Posted on December 18, 2014 by Sue Puckeridge
Construction certificates – inconsistency with DA held not to effect validity
In our previous blog on the decision of the Land and Environment Court (‘LEC‘) in Ralan Pty Limited v Burwood Council  NSWLEC, we stated that the decision would be interpreted by developers to give them scope to modify the detail of their projects through the certification process. The recent decision by the NSW Court of Appeal (‘Court’) reinforces that position.
In Burwood Council v Ralan Burwood Pty Ltd (No 3)  NSWCA 404 , the Court clarified that persons having the benefit of a DA will not be adversely affected where an apparently lawful construction certificate (‘CC‘) has been issued, but where that CC is in fact inconsistent with the development consent, despite the express and emphatic language of the relevant statutory provisions.
The proceedings concerned a major residential and commercial development project involving three towers above a which had been undertaken at 1-3 Railway Parade Burwood pursuant to a Development Consent (‘DC‘) that had been granted by Burwood Council (‘Council‘). See Burwood Council v Ralan Burwood Pty Ltd (No 3)  NSWCA 404.
After acquiring the land the developer, Ralan, had contracted Nolan for design and construction services. Nolan in turn engaged an architect, Bowers, who made changes to the approved plans to improve what he considered to be the residential amenity and aesthetic appearance of the building. The changes had the additional effect of reducing the construction cost of the development.
The CCs relating to the DC were issued by a private accredited certifier. Plans contained in the CCs omitted or substantially modified a number of features relating the facade of the building. This included the louvres on the main facades of the building; curtain walls with hidden frames on the central portion of each of Towers A, B and C; the distinctive colouring of window frames; frames and glass panels with three horizontal divisions on the lower portions of the northern and southern facades; and vertical columns breaking up the southern and northern facades of Towers B and C, incorporating horizontal louvres within each column.
By the time Council had identified the discrepancies between the DC and the built structure shown in the plans of the CCs, the building had been substantially completed.
In the LEC, Sheahan J held that the CC plans were not inconsistent with the consent and should not be set aside. Sheahan J found that even if the CC plans were inconsistent, Ralan was not responsible for any breach of the DC (and hence the EPA Act) because it had not carried out the development.
Before the Court, Council sought several declarations. First, that Ralan had undertaken building and construction works in a manner inconsistent with the modified DA granted to Ralan. Second, that the private certifier had issued CCs relating to the development which were void and of no effect. Finally, that Ralan be required to undertake extensive rectification works in order to ensure greater conformity between the completed building and the DA.
The appeal accordingly raised the following issues:
- Was Ralan responsible for any failure to carry out the development in accordance with the consent?
- Were the plans and specifications approved by the CCs inconsistent with the consent and therefore the CCs contrary to cl145 of the Environmental Planning and Assessment Regulation (‘EPA Regulation’)?
- If so, were the CCs void and had the development been carried on contrary to the DC in contravention of s76A(1)(b) of the Environmental Planning and Assesssment Act 1979 (‘EPA Act’)?
In a unanimous decision, the Court dismissed the appeal.
The Court held that although Ralan did not physically carry out the building works and had given no instruction that the building work should be carried out otherwise than in accordance with the consent, it had not played a purely passive role in the development like a mere lessor. Rather, Ralan had planned the project, engaged the contractors, retained a right to possession of the property and benefited from the completion of the project.
To this extent, the Court found that Sheahan J had been incorrect to rely on the fact that due to the interposition of Nolan and Bowers, Ralan had not been guilty of any ‘knowing involvement’ in any contravention that occurred, as this is not the test under s123 of the EPA Act.
Despite holding that the LEC’s decision could not stand in relation to the finding that the CCs were consistent with the DC and not issued in breach of cl 145(1) of the EPA Reg or s 109F(1)(a) of the EPA Act, it ultimately declined to make a ruling on whether the CCs were inconsistent with the DC.
The Court ruled that even if it had been established that the CCs were inconsistent with the DC, it would not have invalidated the CCs. Rather, the scheme of the EPA Act in conjunction with the Building Professionals Act 2005 is that the matter should be dealt with as a disciplinary matter relating to the accredited certifier.
The Court found that Sheahan J had approached the matter incorrectly because he made no findings as to the nature and extent of the variations, and he applied an incorrect test concerning cl145 of the EPA Reg, namely by considering the following irrelevant matters:
- ‘a certain amount of adjustment or reconfiguration was inevitable’
- the variations improved the external appearance of the building
- Bowers had not deliberately ignored whether the changes warranted a modification application
- the fundamentals of the development were unchanged.
Failure on the part of an accredited certifier to issue accurate CC’s becomes an issue that attracts personal disciplinary sanctions, rather than one which renders a CC void. As a consequence, developers are absolved from liability where they have relied in good faith on such certificates held out by a certifier to be lawfully issued.
Ultimately the public is concerned with the final built product. That the final built form of a development might substantially differ from that which has been approved via the DA process, yet the only remedy is a disciplinary one against the accredited certifier, is likely to be considered to be unsatisfactory. As such, we anticipate that an appeal the to the High Court on this decision is likely.