Posted on August 14, 2023 by Liam Mulligan and Adrian Guy

Reconsidering the roles of objectors and of Commissioners in conciliation conferences

The recent decision of the NSW Court of Appeal in McMillan v Taylor [2023] NSWCA 183, builds upon two matters which have become somewhat familiar judicial themes over recent years:

  1. the proper role of Commissioners of the Land and Environment Court (LEC) in conciliation conferences; and
  2. what it means to say that a decision is ‘a decision that the Court could have made in the proper exercise of its functions’ as referred to in s 34(3) of the Land and Environment Court Act 1979 (LEC Act).

The case also gives some important guidance around the extent of the obligation to afford procedural fairness to non-party objectors in Class 1 development appeals in the LEC. We will touch on each of these matters briefly in this blog.

Background

On 3 March 2022, Woollahra Municipal Council (Council) refused a development application for the demolition of an existing dwelling and construction of a dwelling with swimming pool and sauna at Vaucluse.

The owners of the land (Owners) appealed the Council’s decision to the LEC.

Those proceedings were subject of a mandatory conciliation conference and hearing facilitated by a Commissioner of the LEC, pursuant to section 34AA of the LEC Act.

On 9 June 2022, the conciliation conference commenced with an on-site inspection.

At this time, five resident objectors (Applicants), with their respective lawyers and town planning experts, made oral submissions against the development application. Following, the conciliation conference continued in private session with only the Commissioner and the parties in attendance.

Ultimately, the Owners and Council reached agreement and on 17 November 2022, the Commissioner granted development consent by order of the Court pursuant to section 34(3) of the LEC Act: see Taylor v Council of the Municipality of Woollahra [2022] NSWLEC 1658.

Dissatisfied with the result, the Applicants sought to challenge the decision by way of judicial review under section 69 of the Supreme Court Act 1970.

Issues

The Applicants brought the challenge on four grounds of judicial review. We focus on only two, namely whether the Commissioner:

  1. failed to consider terminating the conciliation conference; and
  2. denied the Applicants procedural fairness by not addressing their concerns.

Central to these grounds is s 34(3) of the LEC Act, which provides (our emphasis):

(3)  If, either at or after a conciliation conference, agreement is reached between the parties or their representatives as to the terms of a decision in the proceedings that would be acceptable to the parties (being a decision that the Court could have made in the proper exercise of its functions), the Commissioner—

(a)  must dispose of the proceedings in accordance with the decision, and

(b)  must set out in writing the terms of the decision.

Ground 1 – Did the Commissioner fail to consider terminating the conciliation conference?

The Applicants submitted that although a Commissioner is not strictly obliged to terminate a conciliation conference, there is a duty to consider doing so. The Applicants claimed that the Commissioner had failed to consider terminating the conciliation conference and sought to have the consent set aside on that basis.

This ground was dismissed. In dismissing the ground, the Court made the following comments:

  1. the power for a Commissioner to terminate a conciliation conference would usually be invoked by a party of the proceedings in circumstances where reaching agreement is unlikely;
  2. if neither party sought termination, it would (in the Court of Appeal’s view) be an “exceptional step” for a Commissioner to exercise that power on his or her own motion; and
  3. the Commissioner was aware that the Applicants wished for the conciliation conference to be terminated, and therefore did take it into account.

The second point above is perhaps surprising to read for many practitioners familiar with Class 1 appeals, where it is not uncommon for the Court to terminate conciliation conferences where the Applicant is likely to need a lengthy adjournment to prepare amended materials (even where those materials have the potential or even likelihood to resolve the proceedings).

Ground 2 – Was procedural fairness afforded to the Applicants in the LEC proceedings?

Procedural fairness generally requires that a person likely to be adversely affected by a decision should be given the opportunity to be heard.  The Applicants’ claim in this case was not that they were not afforded the opportunity to participate in the LEC proceedings, by presenting their objections at the conciliation conference, but that their objections were not considered.

In the context of the development appeals in the LEC, the Court of Appeal appears to accept that there is a duty to afford procedural fairness to objectors, derived from the objects of the Act, in particular in section 1.3(j), being:

to provide increased opportunity for community participation in environmental planning and assessment.

However, the Court held that the content of the duty was discharged by:

  • giving the Applicants notice of the development proposal and an opportunity to make submissions to the Council, as the relevant consent authority;
  • allowing the Applicants opportunity to make submissions; and
  • in the LEC proceedings, giving the Applicants a further opportunity to explain their objections at the outset of the hearing of the proceeding.

The statutory scheme does not provide for further opportunities, and there is no general right of a non-party to be heard or participate in such proceedings: at [37]-[39] and referring to Morrison Design Partnership Pty Ltd v North Sydney Council [2007] NSWLEC 802. In conclusion, the Court of Appeal relevantly held at [49]-[50]:

Unless they enjoyed a statutory right for their objections to be treated in a particular way, the applicants could not assert jurisdictional error on the part of the Commissioner in failing to address their objections.

In court proceedings, procedural fairness is an obligation owed by the court to the parties, as is the obligation to consider material before the court.

The role of Commissioners in conciliation

In reaching the above conclusions, the Court of Appeal considered the role of Commissioners in the context of a conciliation conference at length. Under s 34(3) of the LEC Act, there are two conditions precedent for the Commissioner to dispose of the proceedings in accordance with the decision of the parties:

  1. an agreement has been reached between the parties as to the terms of a decision; and
  2. the decision is one ‘that the Court could have made in the proper exercise of its functions’.

The Court of Appeal has confirmed that, in disposing of proceedings, the Commissioner need not take into account those matters which would have been considered had the matter proceeded to hearing (i.e. the matters requiring evaluation, assessment or consideration under s 4.15 of the EPA Act). In the context of a conciliation conference, the Court has no obligation to ‘assess the evaluative matters that would be required to be addressed if there were a full hearing’.

As held in the recent decision of the Court of Appeal in El Khouri v Gemaveld Pty Ltd [2023] NSWCA 78 (El Khouri), in the context of a s 34 conference, the Commissioner need only ‘be satisfied that that there are no jurisdictional constraints on the power of the Court which would preclude an order of the kind reached in the agreement’.

The matters which are jurisdictional are those matter arising under the  Environmental Planning and Assessment Act 1979 which impose a genuine check on the Court’s power to grant development consent. The Court gave some examples of such matters – that the development is not prohibited (and is permissible with consent on the land), that owners consent has been provided, and (extremely curiously) that the development does ‘not contravene a requirement of, for example, a development control plan’. In our view, that final reference can only be a mistake or error in the judgment, as it is clearly not a constraint on the Court’s power to approve a DA that contravenes in some way a provision of a DCP.

However, the above does not mean that the parties (and in particular the Respondent consent authority) should fail to record the reasons for agreement, with respect to the evaluative matters arising under s 4.15. It will often be important for a consent authority to record its reasons for entering into such agreements and these reasons can be incorporated into the Court’s reasons for making any agreement.

Implications

The key takeaways from McMillan v Taylor are that:

  1. Section 34(3) of the LEC Act does not require the Commissioner to consider whether the concerns of objectors have been addressed as a precondition to disposing of proceedings in accordance with an agreement of the parties.
  2. To the extent that procedural fairness is owed by the Court to non-party objectors, those objectors should not expect to be treated as parties to proceedings (unless they are joined as parties to be proceedings). The Court’s usual practice requires that objectors be provided with an opportunity to make submissions on a DA and (if the elect to) to be heard on site. Generally, procedural fairness will not require anything more.
  3. The decision of El Khouri has been affirmed with respect to its analysis of the matters which constitute jurisdictional constraints on the Court’s power to grant development consent in the context of a s34 conciliation conference. In that context, a Commissioner of the Court generally need not consider the matters arising under s 4.15 of the EPA Act.

If you have any questions in relation to this decision, please leave a comment below or contact Liam Mulligan on 02 8235 9715 or Adrian Guy on 02 8235 9729.