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Land and Environment Court - Working Party
6.4 Options for reform
6.4.1 Should full merits review continue?
A large number of submissions called for the present system of merits review to be retained. The benefits of merits review outlined in these submissions include the view that it enhances the quality of reasons for decisions and increases the accountability of decision makers. Other submissions, such as that of the Local Government and Shires Associations, called for its abolition.
The central issue is whether there should be a right of appeal from a planning decision of a council to an independent body. The arguments in favour of merits review are that it provides a safeguard for the rights of individuals as well as ensuring that the broader public interest is protected. The arguments against merits review centre on the view that a local council should be solely responsible for the application of planning policies which are prepared in consultation with the local community.
The Working Party acknowledges the force of the Environmental Defenders Office’s submission in favour of full merits review, which it encapsulated with the following quote:
“the rationale for merits review is founded in notions of natural justice. The rights, liberties and obligations of citizens should not be unduly dependent upon administrative decisions which are not subject to review on the merits. Prima facie, an administrative decision should be reviewable on the merits if it is likely to affect the interests of a person. Interests can be commercial, property and legal interests as well as intellectual, and like interests (eg environmental interests or concerns within the objects of an organisation). Interests can also include legitimate expectations.
The benefits of merits review include:
- enhancing the quality of the reasons for decisions;
- providing a forum for full and open consideration of issues of major importance;
- increasing the accountability of decision makers;
- clarifying the meaning of legislation;
- ensuring adherence to legislative principles and objects by administrative decision makers;
- focusing attention on the accuracy and quality of policy documents, guidelines and planning documents; and
- highlighting problems that should be addressed by law reform.”
For the reasons outlined in 6.4.4 Conclusion, the majority of the members of the Working Party consider that the Court’s jurisdiction to determine development applications on the merits should be retained.
6.4.2 Full merits review, but not by the Court
Another option would be to split the responsibility for merit and judicial review between the Court and a tribunal. The Court would conduct judicial and administrative reviews only, and the tribunal would deal with merit appeals.
The High Court in a series of cases has made it clear that the Federal Constitution forbids persons having judicial functions from exercising administrative functions and persons discharging administrative functions from discharging judicial functions. Sometimes the boundary is not clear as to what amounts to an administrative function as opposed to a judicial function. However, the making of planning decisions by the Land and Environment Court is unquestionably an administrative function.
As the Working Party has observed, in the past sometimes merit appeals were heard by a court and sometimes by an administrative tribunal (see 6.3 The historical context).
A significant reason for establishing the Land and Environment Court in its present form to hear planning appeals was to avoid the enormous expense and delays that resulted from the rules under which the former Local Government Appeals Tribunal (‘LGAT’) operated. Questions of law had to be referred by the LGAT to the Supreme Court in the course of hearing planning appeals. When that occurred the hearing of the appeal was suspended even though it was concerned with an activity that was presently being carried out on the land. It was believed the establishment of a single tribunal having the status of a superior court of record would ensure that when legal issues arose in the course of a planning appeal they would be dealt with expeditiously and that the court would have the power to make appropriate orders concerning the use of the land pending the hearing of the appeal. In this regard the Court has functioned well. The Land and Environment Court was given the power in its class 4 jurisdiction to make appropriate orders with respect to alleged illegal development which was subject to an application for planning permission. There is no constitutional reason in New South Wales why the Court cannot function to hear administrative appeals and to discharge judicial functions (not, at least, while it remains a separate court exercising exclusive non-federal jurisdiction).
A major difficulty with the tribunal model is that it would introduce a new body to deal with development disputes, as opposed to the ‘one stop shop’ that currently exists. There is also considerable doubt as to whether a tribunal would significantly change how appeals are currently dealt with by commissioners in the Court. As well as the additional costs of setting up a new body, there may be some confusion and duplication of responsibilities between the Court and the tribunal.
The issue of alleged bias by the present members of the Land and Environment Court is also relevant to the question of whether the Court should continue to be responsible for dealing with merit appeals. This allegation is dealt with in 2.2.2 Perception of bias.
6.4.3 Less than full merits review
Restricting the parties’ ability to raise new issues
A number of major developers have submitted that on appeal a council should not be permitted to raise any issue that was not included in the reasons for the council’s decision at first instance. Similarly, some councils submitted that developers should not be permitted to present fresh material to the Court and should be limited to the material that was presented to the council.
These suggestions are aimed at reducing the cost and time of appeals. However, both these suggestions, if implemented, would have the consequence of significantly eroding the Court’s function to hear an appeal de novo on the merits. But leaving that matter to one side there are practical reasons why neither suggestion should be implemented.
It must be borne in mind that there is always some public interest component to be considered in an assessment of a development application. Furthermore, development applications must be determined according to law. The Court should not be constrained by errors of councils. The Working Party is aware of a number of submissions to the effect that unmeritorious issues are raised by councils that were not raised when the matter was before the council and were not included in the reasons for the council’s decision. The Working Party accepts that, not infrequently, the number of grounds of opposition to development expands greatly after the council has referred the matter to its lawyers and external experts. If unmeritorious issues are raised on appeal the proper remedy, in the opinion of the Working Party, is to be found in the Court’s power to award costs rather then precluding the Court from considering matters at all.
Less than one per cent of all applications with councils become the subject of an appeal to the Land and Environment Court and of these less than half are adjudicated by the Court. Development applications range from the very large to the very small. Although the Environmental and Planning Regulation 2000 provides for the type of material that must accompany a development application, not infrequently applications are made by individuals without the assistance of lawyers and expert planners. To provide that applicants cannot lead evidence on an appeal beyond that presented to the council would not only be prejudicial to parties who seek development consent without the aid of lawyers or expert planners but for those who did get advice they will be told that the application should be treated as if it would ultimately be the subject of appeal to the Land and Environment Court. The result would be a considerable increase in the cost of development applications.
Recommendation 13: Material available to the Court
In deciding planning appeals, the Council should not be prevented from raising issues that were not included in the reasons for decision and the developer should not be confined to the material presented to the Council. It is in the public interest that all relevant matters, whether or not raised previously with the council, are taken into account in the determination of development applications.
The Council of the City of Sydney’s model
In the course of the inquiry, the Council of the City of Sydney distributed a publication entitled, A New Legal and Administrative Framework for Development Appeals, which details an alternative model for the appeals process.
The main features of the model proposed by the Council are:
- The decisions of councils (and other consent authorities) on development applications would be reviewable by the Court where the decision “was unreasonable in the circumstances of the case”.
- Each council would be required to set up local appeals panels, comprised of a councillor, a nominee of DUAP and an “independent” expert nominated by the council. These panels would deal with “minor” matters.
- In cases of deemed refusal, the Court would conduct a merits review.
- When hearing minor matters (ie less than $10 million), the Court would be constituted by a judge, assisted by a nominee of the council. For matters worth more than $10 million, the Court would either be made up of a panel consisting of a judge and nominees of the council and DUAP, or the judge would be assisted by the council and DUAP nominees.
The Council, although expressing a preference for judicial review, has advanced a proposal which, in fact, is a modified form of merit review having two distinctive features. First, it advocates a form of review which appears to be somewhat akin to the way the Court of Appeal would deal with the decision of a judge at first instance on a re-hearing. The original decision is not reversed unless the decision is one that the Court of Appeal thinks is wrong and, usually, no additional material is put before the Court. It may be (although it is not stated) that what the Council seeks to do is to introduce into public law a ground of “lack of proportionality” as justifying a judicial review remedy. The second and perhaps most important feature is that under its model the body appealed to would always comprise members or nominees of the body appealed from, raising self-evident issues of conflicts of interest and fairness.
There are a number of concerns with the Council’s model. Leaving to one side the requirement that a senior representative of the Department of Urban Affairs and Planning would be required for each local appeals panel (and there are more than 170 councils in New South Wales), the panel or panels to which an appeal may be brought would always include a member of the body the subject of appeal, with no right of a person lodging the appeal to have a like nominee. In other words, there would be no truly independent review of councils’ decisions.
The Council of the City of Sydney acknowledges the need for a full merit appeal where the council is “deemed” to have refused an application. However, the Council maintains that the panel hearing the appeal must consist of a nominee of the relevant council. This is notwithstanding that the Council of the City of Sydney acknowledged, at a meeting with the Working Party, that many actions and inactions of local councils are “politically motivated” - that is, decisions are made or refused by reference to circumstances and events not authorised by law to be considered by councils.
The idea of treating more minor matters differently is one that appears to have merit, and something that the Working Party supports. Again, however, in the City of Sydney model, the proposal to have a councillor and a council nominee in two of the three positions on the panel is likely to raise concerns about whether an independent review of the decision has been undertaken.
The model put forward by the Council proposes that an appeal should be rejected unless the Court considers the decision of the council was “unreasonable” in the circumstances of the case, however that might be defined. It is likely that this option would also significantly curtail access to the Court. As explained above, the difference between merits review and judicial review is that judicial review is concerned with procedural impropriety, legal error and what courts have referred to as “irrationality”. This is often formulated as being a decision that is so unreasonable that no reasonable person could have made it. For practical purposes, a decision to refuse development consent can rarely be characterised as “irrational” inviting judicial review remedies. This is particularly the case where planning instruments allow a wide discretion. Consequently, a move towards strict judicial review would drastically limit rights of appeal against council decisions to the Court.
6.4.4 Conclusion
It is generally accepted that the public interest in administrative law is served by giving members of the public a right to have decisions reviewed by an independent and impartial tribunal. The existence of tribunals carrying out this function not only provides a fair and just outcome for dissatisfied applicants but improves the quality of administrative decision-making generally.
The arguments for abolishing merit appeals appear to assume that decisions of councils on applications for planning permission are not administrative decisions and that they are in the nature of legislative decisions. Local councils are corporations created by the Parliament of NSW and assigned the function of administering the planning laws. A decision by a council on an application for planning permission is essentially an administrative decision. It does not cease to be so by reason of it being made by people who are elected to office. When considering whether to grant consent to a development application and, if so, subject to what conditions, the discretion of a council is not at large (as is ordinarily the case with respect to legislative decision making). The discretion is constrained by considerations set out in section 79C of the Environmental Planning and Assessment Act 1979.
It would be a retrograde step to abandon appeals on the merits. Since the 1970s, a wide-ranging system of administrative appeals has been established, first by the Federal Government and later by the States, including New South Wales. In each case it was accepted that administrative decisions should be subject to de novo merit appeals and that the function of the tribunal hearing the appeal is to reach the correct or preferable result. Most of the decisions the subject of the relevant legislation are decisions by Ministers of the Crown (i.e. elected persons) or persons to whom the function of making decisions has been delegated.
In New South Wales, members of the public have no rights of appeal against the making of a LEP or DCP. Members of the public have extremely limited third party rights of appeal and cannot be heard, even under the present system, in the Land and Environment Court (otherwise than in respect of designated development) unless an appeal is brought by a developer. To abolish merits appeal would have the practical effect of removing what limited third party rights of appeal exist at the present time.
It must be understood that if merit planning appeals are abolished, homeowners and owners of small businesses will lose the right to an independent and impartial hearing if dissatisfied with the decision of the council. Advocates of abolition frequently make references to the alleged shortcomings of large developers and usually in pejorative terms, but none address the loss of entitlement of small developers, representing the vast bulk of appeals being brought to the Land and Environment Court.
A separate argument advanced in favour of abolishing merits review is based on the claim that the Land and Environment Court (and presumably any other tribunal) is less likely to have regard to good “policy” decisions of councils than the councillors themselves. It is claimed that the Land and Environment Court makes decisions bypassing councils “policies”. If this criticism is intended to convey that the decisions of the Court are made in breach of LEPs, then those decisions are made in breach of the law and would be set aside on appeal. But it seems to be suggested that the Court is making decisions contrary to the provisions of DCPs and that, somehow, it is unlawfully bypassing the planning instruments. If councils believe standards are so important they should not be in DCPs the appropriate course under the present planning system is to include them in LEPs where they must be observed, subject only to the dispensation that might be granted under SEPP 1. In the opinion of the Working Party any dissatisfaction that councils might have with central government on this issue should not be addressed by removing rights of appeal to the Land and Environment Court.
For the reasons outlined above, the Working Party is of the opinion that merit planning appeals should remain and be determined by the Land and Environment Court in accordance with the provisions of the Land and Environment Court Act. However, in response to many of the issues raised in the submissions, the Working Party makes a number of recommendations concerning the way in which appeals should be heard in the Land and Environment Court (see chapters 7, 8 and 9), such as:
- treating minor and major matters differently (eg the use of binding conciliation conferences for minor matters);
- the use of panels for major matters where appropriate;
- appointment of part time commissioners with special expertise; and
- a significant reduction in parties’ cross-examination entitlements.
Recommendation 14: Merits review
The majority of the members of the Working Party consider that the Court’s jurisdiction to determine development applications on the merits should be retained.
6.5 Appeals from determinations of the Central Sydney Planning Committee
In relation to major developments proposed to be carried out in the City of Sydney, the City of Sydney Act 1988 provides that the Central Sydney Planning Committee (‘the CSPC’) assumes the role of consent authority. “Major development” is defined as:
- development the estimated cost of which exceeds $50 million;
- development which, if unconditional consent were to be granted to the application, would not comply with an applicable environmental planning instrument; and
- development the subject of an application, or development of a specified class, that the Minister has requested the CSPC to deal with.
The CSPC is composed of four senior State government appointees,employees and two councillors of the three representatives of the Council of the City of Sydney, and the including the Lord Mayor.
Because of its composition, and the types of development applications it considers, it has been suggested that there should be no appeals on merits from decisions of CSPC.
Statistics provided to the Working Party indicate that, since 1994, the CSPC has determined approximately 587 development applications, and that 12 of these were the subject of appeals to the Court. Of these 12, four were dismissed, five were upheld (one of these by consent) and three have yet to be decided.
It is widely accepted that administrative decisions should be subject to an appeal on the merits, and recently Parliament has made provision for merits appeals from decision of Ministers of the Crown. Accordingly the Working Party is of the view that the right of appeal on the merits against the CSPC’s determinations should be retained. |
