Reported Decision : [2001] ACL Rep 265 NSW 151 (2001) 117 LGERA 334 New South Wales Court of Appeal CITATION : Lyons v Sutherland Shire Council & Ors [2001] NSWCA 430 FILE NUMBER(S) : CA 40903/00 HEARING DATE(S) : 6 November 2001 JUDGMENT DATE : 27 November 2001 William John Lyons - Appellant PARTIES : Sutherland Shire Council - 1st Respondent Ian Mayer & Kylie Ann Mayer - 2nd Respondents JUDGMENT OF : Stein JA at 1; Ipp AJA at 37; Rolfe AJA at 50 LOWER COURT JURISDICTION : Land & Environment Court LOWER COURT LEC 40157/99 FILE NUMBER(S) : LOWER COURT Sheahan J JUDICIAL OFFICER : T S Hale SC/ E A White - Appellant COUNSEL : C W McEwen - 1st Respondent J E Robson - 2nd Respondent The Law Firm of Solaris, Cronulla - Appellant SOLICITORS : Sutherland Shire Council - 1st Respondent Xenos Jordan, Kogarah - 2nd Respondents CATCHWORDS : ENVIRONMENTAL LAW - development consent - delegated authority - impact upon heritage values of adjoining property - whether consent vitiated - whether delegation of authority exceeded - well-founded objections - D LEGISLATION CITED : Sutherland Local Environmental Plan 1993 Brickworks Limited v Warringah Shire Counicl; Exparte Forssberg, Re Warringah Shire Council (1927) 8 LGR (NSW) 74 CASES CITED: Everall v Ku-ring-gai Shire Council (1991) 72 LGRA 369 Joseph Lahoud & Associates Pty Ltd v North Sydney Council (Unreported, Land and Environment Court, 26 February 1998) Pearson v Leichhardt Municipal Council (1997) 93 LGERA 206 DECISION : 1) Appeal allowed 2) Judgment and orders of Sheahan J set aside 3) Declare that the development consent granted by the first respondent to the second respondents and dated 4 August 1999 is invalid 4) Respondents to pay the appellant's costs of the appeal and at first instance and have a certificate under the Suitors' Fund Act if otherwise entitled. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40903/00 LEC 40157/99 STEIN JA IPP AJA ROLFE AJA Tuesday, 27 November 2001 LYONS v SUTHERLAND SHIRE COUNCIL & ORS A development consent was granted to the second respondents to add a second story to their home in Caringbah by Mr P Lupevski, an officer of the first respondent Council, under authority delegated to him by the first respondent. The appellant's house is situated above and directly behind the second respondents' home and has considerable significance as a heritage building. The appellant's home was the work of eminent architect Robin Boyd and the entire building was designed to take advantage of the views available of Port Hacking. The addition of a second story to the second respondents' house would significantly diminish and block the most significant views. By the terms of the delegation, Mr Lupevski's authority to determine the development application was excluded where, upon public notification, 'well founded objections' were made which could not be satisfied by conditions of consent or where they related to matters which were reasonable grounds for refusal of consent. Letters of objection were received from bodies including the National Trust and the Royal Australian Institute of Architects, as well as a number lodged on behalf of the appellant. The development consent was granted under delegated authority regardless of these objections. Held: Per Stein JA (Ipp and Rolfe AJJA agreeing): 1. Acting outside a power of delegation can hardly be termed 'an internal error within the administration of' the Council. There was no internal administrative error by the Council in this matter. - Pearson v Leichhardt Municipal Council (1997) 93 LGERA 206 considered and distinguished 2. The statement of Lloyd J at 211 in Pearson v Leichhardt Municipal Council (1997) 93 LGERA 206 reserves an error of a 'fundamentally grave nature' and acting in excess of a delegation and granting a consent in circumstances where the delegation does not run must be within that reservation. 3. The power delegated is very specifically circumscribed. Where, as in this case, an application has to be notified and brings forth relevant and well founded objections which cannot be reasonably satisfied by the imposition of a condition or the objection relates to a matter that is a reasonable ground of refusal, the delegation does not run. 4. The term 'well founded objections' requires an objective evaluation of the circumstances to establish whether there is an objective factual basis for the objection. The objection must also disclose a real or material impact, not one which is incidental or slight. In the present case, the objections disclosed real and material impacts on the principal views and impact upon the heritage values of the home. - Joseph Lahoud & Associates Pty Ltd v North Sydney Council (Unreported, Land and Environment Court, 26 February 1998) applied 5. The contents of the objections could constitute reasonable and proper grounds for the refusal of development consent. 6. The application before the delegate was outside his power to determine and such determination was made in excess of his power and jurisdiction. Accordingly it must be declared to be invalid. Per Ipp AJA: 1. The objections were of a kind that fell within the exclusionary provisions of the delegation. Per Rolfe AJA: 1. The decision in Pearson v Leichhardt Municipal Council (1997) 93 LGERA 206 is not merely questionable but wrong. Delegated authority can only be exercised if the conditions for its exercise are satisfied. Orders: 1. Appeal allowed. 2. Judgment and orders of Sheahan J set aside. 3. Declare that the development consent granted by the first respondent to the second respondents and dated 4 August 1999 is invalid. 4. Respondents to pay the appellant's costs of the appeal and at first instance and have a certificate under the Suitor's Fund Act if otherwise entitled. IN THE SUPREME COURt OF NEW SOUTH WALES COURT OF APPEAL CA 40903/00 LEC 40157/99 STEIN JA IPP AJA ROLFE AJA Tuesday, 27 November 2001 LYONS v SUTHERLAND SHIRE COUNCIL & ORS Reasons for Judgment 1 STEIN JA: On 6 November 2001, following the hearing of the appeal, the court announced its orders and indicated that reasons would follow in due course. The orders made were as follows: 1. Appeal allowed. 2. Judgment and orders of Sheahan J set aside. 3. Declare that the development consent granted by the first respondent to the second respondents and dated 4 August 1999 is invalid. 4. Respondents to pay the appellant's costs of the appeal and at first instance and have a certificate under the Suitors' Fund Act if otherwise entitled. 2 The appellant raised three issues. Only the first needs to be addressed since it is determinative of the appeal. That is the issue of whether Mr Lupevski, a council officer, was armed with delegated authority from the Council to determine the subject development application and grant development consent to the second respondents. 3 Briefly stated the factual context is as follows. The second respondents (Mr and Mrs Mayer) applied to the Council for development approval to add a second storey to an existing house at 739 Port Hacking Road Caringbah. The appellant is the owner and occupier of 733 Port Hacking Road which adjoins 739. 733 is located to the south of 739 and uphill from it. The Lyons house (733) was designed in the 1960s by the eminent Australian architect Robin Boyd. It is undisputed that it is a house of considerable significance and has been featured in a number of major publications about Boyd's life and work. Sheahan J recorded that it is the only Sydney building designed by Boyd and that it has been classified by the National Trust. 4 The Lyons house has also been included in the RAIA's register of 20th Century Buildings of Significance. The interiors were designed by Marion Hall Best and the landscaping by Bruce McKenzie. The house has always been in the Lyons family. 5 His Honour described the house plan as follows: 41. The accommodation is arranged around a central swimming pool and associated deck, with a strong main outlook axis towards the north-east across the Mayer property. This outlook is to take advantage of the northern views of Dolan's Bay and Burraneer Bay, as well as maintaining maximum amount of sunlight to the pool and deck areas, protection from strong southerly winds, and the benefit of north easterly cooling sea-breezes in summer. 42. Consequently, the house is designed in a U-shape, where the main views are across the deck, and out of the large windows facing north east. The remaining windows are small high sill windows, so designed due to the structural nature and design of the home (See photographs 9 & 10 of Exhibit L8). This means that views are not available from viewpoints in the house, other than those facing north. 6 His Honour also quoted from a letter to Council dated 6 July 1999 from a heritage consultant, Mr Robert Staas: … The Lyons House was particularly designed to capture these views from the major central open courtyard and the living spaces which are largely internalised by the design. The main views which form part of the design intent of Boyd for the house are those to the north from the central deck area and kitchen and to a somewhat lesser extent to the east from the living room. Loss of these views will reduce the significance of the item as originally conceived and executed. 7 Sheahan J said that both houses (733 and 739) overlook and enjoy quite beautiful views of the waters of Port Hacking, Dolan's Bay and Burraneer Bay, generally to the north and north-east. It was conceded that the second storey additions to the Mayers' house would interfere with some of the major views now enjoyed by the Lyons house. Indeed, the evidence makes it plain that the most significant views to the north, particularly from the deck, but also the breakfast room, will be significantly diminished and indeed blocked by the second storey addition. Some views will, however, be preserved to the north-east, for example from the kitchen. 8 The development is located in a Residential 2(e) zone under the Sutherland Local Environmental Plan 1993 and within a designated foreshore protection area. 9 The application was required to be advertised and public notification elicited a number of responses. Letters of objection were received from the National Trust, the Royal Australian Institute of Architects and a number lodged on behalf of the appellant. These consisted of submissions from his solicitor, Mr Solari, from Robert Staas, the heritage consultant and from Mr Michael Ball, a consultant town planner. It is unclear whether the last mentioned report was ever received by the Council although Council was aware of its existence and that it had been forwarded. 10 In broad summary the letters raised objection to the impact of the development on views from the Lyons house, and on the heritage values of the house, as well as privacy considerations. 11 On 4 August 1999 Mr Peter Lupevski, a Council officer, purported to determine the development application by granting it subject to conditions. He purported to so do under delegated authority from the Council. If he was acting within the delegated authority, his decision becomes relevantly the decision of the Council. The Local Government Act 1993 provides that Council's powers and functions may be exercised under delegation but only in accordance with the Act, see ss 355 and 377 – 381. A Council may by resolution delegate to its general manager the function of determining development applications and the general manager may in turn delegate that function to a council employee such as Mr Lupevski (s 378). 12 Indeed, Mr Lupevski received a delegation on 6 July 1998 from the general manager. It relevantly provides: "DEVELOPMENT APPLICATIONS UNDER THE ENVIRONMENTAL PLANNING AND ASSESSMENT ACT (A) To process, evaluate and determine development applications in accordance with Part 4, Division 2 and Division 5 of the Environmental Planning and Assessment Act … AND FURTHER, THIS DELEGATION DOES NOT EMPOWER THE RECIPIENT OF THE DELEGATION TO GRANT APPROVAL WHERE: (i) ……… (ii) ……… (iii) ……… (iv) upon public notification, as necessary, the development proposal brings forward relevant and well founded objections which cannot be reasonably satisfied by conditions of consent or where the objection relates to a matter or matters that are reasonable grounds for refusal. (v) ………" 13 It is the content of (iv) above which has engaged the court, first as a matter of construction, and second as to its effect, bearing in mind the evidence. 14 Before turning to the proper construction of the delegation itself, it is necessary to address the submission of the respondents that the consent is not vitiated even if Mr Lupevski exceeded his delegation. Reliance is placed upon Pearson v Leichhardt Municipal Council (1997) 93 LGERA 206. 15 Before turning to that authority, some fundamental propositions ought be stated. The determination of a development application is required to be made by the Council as a collegiate body. This function may be delegated to the general manager and others under s 377 of the Local Government Act. The general manager may sub-delegate the function to a council employee (s 378). That is what happened here. There is no suggestion that the sub-delegation was not within power. 16 However, the delegate must act within the delegation and not in excess of it. If he does so, he is acting without power. 17 Pearson involved a delegation to a council officer to deal with modification applications but only where previous objectors were notified and no objections were received. By an internal administrative error the Council failed to notify the objectors. 18 Lloyd J said (at 211): … the applicants submit that an internal error within the administration of the respondent, unless of a fundamentally grave nature, cannot vitiate its consent to the application. They again rely for this submission on Brickworks Ltd v Warringah Shire Council and also on Ex parte Forssberg; Re Warringah Shire Council (1927) 8 LGR (NSW) 74 and Everall v Ku-ring-gai Municipal Council (1991) 72 LGRA 369. 19 His Honour accepted the submission. 20 The Council submits that in accordance with Pearson, if the delegate exceeded his authority in granting the development consent, it was an internal error and cannot vitiate the consent. 21 Even if the statement adopted by Lloyd J is correct in law, as to which I harbour some doubts, the cases cited do not support the proposition as referable to the instant factual situation. 22 In any event, acting outside a power of delegation can hardly be termed 'an internal error within the administration of the' Council. In Pearson there was such an error in the Council failing to notify the objectors. Here there was no internal administrative error by the Council. 23 Moreover, the above statement in Pearson reserves an error of a 'fundamentally grave nature'. Acting in excess of a delegation and granting a consent in circumstances where the delegation does not run, must be within that reservation. 24 The situation is plain. Either the officer had a delegation to grant the approval or he did not. If he acted in excess of the delegation and outside it, he had no power to grant the approval. 25 The delegate is given power to determine development applications but this power is very specifically circumscribed as not to include the applications, among others, which come within paragraph (iv) of the instrument. 26 Where an application has to be notified, such as this, and brings forth relevant (admitted) and well founded objections, and such objections cannot be reasonably satisfied by imposition of a condition or the objection relates to a matter that is a reasonable ground of refusal, the delegation does not run. 27 It is obvious, bearing in mind the content of the objections in the case, that they cannot be satisfied by conditions of consent. So much is more or less conceded by the Council. 28 The questions which arise under paragraph (iv) are as follows. First, what is meant by 'well founded objections' and were the objections well founded? Second, what is meant by the objection relating to a matter that is a reasonable ground for refusal? Once this is determined, it is necessary to ascertain whether the objections did in fact comprise reasonable grounds for refusal in the assessment of the relevant planning considerations which arise for consideration by the Council. 29 In relation to the first mentioned question, the decision of Pearlman J in Joseph Lahoud & Associates Pty Ltd v North Sydney Council (Unreported, Land and Environment Court, 26 February 1998) is helpful. Her Honour was considering a clause which provided that a residential flat building must not be erected if 'well founded objections', in the opinion of the Council had been raised by affected persons. I observe that the subject delegation contains no expression of opinion by the officer or delegate. 30 Of the clause her Honour said: The principal difficulty in the application of cl 14A(1)(b) arises in the interpretation of the term "well-founded". In the context of a statutory requirement that a refugee be a person who has "a well-founded fear of being persecuted", it has been held in immigration cases that the term requires an objective evaluation (Damouni and Anor v Minister for Immigration, Local Government and Ethnic Affairs (1989) 87 ALR 97; Chan Yee Kin v Minister for Immigration and Ethnic Affairs (1989) 87 ALR 412). The same requirement should, by analogy, apply in this case. It is not sufficient that a person is subjectively of the opinion that he or she is likely to be affected; there must be an objective factual basis for the objection. 31 I agree with her Honour. An objective evaluation is required and to this extent I reject the Council's submission that account can be taken of the subjective assessment of the officer. 32 Her Honour's second requirement of a 'well founded objection' is that it disclose a real or material impact and not one which is incidental or slight. Again, her Honour's observation is apposite and I am content to adopt it. For objections to be well founded they must raise matters of substance. Clearly, in the present case, the objections disclosed real and material impacts on the principal views from the Lyons deck and house and impact on the heritage attributes of the home. Indeed, I think such a finding is inherent if not express in Sheahan J's judgment. 33 Pearlman J then went on in Lahoud to consider whether the well founded objection was one which should lead to a refusal of the residential flat building. She concluded that that the objection was not one which, in the planning context, required a conclusion that the building should not be built at all. While the applicant's views were impeded, they were not obliterated. These comments must be understood in the light of the particular planning provision with which her Honour was dealing. It is very different from the subject delegation, which is not concerned with outright refusal but only with 'reasonable grounds for refusal'. 34 There is no doubt in my mind that the objections which public notification brought forward were relevant and well founded objections. The only remaining issue is whether they (the objections) constitute reasonable grounds for refusal. 35 Again, I am in no doubt that the contents of the objections as to the loss of significant views and the adverse impact on the heritage values of the Lyons house, could constitute reasonable and proper grounds for refusal. That is not to say that a Council, properly conscious of its planning duties and functions, would necessarily reject the application on the grounds appearing in the objections. But that is not what the clause requires. It is sufficient if the objections relate to matters which could constitute reasonable grounds for refusal. That the application complied with Council's numerical planning requirements and controls is no reason to conclude that the objections were not well founded or did not provide reasonable grounds for refusal. 36 It follows that the application before the delegate was outside his power to determine. His determination, which became the decision of the Council, was made in excess of his power and jurisdiction. It cannot be allowed to stand and must be declared to be invalid. Accordingly the court has made the declaration. In these circumstances, it is seen to be unnecessary to consider the appellant's alternative submissions. 37 IPP AJA: The relevant facts and circumstances relating to this appeal are set out in the reasons to be published by Stein JA. 38 The development consent granted by the first respondent to the second respondents was to add a second storey to their house in Caringbah. 39 The development consent was granted by Mr Peter Lupevski, an officer of the first respondent, under authority delegated to him by the first respondent. 40 By the terms of the delegation, Mr Lupevski's authority to determine the application was excluded where, upon public notification, "well founded objections" were made which could not reasonably be satisfied by conditions of consent or where the objections relate "to a matter or matters that are reasonable grounds for refusal". 41 The appellant's house is situated above and directly behind the second respondents' house. The second storey, the subject of the development consent, would significantly interfere with the views from the appellant's house. As explained by Stein JA, the appellant's house has heritage value and the addition of the second storey would detract from that. 42 The appellant objected to the development proposal on grounds that included the impairment of his views and the heritage value of the house. It is plain that the objections so raised were reasonable and neither the first respondent nor the second respondent contended to the contrary with any enthusiasm. I agree, for the reasons expressed by Stein JA, that the objections were well founded and constituted reasonable grounds for refusal. 43 Of course, by saying that the objections were reasonable, I do not intend to express any opinion that they were bound to succeed. The objections were, however, of a kind that fell squarely within the exclusionary provisions of the delegation. 44 In the circumstances, in determining the development application, Mr Lupeveski acted outside his powers. 45 The respondents relied on a passage from the judgment of Lloyd J in Pearson v Leichhardt Municipal Council (1997) 93 LGERA 206 where his Honour (at 211) accepted a submission "that an internal error within the administration of the respondent, unless of a fundamentally grave nature, cannot vitiate its consent to the application". His Honour regarded Brickworks Limited v Warringah Shire Council, Ex Parte Forssberg; Re Warringah Shire Council (1927) 8 LGR (NSW) 74 and Everall v Ku-ring-gai Municipal Council (1991) 72 LGRA 369 as authority for this proposition. 46 On the strength of Pearson v Leichhardt Municipal Council the respondents submitted that, if Mr Lupevski acted outside his powers in granting the development consent, that act was an internal error within the administration of the first respondent that did not vitiate the consent to the second respondent's development application. 47 In my opinion, however, the authorities referred to do not support the submission accepted by Lloyd J in the passage quoted. I agree with Stein JA that the submission is questionable. 48 In any event, the conduct of Mr Lupevski in determining the development application - in circumstances in which his power to do so was excluded by the delegation - cannot be categorised as an "internal error". He acted outside the powers conferred upon him. The consent he purported to grant was a nullity. 49 For the above reasons I joined in the decision of the Court on 6 November 2001 and the making of the orders on that date referred to in the reasons of Stein JA. 50 ROLFE AJA: The reasons of Stein JA and Ipp AJA, which I have had the advantage of reading in draft, fully support, in my opinion, the orders made on 6 November 2001 and, subject to one qualification, I agree with them. 51 I consider that the decision in Pearson v Leichhardt Municipal Council (1997) 93 LGERA 206 is not merely questionable, but wrong. Delegated authority can only be exercised if the conditions for its exercise are satisfied. In neither this case nor in Pearson were they and, accordingly, I consider the officer in each case acted without power. ******** 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.