court reporter in this issue... Summary of Cases... page 2 Useful Links and Definitions... page 3 Holroyd City Council v Khoury...

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1 court reporter ISSUE 2, 2012 land and environment contact us... Local Government and Shires Associations of NSW tel: (02) fax: (02) GPO Box 7003 Sydney 2001 Level 8, 28 Margaret St Sydney NSW 2000 Free subscription: Subscribe to receive the Land and Environment Court Reporter directly by on the LGSA website at: Maddocks The Associations would welcome any feedback or suggestions relating to future editions of the Land & Environment Court Reporter by to the Associations Legal Officer: Frank Loveridge at in this issue... Summary of Cases... page 2 Useful Links and Definitions... page 3 Holroyd City Council v Khoury... page 4 Newcastle Muslim Association Inc v Newcastle City Council... page 5 Newcastle Muslim Association Inc v Newcastle City Council... page 6 Joseph v Lane Cove Council... page 7 Wallis v Hornsby Shire Council... page 9 Kerford Developments Pty Ltd v Albury Council. page 10 The material contained in the Land and Environment Court Reporter is of the nature of general comment only. No reader should rely on it without seeking legal advice.

2 2 summary of cases... This issue looks at case studies taken from March 2012, which includes:: A case concerned with the principles of sentencing following a conviction for failing to comply with a section 121B Order issued by the council A matter examining the principles to be considered for allowing an objector to participate in Class 1 proceedings and this matters subsequent interlocutory proceedings An appeal against a council order requiring the demolition of a building structure An appeal against a section 121B order requiring the modification of building works Two appeals against the refusal of a development application

3 3 useful links... Local government, planning, environment and related law: Land and Environment Court website: Australasian Legal Information Institute: Commonwealth Development Assessment Forum: NSW Attorney General s Department - Land and Environment Court: Case Law NSW: Environment Australia, Environmental Protection Biodiversity Conservation Act: Environment Protection Biodiversity Conservation Act - subscription to EPBCA group: Environment and Planning Law Association NSW: Development and Environmental Professionals Association: Urban Development Institute of Australia: Property Council: Housing Industry Association: Department of Infrastructure, Planning and Natural Resources: Planning NSW: Environment Australia: EnviroNET Australia: Environmental Protection Authority (NSW): EDONet: Natural Heritage Trust: NSW Agriculture: NSW National Park and Wildlife Service: Planning Institute of Australia: Sustainable Energy Development Authority (SEDA): definitions... Subpoena - a document by which a court compels a person to attend a court to give evidence or to produce documents within that person s possession. Forensic purpose - relating to the matter before the court and not for other reasons. Existing use rights - rights under Planning Legislation to continue previously lawful activities on land which would no longer be permitted following the introduction of changes to environmental planning instruments. Procedural fairness - this term is interchangeable with natural justice and is a common law principle implied in relation to statutory and prerogative powers to ensure the fairness of the decision making procedure of courts and administrators. Development means: (a) the use of land, and (b) the subdivision of land, and (c) the erection of a building, and (d) the carrying out of a work, and (e) the demolition of a building or work, and (f) any other act, matter or thing referred to in section 26 that is controlled by an environmental planning instrument, but does not include any development of a class or description prescribed by the regulations for the purposes of this definition. Development Application means an application for consent under Part 4 of the EP&A Act to carry out development but does not include an application for a complying development certificate.

4 4 Holroyd City Council v Khoury (No 3) [2011] NSWLEC 210 This case concerned the principles of sentencing following the conviction of Mr Khoury for his failure to comply with a s121b order issued by Council. Facts Mr Khoury was granted a development consent in 2003 to build a dwelling, subject to conditions including that he obtain a construction certificate before the commencement of work. In 2009, Council became aware that the building differed from the approved plans in a number of ways. For example, the approval was for a part one storey, part two storey dual occupancy, while the dwelling constructed was a part two storey, part three storey dwelling house. Council issued a notice of intention to issue an order on Mr Khoury, who did not make any representations in response. As such, Council subsequently issued an order pursuant to s121b of the Environmental Planning and Assessment Act 1979 (EP&A Act). The Council then commenced proceedings in the Court arising out of Mr Khoury s failure to comply with the s121b order. Mr Khoury did not appear at the hearing and was found guilty (see Holroyd City Council v Khoury (No 2) [2011] NSWLEC 158). Holroyd City Council v Khoury (No 3) was the sentencing hearing for Mr Khoury. Mr Khoury gave evidence that following the grant of development consent, he arranged for work to commence and was told by his private certifier that he should apply for a construction certificate from Council. When he applied for the construction certificate, he was told by Council staff that no construction certificate could be issued because the development consent had lapsed. Mr Khoury proceeded to build his dwelling because he considered the Council was wrong in not issuing a construction certificate and he had finance from a bank who required him to finish the building. When Mr Khoury was asked about his financial position he stated that he had limited means to pay and could only afford a few thousand dollars should a penalty be imposed. Mr Khoury did not provide the Court with any financial evidence to support this position. Principles of Sentencing Justice Pain noted that general deterrence has been recognised in environmental matters as an important consideration in sentencing. Her Honour first considered the objective factors of sentencing, noting that the maximum penalty for the offence was $1.1 million, which itself was an indication of the intention of parliament to identify these breaches as serious. Her Honour noted that although this matter was at the lower end of the spectrum of seriousness, it was nevertheless a serious matter. Her Honour went on to consider that the planning system in the EP&A Act was designed to ensure the orderly development of the land through the planning approval process, and that the importance of this system had been recognised in numerous contexts by the Court. Justice Pain examined the intention of Mr Khoury. She noted that Mr Khoury had built the development without a construction certificate because he did not accept Council s opinion that he could not be issued with a building certificate. Justice Pain considered that given the conditions of the consent clearly stated that a construction certificate was required, Mr Khoury was aware that this was a legal requirement. Her Honour concluded that Mr Khoury s breach was clearly deliberate and that he was entirely responsible for the circumstances of the offence. Her Honour then proceeded to examine the subjective factors of sentencing, including factors that could be considered to mitigate Mr Khoury s sentence. Her Honour noted that Mr Khoury did not appear to be remorseful for his actions, there was no evidence of cooperation with Council, and Mr Khoury had provided no evidence beyond stating that he would have trouble paying the fine.

5 5 Her Honour concluded that a more than nominal penalty was needed in light of the relatively serious circumstances and that there was a need for general deterrence in matters of this kind. She also noted the lack of mitigating factors which could be taken into account to reduce the penalty in this matter. Costs Her Honour also considered the question of costs. Council sought its costs which it estimated to be roughly $50,000. Mr Khoury submitted that he should not be liable for these costs because of the way Council had behaved in bringing the proceedings. Justice Pain rejected Mr Khoury s submissions on the basis that there was nothing unorthodox or inappropriate in the manner in which Council had pursued the matter. Conclusion Justice Pain ordered that My Khoury be fined $35,000, and pay the Council s costs as agreed or assessed. Newcastle Muslim Association Inc v Newcastle City Council [2012] NSWLEC 13 This case examined the principles to be considered for allowing an objector to participate in Class 1 proceedings. Facts A Class 1 Appeal against Council s refusal of a Development Application for a mosque was commenced by the Newcastle Muslim Association. The Elermore Vale Community for Appropriate Residential and Environmental Strategies Incorporated (EVCARES) was an objector to the (commonly referred to as the Double Bay Marina Orders) to be able to participate in the proceedings. Double Bay Marina Orders are an alternative to a party being formally joined to the proceedings as an intervenor under section 39A of the Land & Environment Court Act 1979 and would enable EVCARES to: access all of the expert evidence in the appeal; make submissions on that evidence; cross-examine witnesses at the hearing; and make final submissions to the Court. EVCARES had made detailed submissions to Council in opposition to the Development Application at various stages. EVCARES had also expressed concerns that Council s contentions did not cover all of the issues EVCARES had with the proposed development. EVCARES contended that the proposal was not an orderly and economic use of land and was not consistent with the objects of the EP&A Act or the Newcastle LEP. Particular issues were raised in relation to planning, acoustic, stormwater, traffic and flora/fauna/ tree removal issues. EVCARES argued that Double Bay Marina Orders were necessary because: its interests were not likely to be sufficiently reflected in the absence of such an order; the order served the interests of justice; and there had been limited opportunities for all potential objectors to consider the proposal fully and make submissions on its impact. Reasoning Justice Sheahan reviewed the authorities in respect of Double Bay Marina Orders. His Honour noted that the power to make the orders was discretionary, and used only occasionally. He commented that the test to apply was not whether the objection was bone fide, or the level of responsibility that the intervenor would display if the orders were granted. Rather, his Honour considered that

6 6 weight should be given to whether important views were being adequately raised by the objector, and whether the interests of justice, or the public interest, required a further voice to be heard. His Honour went on to note that an objector s concerns were normally heard through their written objections being put before the court, and by the opportunities afforded to them to be heard at s34 conferences, onsite hearings, and sometimes in the courtroom. His Honour stated that it was the Council s duty to conduct the appeal, and consequently the Council could choose its own priorities among issues and objections. His Honour was satisfied that Council had demonstrated that it had put all relevant concerns before the Court and that it was common for the material before the Court to be more voluminous and detailed than that before the consent authority at the time of refusal. His Honour concluded that test for making Double Bay Marina Orders required something special or additional to be made available to the Court only through such orders, and this test had not been satisfied in this case. Conclusion His Honour held that that it was not necessary to grant Double Bay Marina Orders for all of EVCARES concerns to be considered at the heading. The Notice of Motion was dismissed. Newcastle Muslim Association Inc v Newcastle City Council [2012] NSWLEC 20 Following Justice Sheahan s refusal to grant Double Bay Marine Orders to EVCARES, Council brought an interlocutory application concerning whether it was at liberty to provide copies of expert reports filed in the proceedings to EVCARES. EVCARES wished to consider the reports for the purposes of their objection. At issue was whether disclosure of the expert reports to EVCARES would breach an implied undertaking to the Court not to use the reports for any purpose other than that for which [the reports were] given without the leave of the Court, until the reports were received into evidence. The Harman Principle The Court considered whether there was an implied undertaking to the Court that Council would not disclose expert reports to objectors without leave of the Court unless the reports were received into evidence. Justice Biscoe noted that the basis for such an undertaking arose from the Harman principle (which has been adopted by the High Court in Hearne v Street [2008] HCA 36, 235 CLR 125). His Honour summarised the principle as: where documents are provided to a party to legal proceedings under some compulsive process of the Court, that party is taken to have impliedly undertaken to the Court not to use the documents otherwise than for the purposes of those proceedings. That is, that party may not use the documents for the purposes of some other proceedings or otherwise for a collateral purpose. Justice Biscoe considered subsequent cases concerning the existence of the implied undertaking and noted that: the reason for the rule was that compulsion by the Court to produce documents is an invasion of a private right to keep one s documents to oneself; and the public interest in privacy and confidence demands that this compulsion should not be pressed further than the course of justice requires. His Honour commented that in order to determine whether the implied undertaking applied to the disclosure of expert reports to objectors, the unique status of objectors in development appeals would need to be considered. He noted that the status of objectors in such appeals has no equivalent in conventional civil litigation. However, his Honour determined that it was not necessary for him to answer the question in order to grant the leave sought by Council and, given the urgency of the application, it was preferable not to express a view on the issue.

7 7 His Honour did however express a preliminary view that a party is free to give copies of its own expert reports to whomever it wishes in any civil litigation. This is because the implied undertaking is only intended to protect against the disclosure of another party s documents that have been provided under compulsion of law. Reasoning Despite making no finding as to whether an implied undertaking existed in this case, Justice Biscoe granted leave to Council to provide copies of the expert reports served in the proceedings to objectors who wished to consider those reports for the purpose of their objections. Justice Biscoe gave the following reasons for granting leave: One of the objects of the EP&A Act is to provide increased opportunity for public involvement and participation in environmental planning and assessment ; When a development application is before a council for consideration any person may inspect the development application and accompanying information. Government information associated with development applications, including expert reports can also be obtained under the Government Information (Public Access) Act 2009 and the Government Information (Public Access) Regulation 2009; In an appeal against a council s refusal of a development consent, the Court stands in the shoes of the council; After a document is tendered in evidence at the hearing of an appeal it is accessible by an objector; The Court s usual directions in Class 1 development appeals provide for objectors to give evidence and for their submissions to be received, and the Court s Site Inspections Policy requires the council to ensure that local residents (including objectors) have a full understanding of the proposal (including recent amendments) so that any concerns expressed on-site are relevant. Conclusion Justice Biscoe held that to provide objectors with access to the expert reports would improve the efficient conduct of the hearing, as well as provide the opportunity for public involvement, participation, access to information and transparency. However, his Honour held that granting leave to Council to provide copies of expert reports to objectors did not mean that those objectors were entitled to enter the expert evidence arena as if they were parties or the beneficiaries of Double Bay Marina Orders. Joseph v Lane Cove Council [2012] NSWLEC 1013 This case concerned two appeals: one against an order issued by Lane Cove Council requiring the demolition of a building structure which had been erected without development consent, and the second against the deemed refusal by Council to issue a building certificate for that structure. Facts The owner of a property in Riverview had a structure, described as a cabana, erected on her property without obtaining development consent from Council or approval from a private certifier. The cabana was a timber framed building, divided into two rooms, with window openings, a large opening for a door to be fitted, electrical and data cabling installed as well as provision for plumbing for a toilet and shower. The building had a gross floor area of 14.59sqm with a patio that increased the footprint to 16.28sqm. The building was set back from the boundaries of the property by just over 900mm at the closest points. It had a maximum eave height of 2.51m above ground level. Contentions The owner submitted that development consent was not required because a cabana is exempt development

8 8 under State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (SEPP 2008). Council submitted that the structure was not a cabana and instead was properly characterised as a detached studio building because the provision of plumbing and electrical and data cabling, along with lined internal walls and ceilings, meant it was capable of use as a dwelling. In addition, Council argued that the building had detrimental impacts on the adjoining property in terms of loss of privacy and the building s height, which obstructed the neighbour s view. Planning Controls The site was zoned R2 Low Density Residential under the Lane Cove Local Environment Plan 2009 (LEP). Dwelling houses are permitted with consent in that zone, as are any structures ancillary to such a dwelling. Part 4 of the LEP contained development standards concerning floor space ratio and height and there was no dispute that the building would comply with those standards. The provisions of SEPP 2008 were also considered by the Court. SEPP 2008 specified that to be exempt development, a structure in R2 zone must, among other things: not have a floor area of more than 20m2; be not higher than 3m above existing ground level; be located at least 900mm from each lot boundary; be located behind the building line of any road frontage; and to the extent it is comprised of metal components be constructed of low reflective, factory pre-coloured materials if it is located on land in a residential area. The Lane Cove Development Control Plan (DCP) was also relevant to the building. At the time the application was lodged, the maximum wall height allowed under the DCP was 2.1m. However, during the hearing Council amended its DCP to allow for a maximum wall height of up to 2.4m. The Council did not inform the owner or the Court of this amendment and therefore no consideration of the issue was made by the experts. The Court only became aware of the amendment prior to judgment, which Commissioner Morris commented was an unacceptable situation which should have not occurred as it is the responsibility of the council to ensure that the Court is referred to its current planning controls Consideration There is no definition of cabana in SEPP 2008 and evidence was heard on the appropriate definition. The owner submitted, referring to the Macquarie Dictionary, that cabana can be described as a cabin or hut, while Council submitted that a cabana does not have walls and is a lightweight structure generally with an earth floor. During the hearing the owner agreed to make several amendments to the building. These included window treatments, installation of privacy screens, the capping of plumbing, the planting of shrubs to screen the building from the neighbour and the use of particular metal cladding for the walls. The expert for the owner submitted that these amendments meant that the structure would comply with the standards for exempt development set out in SEPP In relation to wall height, Council submitted that the amended DCP provided for a maximum height restriction and the height of the structure in the context of its location should be taken into account, including its impact when viewed from the neighbour s property. The owner contented that, because the DCP does not define how wall height is measured, minor amendments would make the external wall heights almost, if not fully, compliant with the amended DCP requirement. Conclusion and findings Commissioner Morris held that the building should be allowed, subject to a number of modifications. These modifications included the deletion of one window, the construction of a privacy screen, the capping and disconnection of all plumbing from the sewer and the use of a prefinished metal wall and roof cladding to complement the surrounding bushland, and the provision of screen planting between the building and the boundary.

9 9 The Commissioner held that the building as modified would be an exempt development as a cabana and did not require the removal of walls or an earth floor to be regarded as such. Given the recent changes to the DCP there was no requirement to reduce the wall height and landscaping would address the contentions in relation to the bulk and scale of the building. In addition, the capping and disconnection of the plumbing from the sewer would address concerns that the structure was capable of use as a dwelling. There was no requirement to remove the electrical wiring from the building. The Order issued by Council in relation to the property was modified revoking the requirement to demolish the unauthorised building structure and instead requiring modification of the structure. On completion of the works required to be undertaken the Court directed Council to issue a building certificate. Wallis v Hornsby Shire Council [2012] NSWLEC 1029 This case concerned an appeal against a 121B Order issued by Hornsby Shire Council requiring modification of building works to comply with plans approved under a development consent. Facts In 2005 Mr Wallis wife (who was the owner at the time) lodged a development application for a first floor addition to a residential property in Pennant Hills. The application was refused by Council and the Court dismissed an appeal of the refusal. In 2007 Mr Wallis wife and his daughters lodged another development application for alterations and additions including a first floor addition. The application was approved on 7 March 2007 subject to conditions of consent, including compliance with the Australian Standard for Construction of Buildings in Bushfire prone areas and the appointment of a Principal Certifying Authority (PCA). No documentation was provided to the Court to show whether a PCA was appointed. On 23 August 2010 Council issued a section 121B Order requiring the owners to modify the building by reducing its size to comply with the approved plans. The Mr Wallis wife then lodged a section 96 application to enlarge the approved works. A Council survey confirmed that the work completed was in excess of the dimensions shown on the as built plans. The Council s assessment of the section 96 application was that the submitted plans were inaccurate and there were unacceptable solar access impacts on adjacent properties. The section 96 application was refused on 3 December A further section 121B Order, the subject of this appeal, was issued on 1 June Contentions The present owner, Mr Wallis, sought to have the section 121B Order revoked on the following bases: the original plans approved by Council were incorrectly drawn by the architect; he was not the owner of the building when the additions were constructed; the Council should have identified the non-compliances earlier; he had not had any complaints from the neighbours since the completion of the works; and being a pensioner, he would be unable to afford the cost of rebuilding in compliance with the plans. Council relied upon an expert report prepared on its behalf which showed that the structure as built did not

10 10 comply with current standards for the calculated bushfire attack level, that the bushfire threat had been underestimated and that internal stairs, smoke alarms and a first floor balcony balustrade were non-compliant. The report concluded that the additions were not fit for occupation. Consideration The Court considered the relevant planning controls, including the Hornsby Shire Local Environment Plan 1994 which specified the maximum floor space ratio for a dwelling house to be 0.4:1 and the Hornsby Shire Dwelling House Development Control Plan concerning solar access. During the course of a section 34 conciliation conference and the hearing, Mr Wallis was given a number of opportunities to provide Council with accurate plans of the structure as built and to apply for a Building Certificate. No plans were submitted and Mr Wallis called no experts and put on no evidence to refute Council s contentions. The fact that no accurate plans were submitted meant that Council s assessment of the floor space ratio and solar access was very difficult and Council had to rely on a survey taken from the street. Council contended that the works had not been carried out in accordance with the approved plans and sought compliance with the section 121B order. Findings Commissioners Fakes and O Neill found that the additions and alterations as built were a significant departure from the approved plans. Mr Wallis contention that the plans were wrong was rejected. Mr Wallis contention that he should not be responsible as he was not the owner of the property at the time the works were carried out was also rejected. The Court noted that as a purchaser of the property it could reasonably be assumed that Mr Wallis was aware of any encumbrances or risks associated with the property. Mr Wallis argument that Council should have picked up the problem earlier was also rejected as there was no evidence that Council had been appointed as the PCA. The appeal was dismissed and the Order issued by Council was modified to reflect a new date for compliance and to include conditions covering the matters raised in the bushfire assessment report and non-compliance with the Building Code of Australia. The Court noted that these were not trivial matters as they had ramifications for the safety of anyone who resided in the dwelling. Kerford Developments Pty Ltd v Albury Council [2012] NSWLEC 1020 In this case, Commissioner Pearson examined two appeals against the refusal of a development application and modification application in relation to a subdivision where a condition of the original consent required the reservation of a lot for environmental purposes. Facts Kerford Developments Pty Ltd (Kerford) filed two appeals in relation to a subdivision development at Thurgoona. The first was against the refusal of consent for a development application seeking approval for a 15 lot residential subdivision. The second was to modify conditions of an existing development consent for an 18 lot residential subdivision of the site. These conditions related to a reserve created for environmental protection, which Kerford wanted to use for part of its new 15 lot subdivision development. Both appeals were held together. A condition of the original consent required that the reserve was not to be dealt with as a residual lot to the subdivision, but rather for environmental protection. Various other conditions imposed restrictions in relation to the reserve lot, including

11 11 the keeping of cats and dogs, road access, prohibiting gates or other access into the reserve and the prohibiting the use of the reserve for storage, stockpiling or dumping goods and materials. At the time of the hearing, Kerford had obtained a construction certificate for the subdivision of the site, and work had commenced. The modification application was to delete and amend various conditions relating to the reserve in order to enable the subsequent development application for a further 15 lot subdivision, which was partly on the reserve. Modification Application Commissioner Pearson reviewed the relevant planning controls and then turned first to the modification application. Council submitted that the modification could not be granted because the deletion of the specified conditions would result in the development as modified not being substantially the same as that originally approved. In the alternative, if there was power to approve the modification, Council submitted that it should be refused on the following bases: the reserve should be designated for the environmental protection of the Speckled Warbler; Kerford had obtained the benefit of the original consent and was now seeking to avoid the burden imposed by the consent; and Kerford should not be permitted to resile from representations it made that it would designate the land subject to the conditions as an environmental reserve for the Spotted Warbler. Kerford submitted that the development would be substantially the same on the basis that the deletion of conditions would not of itself increase the number of lots, or change the subdivision layout. In addition, Kerford argued that the conditions required the dedication of the reserve free of cost but that the dedication was not allowed or determined in accordance with contribution plans, and was therefore a breach of the Act and should be deleted. Commissioner Pearson reviewed the history of the development, in particular the process of consideration by Council, noting that the development for which consent was originally granted included ameliorative measures in the form of the reserve lot and Management Guidelines. These measures had been designed to satisfy Council that the development was not likely to significantly affect threatened species, and could be approved without a site impact statement (SIS). The Commissioner then stated that whilst the alteration of the condition relating to the reserve lot would not itself alter the number of lots approved, the deletion of the requirement that the lot be reserved would remove the ameliorative measures that enabled the Council to grant consent, and would therefore radically transform the originally approved development. The Commissioner also found that the subject condition was not the source of a requirement that the reserve lot be dedicated free of charge, but rather the proposal to dedicate the land was part of the development application to remove the requirement for an SIS. The Commissioner held that, as Council has the power to impose a condition if it relates to any matter referred to in section 79C(1) of relevance to the subject of the consent, those matters included the environmental impacts of the development and therefore the condition valid. The Subdivision Application The Commissioner then turned to the subdivision application. Council submitted that the proposed subdivision would result in contraventions of the conditions of the consent attached to the original consent, namely that the reserve not be dealt with as a residual lot to the subdivision. After reviewing the relevant authorities, the Commissioner held that it did not follow that consent cannot be given where there is a conflict with a condition of an earlier development consent.

12 12 LAND AND ENVIRONMENT COURT REPORTER Whether subdivision should be granted depended on an assessment of the merits of the modification application in accordance with the Act. The Commissioner considered the impacts of the proposed development on the Speckled Warbler in the context of biodiversity certification for the site under the Threatened Species Conservation Act The Commissioner agreed with Council s submission that the clearing of trees for the proposed subdivision would not preserve the amenity of the area, and would have an adverse impact on the habitat of the Speckled Warbler and on the Speckled Warbler itself. Based on the assessment of the likely impacts of the proposed development, the Commissioner was not satisfied that the site was suitable for development. Conclusion The appeals were dismissed. LAND AND ENVIRONMENT COURT REPORTER Published monthly by the Local Government and Shires Associations of NSW GPO Box 7003, Sydney NSW 2001