In the decision of Luxe Manly Pty Limited v Northern Beaches Council [2016] NSWLEC 156, the Land and Environment Court dismissed an appeal made under s56A of the Land and Environment Act 1979 (Court Act), in which the Applicant contended, amongst other things, that the Commissioner erred at law in not providing the Applicant with an opportunity to amend its development application to remedy any deficiencies identified by the Court under the “amber light” approach.

Luxe Manly Pty Ltd v Manly Council [2016] NSWLEC 1167 (Hearing at First Instance)

In the matter of Luxe Manly Pty Ltd v Manly Council [2016] NSWLEC 1167, the Developer sought development consent for a two 6 storey residential flat buildings containing 14 units, and basement parking for 25 cars, at North Steyne, Manly.  The proposal was subsequently amended by the Developer resulting in, amongst other things, the reduction of one apartment.

The Developer contended, as part of its submission, that the proposed height of the building was consistent with the height standard and the zone objectives, and that strict compliance would be unreasonable or unnecessary because the development achieved outcomes equal to or better than a development that complied.  The proposal relied upon a submission made under clause 4.6 of the Manly LEP 2013 to justify the proposal’s exceedance of the 13m height control under the LEP.

The Council submitted to the contrary, arguing that despite a number of amendments made to the design prior to the hearing, the development remained inconsistent with the desired future streetscape character as expressed in height controls of the Manly LEP.

In closing submissions, the Developer contended that, should the Court find that the proposal was inconsistent with desired future character of the area, or upon some other basis, that it be given the opportunity – prior to the making of any final determination – of amending the application through the Court’s “amber light” approach.  The Court ultimately rejected that submission, on the grounds that the amendments required would involve “a fundamental re-design” of the proposal and, as such, it could not be “appropriately managed in that manner”.

Luxe Manly Pty Limited v Northern Beaches Council [2016] NSWLEC 156 (s56A Appeal)

On appeal (to a single judge of the Land and Environment Court, pursuant to s56A of the Court Act), the Applicant essentially contended that the Court should have, instead of dismissing the appeal outright, deferred judgment to enable the Applicant to amend its application under the so called “amber light” approach, and make its determination on the amended plans.

The Court, on appeal, reviewed the history of the “amber light” approach.

The amber light approach

The “amber light approach” emerged in the mid-2000s.  The approach is essentially a finding by the Court that a particular proposal is not, in its current form, acceptable, but that with certain minor and identifiable amendments, the proposal would be acceptable.  The Court would thereafter adjourn the proceedings to permit the Applicant time to make the identified amendments, if it so elected, and thereafter make its determination.  If the identified amendments were made, and the Court otherwise satisfied that the amendments were satisfactory to the Court, the Court would uphold the appeal.

The Court referred to a series of cases in which the amber light approach had been adopted by the Court, whether on the initiative of the Court or in response to a request from one of the parties.  In the decision of Ali v Liverpool City Council [2009] NSWLEC 1327 the Court, at para. [19], summarised the approach as expressed by Senior Commissioner Moore (as his Honour then was):

… This [“amber light”] approach says that, if a proposal is not appropriate to be given approval in the form being considered but, with minor and identifiable amendments consistent with the application before the Court, it would be capable of approval, the Court should make a determination:

  • setting out the changes that are required to render the proposal acceptable;
  • requiring the applicant to make those changes, whether by preparation of amended plans or by Court imposed conditions settled between the parties; and
  • when such modifications are incorporated (thus rendering the proposal acceptable), approval should be given to the amended proposal.

In the decision of The Benevolent Society v Waverley Council [2010] NSWLEC 1082, the Court highlighted, at para. [21], the commentary of Senior Commissioner Moore on the Court’s application of the “amber light” approach:

It has been the consistent approach of the Court, over recent years in development appeal proceedings, to assess proposals on what has been described as an “amber light” basis. This approach means that the Court not only considers the question of whether the proposal should be approved in the form that is before the Court but also asking whether the proposal is capable of approval, with specified modifications imposed by the Court, within the scope of the present proceedings. It is in that fashion that I approach the present appeal.

In the decision of Stanton Dahl Architects v Penrith City Council [2009] NSWLEC 1204, the Court noted the commentary of Justice Biscoe, who considered the “amber light” approach to be “facilitative, providing guidance to the parties”.

Grounds of appeal

The Applicant’s primary complaint concerned the Commissioner’s refusal to adopt the “amber light” approach.  The appeal was particularised in this way:

Ground 1. The Commissioner erred in law in concluding, inter alia, that a re-design of the uppermost floor of the Eastern building to increase the setback around the wall to bedroom 2 would be a “fundamental re-design” without having any, or any proper evidentiary basis for that conclusion.

Ground 2. The error of law described in Ground 1 infected, and caused the Commissioner’s exercise of discretion, to not adopt an “amber light approach” and permit an amendment to increase the setback on the upper level of the Eastern building by 1 metre, to miscarry.

Ground 3. The Commissioner erred in law by failing to afford procedural fairness to the Applicant by providing an opportunity to make submissions and/or lead evidence about the “fundamental re-design” conclusion reached by the Commissioner.

Findings

The Court observed that, consistent with a long line of authority, if a particular inference was reasonably open to the Court, even if reached for “illogical reasons”, there was no place for judicial review, because no error of law has occurred: Duncan v Independent Commissioner Against Corruption [2016] NSWCA 143.

The Court held that, in this instance, there was no evidence of illogicality in the decision making process:

[60] An analysis of the Commissioner’s decision in the present case shows that her finding was not made on the basis of illogical reasons; it was not irrational; and it was not so unreasonable that no reasonable person could have come to it…

The Court observed that the Commissioner, in fact, gave detailed reasons for the decision in question. The Court noting that the Commissioner’s “decision was not made without evidence, nor was her decision manifestly unreasonable, irrational or illogical.”

Turning to the second ground of appeal, the Court held that because ground 1 of the appeal failed, so must ground 2.  In other words, having determined that the nature of any necessary modifications required (to address the issues identified in the hearing) would result in a “fundamental redesign” of the proposal, such modifications could not be addressed via the “amber light” approach.  The Court held that this conclusion was open to the Commissioner.  The Court further observed that this conclusion has been reached by the Court in prior matters, citing the judgment of Justice Moore in ABAX Contracting Pty Limited v The Hills Shire Council [2016] NSWLEC 105, at [73]-[74].

The Applicant, in its third and final ground of appeal, asserted that it was denied procedural fairness in not being given the opportunity to “make submissions, and/or lead evidence, about the conclusion reached” by the Commissioner regarding the “fundamental redesign” issue.  The Applicant contended that the principles of procedural fairness arise where a person has “a legitimate expectation” derived from: (a) an undertaking by a decision-maker to follow a course of conduct, or (b) a representation by the decision maker that it would do so.

[80] Hence, a person with a “legitimate expectation” arising out of a policy or representation is entitled to be heard not only about the decision to accede, but also about departure from that policy or representation. That opportunity to be heard may be required to be afforded even where the person has already been afforded procedural fairness by being heard on the substantive decision: Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648.

The Applicant contended that the Court’s development of the “amber light” approach to merit appeals gave rise to a “legitimate expectation to be heard, and an obligation to afford the applicant procedural fairness”.

The Court disagreed, observing that, even if the concept of “legitimate expectation” still existed, there can be “no expectation gleaned from the Court’s occasional discretionary decisions to adopt the “amber light” approach. It is not a component of standard procedure, to be consistently followed, and remains a matter of flexibility and discretion, to be employed in appropriate cases.”

The Court noted that there was no formal application made by the Applicant to amend or adjourn during the hearing at first instance, nor was there “any discussion of timing, or what precise form the amendments would take, or the possible prejudice to the respondent and the Court’s business.”  The Court dismissed the Applicant’s appeal.

Costs of s56A appeals

For completeness, we note that the Court ordered the unsuccessful Applicant to pay the Respondent’s costs of the s56A appeal proceedings.  Up until recently, that consequence did not always follow.  By virtue of an amendment adopted in 2015 to clause 3.7 of the Land and Environment Rules 2007, section 56A appeals are now subject to conventional cost orders, which means that the Court will typically order the unsuccessful party to pay the successful party’s costs of the appeal.