Reported Decision: 150 LGERA 333 New South Wales Court of Appeal CITATION: Kindimindi Investments Pty. Limited v. Lane Cove Council & Anor [2007] NSWCA 38 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 28 February 2007 JUDGMENT OF: Hodgson JA at 1, 50, 58; Tobias JA at 27; McColl JA at 40 EX TEMPORE JUDGMENT DATE: 28 February 2007 DECISION: 1. Leave to appeal granted. 2. Notice of Appeal to be filed within 14 days. 3. Appeal dismissed with costs. CATCHWORDS: ADMINISTRATIVE LAW - ENVIRONMENT LAW - LOCAL GOVERNMENT - Powers of Land and Environment Court - Invalidity of development consent - Order under s.25B of Land and Environment Court Act 1979 specifying terms compliance with which would validate consent - Whether power to make such order limited to cases of invalidity arising from steps preliminary to granting the consent - COSTS - Public interest litigation - Costs of appeal LEGISLATION CITED: Land and Environment Court Act 1979 ss.25A, 25B, 25E. Blue Metal and Gravel Country v Bombala Shire Council (1992) 26 NSWLR 292 Centro Properties Limited v Warringah Council [No.2] (2003) 132 LGERA 45 CASES CITED: Glowpace Pty Limited v South Sydney City Council (2000) 111 LGERA 84 GPT Re Limited v Wollongong City Council [No 2] (2006) NSW LEC 401 Noble v Cowra Shire Council (2001) 114 LGERA 440 Woolworths Limited v Wyong Shire Council (2005) NSWLEC 67 Kindimindi Investments Pty. Limited - claimant PARTIES: Lane Cove Council - 1st opponent Fabcot Pty. Limited - 2nd opponent FILE NUMBER(S): CA 40328/06 Mr. I. Hemmings for claimant COUNSEL: Mr. M. Craig SC for 1st opponent Mr. J. Ayling SC for 2nd opponent Hones Lawyers, North Sydney for claimant SOLICITORS: Wilshire Webb, Sydney for 1st opponent Mallesons Stephen Jaques, Sydney for 2nd opponent LOWER COURT JURISDICTION: Land & Environment Court LOWER COURT FILE NUMBER(S): LEC40405/05 LOWER COURT JUDICIAL OFFICER: Lloyd J LOWER COURT DATE OF DECISION: 9 May 2006 LOWER COURT MEDIUM NEUTRAL CITATION: [2006] NSWLEC 399 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40328/06 HODGSON JA TOBIAS JA McCOLL JA Wednesday 28 February 2007 KINDIMINDI INVESTMENTS PTY. LIMITED V. LANE COVE COUNCIL & ANOR. Judgment 1 HODGSON JA: On 20 December 2004, the first opponent (the Council) gave consent to a development application made by the second opponent (Fabcot). The claimant (Kindimindi) brought proceedings in the Land and Environment Court challenging the validity of this consent. On 9 August 2005 Cowdroy J dismissed the proceedings. Kindimindi appealed to the Court of Appeal, pressing five grounds of alleged invalidity. 2 On 21 February 2006, the Court of Appeal allowed the appeal, upholding just one ground of invalidity, namely a constructive failure by the Council to properly give effect to its decision by way of an appropriate condition relating to the impact of the proposed development on a nearby property, Lane Cove Public School. The Court of Appeal made an order setting aside the dismissal of the proceedings and remitted the matter to the Land and Environment Court for further consideration according to law. 3 On 9 May 2006, Lloyd J gave his decision upholding the contention of the Council and Fabcot that orders should be made under s 25B of the Land and Environment Court Act 1979 (the Court Act) suspending the operation of the consent and specifying terms, compliance with which would validate the consent. The primary judge made those orders. Thereafter the Council complied with the terms specified in those orders, and on 28 August 2006, Lloyd J made orders upholding the validity of the consent. 4 Kindimindi seeks leave to appeal from those decisions. The application for leave has been argued on the basis that, if leave is granted, the appeal will be disposed of without further argument. STATUTORY PROVISIONS 5 The statutory provisions relevant to this case are those in Division 3 of Part 3 of the Court Act, namely ss.25A to 25E, and they are as follows: 25A Application of Division (1) This Division applies to: (a) a development consent granted, or purporting to be granted, under the Environmental Planning and Assessment Act 1979: (i) by the Minister, and (ii) whether before or after the commencement of this subsection, and (b) a development consent granted, or purporting to be granted, under the Environmental Planning and Assessment Act 1979: (i) by any other consent authority, and (ii) in respect of a development application made on or after the commencement of this subsection. (2) This Division extends to invalidity arising from any steps preliminary to the granting of a development consent to which this Division applies, whether those steps were taken, or should have been taken, by the Minister or any other consent authority, or by any other person or body. (3) In particular, this Division extends to invalidity arising from non-compliance with requirements declared to be mandatory requirements under section 102 of the Environmental Planning and Assessment Act 1979. (4) A reference in this Division to the Minister is a reference to the Minister responsible for the administration of the Environmental Planning and Assessment Act 1979. 25B Orders for conditional validity of development consents (1) The Court may, instead of declaring or determining that a development consent to which this Division applies is invalid, whether in whole or in part, make an order: (a) suspending the operation of the consent in whole or in part, and (b) specifying terms compliance with which will validate the consent (whether without alterations or on being regranted with alterations). (2) Terms may include (without limitation): (a) terms requiring the carrying out again of steps already carried out, or (b) terms requiring the carrying out of steps not already commenced or carried out, or (c) terms requiring acts, matters or things to be done or omitted that are different from acts, matters or things required to be done or omitted by or under this Act or any other Act. 25C Orders for validity of development consents (1) On application by the Minister or any other consent authority for an order under this subsection on the grounds that the terms specified under section 25B have been substantially complied with and that it is not proposed that the relevant development consent be regranted with alterations, the Court may make an order: (a) declaring that the terms have been substantially complied with, and (b) declaring that the consent is valid, and (c) revoking the order of suspension. (2) On application by the Minister or any other consent authority for an order under this subsection on the ground that the terms specified under section 25B have been substantially complied with and that the development consent has been regranted with alterations as referred to in section 103 of the Environmental Planning and Assessment Act 1979, the Court may make an order: (a) declaring that the terms have been complied with, and (b) declaring that the development consent has been validly regranted, and (c) declaring that the suspended development consent has been revoked, and (d) revoking the order of suspension. 25D Power to grant another development consent Nothing in this Division prevents the grant of another development consent in relation to the same matter, during or after the period of suspension, pursuant to a development application duly made. 25E Duty of Court It is the duty of the Court to consider making an order under this Division instead of declaring or determining that a development consent to which this Division applies is invalid, whether in whole or in part. THE ISSUE 6 The question at issue on this appeal, and determined by the primary judge, is whether this Division applies to the development consent or purported development consent in this case, in particular having regard to the ground of invalidity found by the Court of Appeal. 7 The submission of Kindimindi is that s.25A(2) has the effect that the Division does not apply in this case, because the ground of invalidity was not one arising from any steps preliminary to the granting of a development consent, within s.25A(2). This submission makes it appropriate to set out the ground of invalidity found by the Court of Appeal, which is explained as follows in the primary judge's decision of 9 May 2006: 8 The proposed development, to be known as "Lane Cove Library and Market Square" or "Lane Cove Plaza", is a mixed-use development comprising retail space, commercial office space, residential units, a library extension and a car park. It is located in Austin Street, directly opposite Lane Cove Public School. The council clearly considered the potential impact of the development on the public school and a number of conditions were imposed tending to ameliorate any adverse impact: see the Court of Appeal's judgment, par [85]. 9 One particular measure with respect to pedestrian safety was not included in the conditions of consent, but rather in a deed between the council and Fabcot relating to the construction of a school drop-off facility. However, the terms of the deed imposed no legal obligation on Fabcot to construct the drop-off facility without the approval of the school or the Department of Education. As I understand it, the proposed drop-off facility would involve relocating and constructing a new secondary entrance, steps and paving to the school. 10 The Court of Appeal found that the council considered the drop-off facility a necessary part of the proposed development in order to ameliorate what had been identified as a significant adverse impact on a major neighbouring facility. The Court of Appeal further held that the council's requirement was not properly contained in a private deed alone. The council's error was in failing to impose this requirement pursuant to its statutory powers as a consent authority by way of a condition of consent. There was thus a constructive failure by the council to exercise its power to achieve the intended decision. The separate agreement with the developer outside the development as approved was not an available alternative to the imposition of a condition: see generally the Court of Appeal judgment, pars [98] to [104]. SUBMISSIONS 8 Mr Ian Hemmings for Kindimindi submitted to this Court that s.25A of the Court Act defines the application of the Division in two ways. First, in subs.(1), it sets out the consents to which the Division applies. And secondly, in subs.(2), it sets out the types of invalidity to which the Division extends. So understood, the use of the word 'extends' in subs.(2) does not indicate that subs.(2) is adding to the types of invalidity which s.25A would otherwise refer to, but rather indicates the full extent of the cover. 9 Mr Hemmings submitted that this is confirmed by the relationship between subs.(2) of s.25A and subs.(3), since the wording of subs.(3) makes it clear that subs.(3) is merely indicating the full extent of subs.(2), out of what might be called an abundance of caution. The wording of subs.(2), on the other hand, does not suggest that that is a matter which is inserted out of an abundance of caution. The view taken of the matter by the primary judge, when considered in relation to the true interpretation of subs.(1) would mean that subs.(2) was entirely otiose. 10 Mr Hemmings referred the Court to the view contrary to that of the primary judge taken by Pearlman CJ in Glowpace Pty Limited v South Sydney City Council (2000) 111 LGERA 84 and also in Noble v Cowra Shire Council (2001) 114 LGERA 440. This view was followed by Pain J in Centro Properties Limited v Warringah Council [No 2] (2003) 132 LGERA 45 and Woolworths Limited v Wyong Shire Council (2005) NSWLEC 67. Most recently, in GPT Re Limited v Wollongong City Council [No 2] (2006) NSW LEC 401, the matter was left open by Biscoe J. 11 Mr Hemmings submitted that the reasoning of the primary judge was in error in the following paragraph of his judgment. 16 In the present case it is appropriate to have regard to what s 25A actually says. Subsection (1) says that this division applies to a development consent. A development consent is the notice of determination which is issued by the consent authority. Prima facie , therefore, this division applies to a development consent and is not limited in any way. Subsection (2) then goes on to provide words of extension, that is extending its application to not only the notice of determination but also to invalidity arising from any step preliminary to the granting of development consent. This is the plain meaning of the two provisions. Subsection (3) further extends its application to invalidity arising from non-compliance with requirements declared to be mandatory requirements under s 102 of the Environmental Planning and Assessment Act 1979 . The context supports a meaning which is contrary to that adopted by her Honour in Glowpace 12 In relation to that passage, Mr Hemmings submitted that the development consent referred to in s.25A(1) is not the notice of determination, as suggested by the primary judge, but rather the consent itself, that is, the determination of the consent authority. 13 That meant, Mr Hemmings submitted, that in the absence of s.25A(2), s.25A would cover invalidity due to steps preliminary to the grant of development consent, making s.25A(2) otiose. 14 Mr Hemmings in his submissions also relied on the heading of the Division, namely "Orders of conditional validity for certain development consents", the use of the word "certain" confirming that it was only those development consents with a particular type of invalidity that were intended to be covered by the Division. 15 Mr Hemmings also referred the Court to the second reading speech for the legislation which introduced the provisions. He submitted that this disclosed that the legislative intention was to retain public involvement through the steps preliminary to the making of development consents, but to avoid the consequence that technical breaches in relation to these steps would give rise to total invalidity. 16 He submitted that the second reading speech indicated that the intention was not to protect every consent from every kind of invalidity. The speech referred to quite technical procedural small-scale breaches and although that terminology is not taken up by s.25A(2), the differently expressed limitation in s.25A(2) is consistent with that intention. DECISION 17 In my opinion, the particular criticism made of the judgment of the primary judge in his identification of the development consent and the notice of determination is well founded. The development consent referred to s.25A(1) is the consent itself, namely the determination of the relevant consent authority. On this view, it does seem to me that the Division would apply to invalidity arising from steps preliminary to the granting of such a consent, even in the absence of subs.(2). 18 That lends some force to Mr Hemmings' submission that subs.(2) would be otiose if it was there truly as an extension, rather than as an indication of the totality of the type or types of invalidity to which the Division extends. 19 However, in my view the use of the word "extends" in subs.(2) is a strong indication that the subsection was not intended to be an exhaustive indication of the type or types of invalidity to which the Division applies. If the subsection had used the word "applies", or "applies only", then that may have been the intention disclosed. 20 There are other indications, in my opinion, of a legislative intention that the Division should not be limited to the particular kind of invalidity specified in subs.(2). 21 Firstly, there seems no logic in selecting that particular type of invalidity, rather than any type of invalidity that might affect a development consent or purported development consent. The general intention was that technical breaches should be capable of being rectified, and there can be technical breaches which are not matters arising from preliminary steps. 22 Next, it seems to me there is some uncertainty as to the scope of steps preliminary to the granting of a development consent. It is not entirely clear whether that would include the requirement that consideration of certain matters take place. If it does extend to the requirement of consideration of certain matters, then the lack of logic in separating out preliminary steps from other matters becomes even clearer. 23 Another matter which it seems to me confirms that subs.(2) of s.25A should not be given that limiting effect appears from s.25E of the Court Act That section requires the court to consider the making of an order under the Division in relation to development consents to which this Division applies, that is, all development consents falling within s.25A(1). That, in my opinion, would be a little strange if the Division was only intended to apply to particular types of invalidity. 24 For those reasons, I would regard subs.(2) of s.25A as a matter inserted out of an abundance of caution, perhaps out of concern that matters in relation to which considerations of natural justice apply might have been thought matters which should not be capable of being rectified in this way. 25 The issue raised by this appeal has been the subject of conflicting decisions in the Land and Environment Court, and it is appropriate that leave to appeal be given. But for the reasons I have given, in my opinion the appeal should be dismissed with costs. 26 I would add that one other issue was raised by the appeal. In his second judgment, the primary judge indicated that, even if Division 3 of Part 3 did not apply, he would have made the orders that he did make under s.124 of the Environmental Planning and Assessment Act. It is not necessary for the Court to express a view on that, and in dismissing the appeal, the Court should not be taken as agreeing with that aspect of the primary judge's judgments. 27 TOBIAS JA: I agree with the orders proposed by the presiding judge and with his Honour's reasons but wish to add the following further observations. 28 In GPT Limited v Wollongong City Council [No 2] (2006) NSW LEC 401, Biscoe J at [43]-[54] sets out a history of the decisions by individual judges of the Land and Environment Court in relation to the proper construction of Part 3 Division 3 of the Court Act. 29 The contention of the claimant in the present case is that Pearlman CJ in Glowpace Pty Limited v South Sydney Council (2000) 111 LGERA 84, was correct when, in effect, her Honour held that as a consequence of the provisions of s.25A(2), the making of an order under s.25B(1) of the Court Act, or at least the exercise of the discretion to make such an order was confined to those grounds of invalidity of a development consent referred to in s.25A(1)(b) which involved a failure to take some procedural and/or preliminary step which, if taken, would have resulted in the substantial validity of that consent. 30 In addition to the reasons advanced by Hodgson JA for rejecting that construction, I would draw attention to s.25B(1)(b) which speaks, in the event of an order suspending the operation of the consent in whole or in part, of specifying terms compliance with which will validate the consent whether without alterations or on being regranted with alterations. The latter is a reference to the provisions of s.103(3) of the Environmental Planning and Assessment Act to which I will return in a moment. 31 Section 25B(2) sets out in a non-exclusive manner the type of terms which can be imposed for the purpose of validating the consent, and which include terms requiring the carrying out again of steps already carried out or the carrying out of steps not already carried out. But importantly, 25B(2) is not confined in any way to terms involving the carrying out of preliminary steps referred to in sub-paragraphs (a) and (b). It includes in sub-paragraph (c) terms requiring acts, matters or things to be done or omitted that are different to acts, matters or things required to be done or omitted by or under this Act or any other Act. Any other Act would include the Environmental Planning and Assessment Act. 32 It seems to me that s.25B(2)(c), for instance, would authorise the imposition of a term requiring a consent authority to reconsider if it has already considered the matter, or to consider for the first time if it has failed to consider the matter, any one or more of the matters required to be considered by, for instance, s.79C of the Environmental Planning and Assessment Act. That, of course, does not mean that in every case where a purported consent is invalid upon the basis that s.79C has not been complied with, that the court will exercise its discretion to suspend the consent and to require the consideration or reconsideration of a s.79C matter. 33 On the contrary, there would be those cases of which, for instance, the decision of McClellan J, then Chief Judge of the Land and Environment Court, in Centro Properties Limited v Hurstville City Council (referred to in [47] of Biscoe J's judgment in GPT) is an example where his Honour, without determining whether s.25A(2) limited the type of invalidity in respect of which the court's discretion under s.25B(1) could be exercised, nonetheless refused to exercise his discretion under that provision in circumstances where the ground of invalidity was the failure of the council to consider a noise impact when granting development consent. That failure involved a breach of s.79C. However, as the council had already determined to grant consent, his Honour considered that it would be insufficient to simply require the council to consider a noise report and then to decide whether to confirm its original decision. Rather, it would be more appropriate in those circumstances if the council considered the whole of the relevant material, including information relating to the issue of noise impact afresh. 34 The point of that decision is that the issues upon which Mr Hemmings relied in his very careful, complete and skilful argument involve the types of issues that are the subject of the exercise of the court's discretion under s.25B(1). There is no reason, it seems to me, either as a matter of logic or as a matter of the language used in s.25A(2), to confine the power to exercise the discretion in s.25B(1) in the manner which the claimant asserts and which was adopted by Pearlman CJ in Glowpace. 35 Biscoe J in GPT sets out in [45] a suggested explanation for her Honour's failure in Glowpace to explain why s.25A(2) had the limiting effect which she adopted, but I do not find that explanation in any way persuasive. In my view, her Honour's decision in Glowpace was incorrect as were the decisions of Pain J which followed it in Centro Properties Limited and Warringah Council [No.2] (2003) 132 LGERA 45 and Woolworth's Limited v Wyong Shire Council (2005) NSW LEC 607. 36 In the first of those cases, Pain J held that a deliberation under s.79C of the Environmental Planning and Assessment Act was part of the decision whether or not to grant development consent and, therefore, not a step "preliminary" to it. In my view, there is no reason why the requirement to take a matter into consideration under s.79C before granting a development consent could not be described as a step in the process leading to the granting of a consent. Nevertheless, her Honour's limitation on the extent of the jurisdiction conferred by ss.25A and 25B by excluding a failure to take into account a matter under s.79C cannot, in my respectful view, be sustained. 37 I referred earlier to the provisions of s.103 of the Environmental Planning and Assessment Act, which applies to a development consent granted or purported to be granted by a consent authority to which an order of suspension applies under s.25B of the Court Act. Under subs.(2), a consent authority may revoke such a consent whether or not the terms imposed by the court under s.25B(1) have been complied with. However, pursuant to sub-section (3), if the terms imposed by the court have been substantially complied with, the consent authority may revoke the consent and grant a new consent with such alterations to the revoked consent as the consent authority thinks appropriate having regard to the terms themselves or to any matter arising in the course of complying with those terms. 38 The width of that provision, it seems to me, is a further nail in the coffin of the contention that the making of an order under s.25B(1) is confined to what are preliminary and purely procedural steps of the nature of those referred to by the Chief Judge in Glowpace. Part 3 Division 3 of the Court Act needs to be read in conjunction with s.103 of the Environmental Planning and Assessment Act which, in my view, merely adds force to the construction which the presiding judge has adopted, which was adopted by Lloyd J and which I also consider to be the appropriate construction to be given to s.25B(1). 39 For those additional reasons, I agree with the presiding judge that leave to appeal should be granted and that the appeal should be dismissed with costs. 40 McCOLL JA: I agree with Hodgson JA and Tobias JA. I would add some additional observations. 41 Lloyd J in the decision under challenge applied to the word "extends" in s.25A(2) of the Land and Environment Court Act 1979 one of its dictionary senses, being "to enlarge the scope of or to make more comprehensive". 42 The claimant's argument turns principally on the proposition that the word "extends" in that subsection should be read as a word of limitation which cuts down what might otherwise be discerned to be the wide ambit of subs.25A(1). 43 In Blue Metal and Gravel Country v Bombala Shire Council (1992) 26 NSWLR 292 (at 304), Handley JA said "the verb 'extend' and its various derivatives have an embarrassingly large number of meanings or shades of meaning. It is therefore clear that its meaning in any particular case will very much depend on its context and the relevance subject matter." 44 In the same case, Kirby J gave reasons why he preferred to apply a general meaning to the word "extend". The only meaning it is relevant to note here is his Honour's observation that a synonym of "extend" is "expand". Priestley JA also construed the verb "extend" as having the general meaning which it readily bore in ordinary speech rather than the more limited one which Handley JA had reached upon contextual considerations. 45 In my view, the word "extends" in ss.25A(2) should be given its ordinary meaning. That is, that it is a word of expansion. Whether, as the presiding judge has said, for abundant caution or for other reasons, the Legislature has chosen to emphasise that s.25A(2) applies to all development consents or purported development consents and also to the sorts of invalidity referred to in subs.(2) and (3), neither of those subsections, in my view, detracts from the conclusion that the verb "extends" should be given that ordinary meaning. 46 This conclusion is also supported by the context in which s.25A appears. 47 Section 25E requires the court to consider making an order under Division 3 instead of declaring or determining that a development consent to which Division 3 applies is invalid, whether in whole or in part. That provision, in my view, emphasises the amplitude of the power conferred by Division 3. The Division creates a regime for suspending the operation of development consent pending the applicant for that consent being given an opportunity to remedy a breach which might otherwise render the development consent invalid. The duty which s.25E imposes on the court to consider making a Division 3 order emphasises the legislative concern that development consents not be frustrated by potential invalidities in respect of which the court may, as a matter of discretion, consider making a s.25B order. 48 Mr Hemmings also relied on the Second Reading Speech, by which Division 3 was inserted in the Land & Environment Court Act, but nothing in that speech, in my view, cuts down the ordinary meaning to be given to the word "extends". In particular, it does not indicate any intention to confine s.25A to breaches preliminary to the granting of a development consent. If I draw anything from the Second Reading Speech, it is that the Legislature was concerned to confer on the Land and Environment Court a broad power to remedy breaches. The construction for which Mr Hemming contends is, in my view, contrary to the text, the context and the policy of s.25A(2). 49 I agree with the orders proposed by Hodgson JA. 50 HODGSON JA: Mr Hemmings has submitted that the Court should not order that the claimant pay the costs of the opponents of this application and the appeal. 51 He pointed to a finding by Cowdroy J in the original first instance decision that his client was a public interest litigant, bringing the proceedings to further matters of public interest; and he submitted that taking that into account the appropriate order at this stage was that each party bear their own costs of the appeal. 52 In my opinion considerations associated with the bringing of proceedings in the public interest may weigh less heavily in appeal proceedings than in first instance proceedings. 53 In seems to me in this case that the aspect of public interest was substantially satisfied by the original Court of Appeal decision, and the giving effect to that decision by ensuring that the matter raised in the Court of Appeal decision was appropriately dealt with in the development consent itself rather than a deed. 54 This appeal, although it was supported by first instance decisions below, did relate to a rather technical challenge to what had been done at first instance. 55 Having regard to all those considerations, in my opinion the ordinary result as to costs should follow, and costs should follow the event. 56 TOBIAS JA: I agree. 57 MCCOLL JA: I also agree. 58 HODGSON JA: So the orders of the court are: 1. Leave to appeal granted. 2. Notice of appeal to be filed within fourteen days. 3. Appeal dismissed with costs. ********** 05/03/2007 - Judgment date incorrect - Paragraph(s) coversheet 06/03/2007 - Spelling correction - Paragraph(s) Heading 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.