Reported Decision : 105 LGERA 445 New South Wales Court of Appeal CITATION : Byron Shire Council v Greenfields Mountain [1999] NSWCA 461 FILE NUMBER(S) : CA 40882/98 HEARING DATE(S) : 2 December 1999 JUDGMENT DATE : 13 December 1999 Byron Shire Council (Appellant) PARTIES : v Greenfields Mountain Pty Limited (Respondent) JUDGMENT OF : Mason P at 1; Priestley JA at 2; Fitzgerald JA at 3 LOWER COURT JURISDICTION : Land & Environment Court LOWER COURT FILE NUMBER(S) : LEC 40101/98 LOWER COURT JUDICIAL OFFICER : Sheahan J COUNSEL : A: S B Austin QC, D Miller R: J Webster SOLICITORS : A: Wilshire Webb R: Halliday & Stainlay, Murwillumbah CATCHWORDS : Local Government; interpretation of Local Environmental Plan; compulsory acquisition of land; whether Council required to use its best endeavours to acquire land pursuant to Local Environmental Plan; change in zoning; whether right accrued under former zoning. Land Acquisition (Just Terms Compensation) Act 1991, s19 ACTS CITED : Local Government Act 1993, Chapter 8 Environmental Planning and Assessment Act 1979, ss4,34 Esber v The Commonwealth 174 CLR 430 Clarke v Bailey (1993) 30 NSWLR 556 R v Kearney; ex parte Northern Land Council 158 CLR 365 NSW Aboriginal Land Council v The Minister for Administering the Crown Lands Act (1988) 14 NSWLR 685 CASES CITED: Mathieson v Burton 124 CLR 1 Robertson v City of Nunawading (1973) VR 819 Newell v R 55 CLR 707 Director of Public Works v Ho Po Sang (1961) AC 901 Ungar v City of Malvern (1979) VR 259 Butts v O'Dwyer 87 CLR 267 DECISION : Appeal dismissed with costs. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40882/98 LEC 40101/98 MASON P PRIESTLEY JA FITZGERALD JA MONDAY 13 DECEMBER 1999 BYRON SHIRE COUNCIL v GREENFIELDS MOUNTAIN PTY LIMITED JUDGMENT 1 MASON P: I agree with Fitzgerald JA. 2 PRIESTLEY JA: I agree with Fitzgerald JA. 3 FITZGERALD JA: Byron Shire Council has appealed against a judgment given against it by the Land and Environment Court of New South Wales on 14 October 1998 in a proceeding commenced by the respondent. That Court declared that the Council "… is bound to acquire the land known as lot 103 in DP856767, having been served with a request so to do by the owner pursuant to clause 43(2) of the Byron Local Environmental Plan 1988", and ordered the Council to "take all such steps as are necessary to seek the consent of the Governor in Council to acquire the land …". The parties agree that, if the appeal fails, it might be appropriate to vary the declaration and order but, at least in the first instance, it can be left to the parties to determine a suitable form of order, and a form of declaration if a declaration is called for. 4 The parties are also agreed that the question for decision is whether the Council is obliged to use its best endeavours to acquire the land, that the Council's acquisition of the land would be a compulsory acquisition within the meaning of the Land Acquisition (Just Terms Compensation) Act 1991 and Chapter 8 of the Local Government Act 1993, and that the process would include publication of a notice of acquisition of the land in the Gazette "with the approval of the Governor". Land Acquisition (Just Terms Compensation) Act 1991, subs 19(1). Although there was some discussion of other aspects of the procedure for the Council's acquisition of the land, it was not submitted that any other step which the Council might be required to take could affect the outcome of this appeal. 5 The respondent is, and at all material times was, the registered proprietor of the land, which is located within the Byron Shire. 6 Because of the land's zoning prior to 31 July 1998 when the Byron Local Environmental Plan (the "Plan") was materially amended, clause 43 of the Plan then permitted the respondent, as owner of the land, to require the Council, by notice in writing, to acquire the land. 7 On 6 December 1996, the respondent served a notice in writing on the Council requiring it to acquire the land. It is common ground that the Council then became obliged to use its best endeavours to acquire the land, and, for that purpose, to obtain the Governor's approval to the publication by the Council of a notice of acquisition of the land in the Gazette. While the respondent did not submit that it has, or had, a right to the Governor's approval of the Council's acquisition of the land, it did submit that the Governor's only function is to be satisfied that the statutory preconditions to the Council's acquisition of the land (other than the Governor's approval) have been satisfied and that, in that event, the Governor has no discretion to refuse approval. 8 At that time, discussions were in progress between the respondent and the Council concerning a request by the respondent that the land be rezoned. 9 The respondent informed the Council that it would withdraw its notice requiring the Council to acquire the land if "an agreement as to rezoning … was reached". However, the respondent was not satisfied with the rezoning proposed by the Council. 10 On 26 May 1998, the respondent commenced its proceeding in the Land and Environment Court. It is common ground that the respondent was then entitled to an order that the Council use its best endeavours to acquire the land and, for that purpose, to obtain the Governor's approval to the publication by the Council of a notice of acquisition of the land in the Gazette, and that the Land and Environment Court had no discretion to decline such an order. 11 On 31 July 1998, the Plan was amended in accordance with the Council's proposal. Thereafter, the respondent was no longer entitled to give the Council a notice requiring it to acquire the land. 12 The Plan is, by s 4 of the Environmental Planning and Assessment Act 1979, an "environmental planning instrument" within the meaning of subs 34(4) of that Act. That provision is as follows: "(4) The amendment … of any environmental planning instrument does not affect - (a) the previous operation of the instrument or anything duly … done … under the instrument; (b) any right … [or] obligation … acquired [or] accrued … under the instrument; or (c) any … legal proceedings or remedy in respect of any such right …" This case was conducted on the footing that the respondent needs to resort to subs 34(4), and I will proceed on that basis. 13 The respondent placed its entitlement to have the Land and Environment Court order the Council to apply for the Governor's approval prior to the amendment of the Plan at the forefront of its submissions in this Court. However, there is a risk of circularity in this approach. As Brennan J pointed out in his dissenting judgment in Esber v The Commonwealth (1992) 174 CLR 430. See also Clarke v Bailey (1993) 30 NSWLR 556, 564., "in a judicial proceeding brought to enforce an alleged right accrued at the time when the proceedings were instituted, the question for decision is determined according to the law existing when the proceedings were instituted unless statute otherwise provides …". 174 CLR 430, 448-449. It nonetheless remains necessary to decide whether the respondent's entitlement to have the Council apply for the Governor's approval to its publication of a notice of acquisition of the land in the Gazette prior to the amendment of the Plan, being the entitlement which the respondent had asserted in the Land and Environment Court, was an accrued or acquired right at the time when the Plan was amended. 14 The majority judgment in Esber v The Commonwealth 174 CLR 430. does not dictate a different conclusion. Their Honours considered that Mr Esber had satisfied the preconditions of his entitlement to redemption of his weekly compensation payments by payment of a lump sum prior to the material change in the law and that his right to payment of a lump sum continued after the law was changed. Similarly, in this instance, if the respondent has a continuing entitlement to an order requiring the Council to use its best endeavours to acquire its land, it is because the respondent had done all that was necessary to oblige the Council to apply for the Governor's approval to the publication of a notice of acquisition of the land in the Gazette prior to the amendment of the Plan and its entitlement to have the Council apply for the Governor's approval is a right which continued after the Plan was amended. 15 The Council's argument that the respondent's entitlement to have the Council use its best endeavours to acquire the land did not continue after the Plan was amended was founded on the premise that the legislative purpose for its entitlement to require the Council to acquire the land ceased to exist when the Plan was amended to rezone the land. However, while the respondent could no longer give the Council a notice in writing requiring it to acquire the land once the Plan was amended, it does not necessarily follow that the respondent could not continue to rely on the entitlement which it had earlier acquired when it gave the Council a notice in writing requiring it to acquire the land at a time when that was permitted by the Plan. Cf. R v Kearney; ex parte Northern Land Council (1984) 158 CLR 365. The reasonableness of the respondent continuing to assert its entitlement after the Plan was amended is immaterial. In any event, the parties disagree on the suitability of the rezoning of the land effected by the amendment of the Plan. 16 Whether or not the respondent could continue after the amendment of the Plan to rely on its pre-existing entitlement to require the Council to acquire the land pursuant to the respondent's notice prior to the amendment of the Plan depends not only on the statutory provisions which authorised the respondent to require the Council to acquire the land but also on subs 34(4) of the Environmental Planning and Assessment Act 1979. 17 If, as the respondent submits, the Governor has no discretion to refuse approval when the statutory preconditions - in this instance the respondent's notice under cl 43 of the Plan - are satisfied, the Council's case must fail. On that hypothesis, prior to the amendment of the Plan the respondent's entitlement to have the Council acquire the land, and the Council's obligation to acquire the land, were subject only to formalities. Cf. NSW Aboriginal Land Council v The Minister Administering the Crown Lands Act (1988) 14 NSWLR 685. 18 The Council submitted that the Governor has a discretion to grant or refuse approval of its acquisition of the land; for example, in the public interest. If that is correct, the respondent would neither have, nor have had, a right to the Governor's approval even if the Council had applied for approval prior to the amendment of the Plan. According to the Council, the respondent's entitlement prior to the amendment of the Plan to have the Council apply to the Governor for his approval to its publication of a notice of acquisition of the land in the Gazette was merely an entitlement "to set in train a discretionary process", which, it was submitted, was not a right within the meaning of subs 34(4)(b) of the Environmental Planning and Assessment Act 1979. 19 It is neither accurate nor helpful to describe the respondent's entitlement to have the Council apply for the Governor's approval to its publication of a notice of acquisition of the land in the Gazette as an entitlement "to set in train a discretionary process". The "process", whether or not it is correctly described as "discretionary", had been "set in train" prior to the amendment of the Plan by the respondent's notice in writing to the Council requiring it to acquire the land. 20 On the hypothesis advanced by the Council that the Governor has a discretion to refuse to approve an application by it to acquire the land, the respondent's material entitlement at the time when the Plan was amended was an entitlement to have the Council apply for and use its best endeavours to obtain the exercise of that discretion in favour of the approval of the Council's publication of a notice of acquisition of the land in the Gazette, and the Council's material obligation at that time was an obligation to make such an application and use its best endeavours to obtain the Governor's approval. The Council's essential submission was that the respondent's entitlement prior to the amendment of the Plan is not a right protected by subs 34(4)(b). Although the point was discussed, it is a necessary consequence of the Council's argument that its obligation was not an obligation within that subsection. 21 Some entitlements are not rights within the meaning of subs 34(4) and analogous provisions which are commonly found in Interpretation Acts. It has been held that "a power to take advantage of" a provision such as cl 43 of the Plan, Mathieson v Burton (1971) 124 CLR 1, 23; Robertson v City of Nunawading (1973) VR 819; Esber v The Commonwealth (1992) 174 CLR 430, 440-441. a "matter of procedure", Newell v R (1936) 55 CLR 707, 711-712; Esber v The Commonwealth (1992) 174 CLR 430, 440-441. or an entitlement to apply for the exercise of a discretion to obtain a benefit, even if accompanied by a "hope or expectation" that the discretion will be favourably exercised Director of Public Works v Ho Po Sang (1961) AC 901, 921-922; Robertson v City of Nunawading (1973) VR 819, 825; Ungar v City of Malvern (1979) VR 259; Esber v The Commonwealth (1992) 174 CLR 430, 439, 447-448., is not a right in the material sense. While these are not necessarily the only entitlements which are not rights, the Council failed to persuade me that the categories should be intended to exclude an entitlement to have another apply for an approval which will benefit the person entitled to have the application made. Such an entitlement is properly described as a "substantive right". Esber v The Commonwealth (1992) 174 CLR 430, 440-441. Although the rights are different, compare Heston and Isleworth Urban District Council v Grout [1897] 2 Ch 306 which was cited with approval by the High Court in Carr v Finance Corporation of Australia Ltd [No. 2] (1982) 150 CLR 139 at 151-152, and by the Privy Council in Director of Public Works v Ho Po Sang AC 901, at 922, 924; Hamilton Gell v White [1922] 2 KB 422; and Free Lanka Insurance Co Ltd v Ranasinghe [1964] AC 541. As the President pointed out in the course of argument, such an entitlement, when derived from a contract, can be enforced by specific performance. Cf. Butts v O'Dwyer (1952) 87 CLR 267. 22 Although there are sometimes fine distinctions drawn in this area of the law, I consider this a plain case. 23 The appeal should be dismissed, with costs. ********** 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.