Posted on September 2, 2015 by

Agent or Delegate? Court of Appeal overturns De Angelis v Pepping.

The NSW Court of Appeal has overturned the Land and Environment Court’s finding that a council officer had the authority, as an agent of the council, to sign an instrument amending that council’s local environmental plan, so as to rezone ‘B4 Mixed Use’ land to ‘R3 Medium Density Residential’, thwarting the Appellant’s redevelopment plans.

In a previous blog, ‘Challenge to LEP dismissed‘, we highlighted the three key findings of the Land and Environment Court in De Angelis v Pepping [2014] NSWLEC 108, which were:

• Mr Pepping, Wingecarribee Shire Council’s (Council) Group Manager, Strategic and Assets, had the authority to make the Wingecarribee Local Environmental Plan 2010 (Amendment No 13) (Amending Instrument) as agent for the Council (being the party who had the appropriate delegation from the Minister);
• in carrying out community consultation, the parties only had to comply with the mandatory requirements of ‘A guide to preparing local environment plans’; and
• the Council did not need to exhibit the changes it made to the DCP arising from the amendment of the LEP.

In De Angelis v Pepping [2015] NSWCA 236, the Court of Appeal ruled that the primary judge’s finding that Mr Pepping had acted as an agent for Council, despite not having the appropriate delegated authority, was incorrect. The findings in relation to community consultation and the exhibition of a DCP were not overturned.

Authority as Agent

The relevant issue was whether the Council decision to ‘proceed with the making’ of the Amending Instrument gave the authority to Mr Pepping to sign the Amending Instrument. The parties agreed that the Minister’s delegation to Council under s59(2) of the Environmental Planning and Assessment Act 1979 (EPA Act) was valid, as was the delegation from Council to the General Manager under s377(1) of the Local Government Act 2001 (LG Act).

The parties also agreed that the delegation from the General Manager to Mr Pepping was invalid, and that the Council lacked the power to delegate authority directly to Mr Pepping to sign the Amending Instrument.

The Court of Appeal found that Mr Pepping did not have authority to sign the Amending Instrument on behalf of Council for two primary reasons.

The Effect of the Council Resolution of 27 November 2013

Council contended that the Council resolution that it would ‘proceed with the making of the amendment to Wingecarribee LEP 2010′ on 27 November 2013 should be understood as a decision authorising the relevant Council agent to undertake the ‘secretarial’ task of bringing the Amending Instrument into force, which could be done by any employee under s355(a) of the LG Act.

The Court of Appeal rejected this argument. It held that the resolution provided authority for Council officers to forward the ‘final proposals‘ to the Department of Planning and Infrastructure for the drafting of the LEP. The language of the resolution did not purport to confer authority on anyone other than Council, or such person with the appropriate level of delegated authority. Before the Amending Instrument could take effect, the relevant decision maker needed to determine that the Amending Instrument, as drafted, should be made, and exercise the power under s59(2) of the EPA Act to make the Amending Instrument. Nothing in the Council resolution suggested a departure from this process.

Mr Pepping’s authority as an agent

While there is authority to the effect that an administrative decision maker can act through an agent independently of its power of delegation, s377(1) of the LG Act limits this ability in the case of a Council.

Given that s377(1) prevents a council from delegating its functions to an employee of the Council other than the General Manager, the resolution of 27 November 2013 could not be construed ‘to authorise Mr Pepping to do as agent that which the Council could not authorise him to do in the exercise of delegated authority.’ (at [131]).

Although the General Manager could have delegated the powers to Mr Pepping, she had not validly done so. The doctrine of agency cannot overcome the requirements of s377 of the LG Act. Accordingly, Mr Pepping’s actions in purporting to make the Amending Instrument were done without the authority of the Council.

Consequently, the Amending Instrument was invalid and of no effect. The Court was not willing to exercise its discretionary power to refuse to declare that the Amending Instrument was invalid, as it considered the breach of the instrument to be more than ‘merely technical‘, and the fact that the General Manager could have taken steps to rectify the flaw in the delegation did not overcome this breach.

Effects for Councils

The requirement for a council, as the Minister’s delegate, to ‘make the local environmental plan‘ pursuant to s59(2) of the EPA Act is an important part of the statutory scheme. If the council does not ‘make‘ the LEP by passing a resolution to that effect, then it must ensure that the appropriate delegations are in place. A failure by a council to follow the correct delegation process under the LG Act cannot be seen as ‘merely technical‘, and is likely to invalidate the LEP.

Prepared by Sue Puckeridge and Alex Beale