Land and Environment Court New South Wales

• Medium Neutral Citation: Amalgamated Holdings Ltd v North Sydney Council [2012] NSWLEC 138
• Hearing dates: 13-14 June 2012
• Decision date: 22 June 2012
• Jurisdiction: Class 4
• Before: Biscoe J

Decision

Proceedings dismissed with costs. Interest on second respondent's costs ordered.

• Catchwords: JUDICIAL REVIEW - validity of development consent governed by State Environmental Planning Policy (Major Development) 2005 - whether council discharged its function of assessing development application - scope of regional panel's function of determining a development application - whether interest should be ordered on costs awarded to respondent.
• Legislation Cited: Civil Procedure Act 2005 ss100, 101; Environmental Planning and Assessment Act 1979 ss 4, 23G, 23H, 79C, 80, 80A, 83B, 123, Part 4; Environmental Planning and Assessment Regulation 2000 cll 50, 123E, Schedule 1; Legal Profession Act 2004 s 368(5); State Environmental Planning Policy (Housing for Seniors or People with a Disability) 2004 cll 2, 4, 14, 15, 32, Chapter 3 Part 3; State Environmental Planning Policy (Major Development) 2005 Part 3; State Environmental Planning Policy No 5 - Housing for Older People or People with a Disability; Land and Environment Court Practice Note on Pre-Judgment Interest Rates
• Cases Cited: Addenbrooke Pty Ltd v Woollahra Municipal Council (No 2) [2009] NSWLEC 134; Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd (in Liquidation) [2002] NSWSC 280; Belmorgan Property Development Pty Ltd v GPT Re Ltd [2007] NSWCA 171, 153 LGERA 450; Capital Airport Group Pty Ltd v Director-General of the NSW Department of Planning (No 2) [2011] NSWLEC 83; Central Coast Care v Wyong Shire Council [2003] NSWLEC 17, 124 LGERA 320; Drummond and Rosen Pty Ltd v Easey [No 2] [2009] NSWCA 331; Eco-Villages Australia Pty Ltd v Pittwater Council [2012] NSWLEC 49; GPT Re Ltd v Wollongong City Council [2006] NSWLEC 303, 151 LGERA 116; Ku-ring-gai Council v Sydney West Joint Regional Planning Panel (No 2) [2010] NSWLEC 270, 181 LGERA 11; Lahoud v Lahoud [2006] NSWSC 126; Leda Pty Ltd v Weerden (No 2) [2007] NSWCA 283; Robb Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170; Ryding v Miles (No 2) [2012] NSWSC 312; Taylor v Port Macquarie-Hastings Council [2010] NSWLEC 153, 175 LGERA 189; Ying v Song [2011] NSWSC 618
• Category: Principal judgment
• Parties: Amalgamated Holdings Ltd (Applicant); North Sydney Council (First Respondent); Uniting Church in Australia Property Trust (NSW) (Second Respondent); Sydney East Joint Regional Planning Panel (Third Respondent)
• Representation: COUNSEL: Mr N J Williams SC and Ms Ms V Bosnjak (Applicant); Submitting appearance (First Respondent); Mr T F Robertson SC and Ms H Irish (Second Respondent); Submitting appearance (Third Respondent); SOLICITORS: Minter Ellison (Applicant); HWL Ebsworth (First Respondent); Pikes and Verekers Lawyers (Second Respondent); Department of Planning and Infrastructure (Third Respondent)
• File Number(s): 41035 of 2011

Judgment

1 The applicant, Amalgamated Holdings Ltd, seeks judicial review of a development consent for a Stage 1 concept proposal for a high-rise aged care housing development, associated non-residential uses and certain works on land at 50 - 52 McLaren Street, North Sydney.

2 The applicant is the owner and operator of the Rydges Hotel at 54 McLaren Street, North Sydney. The applicant is concerned about the effect of the proposed development on existing views from the Rydges Hotel. The development application was assessed by the first respondent, North Sydney Council (Council), and determined by the third respondent, Sydney East Joint Regional Planning Panel (Panel), under s 23G of the Environmental Planning and Assessment Act 1979 (EPA Act) and cll 13F and 13G of State Environmental Planning Policy (Major Development) 2005 (Major Development SEPP). The developer is the second respondent, Uniting Church in Australia Property Trust (NSW) (Developer). The Council and the Panel filed submitting appearances. The proceedings were defended by the Developer.

3 Two grounds of judicial review are pressed. First, that the Panel exceeded its jurisdiction to determine the development application because, contrary to cl 13F(2)(d) of the Major Development SEPP, the Council did not first assess modifications that the Council suggested to the Panel which the Panel adopted. Secondly, that the Council, contrary to s 79C(1)(a)(i) of the EPA Act, failed to properly consider the design principles in State Environmental Planning Policy (Housing for Seniors or People with a Disability) 2004 (Seniors SEPP).

4 I do not accept either ground and propose to dismiss the proceedings.

THE STATUTORY CONTEXT

5 The EPA Act provides:

23G Joint regional planning panels

(1)  The Minister may, by order published on the NSW legislation website, constitute a joint regional planning panel for a particular part of the State specified in the order.

(2)  A regional panel has the following functions:

      (a)any of a council's functions as a consent authority that are conferred on it under an environmental planning instrument,

...

(5A) Subject to the regulations, a regional panel is, in the exercise of functions conferred under subsection (2) (a), taken to be the council whose functions are conferred on a regional panel as referred to in subsection (2) (a).

(5B) A regional panel is to exercise functions conferred as referred to in subsection (2) (a) to the exclusion of the applicable council (subject to any delegation under this Act).

...

23H Regulations

The regulations may make provision for or with respect to the following matters:

(a)the functions conferred by this Act on a regional panel including its procedures in exercising its functions, and procedures in relation to its determination of development applications and applications to modify development consents,

...

79C Evaluation

(1) Matters for consideration-general

In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application:

(a) the provisions of:

     (i) any environmental planning instrument, and

...

80 Determination

(1) General

A consent authority is to determine a development application by:

(a) granting consent to the application, either unconditionally or subject to conditions, or

(b) refusing consent to the application.

...

(4) Total or partial consent

A development consent may be granted:

(a) for the development for which the consent is sought, or

(b) for that development, except for a specified part or aspect of that development, or

(c) for a specified part or aspect of that development.

...

80A Imposition of conditions

(1) Conditions-generally

A condition of development consent may be imposed if:

...

(g) it modifies details of the development the subject of the development application, or...

83B Staged development applications

(1)  For the purposes of this Act, a staged development application is a development application that sets out concept proposals for the development of a site, and for which detailed proposals for separate parts of the site are to be the subject of subsequent development applications. The application may set out detailed proposals for the first stage of development.

(2)  A development application is not to be treated as a staged development application unless the applicant requests it to be treated as a staged development application.

...

6 The Environmental Planning and Assessment Regulation 2000 (EPA Regulation) provides:

123E Procedural matters related to determination of development applications

(1)  A regional panel may, for the purpose of determining a development application:

      (a) obtain assessment reports, in addition to any assessment report or other information provided by a relevant council in dealing with the application, and

      (b) obtain other technical advice or assistance as the panel thinks fit.

(2)  If a development consent is granted by a regional panel subject to a condition referred to in section 80 (3) or 80A (2) of the Act, the regional panel is taken to be satisfied as to a matter specified in the condition if the council for the area in which the land on which the development is to be carried out notifies the chairperson of the panel in writing that the matter specified in the condition has been satisfied.

7 Part 3 (cll 13 to 13G), entitled "Regional development", of the Major Development SEPP provided at the relevant time:

13B General development to which Part applies

(1) This Part applies to the following development:

     (a) development that has a capital investment value of more than $10 million,

...

Division 3 Consent authority functions that may be exercised by regional panels

13F Council consent functions to be exercised by regional panels

(1)  A regional panel for a part of the State may exercise the following consent authority functions of the council or councils for that part of the State for development to which this Part applies:

      (a) the determination of development applications, and applications for the modification of development consents previously granted by the panel, in accordance with Part 4 of the Act,

      (b) without limiting paragraph (a), the functions of a consent authority under Divisions 2 and 2A of Part 4 of the Act and sections 89A, 93I, 94, 94A, 94B, 94C, 94CA, 94EF, 94F, 95 (2), 96 (2) and 96AA.

(2)  However, the following functions of a council as a consent authority are not conferred by this clause on a regional panel:

...

      (d) the receipt and assessment of development applications,

...

(3) The council remains the consent authority for development to which this Part applies, subject to the exercise by regional panels of functions conferred on them by this clause.

(emphasis added)

13G Staged development functions

(1)  The functions of a council conferred on a regional panel extend to the determination of the separate development applications that form part of a staged development application, if:

       (a) the estimated capital investment value of the whole of the development likely to be covered by all the applicable development applications is an amount specified under clause 13B (1) (a)-(d) or (2) in relation to that type of development, or

       (b) any of the development applications involves designated development or subdivision to create more than 250 lots.

...

8 The Seniors SEPP provides:

2 Aims of Policy

(1) This Policy aims to encourage the provision of housing (including residential care facilities) that will:

       (a) increase the supply and diversity of residences that meet the needs of seniors or people with a disability, and

       (b) make efficient use of existing infrastructure and services, and

       (c) be of good design.

(2) These aims will be achieved by:

       (a) setting aside local planning controls that would prevent the development of housing for seniors or people with a disability that meets the development criteria and standards specified in this Policy, and

       (b) setting out design principles that should be followed to achieve built form that responds to the characteristics of its site and form, and

       (c) ensuring that applicants provide support services for seniors or people with a disability for developments on land adjoining land zoned primarily for urban purposes.

4 Land to which Policy applies

(1) General

This Policy applies to land within New South Wales that is land zoned primarily for urban purposes or land that adjoins land zoned primarily for urban purposes, but only if:

       (a) development for the purpose of any of the following is permitted on the land:

       ...

              (ii)residential flat buildings,

              (iii)hospitals,

              ...

Chapter 3 Development for seniors housing

Part 1 General

14 Objective of Chapter

The objective of this Chapter is to create opportunities for the development of housing that is located and designed in a manner particularly suited to both those seniors who are independent, mobile and active as well as those who are frail, and other people with a disability regardless of their age.

15 What Chapter does

This Chapter allows the following development despite the provisions of any other environmental planning instrument if the development is carried out in accordance with this Policy:

(a)development on land zoned primarily for urban purposes for the purpose of any form of seniors housing,...

...

Part 3 Design requirements

Division 1 General

...

32 Design of residential development

A consent authority must not consent to a development application made pursuant to this Chapter unless the consent authority is satisfied that the proposed development demonstrates that adequate regard has been given to the principles set out in Division 2.

Division 2 Design principles

...

9 Clauses 33 to 39 in Division 2 of Part 3 of the Seniors SEPP contain the design principles.

GROUND 1

10 Ground 1 is that the Panel exceeded its jurisdiction to determine the development application because, contrary to cl 13F(2)(d) of the Major Development SEPP, the Council did not first assess modifications which the Council suggested to the Panel and which the Panel adopted.

11 A council has the function of determining a development application by granting consent either unconditionally or subject to conditions, or by refusing consent: s 80(1) EPA Act. In "determining a development application", it is mandatory for a consent authority to take into consideration relevant matters listed in s 79C (headed "Evaluation").

12 A joint regional planning panel constituted by the Minister has any of a council's functions as a consent authority that are conferred on it under an environmental planning instrument, and the regional panel must exercise those functions to the exclusion of the council: s 23G(2)(a) and (5B) EPA Act. Part 3 of the Major Development SEPP, which is an environmental planning instrument (s 4 EPA Act), applies to development that has a capital investment value of more than $10 million: cl 13B(1)(a). The Major Development SEPP confers on a regional panel certain consent authority functions of councils including "the determination of development applications": cl 13F(1)(a). The functions of a council conferred on a regional panel extend to the determination of the separate development applications that form part of a staged development application if the estimated capital investment value of the whole of the development likely to be covered by all applicable development applications exceeds $10 million, as it does in the present case: cl 13G(1)(a). Other specified functions of a council as a consent authority are expressly not conferred on a regional panel, including, importantly for present purposes, the "assessment of development applications": cl 13F(2)(d).

13 In the present case, the Council made an assessment of the development application and provided the Panel with a report entitled "Assessment Report and Recommendation". In the report, the Council recommended refusal of the development application. However, the report concluded that seven specified modifications, mainly concerning height and setbacks, were necessary to provide "a more acceptable envelope for development", and commented that it may not be possible to provide for the suggested setbacks having regard to the shape and narrowness of the site. The Panel adopted some of those modifications including height, but not setbacks, as conditions of consent in determining to grant consent. The applicant argues that the Council had to assess its suggested modifications before the jurisdiction of the Panel to determine the development application arose, and did not do so.

14 The applicant's case is based on the language used in the Council report relating to the modifications. Consequently, I will quote the passages on which the applicant principally relies.

15 The applicant relies on the following passage:

The context, scale and built form have been assessed above. The height and setbacks require further modification before they can be signed off as satisfactory under SEPP 65. The minimum setbacks for the residential towers should be 6m weighted average up to 25m high and 9m weighted average over 25m in height. Currently tower A has a setback of 6m from the western boundary (minus 2m in some areas to allow for articulation) and 3m from the eastern boundary. A proposal compliant with the minimum setbacks with reduced heights will have significantly less impacts than the building proposed.

16 The applicant also relies on the last three paragraphs of the Conclusion section of that report. In order to put those paragraphs in context, I will quote the Conclusion section in full:

CONCLUSION

The application has been assessed against the relevant statutory controls. A thorough analysis of the site and surrounds has been provided along with numerous reports and studies. The applicant considers the height and scale of the proposal to be in context with the surrounding areas. Photomontages were provided showing the proposed building from various locations to demonstrate that the building should have a height equal to the Rydges Hotel.

Council has undertaken extensive studies of the whole of the CBD providing specific heights for each site in the CBD. The heights were based on the objectives of the current controls having regard to sites adjoining the centre with the benefit of Court decisions concerning the controls.

Having regard to the transition requirements in the LEP and the notional arc in the DCP and the existing buildings north south and west east, it would seem that the northern tower should be lower than the Rydges building (not higher than it).

The applicant has advised that the northern building (tower A) is to be used for self contained apartments. Accordingly SEPP 65 is relevant. The applicant claims that separation distances comply but relies heavily on the majority of the separation being on the neighbours' site rather than equal sharing of setbacks. This is of particular concern as the building exceeds 25m in height.

The application was referred to Council's Design Excellence Panel for comment and there was concern raised about the height of tower B being excessive for the McLaren Street building. The Panel commented on the need for some articulation to the larger tower to reduce its scale when viewed from the Miller Street properties, perhaps by a podium/setback/facade treatment at the RL101 level. This would coincide with the SEPP 65 requirement of increased setback for a building in excess of 25m.

The Design Excellence Panel raised concerns with the scale of the south eastern corner (tower B) and Council's Conservation Planner raised concern about the building needing to be articulated to create a compatible form and scale to the adjacent heritage items. The applicant's Heritage Consultant recommended:

...the west and north elevations of the Miller/McLaren Street building at the lower levels/podium be articulated and detailed to complement the scale and character of the heritage items along Miller Street...

To achieve an appropriate scale, tower B and the western end of the McLaren Street building need to be lowered.

Council's Traffic Engineer raised concern about the increased amount of parking on the site and recommended no more than the maximum permitted under the DCP.

The application is seeking consent for the demolition of existing structures, tree removal, installation of drainage infrastructure and Stage 1 concept approval for an aged care housing development and associated non residential uses. The height and setbacks of various sections of the building are not supported as indicated in the assessment report.

The following changes are considered necessary to provide for a more acceptable envelope for development:

• Reduce height of tower A to no more than RL 118 (to top of plant)
• Provide minimum of 6m setback from side boundaries for building up to RL 101
• Provide minimum of 9m setback from side boundaries for building over RL 101
• Reduce tower B to be one floor higher than RL 101 with 3m setback from podium edge to McLaren Street to provide lift and stair access to podium level (RL 101) with associated facilities
• Maximise open space terrace at podium level
• Increase setback at western end of McLaren Street building at RL 91 to the rear alignment of the heritage building at 243 Miller Street
• Parking on site to be in accordance with maximum requirements of DCP

It may not be possible to provide for the suggested setbacks having regard to the shape and narrowness of the site. That means that the site is not really suitable for the scale of development proposed. It may mean that the applicant may need to consolidate the site to make it wider. It is noted that the taller buildings to the east have a larger site with more generous setbacks.

The application is recommended for refusal. Should the Panel agree with the suggested modifications above, the applicant could lodge a new application for the complete proposal with full details of use, architectural details, materials and finishes rather than another Stage 1 concept application.

17 The applicant acknowledges that if, for example, the language used had been to the effect that the Council had assessed the modifications and recommended that the application be granted subject to the modifications, then it would be much more difficult to put forward Ground 1.

18 Minutes of a subsequent meeting of the Panel record its determination to approve the development application subject to modifications as follows:

1) The Panel resolves to accept the conclusions of the planning assessment report. However, since the application is a staged application, the Panel resolves to approve the application subject to the following amendments being made to the proposal:

     a) reduce the height of Tower A to no more than RL 118 (top of plant);

     b) provide setbacks from boundaries up to level RL 101 in accordance with the application drawings, with all articulation inside the building envelope;

     c) provide setbacks from boundaries for Tower A over RL 101 to a minimum of 6m, with all articulation within the building envelope and with all balconies off living rooms having setbacks of at least 7m;

     d) reduce Tower B to be one floor higher than RL 101, with 3m setback from the podium edge to McLaren Street, in order to provide lift and stair access to the podium level (RL 101) with associated facilities;

     e) the podium level is to be used for community open space; and

     f) Parking not to exceed the maximum requirement of DCP.

2) The Panel was unanimous on the above requirements. Michel Reymond voted to also increase the setback at the western end of McLaren Street; however, the other members of the Panel did not think this was necessary.

3) The access link from McLaren Street to Elliott Street is to be a public right-of-way.

4) The plant room on Tower A should be moved to the north as much as practicable in order to obstruct less of the view from the Rydges Hotel

19 For present purposes, the only modifications of significance suggested by the Council that were adopted by the Panel were the reductions in the height of the two towers:

 

(a) For Tower A, the development application proposed a height of RL 127.6, compared with the adjacent Rydges Hotel height of RL 123.6. The Council's Design Excellence Panel in its report to the Council said it had no concern with the height of Tower A in the context of the Rydges building and other buildings. However, the Council's assessment was that Tower A should be lower, not higher than the Rydges building. The Council suggested and the Panel approved a height of RL 118 - a reduction of 9.6 metres from the original proposal and 5.6 metres lower than the Rydges Hotel.

(b) For Tower B, the development application proposed a height of RL 118. The assessment of the Council's Design Excellence Panel in its report to the Council was that Tower B should be lowered by four floors (ie 12 metres since one floor equates to three metres) to RL 106. The Council suggested and the Panel approved a height of RL 104 - a reduction of 14 metres from the original proposal and two metres lower than the assessment by the Council's Design Excellence Panel. However, in response to the assessment by the Council's Design Excellence Panel, the Developer had earlier agreed to accept a reduction of 12 metres (four storeys) to RL 106 if the Council and the Panel agreed to that reduction. For present purposes, the applicant emphasises the 14 metres reduction from the original proposal while the Developer emphasises the two metres reduction from its agreed reduction.

20 The applicant submits that the question of whether the Council assessed its suggested modifications adopted by the Panel is one of fact and degree. The applicant says that if the Council had instead favoured, and the Panel had approved, a height reduction of say one metre for each of the towers compared with the height proposed in the development application, then, as a matter of fact and degree, it could not be said that the Council had not assessed the change. But, the applicant argues, the somewhat greater height reductions that the Council suggested and the Panel accepted fall on the wrong side of the line and, therefore, were not assessed by the Council as they had to be under the Major Development SEPP.

21 I do not accept the applicant's submission.

22 Under the Major Development SEPP, a council retains the function of assessment of development applications: cl 13F(2)(d). There is no doubt that the Council did thoroughly assess the subject development application, including referring the application to its Design Excellence Panel. The latter made an assessment to which the modifications suggested by the Council were responsive. Actually, the applicant does not submit that the Council did not assess the development application. Rather, it says that the Council did not assess the modifications, including height reductions, which the Council considered would be more acceptable. Having assessed the development application, the Council found it wanting in certain respects, mainly relating to height and setbacks, and suggested specific modifications which it assessed as necessary to provide a more acceptable envelope. Those modifications were the very product of the Council's assessment of the development application. In these circumstances, in my opinion, the Council discharged its assessment function. If the question boils down to one of fact and degree, as the applicant suggests, then in my judgment the modifications fall on the right side of the line.

23 For these reasons, I do not accept Ground 1.

24 The Developer made the further submission that Ground 1 also fails because assessment of mandatory relevant matters listed in s 79C of the EPA Act is part of the determination function assigned to the Panel and not the assessment function retained by the Council. The Developer's reasoning is that: (a) the determination function bestowed on a regional panel under cl 13F(1)(a) of the Major Development SEPP is indivisible; (b) the opening words of s 79C are "In determining a development application"; and (c) the function of assessment of development applications reserved to a council under cl 13F(2)(d) of the Major Development SEPP is limited to jurisdictional facts (conditions precedent) to the exercise of the Panel's determination function and therefore does not include assessment of relevant s 79C matters. This further submission became somewhat frayed when questioned on the basis that a council's assessment report would then be of remarkably limited assistance to the Panel. The Developer thereupon fell back to the position that this jurisdictional fact concept of "assessment" of development applications includes assessment of statements of environmental effects which are required to accompany development applications (EPA Regulation cl 50(1) and Schedule 1 Part 1 cl 2(1)(c)), and that it would only be in a "rare case" that the latter assessment would not include the mandatory considerations under s 79C. If that is correct, then it seems to me to take most of the steam out of the Developer's further submission.

25 I do not accept the Developer's further submission. When granting development consent, a consent authority is empowered to alter the development proposed in the development application in at least two ways. First, a condition of consent may be imposed modifying details of the development: s 80A(1)(g) EPA Act. This occurred in the present case. Secondly, the development consent may be granted for only a specified part or aspect of the development, or for the development except for a specified part or aspect (as occurred, for example, in Addenbrooke Pty Ltd v Woollahra Municipal Council (No 2) [2009] NSWLEC 134 per Biscoe J where an arm of a proposed marina was excepted from the consent): s 80(4). See also Eco-Villages Australia Pty Ltd v Pittwater Council [2012] NSWLEC 49 at [49] per Craig J.

26 It is true that a consent authority has a single, indivisible determination function under s 80(1) of the EPA Act such that a council cannot delegate only the consent part of that function and not the refusal part: GPT Re Ltd v Wollongong City Council [2006] NSWLEC 303, 151 LGERA 116 at [47] per Biscoe J; affirmed in Belmorgan Property Development Pty Ltd v GPT Re Ltd [2007] NSWCA 171, 153 LGERA 450 at [56] - [59]. Section 79C(1) provides that "In determining a development application", a consent authority must take into consideration the matters which it lists insofar as they are relevant. However, s 23G creates a regional panel scheme and was enacted subsequently. It permits some functions but not others to be conferred on a regional panel by an environmental planning instrument: s 23G(2)(a). This necessarily contemplates a division of functions. Clause 13F of the Major Development SEPP confers the Council's determination function on the Panel (cl 13F(1)(a)) but the assessment function is expressly not conferred (cl 13F(2)(d)). That is reinforced by cl 123E(1) of the EPA Regulation, which provides that a regional panel may, for the purpose of determining a development application, obtain assessment reports "in addition to any assessment report or other information provided by a relevant council", and may obtain other technical advice or assistance as the panel thinks fit.

27 Under the statutory scheme, a regional panel is not to go it alone but is to have local input through a local council's assessment of a development application. This council assessment is a condition precedent to a regional panel's determination of the application. In exercising its determination function, the regional panel need not accept the council's assessment and ultimately may base its determination on its own evaluation: Ku-ring-gai Council v Sydney West Joint Regional Planning Panel (No 2) [2010] NSWLEC 270, 181 LGERA 11 at [100] - [104] per Biscoe J. A regional panel's evaluation may also be assisted by any other assessment, information, technical advice or assistance to which the panel may have recourse under cl 123E(1) of the EPA Regulation.

28 The Environmental Planning and Assessment Act implements a policy of assessment of development applications. An interpretation of the undefined word "assessment" that diminishes the importance of this policy would not justify the assessment provisions of the Act or an instrument made under it, let alone the name of the Act. The Developer proposes an interpretation of the function of assessment of a development application in cl 13F(2)(d) of the Major Development SEPP so as to confine it to jurisdictional facts (conditions precedent) not including assessment of the mandatory matters listed in s 79C of the EPA Act. That involves, I think, diminishing the importance of the EPA Act's assessment policy.

29 In my opinion, although, in conferring functions of a council on a regional panel, cl 13F of the Major Development SEPP does not specifically mention s 79C: (a) its reservation to the council of the function of assessment of development applications includes assessing relevant matters listed in s 79C; and (b) the determination function conferred on the regional panel includes evaluation of the same matters.

30 For these reasons, while upholding Ground 1, I do not accept the Developer's further submission.

GROUND 2

31 Ground 2 is that, contrary to s 79C(1)(a)(i) of the EPA Act, the Council did not properly consider the design principles in the Seniors SEPP. It is convenient to repeat s 79C(1)(a)(i):

79C Evaluation

(1) Matters for consideration-general

In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application:

     (a) the provisions of:

          (i) any environmental planning instrument, and

...

32 As regards this statutory duty to consider, in Capital Airport Group Pty Ltd v Director-General of the NSW Department of Planning (No 2) [2011] NSWLEC 83 at [100] I wrote:

The High Court in Minister for Immigration and Citizenship v SZJSS [2010] HCA 48, 85 ALJR 306 at [26] approved the formula of Gummow J in Khan v Minister for Immigration and Ethnic Affairs [1987] FCA 457, 14 ALD 291 that the statutory duty to "consider" means to "give proper, genuine and realistic consideration to the merits of the case", whilst noting the caution in Swift v SAS Trustee Corporation [2010] NSWCA 182 at [45] that those words should not be permitted to encourage a slide into impermissible merits review. No reference was made to a view earlier expressed by the Court of Appeal that it is preferable to avoid using that formula or similar descriptive formulae, but that the relevant matter must be more than merely adverted to or given mere lip-service: Anderson v Director-General Department of Environment and Climate Change [2008] NSWCA 337, 163 LGERA 400 at [51] - [58]. For an earlier review of the authorities relating to the use of this formula see my judgment in Anderson v Minister for Infrastructure Planning and Natural Resources [2006] NSWLEC 725, 151 LGERA 229 at [52].

33 I do not accept Ground 2 for three reasons. First, in my opinion, the Seniors SEPP design principles in fact were properly considered. There should be taken into account that the development application is for a staged concept approval without requisite details and that consideration of the design principles must take place at that level of generality. The Seniors SEPP design principles were addressed in the Developer's Statement of Environmental Effects accompanying its development application; in written submissions by or on behalf of the applicant to the Council; and in the Council report to the Panel where relevant design principles of the Seniors SEPP were quoted in full and followed by brief comments. The Council report said that although the Developer did not rely on the Seniors SEPP, the application had been assessed against relevant design principles in the Seniors SEPP. In my opinion, all this establishes that the Seniors SEPP design principles were properly considered.

34 Secondly, in any event, in my opinion, the Seniors SEPP was inapplicable because the development application was not made pursuant to the Seniors SEPP and was permissible with consent under a local environmental plan. Therefore, the design principles in the Seniors SEPP were not mandatory considerations under s 79C(1)(a)(i) of the EPA Act (it does not follow that they could not be taken into account as relevant, even though not mandatory) The predecessor of the Seniors SEPP was State Environmental Planning Policy No 5 - Housing for Older People or People with a Disability (SEPP 5). SEPP 5 has been held not to apply where an applicant for development consent has not invoked it in its development application and the development was permissible with consent under a relevant local environmental plan: Central Coast Care v Wyong Shire Council [2003] NSWLEC 17, 124 LGERA 320 at [21] - [29] per Lloyd J.

35 The applicant submits that the language of the Seniors SEPP is materially different from the language of SEPP 5 and, therefore, that Central Coast Care is distinguishable. The design principles are in Division 2 (cll 33-39) of Part 3 of Chapter 3 of the Seniors SEPP. The applicant points out that unlike Division 1 (cll 30-32) of Part 3 of Chapter 3, which refers in each of its clauses to a development application "made pursuant to this Chapter", Division 2 does not use those words. Rather, each clause of Division 2 commences with the words "The proposed development should" and then sets out a design principle. The applicant submits that, consequently, although Division 1 is inapplicable, Division 2 containing the design principles is applicable, and therefore those design principles are mandatory considerations under s 79C(1)(a)(i) of the EPA Act.

36 I do not agree. In my view, "The proposed development" referred to at the commencement of each clause of Division 2 is "the proposed development" referred to in cl 32 of the Seniors SEPP - the clause immediately preceding Division 2 - which for convenience I repeat:

       32 Design of residential development

A consent authority must not consent to a development application made pursuant to this Chapter unless the consent authority is satisfied that the proposed development demonstrates that adequate regard has been given to the principles set out in Division 2.

37 Therefore, the Seniors SEPP design principles are only applicable and a mandatory consideration under s 79C(1)(a)(i) where the development application is made pursuant to Chapter 3 of the Seniors SEPP.

38 Thirdly, lest I am in error and the Seniors SEPP is applicable, then in my opinion, under s 79C(1)(a)(i) of the EPA Act the only relevant provision of the Seniors SEPP is cl 32. Clause 32 is only concerned with the consent authority's subjective satisfaction. That is, the design principles in Division 2 are not free-standing mandatory considerations under s 79C(1)(a)(i). Understandably, in oral submissions the applicant specifically disclaimed any reliance on cl 32.

39 For these reasons, I do not accept Ground 2.

INTEREST ON COSTS

40 As the applicant has been unsuccessful, it should pay the successful Developer's costs.

41 There is a contested claim by the Developer for interest on costs under s 101(4) of the Civil Procedure Act 2005. Section 100 of the Civil Procedure Act 2005 gives the courts a discretion, which is routinely exercised, to order interest on monies recovered up to judgment and provides that such interest is to be included in the amount for which judgment is given. Section 368(5) of the Legal Profession Act 2004 provides for interest on costs after assessment but not before assessment.

42 Section 101 of the Civil Procedure Act provides:

101 Interest after judgment

(1) Unless the court orders otherwise, interest is payable on so much of the amount of a judgment (exclusive of any order for costs) as is from time to time unpaid.

(2) Interest under subsection (1) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from:

     (a) the date on which the judgment takes effect, or

     (b) such later date as the court may order.

(3) Despite subsection (1), interest is not payable on the amount of a judgment if the amount is paid in full within 28 days after the date on which the judgment takes effect, unless the court orders to the contrary.

(4) The court may order that interest is to be paid on any amount payable under an order for the payment of costs.

(5) Interest under subsection (4) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from:

     (a) the date or dates on which the costs concerned were paid, or

     (b) such later date as the court may order.

     ...

43 The exercise of the discretion under s 101(4) focuses upon whether the successful party has been out of its money for costs already paid and whether that party will be appropriately compensated by an award of costs in its favour without an award of interest on costs already paid: Taylor v Port Macquarie-Hastings Council [2010] NSWLEC 153, 175 LGERA 189 at [84] per Biscoe J; Ying v Song [2011] NSWSC 618 at [102] per Ward J. I think that the focus could also be on whether the successful party is likely to be out of money for costs paid in the future and before interest on costs becomes payable under s 368(5) of the Legal Profession Act.

44 Taylor is the only case in this Court in which an order for interest on costs has been sought, so far as I am aware. It was a claim for compensation for compulsory acquisition of land. I ordered the respondent to pay interest on costs awarded to the applicants, adopting the form of order made in the influential judgment of Campbell J in Lahoud v Lahoud [2006] NSWSC 126 and approved by the Court of Appeal in Leda Pty Ltd v Weerden (No 2) [2007] NSWCA 283.

45 In Leda at [7] the Court of Appeal approved the following passage in Lahoud at [82] - [87] (omitting citations):

82 In my view it is appropriate to make an order for the payment of interest on costs. There is no requirement, before an order for payment of interest on costs is made, for the Court to be satisfied that the circumstances of the case are out of the ordinary.

83 To the extent to which the plaintiffs have been out of pocket as a result of having to pay their lawyers' costs and disbursements, it is appropriate that the compensation which is recognised in the Court's order for costs take into account the fact that the plaintiffs have been out of pocket in that way. Given the length of time the proceedings have been on foot and the extensive preparation, the amount by which the plaintiffs have been out of pocket could be large. It is relevant that the plaintiffs, and the defendants, each conduct businesses and so the amounts which the plaintiffs have had to pay to finance the litigation is likely to be money which otherwise could have been put to a productive use. Conversely, the defendants, by not being required to pay costs until some time in the future when the costs are agreed or assessed, are likely to have been able to retain, for their own productive use, the amount of those costs.

84 The form of the order for interest on costs has occasioned me some concern. As the plaintiffs have succeeded in obtaining an order for indemnity costs in relation to only one issue in the proceedings, it is possible that there will be some costs and disbursements which the plaintiff has paid from time to time as the litigation progressed, but which are not allowed on assessment. It might sometimes be possible to cast an order in the form of allowing interest only on such costs as the plaintiff has paid as are allowed on assessment - but such an order would require the assessor to conduct what would amount to a separate assessment in relation to each payment that the plaintiffs had made. While the making of such a series of costs assessments would be within the scope of section 353 Legal Profession Act 2004, adopting such a procedure has the potential for making the costs assessment itself more complex and expensive. Further, it sometimes happens in the course of litigation - and the evidence does not tell me whether it has happened in the course of this litigation - that a litigant makes payments to his lawyers from time to time of lump sums on account of costs, without purporting to allocate those payments to particular memoranda of fees or items of work performed. If that had happened in the present case, one could not tell whether the whole or any part of such a payment had been allowed on assessment.

85 In all the circumstances, the appropriate way of calculating interest on costs is to ascertain the total of the amounts which the plaintiffs have paid and are liable to pay for costs and disbursements, ascertain the total amount of costs and disbursements allowed on assessment, calculate the percentage which the total amount allowed on assessment bears to the total costs and disbursements which the plaintiffs have paid or are liable to pay, and allow the plaintiffs interest on that percentage of each payment which they have made from time to time on account of costs and disbursements.

86 I recognise that that method of proceeding contains within it the possibility that the plaintiffs might have paid for some items of work which the assessor discounts considerably or totally. If the plaintiffs had paid such an amount comparatively early in the course of the litigation, and interest was allowed on the percentage of that amount which seems to me to be appropriate, then the plaintiffs would be somewhat overpaid interest, by comparison to the amount that the plaintiffs would receive if individual assessments of each payment made were carried out. Conversely, if the plaintiffs paid for such an item of work comparatively late in the course of the litigation, the method of proceeding which I am proposing to adopt could result in the plaintiffs being underpaid interest, by comparison to the amount that the plaintiffs would receive if individual assessments of each payment made were carried out. However, it seems to me that those possibilities are ones which fall within the ambit of the degree of approximation and estimation which is frequently involved in assessing compensation. I do not regard them as a reason for not following that method.

87 I see no reason for ordering interest to accrue at any rate other than the rate set out in Schedule 5 of the Rules.

46 In Leda at [9] the Court of Appeal made an interest on costs order in substantially the same form as that which had been made in Lahoud, as follows:

4.In this order:

X equals the total amount of costs and disbursements paid or liable to be paid to the respondent's legal advisers in connection with these proceedings;

Y equals the total amount of costs and disbursements allowed on assessment to the respondent in connection with these proceedings; and

The Allowed Percentage equals ((Y/X) x 100)%

Appellant to pay to the respondent interest on costs and disbursements, at the rates set out in Schedule 5 to the Uniform Civil Procedure Rules, on the Allowed Percentage of each amount for or on account of costs and disbursements actually paid to his legal advisers by or on behalf of the respondent, from the date of payment of each such amount until the first to occur of:

(a) such time as the appellant has paid the costs due to the respondent under order 3 above, or

(b) any further order relating to interest on costs in these proceedings.

47 The successful party has to demonstrate that costs have been paid. In Lahoud Campbell J drew that inference from the fact that the litigation was commercial litigation, which he described as a species of litigation concerning which there is no regular practice of lawyers accepting work on a speculative basis: at [81]. In Robb Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 Basten JA, with the concurrence of Campbell JA, said at [34]:

In cases involving personal injury claims, orders for interests on costs may be refused on the basis that the successful party has not demonstrated that costs have been paid, such claims commonly being run on a speculative basis, so that costs will only be recovered and paid by the client from recovery pursuant to an order of the court: see, eg, Spedding v Nobles; Spedding v McNally (No 2) [2007] NSWCA 87 at [17]. In the present case, there was evidence that, as is commonplace in commercial litigation, costs were paid by the client on a regular basis during the course of the proceedings. The precondition to the operation of s 101(4) was satisfied.

48 However, evidence of the amounts paid and the dates of payment is not essential: Drummond and Rosen Pty Ltd v Easey [No 2] [2009] NSWCA 331 per Macfarlan JA, Tobias JA concurring, at [3] - [7] (Handley AJA dissenting at [49] - [52]).

49 This is a routine judicial review case pursuant to the open standing rights conferred by s 123 of the EPA Act. In such cases, often no inference can be drawn from the nature of the litigation that it is likely that costs have been paid. However, in this case the Developer, albeit a not-for-profit organisation, is the largest single provider of aged and community services in NSW and the ACT and submits that it should not be disadvantaged by losing the value of money outlaid on costs. Having regard to the nature and scale of the Developer's business, I infer that it is likely that it has paid costs to its solicitors during the course of the litigation. I also infer that, to the extent that it has not already done so, it is likely to pay such costs before any assessment of costs.

50 In determining whether to exercise the discretion under s 101(4) of the Civil Procedure Act:

 

(a) it is not necessary to show special circumstances: Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd (in Liquidation) [2002] NSWSC 280 at [31] per Einstein J; Ying v Song [2011] NSWSC 618 at [99] per Ward J;

(b) relevant circumstances include whether the proceedings have been on foot for a lengthy period in which extensive preparation has been undertaken resulting in the party being out of pocket for large amounts, and whether each party conducts a business in which such amounts could have been put to productive use: Leda at [7] quoting Lahoud at [83]; Ying v Song at [100]; Ryding v Miles (No 2) [2012] NSWSC 312 at [16] per Black J.

51 Although the proceedings have not been on foot for a lengthy period, they do not have a substantial public interest nature and are driven by concerns over the impact of the proposed development on the applicant's business at its adjoining commercial development. On balance, I consider that interest on costs should be ordered.

ORDERS

52 The orders of the Court are as follows:

(1) The proceedings are dismissed with costs.

(2) The applicant is to pay interest on the second respondent's costs as follows:

    In this order:

X - equals the total amount of costs and disbursements which the second respondent has paid or is liable to pay to its legal advisers in connection with these proceedings.

Y - equals the total amount of costs and disbursements allowed on assessment to the second respondent in connection with these proceedings.

    The Allowed Percentage equals ((y/x) x 100)%

Order the applicant to pay to the second respondent interest on costs and disbursements, at the rates set out in the Land and Environment Court's Practice Note on Pre-Judgment Interest Rates dated 22 June 2010, on the Allowed Percentage of each amount of costs and disbursements actually paid by the second respondent, from the date of payment by the second respondent of each such amount of costs and disbursements until the first to occur of:

(a) such time as the applicant has paid the costs due to the second respondent under any order made in these proceedings, or

(b)  any further order relating to interest on costs in these proceedings.

(3) The exhibits may be returned.

Amendments

13 July 2012 - amendment under the "slip rule" to order (2)
Amended paragraphs: cover, [52]

Decision last updated: 13 July 2012