Posted on May 23, 2024 by Stuart Simington and Dimitrious Havadjia 4

Section 68 appeals dismissed: The limit of the Court’s power in merit appeals under s39(2) of the Land and Environment Court Act

When making decisions in its ‘merit appeal’ jurisdiction (such as Class 1 and 2 Appeals), the Land and Environment Court (LEC) is vested with all the functions and discretions which the person or body whose decision is the subject of the appeal had in respect of the matter the subject of the appeal (section 39(2) Land and Environment Court Act 1979 (Section 39(2)).

The Court has frequently used the power in s39(2) to do such things as:

• grant owner’s consent to a development application on behalf of the Council when considering whether to grant consent to the development application
• granting a s68 approval under the Local Government Act 1993 for footpath dining for a proposed restaurant the subject of a development application

In a recent decision where LTL acted for the Council, however, the Senior Commissioner of the LEC agreed with the Council’s submissions as to the limits of Section 39(2), and therefore found that she had no power to grant approval to two section 68 applications (s68 Applications) under the Local Government Act 1993 (LG Act) and a section 138 application under the Roads Act 1993 (s138 Application).

Background

Ballina Island Developments Pty Ltd (Applicant) benefited from two development consents in relation to a housing subdivision on a site that also contained an area of littoral rainforest and an extensive area of freshwater wetland habitat.

Both consents contained conditions that required the Applicant to prepare amended plans and materials (Amended Materials) for the systems required in order to protect those environments.

The conditions of relevance in the development consent (57, 58 and 60) (Relevant Conditions) were expressed in similar terms generally as follows (our emphasis):

“Prior to the issue of an approval under Section 68 of the Local Government Act 1993 for the proposed drainage work the proponent shall prepare [Amended Materials] to the satisfaction of Council.”

The Class 2 proceedings were commenced by the Applicant on the basis of deemed refusals by the Council of the s68 Applications and the Court papers also expressly sought that the Court grant a s138 Application under s39(2) of the LEC Act for certain works in the road reserve. No appeal is available against the refusal of the latter kind of application.

Putting aside the merits of the several complex engineering and ecological issues underlying the requirements of the Relevant Conditions, the key legal issue between the parties was whether the LEC, when determining the s68 Applications, had power under Section 39(2) to reach the state of satisfaction required by the Relevant Conditions with regard to the Amended Materials.

Decision

The Senior Commissioner accepted the Council’s submissions that Section 39(2) did not give the LEC the power to reach the ‘state of satisfaction’ required by the Relevant Conditions, because:

[64] The s68 applications, the subject of the appeals in these proceedings, have nothing to do with the state of the Council’s satisfaction in respect of the matters raised by the conditions. The only relevance is that those matters must be satisfied prior to the grant of the s68 approvals which facilitates the orderly development of the land as those matters can then be accommodated as required by the s68 conditions of approval.

[65] The applicant had opportunity to agitate the Council’s dissatisfaction with the matters raised by the conditions in the Court’s Class 1 jurisdiction and has elected not to do so. I accept the Council’s submission that these Class 2 appeals cannot provide a backdoor to the rewriting of the terms of the conditions of the development consent in circumstances where the Council is dissatisfied with the matters identified in conditions 57, 58 and 60. After careful consideration of the case law as submitted, I do not accept that the Court can utilise s 39(2) of the Court Act to stand in the shoes of the Council to substitute its satisfaction in respect to the conditions of the development consents granted under the EPA Act on the facts in these s68 appeals under the LG Act.

If the Applicant wanted the LEC to determine whether the Amended Materials satisfied the Relevant Conditions, it should have commenced Class 1 proceedings against the Council’s failure to be satisfied with the Amended Materials under the conditions of consent. Such an appeal is available to an applicant under s8.7(2) of the EPA Act.

The Commissioner’s decision also relied on the decision in Codlea Pty Ltd v Byron Shire Council (1999) 105 LGERA 370; [1999] NSWCA 399, where a similar issue of ‘prior satisfaction’ as to a matter had been held by the Court of Appeal to be beyond the power available to the Court under s39(2) of the LEC Act.

[68] In these proceedings, I find that the applicant is inviting me to do what the Court in Codlea made plain I cannot do. That is, to rely on s 39(2) to make the adequate arrangements by importing the applicant’s amended additional material and plans … into the conditions of consent granted by the Council under the EPA Act. That is a function outside the subject matter of the s68 appeals – and needs to be dealt with under the terms of the conditions to the satisfaction of the Council and prior to the grant of any s68 approvals. 

The Commissioner determined that there was no power for the LEC to determine the s68 Applications and refused the appeals.

Commissioner Dixon did not finally determine whether the LEC had power to grant the s138 Application because the application was a part of the s68 Applications she proposed to dismiss.

For completeness, the Commissioner would not have been satisfied to grant the s68 Applications for various merit-based reasons even if there had have been power to do so.

Impact

The Commissioner’s decision confirms the limits of Section 39(2) on the Court’s power in merit appeals.

A failure to correctly identify the pre-conditions to the approval of an application may result in proceedings that the LEC has no power to decide, in particular in relation to section 68 approvals under the LG Act. As was illustrated in this case, that process may be legally complex and depend on the precise wording of the relevant conditions of consent.

You can read the decision in full here: Ballina Island Developments Pty Ltd v Ballina Shire Council [2024] NSWLEC 1223.

If you have any questions in relation to this post, please contact Stuart Simington or Dimitrious Havadjia.