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The past year has seen many interesting developments across the various classes of jurisdiction of the Land and Environment Court. The aim of this article is to provide a brief overview of some of those decisions.

It should be noted there have been some very interesting recent judgments regarding climate change and greenhouse gas emissions in Bushfire Survivors for Climate Action Incorporated v Environment Protection Authority [2021] NSWLEC 92 and Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd [2021] NSWLEC 110. It is beyond the scope of this article to provide a summary of those decisions but further litigation in this area can be expected in 2022.

Class 1 Development Appeals

Building Height

The two principal development standards across the majority of metropolitan Sydney are building height and floor space ratio.

Building Height is defined in the Standard Instrument—Principal Local Environmental Plan (‘Standard Instrument’) by reference to the vertical distance from ground level (existing) to the highest point of the building. Ground level (existing) means the existing level of a site at any point. This definition can give rise to an unusual height plane where there is existing excavation on a development site.

In Merman Investments Pty Ltd v Woollahra Municipal Council [2021] NSWLEC 1582, Commissioner O’Neill considered a circumstance where excavation underneath an existing building created a dip in the height plane. The Court held that the existing level of the site at a point beneath the existing building is the ground level (existing) at that point. The Court also held that the distortion of the height plane due to existing excavation when compared to the natural ground level of the site can properly be described as an environmental planning ground.

Merman represents somewhat of a departure from a chain of authorities, including Bettar v  Council  of  the  City of   Sydney [2014] NSWLEC 1070, where Commissioner O’Neill preferred an approach to determining ground level (existing) underneath an existing building by interpolating from existing natural ground levels outside the envelope of an existing building.

The implication is that, although it appears the Court will now require a cl 4.6 written request where the height plane is distorted by existing excavation, that distortion can be relied upon as a valid environmental planning ground to justify the cl 4.6.

Floor Space Ratio

The floor space ratio (‘FSR’) development standard dictates the floor space permitted on a site by reference to gross floor area. Gross floor area (‘GFA’) means the sum of the floor area of a building, but certain areas are excluded from the definition (cl 4.5 of the Standard Instrument). Over the last 12 months there have been several decisions relating to interpretation of the various aspects of the definition of GFA.

In HPG Mosman Projects Pty Ltd v Mosman Municipal Council [2021] NSWLEC 1243, Commissioner O’Neill considered whether ‘breezeways’, which are corridors that are open to the elements in some way, ought to be excluded from calculation of GFA. The Court agreed with Council’s sentiment that ‘breezeways’ contribute to the volume of a building envelope and that FSR is an inexact measure of volume. The interpretation turned on whether the walls of the breezeways were ‘external walls’, which is an undefined term. The Court held that the ‘breezeways’ were external spaces because they functioned in the same way as an inset balcony and the opening had an outer wall less than 1.4m high.

The Court adopted the explanation given in GGD Danks Street P/L and CR Danks Street P/L v Council of the City of Sydney [2015] NSWLEC 1521 (‘GGD Danks’), another decision where ‘breezeways’ were excluded from the GFA calculation. By way of contrast, in Landmark Group Australia Pty Ltd v Sutherland Shire Council [2016] NSWLEC 1577 (‘Landmark Group’) the ‘breezeways’ were included as GFA. Although this may give rise to a perception that the decision in HPG Mosman settles a tension between the decisions in GGD Danks and Landmark Group, it should be noted that both cases were decisions in Class 1 and are therefore not binding (Segal v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310).

The Modification Power

Buyozo Pty Limited v Ku-ring-gai Council [2021] NSWLEC 2 considers both interpretation of the definition of GFA and the modification power pursuant to s 4.56 of the Environmental Planning and Assessment Act 1979. In the LEC at first instance, Pepper J determined that the corridors in a self-storage development were not GFA as they were a ‘space used for the loading or unloading of goods (including access to it)’. The Council had therefore miscalculated the s 7.11 contributions by reference to an incorrect GFA calculation. Pepper J determined to modify the consent to reduce the s 7.11 contributions.

The decision was overturned by the Court of Appeal in Ku-ring-gai Council v Buyozo Pty Ltd [2021] NSWCA 177. The Court of Appeal held, inter alia, that:

  1. a modification under s 4.56(1) of the EPA Act must effect some change to the development. Substituting a lesser amount for a greater amount of the monetary contribution could not effect any change to the development. In this circumstance, the preconditions to the exercise of the power in s 4.56(1) could have no application and s 4.56(1) was not an available source of power to modify the development consent;
  2. there was no power to modify the development consent to amend a condition requiring payment of a development contribution in circumstances where the contribution had already been paid;
  3. the only areas within the building that could properly be characterised as being spaces used for the loading or unloading of goods within paragraph (h) of the definition of GFA are the areas that have been approved by the development consent for that activity.

Class 3 Compulsory Acquisition

A dispossessed landowner can appeal the Valuer-General’s determination of compensation to the Land and Environment Court when their land is acquired. Pursuant to s 68(2)(a) of the Land Acquisition (Just Terms Compensation) Act 1991 (‘Just Terms Act’), an acquiring authority is required to pay 90 per cent of the amount of compensation offered in a compensation notice (as an advance payment) within 28 days after the authority is given notice of the institution of the proceedings.

Council of the City of Ryde v Azizi (2021) 248 LGERA 204; [2021] NSWCA 165 related to an appeal against an interlocutory order of the LEC that Council pay the 90 per cent to the dispossessed landowner in accordance with s 68(2) of the Just Terms Act. The Council only paid part of the required 90 per cent to the landowners and paid the balance into their own solicitor’s trust account. Council did so due to a concern that the landowners would be unable to repay the funds if the LEC determined a lesser amount for compensation. The LEC ordered Council to pay the land owners the full 90 per cent.

On appeal, the Council argued that the LEC had no power to enforce statutory obligations such as s 68(2) under the Just Terms Act. The Court of Appeal held that ‘as a matter of principle, legislation should not be read narrowly in such a way as to create a division of jurisdiction between two institutions if an alternative reading allowing for matters to be disposed of in one court only can be adopted’ (at [34]).

The Court of Appeal found that ‘the Land and Environment Court has jurisdiction both to enforce the obligation for payment of a proportion of the compensation offer, on an interlocutory basis, and, in making final orders, to provide for any overpayment that may have been made on an interim basis.’ The appeal was dismissed and the LEC order to pay the full 90 per cent remained in place.

Class 4 Judicial Review

Lu v Walding (No 2) [2021] NSWLEC 21 involved judicial review proceedings challenging a development consent for a garage and house alterations. The garage was approved on Council property. The proponent, Walding, and the Council were unaware of this fact at the time of approval.

Pursuant to cl 49 of the Environmental Planning and Assessment Regulation 2000, a development application can only be made by the owner of land or with the consent of the owner. Where a Council determines a development application which includes land owned by Council, the grant of owner’s consent is implicit in the grant of development consent (per Sydney City Council v Claude Neon Ltd (1989) 15 NSWLR 724 (‘Claude Neon’) and Sydney City Council v Ipoh Pty Ltd [2006] NSWCA 300).

In the subject circumstances where the Council was not aware that the application related to its own land, the Court distinguished the principle in Claude Neon on the basis that a consent authority must understand when it is exercising a statutory function. Therefore, owner’s consent could not be implied. The Court found the absence of owner’s consent was a jurisdictional error but ultimately required certain remediation works rather than making a declaration of invalidity.

The decision also considered the applicable statutory limitation periods for judicial review under s 101 of the Environmental Planning and Assessment Act 1979 (‘EPA Act’) and r 59.10 of the Uniform Civil Procedure Rules 2005 (‘UCPR’). The proceedings were commenced over 18 months after the grant of consent.

Under former s 101 (current s 4.59) of the EPA Act, proceedings challenging the validity of a development consent must be commenced within three months of a development being validly notified (per cl 124 of the Environmental Planning and Assessment Regulation 2000). Under r 59.10 of the UCPR, judicial review proceedings must be commenced within three months of the decision, but the Court can extend the time. However, the rule does not apply if there is a statutory limitation period.

The Court distinguished the privative clause in s 101 from that discussed in Kirk v Industrial Court (NSW) (2010) 239 CLR 531; [2010] HCA 1 and followed Woolworths Ltd v Pallas Newco Pty Ltd (2004) 61 NSWLR 707; [2004] NSWCA 422 in finding the proceedings would be time-barred but for application of the principles in R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598; [1945] HCA 53. The Court found the absence of owner’s consent was jurisdictional, fell within the Hickman principle, and therefore the proceedings were not time-barred by the former s 101 of the EPA Act.

Alistair Knox is a Senior Associate at Pikes & Verekers Lawyers and Accredited Specialist Planning & Environment Law.