Can a neighbour (resident objector) challenge a decision by Council to grant a development approval at Land & Environment Court Conciliation Conference?

Case note: McMillan v Taylor [2023] NSWCA 183

Decision Date: 9 Aug 2023

 Headnote: an interesting case of when Resident Objectors seek to challenge a decision to approve a development application made in a Land and Environment Court conciliation conference.

• The original Land and Environment Court proceedings

Campbell Taylor and Sarah Curtis are the owners of a house in Vaucluse.

They made a Development Application to demolish the existing dwelling and build a new house (1 storey at the front and 3 storeys at the back) with swimming pool and sauna.

Woollahra Municipal Council (the Council) rejected the Development Application.

Campbell Taylor and Sarah Curtis appealed to the Land and Environment Court.

In doing so, the parties (the Applicants and Council) are obliged to attend a Conciliation Conference. The legislation requires that these parties attend “in good faith”.

The proceedings were listed for a site visit on 9 June 2022.

This site visit was attended by 5 neighbours, known in these matters as Resident Objectors, in addition to the Applicant, Council, and the Commissioner.

Importantly, Resident Objectors are not parties to that appeal, albeit they do play an important role in ventilating concerns, as local members of the public, in relation to the proposed development. S39A of the Land and Environment Court Act once provided for these ‘third parties’ to apply to be adjoined to the proceedings, but that section has now been repealed.

The Resident Objectors in this matter strongly opposed the development application, and were represented by their own lawyers, and accompanied by their own experts.

The Conciliation Conference then began in proper the following day, with only the parties (the applicant and Council) present, along with the Commissioner.

The parties ‘successfully’ negotiated amendments which both parties were happy with (although it took a number of months for the final conditions to be agreed between the parties). After the final terms were negotiated, Conciliation Conference was then terminated, with the legislation providing that the Commissioner must then dispose of the proceedings in accordance with the decision of parties, provided such a decision was one “that the Court could have made in the proper exercise of its functions”: s34(3) of the Land and Environment Court Act.

The Resident Objectors were not happy.

As the Resident Objectors were not parties to the proceedings, they could not appeal the decision to a judge of the Land and Environment Court (taking the proceedings from Class 1 to Class 4).

Instead, their only avenue was to appeal straight to the appellant division of the Supreme Court: the NSW Court of Appeal.

• The Court of Appeal proceedings

The Resident Objectors asserted that there were 4 grounds of appeal, namely that the Commissioner:

1. had ‘failed to consider terminating the Conciliation Conference’;
2. denied the Resident Objectors “procedural fairness” in not addressing their concerns;
3. failed to consider an amendment to the Local Environmental Plan (LEP); and
4. granted a consent which was ‘legally uncertain’.

The three Justices of Appeal, Basten AJA, Payne JA and Kirk JA agreeing, rejected all of these grounds.

Basten AJA delivered the lead judgment, although Kirk JA made some important further observations.

HH Kirk JA rejected the Resident Objectors’ arguments on statutory interpretation. HH Kirk JA noted that the Conciliation stage of the proceedings is quite different to the formal hearing stage of the proceedings. Conciliation involves “the coming together of the parties for the discussion of questions with a view to amicable settlement”: Australian Railways Union v Victorian Railways Commissioners (1930) 44 CLR 319; [1930] HCA 52 per Isaacs CJ at 358.

HH Kirk JA elaborated:

“Here, when presiding over a conciliation conference, the Commissioner is seeking to bring the parties together to reach their own agreed outcome. The agreed outcome is the product of the parties’ decision, as facilitated by the Commissioner; it is not the Commissioner’s decision. In contrast, when conducting a hearing the Commissioner is moving to make an independent determination on the merits of the application.”: at [6]

The Commissioner then enters the decision if it is one the Court could have made, not necessarily should have made.

According to HH Kirk JA, the argument that the Commission should only approve the decision after conducting its own merits review is likewise “impractical” as the evidence (which will be before the Commissioner should the matter run to final hearing) is not before the Commissioner at the conciliation stage.

Basten AJA dealt with the grounds in full.

1. Terminating the Conciliation Conference. The Resident Objectors accepted that while there is no statutory duty for the commission to terminate the Conciliation Conference without request of the parties, such a duty ‘could arise in particular circumstances’, although they ‘struggled’ to identify such circumstances for this case.
2. Procedural Fairness. The Resident Objectors argued they their “legitimate expectations” of their evidence being taken into account was not met, and there was a failure to address their evidence and submissions. The essence being that their submissions ‘fell on deaf ears’ with the Commissioner. But they could not establish an statutory right to be treated a certain way, and were indeed not parties to the L&E proceedings.
3. Amendment to the LEP. Again this ground was not made out for a variety of reason set out at [85].
4. Lack of Certainty of a Condition. Ultimately the respondent’s argument was accepted that this ground raised a factual change of no consequence.

Ultimately the NSWCA dismissed the application and issued a costs order against the Resident Objectors.

The case is an important reminder of the difficulties Resident Objectors face in being able to mount any legal challenge when they are unhappy with an agreement made between the parties to a conciliation conference.