) or an accredited certifier and the person having the benefit of the development consent has appointed a principal certifying authority for the building work. In this case, it is common ground that the buildings were erected in contravention of both of these statutory requirements. 9. Part 4A of the EPA Act concerns the certification of development. Section 109M prohibits the commencement of the occupation or use of a new building unless an occupation certificate has been issued in relation to he building. Contravention of s 109M is an offence. 10. An occupation certificate is a certificate that authorises the occupation and use of a new building or a change of building use for an existing building (s 109C(1)(c)). An occupation certificate may be an interim certificate or a final certificate and may be issued for the whole or any part of a building (s 109C(2)). 11. Section 109D(1)(c) provides that an occupation certificate may be issued by a consent authority, the council or an accredited certifier. That section is qualified by s 109D(2), which provides that an occupation certificate must not be issued to authorise a person to commence occupation or use of a new building except by the principal certifying authority appointed for the erection of the building. Persons who are eligible to be appointed as the principal certifying authority (the consent authority, the council or an accredited certifier) are specified in s 109E(1). 12. Section 109E(3) provides that: (3) A principal certifying authority for building work or subdivision work to be carried out on a site is required to be satisfied: (a) …, and … (d) that building work or subdivision work on the site has been inspected by the principal certifying authority or another certifying authority on such occasions (if any) as are prescribed by the regulations and on such other occasions as may be required by the principal certifying authority, before the principal certifying authority issues an occupation certificate or subdivision certificate for the building or work, and (e) that any preconditions required by a development consent or complying development certificate to be met for the work before the issue of an occupation certificate or subdivision certificate have been met, before the principal certifying authority issues the occupation certificate or subdivision certificate. 13. Certain inspections are prescribed by the Regulations, as referred to in s 109E(3)(d), for different classes of building. Relevantly, cll 162A(4) and (5) now provide that: (4) In the case of a class 1 or 10 building, the occasions on which building work for which a principal certifying authority is first appointed on or after 1 July 2004 must be inspected are: (a) at the commencement of the building work, and (b) after excavation for, and prior to the placement of, any footings, and (c) prior to pouring any in-situ reinforced concrete building element, and (d) prior to covering of the framework for any floor, wall, roof or other building element, and (e) prior to covering waterproofing in any wet areas, and (f) prior to covering any stormwater drainage connections, and (g) after the building work has been completed and prior to any occupation certificate being issued in relation to the building. … (5) In the case of a class 2, 3 or 4 building, the occasions on which building work must be inspected are: (a) at the commencement of the building work, and (b) prior to covering of waterproofing in any wet areas, for a minimum of 10% of rooms with wet areas within a building, and (c) prior to covering any stormwater drainage connections, and (d) after the building work has been completed and prior to any occupation certificate being issued in relation to the building. 14. Clause 162B, referred to in the points of law, concerns the keeping of records of inspections required by cl 162A. 15. Clause 162C provides a form of "escape" provision from the requirements of cl 162A, being in the following terms: (1) If the circumstances described in subclause (2) apply: (a) an inspection, other than a final inspection, that would be prescribed for the purposes of section 109E(3)(d) of the Act in the absence of this clause, is not prescribed for the purposes of that paragraph, and (b) an inspection that is not prescribed for the purposes of that paragraph, but is required to be carried out by the principal certifying authority under that paragraph, need not be carried out. (2) The circumstances are: (a) the inspection was missed because of circumstances that the principal certifying authority considers were unavoidable, and (b) the principal certifying authority is satisfied that the work that would have been the subject of the missed inspection was satisfactory, and (c) the principal certifying authority, as soon as practicable after becoming aware of the circumstances that caused the inspection to be missed, makes a record in accordance with subclause (3). 16. Section 109H, relied upon by the Council in its refusal of the occupation certificate application, specifies other restrictions on the issue of occupation certificates. Its provisions include the following: … (1B) An occupation certificate must not be issued unless any preconditions to the issue of the certificate that are specified in a development consent or complying development certificate have been met. … (1) A final occupation certificate must not be issued to authorise a person to commence occupation or use of a new building unless the certifying authority is satisfied: (a) that a development consent or complying development certificate is in force with respect to the building, and (b) in the case of a building erected pursuant to a development consent but not a complying development certificate, that a construction certificate has been issued with respect to the plans and specifications for the building, and (c) that the building is suitable for occupation or use in accordance with its classification under the Building Code of Australia, and (d) that such other matters as are required by the regulations to be complied with before such a certificate may be issued have been complied with. 17. Section 109E(3), in its current form, was inserted into the EPA Act by the Environmental Planning and Assessment Amendment (Quality of Construction) Act 2003 ("the 2003 Amending Act"), which commenced on 1 January 2004. That Act, amongst other things, introduced the related notion of "critical stage inspections" (defined in s 4(1) of the EPA Act as the inspections prescribed by the regulations for the purposes of section 109E (3) (d)), amended the terms of s 81A, inserted subsections (1A) to (1D) into s 109H and inserted cl 162A and 162B into the Regulations (which were subsequently amended on 1 March 2004). Schedule 6 to the EPA Act was also amended so as to include savings and transitional provisions consequential on the coming into force of the 2003 Amending Act. Those provisions include the following: 72 Appointment of principal certifying authorities Section 109E, as amended by the 2003 amending Act, extends to any development consent or complying development certificate issued before the commencement of those amendments for which a principal certifying authority needs to be appointed after that commencement. 74 Restriction on issue of occupation certificates Section 109H (1B), as inserted by the 2003 amending Act, does not apply to any building work that commenced before that amendment. 18. Clause 162C was inserted into the Regulations on 9 July 2004. The Submissions 19. The submissions on behalf of the Council may be summarised as follows: 19.1 Prior to the letter dated 27 January 2006, there was no principal certifying authority and thus an occupation certificate could not be granted (s 109D(2)). 19.2 The letter dated 27 January 2006 was not effective to appoint the Council as the principal certifying authority for two reasons – namely, (a) that a principal certifying authority is to be appointed "for the erection of the building" and the buildings in question had already been erected and (b) that the application for the occupation certificate was required to be made to the principal certifying authority. At the time of lodgement of the application for the occupation certificate on 8 September 2005, the Council had not been appointed (the earliest purported appointment being by the letter dated 27 January 2006). 19.3 Absent the valid appointment of a principal certifying authority, a final occupation certificate could not be issued. 19.4 The buildings had not been subject to the inspections prescribed by cl 162A of the Regulations and thus the Council (if the principal certifying authority) could not be satisfied in terms of s 109E(3)(d), which is a mandatory provision. Section 109E(3)(d) applies because the savings provision in cl 72 of Sch 6 refers to a development consent issued before the commencement of the 2003 Amending Act "for which a principal certifying authority needs to be appointed after that commencement". In this case, a principal certifying authority did need to be appointed after the commencement of the 2003 Amending Act as no principal certifying authority had been appointed by that date (1 January 2004). 19.5 It would be difficult for the applicant to establish the application of the "escape" provision in cl 162C of the Regulations as the reason for the omission of the inspections was not "circumstances that the principal certifying authority considers were unavoidable" but the failure to appoint a principal certifying authority at all. 19.6 The applicant had also not been able to establish that the relevant building works, required to be the subject of the cl 162A inspections, were carried out prior to 1 January 2004 and thus the cl 162A inspection requirements were applicable. 20. On behalf of the applicant, the following submissions were made: 20.1 The Council had been appointed as the principal certifying authority by the letter dated 27 January 2006. As such, there was a principal certifying authority capable of issuing a final occupation certificate in accordance with s109D(2). 20.2 Clause 72 should not be construed so as to render s 109E(3) (and thus cl 162A of the Regulations) applicable to building works commenced pursuant to a development consent granted when such inspections were not required. In this case, condition 6 of the development consent contained its own scheme for inspections different from that prescribed by cl 162A. 20.3 Clause 162C is available in that the principal certifying authority could be satisfied that the circumstances fell within the descriptions in cl 162C(2) – the failure to appoint a principal certifying authority meant that the inspections were missed due to circumstances that the principal certifying authority should consider were unavoidable. 20.4 Alternatively, the applicant had a further option of seeking to modify the development consent to carry out minor works which would have the effect of altering the classification of the building to a class 1 building, which could then be inspected in accordance with cl 162A and thereby enable the occupation certificate to be issued. 21. The applicant also emphasised that acceptance of the Council's submissions would have the effect of sterilising the buildings which had been erected and which were the subject of a building certificate and that such a result would be inappropriate (see, for example, the observations of McClellan J in Austcorp No. 459 Pty Ltd v Baulkham Hills Shire Council [2003] NSWLEC 318 at [32]). 22. With respect to this aspect of the applicant's submission, the Council referred to various aspects of the EPA Act (s 109M(2)(b)) and to the conveyancing legislation (in particular, the Conveyancing (Sale of Land) Regulation 2005, cl 6(1)) to support a submission that occupation for an initial period of 12 months may be in contravention of s 109M(1), but the legislation thereafter enabled an occupation certificate to be obtained (s 109M(2)(b)). Further, that the Council's conduct made it clear that it wished to see a practical resolution to the problem created by the fact that the buildings had been erected in contravention of the requirements of the EPA Act and that there was no practical risk in all of the circumstances of the Council seeking to restrain the occupation or otherwise to take proceedings for what the Council appeared to agree would be a contravention of s 109M(1) (namely, occupation absent an occupation certificate). 23. I should also note that the Council accepted that question 1 in the points of law would not necessarily be determinative of the proceedings. The Council observed that the question was predicated on the requirements of cl 162A not in fact having been met with respect to building works carried out after 1 January 2004 and cl 162C ultimately being found, in fact, to be unavailable. This acceptance discloses a difficulty in the formulation of question 1, which I deal with further below. Conclusions 24. Where a question of law is raised as a preliminary point, the general requirement is that the issue should be capable of being resolved by reference to clearly ascertainable facts (see Radstock Co-operative & Industrial Society v Norton-Radstock Urban District Council [1968] 1 Ch 605 at 632 referred to by Preston J in Delbant Pty Limited v North Sydney Council [2005] NSWLEC 657 at [12]). Further, for a question to be separated and dealt with on a preliminary basis, true savings in time and cost are generally likely only where resolution of the question is at least capable of being determinative of the proceedings or an identifiable part of the proceedings (see, again, the observations of Preston J in Delbant Pty Limited v North Sydney Council [2005] NSWLEC 657 at [9] to [11]). Question 1, as framed, does not satisfy either of these criteria. 25. One of the particular difficulties with question 1 is that, unless and until facts are found which would enable the consent authority (or the Court exercising the functions of that authority (s 39(2) of the Land and Environment Court Act 1979)) to determine whether the facts are capable of falling within cl 162C of the Regulations, the question is hypothetical. For question 1 to constitute a question of law appropriate for separate determination, it would have been necessary not only for all facts relevant to the application of cl 162C to be agreed or readily capable of being found outside the context of the merits hearing, but also for the Council to accept the burden of establishing that those facts were necessarily incapable of falling within the scope of the exemption of cl 162C(2) (see Hope v Bathurst City Council (1980) 144 CLR 1 at 7 and 10, Australian Gas Light Co v Valuer-General (1940) SR (NSW) 126 at 138, Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156 and Fernance Family Holdings Pty Ltd v Newcastle City Council (2000) 110 LGERA 66 at 74). If it is accepted that the facts to be found might be capable of falling within the scope of cl 162C(2), then question 1 is hypothetical and inappropriate for separate determination (in that the requirements of cl 162C(2) might be met whereas the question pre-supposes that the requirements will not be met). 26. Although it is appropriate that I decline to answer question 1 as framed for these reasons, I also make the following observations. 27. Clause 162C(1) operates so that, in the circumstances identified in cl 162C(2), an inspection which would otherwise be prescribed for the purpose of s 109E(3)(d) is not prescribed. The circumstances identified in cl 162C(2) are each framed by reference to the state of mind of the principal certifying authority. The focus of the provision is the reason for the inspections being missed, not (for example) the reason for the failure to appoint the principal certifying authority. Further, the provision is intended to ameliorate against the possibility of an otherwise satisfactory building being unable to be the subject of an occupation certificate – in that context, narrowly construing the phrase "circumstances that the principal certifying authority considers were unavoidable" seems unwarranted. It seems to me that, prima facie at least, the fact that a principal certifying authority had not been appointed could be capable of being considered by the principal certifying authority (when appointed) to mean that inspections required to be carried out had been missed because of circumstances that were unavoidable. 28. The savings provisions in cll 72 and 74 of Schedule 6 to the EPA Act, as both the applicant and the Council recognised, operate by reference to different criteria – cl 72 by reference to the need for appointment of a principal certifying authority and cl 74 by reference to the commencement of building work. The applicant's submission, seeking to read cl 72 as applying only where building work is commenced after the commencement of the 2003 Amending Act, is inconsistent with the words of the clause. Had question 1 been capable of resolution as a separate point of law, I would not have been inclined to accept the applicant's submissions on the meaning of cl 72. I prefer giving the clause what appears to be its ordinary meaning – that s 109E, as amended, applies to development consents granted prior to the commencement of the 2003 Amending Act if a principal certifying authority needs to be appointed after that commencement date. The clause contemplates that a principal certifying authority will have been appointed prior to the commencement of building works, which is a fundamental requirement of the scheme of Pt 4A of the EPA Act. The effect that the clause may have in a case such as the present, however, is ameliorated by the presence in the Regulations of cl 162C. 29. Question 2 in the points of law was appropriate for separate determination because the question satisfied both criteria to which I have referred in para 24 above. Prior to 27 January 2006, the applicant had not appointed a principal certifying authority for the erection of the building in accordance with s 109E(1). The factual basis for question 2 altered on 27 January 2006 when the applicant notified the Council that the applicant appointed the Council as the principal certifying authority. This change, as noted, led the Council to submit that the appointment was not effective for the two reasons I have identified. 30. I do not accept the reasons put forward to support the submission that the appointment was ineffective. As to the first reason, although s 109D(2) refers to the "the principal certifying authority appointed for the erection of the building", and the building in this case was erected prior to the appointment, the source of the power to appoint is found in s 109E(1), which refers to "the principal certifying authority for the development". Under the scheme of the EPA Act and Regulations, the functions of the principal certifying authority extend to the determination of occupation certificate applications for new buildings. The phrase "for the erection of the building", in my view, should be read as descriptive of one of the primary functions of a principal certifying authority and not as a constraint on the capacity of the person with the benefit of a development consent involving building work to appoint such an authority. 31. The Council submitted that enabling a person with the benefit of a development consent to appoint a principal certifying authority after the completion of building works was inappropriate and potentially placed an unreasonable burden on the principal certifying authority. That concern appears to me to be answered by the scheme of the legislation, particularly s 109E(3) and s 109H: a principal certifying authority may find it more difficult to reach the required states of satisfaction with respect to a building erected in contravention of the requirement that a principal certifying authority be appointed prior to the commencement of building works and, in consequence, an applicant in such a case may be required to take additional steps and supply further information to enable such a state of satisfaction to be reached. If, however, the requirements of the statute are able to be met, then the function of issuing a final occupation certificate may still be able to be discharged despite the commencement (or, as here, the completion) of building works without the principal certifying authority having been appointed. 32. As to the second reason, the requirements for lodgement of an application for an occupation certificate are contained in cl 149 of the Regulations. I do not consider that the fact that the effective date for appointment of the Council as the principal certifying authority was 27 January 2006, some 4 months after lodgement of the application, renders the appointment (or the application) invalid or ineffective. An application was lodged with the Council, in the form the Council required (albeit absent some necessary accompanying information to enable the application to be successful), in circumstances where the Council (if appointed as the principal certifying authority) would have been able to issue an occupation certificate. The Council, moreover, processed and determined the application by way of refusal and, in accordance with cl 151(1)(c)(ii) of the Regulations, notified the applicant of "the applicant's right of appeal under the Act against the refusal". 33. It follows in my view that question 2 is based on an inapplicable premise – that a principal certifying authority has not been appointed. As such, the answer to question 2 is that the question does not arise. A principal certifying authority, the Council, has been appointed for the development. 34. Given the answer I have given to question 2, the answer to question 3 is necessarily "No". This Court has jurisdiction to hear and determine the appeal (s 109K of the EPA Act and s 17(d) of the Land and Environment Court Act 1979). 35. The questions framed as points of law are therefore formally answered as follows: Question 1: the Court declines to answer this question. Question 2: the question does not arise. Question 3: no. 36. As a result of the matters set out above, it is unnecessary that I address the applicant's submissions on the further option available to the applicant by way of modification of the development. 37. The parties indicated to me that in order for the appeal to be determined on the merits, further information was required to be provided by the applicant to the Council. In particular, the applicant accepts (as I understand it) that it must obtain a construction certificate for the building work which has been completed. For its part, the Council, consistent with the decision of this Court in Marvan Properties Pty Ltd v Randwick City Council (2005) 138 LGERA 1, accepts that a construction certificate may be issued for the building works even though those works have already been completed. Other information is required also to be provided by the applicant, particularly relating to fire safety. It is necessary that directions be made for the further conduct of the merits hearing in the ordinary course. **************************** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.