Land and Environment Court New South Wales Medium Neutral Citation: Fenwick v Woodside Properties Pty Ltd [2016] NSWLEC 61 Hearing dates: 25 May 2016 Date of orders: 27 May 2016 Decision date: 27 May 2016 Jurisdiction: Class 4 Before: Pain J Decision: (1) The Applicant is granted leave to rely on the second further amended summons marked annexure "C" to the affidavit of Ms Hill sworn 23 May 2016. (2) The Applicant must file a redrafted amended points of claim no later than 4 pm Monday 30 May 2016. (3) Exhibits are to be returned. Catchwords: PROCEDURE – whether reasonable cause of action identified to justify leave being granted to amend pleadings – leave to amend pleadings partially granted Legislation Cited: Environmental Planning and Assessment Act 1979, ss 96, 124 Environmental Planning and Assessment Regulation 2000, cl 119 Civil Procedure Act 2005, s 64 Cases Cited: Coalcliff Community Association Inc v Minister for Urban Affairs and Planning [1999] NSWCA 317; (1999) 106 LGERA 243 F Hannan (Properties) Pty Ltd v Council of the City of Sydney [2011] NSWLEC 44 General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 Hollis v Shellharbour City Council [2002] NSWLEC 83 Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 Mirvac Projects Pty Ltd v Ku-Ring-Gai Council [2007] NSWLEC 245 MLC Properties v Camden Council (1997) 96 LGERA 52 Swadling v Sutherland Shire Council (1994) 82 LGERA 431 Category: Procedural and other rulings Parties: Christine Fenwick (Applicant) Woodside Properties Pty Ltd (First Respondent) Rochester Estate Pty Ltd (Second Respondent) Wingecarribee Shire Council (Third Respondent) Representation: COUNSEL: N Hammond (Applicant) P Rigg (First & Second Respondents) T To (Third Respondent) SOLICITORS: Hones Lawyers Pty Ltd (Applicant) P Rigg (First & Second Respondents) Swaab Attorneys (Third Respondent) File Number(s): 2016/152445 Judgment 1. By Notice of Motion dated 23 May 2016 the Applicant seeks leave to rely on a second further amended summons marked annexure "C" to the affidavit of Ms Hill the Applicant's solicitor sworn 23 May 2016 and amended points of claim dated 25 May 2016 handed up in court at 3 pm on the day of the hearing. A number of minor amendments are proposed and one ground relating to legitimate expectation is to be deleted. These changes are not opposed by the Respondents. The matter is set down for hearing on 8-9 June 2016. The Respondents oppose the substantial part of the amendments sought on the basis no cause of action is identified. 2. The Applicant commenced these proceedings to challenge two modifications, modifications 04/0353.01 ("mod 01") and 04/0353.04 ("mod 04"). The Applicant now seeks leave to challenge a third modification being modification 04/0353.05 ("mod 05"). The three modifications (01, 04, 05) are modifications of a development consent granted by Wingecarribee Shire Council the Third Respondent ("the Council") to the First and Second Respondents for a subdivision at Bundanoon. 3. Section 64 of the Civil Procedure Act 2005 (NSW) ("the CPA") provides: 64 Amendment of documents generally (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. … Principles applicable to amendment application 1. F Hannan (Properties) Pty Ltd v Council of the City of Sydney [2011] NSWLEC 44 ("F Hannan") citing General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 ("General Steel") and other authorities at [21]-[24] provides a useful summary of the approach the parties agreed I should take in this case. I quote the paragraphs as follows: [21] Section 58(1)(a)(i) of that Act [the CPA] makes it plain that in exercising its discretion to grant an amendment to a pleading, the court must have regard to the dictates of justice. This is intended to emphasise the overriding purpose of facilitating the "just, quick and cheap resolution of the real issues in the proceedings" (ss 56 and 57-60 of the CPA). [22] Both ss 64 and 58 of the CPA are silent, however, as to the applicable legal principles to be applied in determining how the wide discretion contained in s 64 of the CPA should be exercised, particularly when an issue arises either as to the substance or form of the proposed amendment. The Land and Environment Court Rules 2007 ("the LEC Rules") and the UCPR are similarly mute. [23] The parties agreed, and the court accepts, that by analogy to r 14.28 of the UCPR, central to the question of whether the amendments ought to be permitted in this application is whether or not the proposed amendments are liable to be struck out as disclosing no reasonable cause of action. [24] At common law the power to strike out pleadings because they disclose no reasonable cause of action should be exercised only in plain and obvious cases. Various formulations of the test have been enunciated by the courts. A review of the cases reveals the following pertinent principles in relation to the striking out of pleadings for failing to disclose a reasonable cause of action: (a) [the] power to strike out pleadings should only be exercised in plain and obvious cases. That is where the case proposed is "so obviously untenable that it cannot possibly succeed" or is "manifestly groundless" (General Steel Industries Inc v Cmr for Railways (NSW) (1964) 112 CLR 125 at 129); (b) the mere fact that an Applicant's prospects of success might be characterised as slim would not be enough to strike out a pleading (Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (Reg) [1997] HCA 8; (1997) 188 CLR 241 at 271); (c) great caution is required where factual questions are involved because it may be difficult to predict in advance of a final hearing the precise manner in which the evidence will unfold. By contrast, where the application turns on questions of law, while caution ought nevertheless be the touchstone of the exercise of the court's discretion, unless there is no reasonable prospect that the deficiencies in what is pleaded are able to be cured by amendment, opportunities for strike out claims will arise more frequently (Leerdam v Noori [2009] NSWCA 90; (2009) 255 ALR 553 at [75]); and (d) the Court is not precluded from hearing argument "even of an extensive kind" in determining whether or not the plaintiff's case is untenable (General Steel Industries at 130). Environmental Planning and Assessment Act 1979 (NSW) ("EPA Act") 1. Section 96(1), (1A) and (2) concerning modification and consents of the EPA Act states: 96 Modification of consents—generally (1) Modifications involving minor error, misdescription or miscalculation A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify a development consent granted by it to correct a minor error, misdescription or miscalculation. Subsections (1A), (2), (3), (5) and (6), section 96AB and Division 8 do not apply to such a modification. (1A) Modifications involving minimal environmental impact A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if: (a) it is satisfied that the proposed modification is of minimal environmental impact, and (b) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted and before that consent as originally granted was modified (if at all), and (c) it has notified the application in accordance with: (i) the regulations, if the regulations so require, or (ii) a development control plan, if the consent authority is a council that has made a development control plan that requires the notification or advertising of applications for modification of a development consent, and (d) it has considered any submissions made concerning the proposed modification within any period prescribed by the regulations or provided by the development control plan, as the case may be. Subsections (1), (2) and (5) do not apply to such a modification. (2) Other modifications A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if: (a) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which consent was originally granted and before that consent as originally granted was modified (if at all), and (b) it has consulted with the relevant Minister, public authority or approval body (within the meaning of Division 5) in respect of a condition imposed as a requirement of a concurrence to the consent or in accordance with the general terms of an approval proposed to be granted by the approval body and that Minister, authority or body has not, within 21 days after being consulted, objected to the modification of that consent, and (c) it has notified the application in accordance with: (i) the regulations, if the regulations so require, or (ii) a development control plan, if the consent authority is a council that has made a development control plan that requires the notification or advertising of applications for modification of a development consent, and (d) it has considered any submissions made concerning the proposed modification within the period prescribed by the regulations or provided by the development control plan, as the case may be. Subsections (1) and (1A) do not apply to such a modification. Environmental Planning and Assessment Regulation 2000 (NSW) ("EPA Regulation") 1. Clause 119(1) and (2) of the EPA Regulation states: 119 Public participation—applications under sections 96(2) and 96AA for modification of other development consents (1) This clause applies to an application under section 96 (2) of the Act to which clause 118 does not apply or under section 96AA (1) of the Act to which clauses 117 and 118 do not apply. (2) An application to which this clause applies must be notified or advertised for a period not exceeding 14 days but otherwise in the same manner as the original development application was notified or advertised. Amended pleadings the subject of this Notice of Motion 1. The further amended summons (the version now sought to be amended) seeks declarations of invalidity of mods 01 and 04. The second further amended summons the subject of these proceedings seeks to add an additional declaration of invalidity of the latest modification mod 05 approved by the Council on 10 May 2016. The amended points of claim dated 25 May 2016 plead as follows (as I found the pleadings unclear I have inserted in square brackets clarification of these as I understood them during the hearing): Legal errors in consent to modify – 353.05 36 In approving modification number 04/353.05, the Council purported to modify condition 17(a) (formerly condition 16(a)) on the assumption that the condition as it was immediately prior to approval on 10 May 2016 had been lawfully amended by virtue of modifications 04/353.01 and 04/353.04. 37 Each of modifications 04/353.01 and 04/353.04 were a nullity. Therefore, there was no power to approve modification 04/353.05. 38 In the alternative, if not a nullity then in order to remedy the breach [in relation to 01 and 04] the Court would grant the relief sought. 39 Further, the Council's notification of modification number 04/353.05 was infected by procedural unfairness. a. The public was notified of application number 04/353.05 from 7 April 2016 to 25 April 2016. b. The public notification included a letter dated 25 February 2016 from Precise Planning to the Council in support of the modification application. In relation to condition 17(a) it stated as follows: Building Height Condition 16(a) of the original consent (renumbered 17(a) in subsequent modified consents) reads as follows: 16. The linen plans of subdivision shall be accompanied by a Section 88B instrument, which requires: (a) Dwelling houses to be single storey only with a maximum 1.2m from natural ground level to floor level. The most recent modified consent approved the following amended wording for this condition: 17. The linen plans of subdivision shall be accompanied by a Section 88B Instrument, which requires: (a) The design of any future dwellings to be erected on lots in the subdivision shall be designed in accordance with the applicable provisions at the time of lodgement of the Bundanoon Town Plan – Part C Provisions Applicable to Residential-zoned land. This modified condition places a requirement within an 88B Instrument, which is already a requirement under the provisions of the applicable DCP. It is an unnecessary duplication, because any future application for a dwelling on one of the burdened lots would be required to conform to the provisions of the applicable DCP, without the need for it to be reinforced by an 88B restriction. Given the obvious and unnecessary duplication, the proponent requests this condition be deleted altogether. c. In relation to condition 40(a)(iii) it stated as follows: Condition 40(a)(ii) of the original consent (renumbered 41(a)(iii) in subsequent modified consents) reads as follows: (a) stormwater drainage … (iii) Roof/Impervious/Stormwater All stormwater runoff from the development shall be collected within the property and discharged in a manner approved by the development control engineer and/or council's building surveyor. This condition was deleted in subsequent modified consents. It is hereby requested that this condition be reinstated, but modified as follows: (a) stormwater drainage … (iii) Roof/Impervious/Stormwater All stormwater runoff from the development shall be collected within the property and discharged on site, or if discharged through an adjoining property or properties, into a registered easement benefiting the subject site. d. The public was consulted on an application to amend condition 17(a) by deleting condition 17(a) in its most recent form, having been purportedly modified (04/353.04). However, the public had not been notified of modification application number 04/353.04, nor of modification application number 04/353.01 as required by s 96(2)(c)(i). e. Similarly, the public was consulted on an application to reinstate and amend condition 40(a)(iii), which was deleted as a result of the purported modification 04/353.01. However, the public had not been notified of modification application number 04/353.01 as required by s 96(2)(c)(i). f. The public, therefore, was invited [in relation to mod 05] to make submissions on proposed amendments to conditions that had not been previously been publicly notified. g. The public was not given the opportunity to make submissions on the application to modify the conditions as originally approved [in 01 and 04]. Therefore, the public was not given an opportunity [in relation to 05] to make informed submissions. 40 The Council's consideration of the submissions was infected by procedural unfairness. a. The Council was required to consider any public submissions made: s 79C(1)(d). b. The applicant repeats particulars 39(a) to (g). Evidence 1. The Applicant read the affidavit of Ms Hill sworn 23 May 2016 on the notice of motion. The affidavit outlines the background to the proceedings and annexes documents including the Applicant's reply to defences and the notice of determination dated 20 April 2016 of the s 96(2) modification application lodged with the Council on or about 25 February 2016 being mod 05. Also annexed to the affidavit are a second further amended summons and an amended points of claim (not the version ultimately pressed which was handed up in the course of the hearing). 2. The First and Second Respondents tendered as Exhibit 1 two documents being a letter from Precise Planning to the Council and the approvals application form for mod 05 dated 1 March 2016. The letter from Precise Planning was written in support of mod 05 and outlines the conditions to be modified. With respect of the Building Height 88B Instrument Condition 16(a), the letter states that "given the obvious and unnecessary duplication, the proponent requests this condition be deleted altogether." 3. The Council read two affidavits of Mr C McFadzean the Council's solicitor. The first sworn 23 May 2016 included as an annexure a table summarising the progressive change to the conditions of consent affected by the modification applications. With respect to the Building Height 88B condition, the original DA specified that the dwelling houses be restricted to single storey height. Mod 01 changed the condition to allow dwelling houses to be single storey, split level or if two storey with second storey element to be entirely contained within a dormer style roof. Mod 02 renumbered the condition but did not make any other change. Mod 04 modified the condition to require that any future dwellings within the subdivision be designed in accordance with the applicable provisions at the time of lodgement of the Bundanoon Town Plan – Part C Provisions Applicable to Residential Zoned Land. The final modification mod 05 made on 10 May 2016 deleted the Building Height 88B condition. The exhibit to Mr McFadzean's first affidavit was tendered as Exhibit 1B. That exhibit contains the notices of determination for DA No. LUA04/0353 and mods 01, 02, 04 and 05. 4. The affidavit of Mr McFadzean sworn 25 May 2016 was also read by the Council, which annexed the copy of the notification letter issued by the Council concerning mod 05. The letter was sent to members of the public residing in proximity to the proposed development and informed them of the development application, described as: S96(2)Modification to approved 32 Lot Subdivision to delete condition relating to design of future dwellings and modification/deletion/reinstatement of various engineering conditions relating to driveway catch drains, stormwater runoff and construction of driveway access as per enclosed correspondence from Precise Planning Ref: 1349 dated 25.2.2015 1. The notification period and the date by which submissions were required to be received were also outlined in the letter. The letter from Precise Planning (Exhibit 1) was attached along with a plan of the subdivision site. Applicant's submissions 1. There is now no challenge to the original development consent. The earlier mods 01 and 04 are alleged to be invalid because of a failure to notify the public of their receipt by the Council as required by s 96(2)(c) and a failure to consider s 79C considerations in the approval process by the Council. As a result of these failures these decisions are said to be null and void and because of Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 ("Bhardwaj") are presumed never to have existed. The most recent modification approved by the Council in May 2016 mod 05 deletes Condition 17(a) (previously 16(a)) as modified in mod 01 and mod 04. As identified in pars [36]-[37] of the amended points of claim mod 05 is null and void because it was approved on the assumption that mod 01 and 04 are valid. Each of those modifications was a nullity. The Council therefore had no power to amend mod 05. The Applicant relies on Bhardwaj as applied in Hollis v Shellharbour City Council [2002] NSWLEC 83 ("Hollis") in relation to a finding that a development consent was null and void. 2. A separate claim for relief appears in par [38]. The additional ground in pars [39]-[40] alleges (by implication) breaches of s 96(2) of the EPA Act in relation to the public notification process for mod 05 because of the lack of notification of mod 01 and mod 04. Respondents' submissions 1. The Respondents submit there are no causes of action identified because the power to modify which operates at all times under s 96(1), (1A) and (2) in relation to a valid development consent cannot be constrained as a matter of law in the manner contended for by the Applicant. There are conflicting views in the Court about the application of Bhardwaj as applied in Hollis, see Mirvac Projects Pty Ltd v Ku-Ring-Gai Council [2007] NSWLEC 245 at [17]-[26]. Partial leave to rely on amended pleadings granted 1. I have found it difficult to understand the Applicant's case as pleaded in the amended points of claim. A threshold observation made by the Respondents which I agree is central to the Court's consideration is that in the absence of any successful challenge to the original consent it remains in force and is able to be modified as provided by s 96 of the EPA Act, a matter well settled in case law such as Swadling v Sutherland Shire Council (1994) 82 LGERA 431, MLC Properties v Camden Council (1997) 96 LGERA 52 and Coalcliff Community Association Inc v Minister for Urban Affairs and Planning [1999] NSWCA 317; (1999) 106 LGERA 243. Mod 05 seeks the deletion of the original condition 16(a) as renumbered 17(a) and as modified in mod 01 and mod 04. At issue is whether the Council's power to modify a consent under s 96 as it has done in mod 05 is constrained because of the breaches of the EPA Act identified in relation to mod 01 and mod 04 (if established) render these void and of no effect from the purported approval date applying Bhardwaj. This means that they did not legally exist when mod 05 was approved. 2. Paragraph [36] alleges that the Council operated on the assumption in approving mod 05 that mod 01 and mod 04 were valid. Whether that assumption was expressly or impliedly made or not by the Council may not really matter. The issue at stake is whether a finding of invalidity of mod 01 and mod 04 gives rise to a nullity within the meaning identified in Bhardwaj which means those modifications did not legally exist at the time of approval of mod 05. The Respondents criticise the Applicant's claim as it is based on the proposition that where a modification is liable to be declared invalid any invalidity cannot be cured by later modification. That appears to be at odds with the scheme in s 96 of the EPA Act. 3. Turning to the factual basis on which the case can be considered, the parties agree the documents relevant to this ground are now in evidence and are limited. The Respondents identify through Exhibit 1 the letter dated 25 February 2016 from Precise Planning acting for the First and Second Respondents which reminded the Council that the validity of two of the modified consents was currently being challenged in this Court. No reliance was placed on the earlier modifications by Precise Planning in the application for mod 05. The Council's determination of mod 05 is at tab 5 of Exhibit 1B. 4. Paragraphs [36]-[37] raise novel issues which I have difficulty concluding in the short time available to consider this matter are untenable. The matter is finely balanced I have to say. 5. I am unclear on the intended scope of par [38] of the amended points of claim. I understand it is as an alternative form of relief relying on s 124 of the EPA Act. Pursuant to s 124 of the Act, if the Court is satisfied that a breach of the Act has been committed, it may make such orders as it thinks fit to remedy the breach. If identifying a potential form of relief in relation to mod 01 and mod 04 it can be pleaded. Unless a breach of the Act is identified in relation to the approval of mod 05, the Court's discretion to make an order under s 124 is not enlivened. The Applicant needs to further clarify the scope of par [38]. 6. Paragraphs [39]-[40] were provided in the course of the hearing and identify a new allegation of legal error in alleging procedural unfairness in relation to the notification of mod 05. No breach of the provisions of s 96 of the EPA Act or cl 119 of the EPA Regulation is alleged in relation to the public notification process of mod 5. Essentially common law procedural fairness is to be relied upon. The error alleged commences at par [39](d)-(g) and discloses reliance on the lack of notification of mod 01 and mod 04 in relation to condition 17(a) (16(a)) and condition 40(a)(iii) as infecting mod 05 in the terms stated in (f) and (g). 7. The case articulated in pars [38](f) and (g) and 40 is difficult to comprehend but I think is seeking to state that the lack of opportunity for public submissions in relation to mod 01 and mod 04 infects the public submissions that may have been or were (I don't know if any were) made in relation to mod 05 because the public was not properly informed in a manner unspecified in oral submissions. The material before the public is contained in Exhibit 1 and the annexures to Mr McFadzean's affidavit dated 25 May 2016 and is extracted in the amended points of claim pars [39](b) and (c). The Precise Planning letter refers to the earlier mods 01 and 04, identifies that these are the subject of challenge and identifies the changes made to condition 16(a), later renumbered 17(a). Given this evidence and the absence of any articulation of how there was a failure to properly inform the public at the time mod 05 was notified no cause of action is disclosed by pars [39] and [40] that I can discern and these may not proceed. 8. In the course of argument it became apparent that the lack of notification of mod 01 and mod 04 by the Council (which is accepted) was because a decision to approve those modifications was made under s 96(1A) as having minor environmental impact and consequently no notification was required. As all the evidence to support that submission has yet to be served on the Applicant I simply note that circumstance at present but identify that it is an issue that requires clarification before the hearing if at all possible because it means that one of the two challenges to mod 01 and mod 04 may fall away. 9. In conclusion, applying the principles identified in General Steel and other authorities identified at [24] by Pepper J in F Hannan it is appropriate to allow paragraphs 36 and 37 to be pleaded. It is in the interests of the just, quick and cheap resolution of the final proceedings that leave be granted to include the challenge to mod 05 in these proceedings challenging mod 01 and mod 04. If leave is not granted the Applicant intends to bring a separate challenge to mod 05 which is not in the interests of all parties in having the entirety of the proceedings determined as swiftly as possible. The limited extent of additional evidence and the largely legal arguments necessitated by the amendments should be able to be dealt with in the two hearing days presently allocated to the matter. 10. The Applicant is granted leave to rely on the second further amended summons. The Applicant must file a redrafted amended points of claim in conformity with this judgment as soon as possible, and no later than 4 pm Monday 30 May 2016. Leave is given to rely on pars [36]-[37] of the amended points of claim. Clarification of par [38] is necessary before leave is granted for its inclusion and I will rule separately on that following delivery of this judgment. Orders 1. The Court orders as follows in relation to the Applicant's Notice of Motion dated 23 May 2016: 1. The Applicant is granted leave to rely on the second further amended summons marked annexure "C" to the affidavit of Ms Hill sworn 23 May 2016. 2. The Applicant must file a redrafted amended points of claim no later than 4 pm Monday 30 May 2016. 3. Exhibits are to be returned. ********** 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. Decision last updated: 30 May 2016