Posted on December 15, 2015 by

Challenging CDCs – Hornsby Shire Council v Trives

A recent decision of Biscoe J in Hornsby Shire Council v Trives (No 3) [2015] NSWLEC 190 has confirmed the grounds on which a complying development certificate (CDC) may be set aside as invalid.

The decision provides important guidance on how the provisions of the Environmental Planning and Assessment Act 1979 (EPA Act) that relate to CDCs operate, and the circumstances in which the validity of a CDC can be challenged; in summary if the certifier’s decision that the development is complying development is unreasonable.

Background to the proceedings

Biscoe J’s decision is the latest in a series of decisions in these proceedings.

In April 2014, the Council commenced proceedings challenging the validity of three CDCs that were issued by a private certifier (Trives). The basis for the challenge was whether the structures that were certified by the CDCs were properly characterised as ‘detached studios’ within the meaning of the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (Codes SEPP).

In August 2014, the Court ordered that the question of whether the CDCs were validly issued be determined as a separate question. By agreement of the parties, the question for the Court (constituted by Craig J) was whether, as an objective ‘jurisdictional fact’, the structures were properly characterised as ‘detached studios’.

That is, Craig J was being asked to look at the evidence and determine whether the structures were ‘detached studios’ within the meaning of the Codes SEPP and therefore whether the certifier had the power to issue the CDCs.

This is similar to the task that a Court is sometimes asked to undertake in judicial review proceedings challenging the validity of a development consent. A court may be asked to determine how a particular development is properly characterised, in order to determine whether there was legal power to grant the consent.

Craig J determined that on a proper interpretation of the Codes SEPP and the Hornsby Local Environmental Plan 2013 (LEP), each of the proposed structures could not be complying development because they could not be properly characterised as ‘detached studios’.

Court of Appeal Proceedings – Decision of Craig J overturned

An appeal was brought by Mr Trives against Craig J’s decision.

The sole issue before the Court of Appeal was whether the determination of whether the proposed development was complying development was an objective jurisdictional fact. That is, it was argued by Mr Trives that Craig J was incorrect in deciding that a Court could substitute its own opinion about whether or not particular development that was certified as complying development was in fact complying development.

The Court of Appeal agreed with this argument. It held that the power to issue a CDC depends on the state of satisfaction of the certifier, not whether the Court decided that particular development was or was not to be properly characterised as ‘complying development’. The Court of Appeal allowed the appeal and remitted the matter to the Land and Environment Court to be re-determined.

Decision of Biscoe J

As the Court of Appeal pointed out, the fact that a certifier may have been satisfied that particular development was ‘complying development’ did not mean that the decision was beyond legal challenge. The law has long recognised that if an exercise of power under legislation is made conditional on the state of satisfaction or opinion of a decision maker, a Court may review whether that opinion has been formed reasonably.

Biscoe J proceeded on this basis. His Honour explained that:

• Where a statute provides that the exercise of a power can only occur if the decision maker forms an opinion or is satisfied of some thing, the statute is treated as impliedly referring to a satisfaction or opinion formed by a reasonable person who correctly understands the meaning of the law,
• A decision maker may be said to have acted unreasonably in the exercise of a statutory power if they misunderstand their statutory obligations or make a decision that lacks  ‘evidence and intelligible justification’,
• Unreasonableness in this context is not limited to an irrational or bizarre decision,
• Even if a decision maker has not disclosed reasons for making the decision, the decision may still be found to be misconceived through an examination of the material that was before the decision maker.

Applying those principles to the decisions made by the certifier, Biscoe J concluded that each of the CDCs should be declared invalid.

Before the power to issue the CDCs could be exercised, s85A(3)(a) of the EPA Act required that the certifier had to be satisfied that the proposed structures were ‘complying development‘ within the meaning of the Codes SEPP. That state of satisfaction ‘had to be one that could be formed by a reasonable person who correctly understood the meaning of the SEPP and the LEP’.

In particular, His Honour found that on the correct interpretation of the relevant provisions of the Codes SEPP, the structures could not reasonably be characterised as complying development or a ‘detached studio‘ because:

• they were not ‘ancillary to a dwelling house’ on the lot as required by cl.3.5 of the Codes SEPP,
• they were not established ‘in conjunction with a dwelling house’ and therefore not within the definition of ‘detached studio’ in cl.1.5 of the Codes SEPP,
• they resulted in there being ‘more than one dwelling house’ on the lot contrary to cl.3.8(1)(a) of the Codes SEPP,
• they were not ‘permissible with consent’ within the relevant zone as required by cl.1.18(1)(b) of the Codes SEPP.

Comment

The effect of the decisions by the Court of Appeal and Biscoe J is to clarify the basis on which the issue of a CDC may be challenged. A Court will not substitute its own opinion about whether development approved by a CDC is complying development, but it will examine whether the decision is unreasonable in the senses described above.

Because a certifier is not required to provide reasons in issuing a CDC, it may be difficult in some cases to determine whether they have acted unreasonably in being satisfied that development the subject of a CDC is complying development. This may impact on a decision whether to bring legal proceedings challenging a decision of a certifier to issue a CDC.

Nonetheless, in many cases it will be possible to form a view about whether a certifier has acted unreasonably by considering whether there has been a breach of the applicable legislation, especially the development standards in an environmental planning instrument. Where that occurs, the certifier’s state of satisfaction may well be unreasonable on the basis that they had not properly understood the statutory framework in which they made their decision.