Conciliated agreements and a requirement to give reasons?

18 FEB 2019

 

Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245

The New South Wales Court of Appeal recently clarified Land and Environment Court Commissioners’ obligations in disposing of proceedings in accordance with the terms of a conciliated agreement between the parties.

Huajun Investments Pty Ltd commenced proceedings in Class 1 of the Land and Environment Court’s jurisdiction appealing against the City of Canada Bay Council’s deemed refusal of a development application seeking consent for a residential flat building.

Following a conciliation conference, the parties reached agreement as to the terms of a decision that would be acceptable to the parties, the terms of which granted leave to further amend the development application, upheld the appeal and granted development consent to the further amended development application.

The Court disposed of the proceedings in accordance with this agreement pursuant to its power in section 34(3) of the Land and Environment Court Act 1979 (“the Court Act”).

Section 34(3) provides as follows:

             “34   Conciliation conferences

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:

      1. must dispose of the proceedings in accordance with the decision, and
      2. must set out in writing the terms of the decision.”

Al Maha Pty Ltd, an adjoining land owner, commenced judicial review proceedings appealing against the decision of the Commissioner to make orders in accordance with the parties’ agreement. Two important grounds of appeal related to the failure to satisfy certain judicial prerequisites to the exercise of the function of determining a development application in accordance with section 34(3) of the Court Act, including:

  1. The absence of consent of Al Maha to Huajun’s development application to carry out part of the development on Al Maha’s land (“the owner’s consent ground”);
  2. The failure of the Commissioner to form the requisite opinions of satisfaction pursuant to clause 4.6 of the LEP justifying the contravention of a development standard (“the clause 4.6 ground”).

The owner’s consent ground

The requirement in the Environmental Planning and Assessment Act 1979 and the Environmental Planning and Assessment Regulation 2000 for a development application to be accompanied by evidence of owner’s consent is a jurisdictional prerequisite enabling the consent authority to determine a development application by way of consent.

Preston CJ found that the development consent issued by the Land and Environment Court did involve construction of a driveway connection on land owned by Al Maha. As Al Maha has not provided owner’s consent, the parties’ agreement was not a decision the Court could have made in the proper exercise of its functions and the Commissioner therefore fell into jurisdictional error.

The clause 4.6 ground

The development application contravened the height of buildings development standard in clause 4.3 of the LEP and a written request was made pursuant to clause 4.6 of the LEP seeking the justify the contravention of the development standard.

Clause 4.6(4) specifies two jurisdictional prerequisites that must be satisfied before a consent authority can grant development consent to a development application which contravenes a development standard, one being that the consent authority must be satisfied of those matters specified in clause 4.6(4)(a)(i) and (ii).

The Commissioner’s decision did not disclose any consideration of her satisfaction of the factors in clause 4.6(4) of the LEP. The Court held that this supported an inference that the Commissioner had not formed the requisite opinions of satisfaction. This ground of review was therefore established and the Commissioner fell into jurisdictional error.

A requirement for reasons?

The Court acknowledged that a Commissioner is not obliged to give reasons for a decision to uphold a conciliated agreement in the same manner as determining a development application at hearing.

However, it was held that a Commissioner is required to address any jurisdictional prerequisite to the exercise of its power in disposing of the proceedings under section 34(3) of the Court Act. At paragraph [202], Chief Justice Preston noted “…the content of the reasons…will not extend to the overall decision to dispose of the proceedings in accordance with the parties’ decision. The detail of the reasons can be brief, identifying any jurisdictional prerequisite to the exercise of the function and indicating why the prerequisite is satisfied and the decision is one that the Court could have made in the proper exercise of its functions.

The Court’s findings will have significant implications for the drafting of decisions making orders in accordance with a conciliated agreement reached between the parties.

The Court ultimately made orders quashing the Commissioner’s decision to grant consent to the development application, declaring the development consent invalid and ordering Huajun to pay the costs of Al Maha.

For further information on these planning and environmental law updates, please contact Adam Seton on aseton@marsdens.net.au or (02) 4626 5077 and David Baird on dbaird@marsdens.net.au or (02) 4626 5077.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.

 

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