Posted on November 17, 2014 by Lindsay Taylor
Can a council be ordered to determine a DA after developer’s merit appeal period lapses?
In CSKS Holdings Pty Ltd v Woollahra Council  NSWLEC 176, Pain J in the Land and Environment Court dismissed an application by a developer whose merit appeal rights had lapsed for an order in the nature of mandamus compelling the Council to determine its development application. Such cases are relatively rare, and the decision provides guidance on the principles the Court will follow in order to determine whether to grant such an order.
The applicant was the lessee of Crown land, having received a transfer of lease from the previous lessee with the consent of the Minister administering the Crown Lands Act 1989.
The applicant made a development application to the Council for the construction of a new child care centre. The Minister gave landowner’s consent to the making of the development application.
Soon after the the development application was made, the NSW Government ordered an independent review into the transfer of the lease to the applicant, which included consideration of the giving of landowner’s consent t0 enable the development application to be made.
Subsequently, and despite a report from its officers recommending that consent be granted to the development application, the Council deferred its decision pending finalisation of the independent review.
The applicant’s right of merit appeal to the Court against a deemed refusal of the development application eventually expired without an appeal having been made. The applicant told the Court in evidence that it had not utilised its appeal right because of uncertainty about when the appeal period had expired, the cost of bringing the appeal, and the fact that the Council (at least its officers) appeared to be considering the development application favourably.
After the mandamus proceedings were commenced, the Council was advised by letter from the NSW Government that the independent review had been completed and the relevant report had been referred to the Independent Commission Against Corruption. The letter cast doubt on whether landowner’s consent to the making of the development application would have been given had the findings of the independent review been known at the relevant time. The Council again deferred determination of the development application, this time until the outcome of the referral to the ICAC was known.
The Court held that it had power under s20(2)(b) of the Land and Environment Court Act 1979 to ‘command‘ the exercise of a function such as the determination of a development application by a consent authority. The relevant question was in what circumstances?
Pain J said that if the Council’s behaviour in not determining the application was unreasonable or there was a constructive failure to determine the application, the Court could exercise its discretion to make an order of mandamus. The onus was on the applicant in this regard.
Her Honour held that, in considering the public interest in determining the development application as required by 79(c)(1)(e) of the Environmental Planning and Assessment Act 1979, the Council was entitled to consider whether landowner’s consent to the development application was validly given. The applicant conceded that such a consent may be vitiated by fraud or other corrupt conduct.
On the evidence, Her Honour said that the letter from the NSW Government to the Council raised a substantial concern whether the giving of landowner’s consent by the Minister was affected by corrupt conduct, which was not speculative given the independent review that had been undertaken.
Pain J held that the Council’s reasons for deferring its consideration of the development application in such circumstances were within its proper contemplation as the consent authority, not least because if landowner’s consent was vitiated by fraud or other corrupt conduct an essential precondition to the making of a valid development application would be absent and no valid development consent could be granted to the development application.
Furthermore, Her Honour held that the relevant period of ‘delay’ by the Council was only three months, as the period had only commenced to run when it received the letter from the NSW Government. In these circumstances, the Council’s behaviour in not determining the development application was not unreasonable.
Her Honour rejected the applicant’s argument that the Council could have refused the development application in order to restore the applicant’s right to bring a merit appeal in the Court, stating that this course of action was not appropriate while the uncertainty over the granting of landowner’s consent was unresolved and given that the same uncertainty would likely arise in any merit appeal to the Court.
An interesting aspect of this case is that the Court rejected the Council’s argument that the failure by the applicant to exercise its merit appeal rights should weigh against it in the exercise of the Court’s discretion whether to grant mandamus. Her Honour said that this was a ‘neutral factor in the context of this case as the key question is whether the Council acted reasonably in deferring for an undefined time a decision on the DA‘ [par. 57].
Many consent authorities delay the determination of development applications for many different reasons. Likewise, many developers decline to exercise their merit appeal rights for many different reasons. As much as this case involved a refusal to grant mandamus on its particular facts, the principles enunciated by Pain J as to when the Court will order mandamus give insight into the circumstances where the remedy will be available to a developer which has lost its merit appeal rights.