Norman Waterhouse
   
Norman Waterhouse

Normans Briefly

In this issue

Welcome to the November edition of our Local Government Briefly.

Christmas closure

Our office will close at 12 noon on Friday 20 December 2013 and reopen on Thursday 2 January 2014.

Walking the Talk – Industrial Relations in the Real World
Full Day Seminar
4th April 2014

Following our highly successful industrial relations conference earlier this year, the Norman Waterhouse Employment and Industrial Relations Team invites you to join them again for a full day of in-depth and interactive analysis of workplace issues.

Please click here to download a printable flyer.

Program available online early December.

>   Local Government Industrial Relations – Bullying claims, and the impending resurrection of the great ‘constitutional corporation’ debate
>   Joint report: Governance and Planning – Changes regarding CDAP member conflicts of interest
>   Environment - Case Law Update
>   Local Government – Progress made on 'super-tribunal': an update on SACAT
>   Employment – Intercourse not “in the course” of employment
>   Retail and Commercial Leases (Miscellaneous) Amendment Bill
>   Town Planning & Development – the Supreme Court on gross leasable area, pad sites, variations, delegations and more
>   Development and Town Planning – Urban Renewal Amendment Bill 2013 update

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Local Government Industrial Relations – Bullying claims, and the impending resurrection of the great ‘constitutional corporation’ debate

A number of amendments were passed in relation to the Fair Work Act 2009 (Cth) (the Act) earlier in the year by the Federal Parliament. The amendments include the endowment upon the Federal Fair Work Commission (FWC) of a new ‘bullying’ jurisdiction.

Most elements of the Federal industrial relations jurisdiction do not apply to South Australian councils. In spite of this, your council may still be subject to the new FWC bullying jurisdiction if it is a ‘constitutional corporation’.

The FWC bullying jurisdiction

This new jurisdiction will allow persons to apply directly to the FWC to deal with a workplace bullying complaint. The jurisdiction will commence on 1 January 2014.

The term ‘bullying’ in the Act will encompass repeated unreasonable behaviour directed towards one or more employees which creates a risk to their health (including mental health) and safety. It will not include reasonable management action carried out in a reasonable manner.

Persons allegedly subject to bullying may apply to the FWC for an order to stop the conduct. The FWC will hold hearings with the relevant parties, reach findings and, if appropriate, make orders. However, the FWC cannot order compensation or pecuniary penalties in circumstances other than for a breach of an order.

Generally, the Federal industrial relations jurisdiction is restricted to ‘national system’ employees and employers. South Australian Local Government employers and employees are not in this ‘national system’. Rather, they are subject to the State’s industrial relations system.

However, as we highlighted at the time these recent amendments were passed, the bullying jurisdiction of the FWC is not expressed to apply to ‘national system’ employers and employees. Rather, it purports to apply to ‘constitutionally-covered businesses’. Relevantly for the Local Government sector in South Australia, the term ‘constitutionally-covered business’ includes constitutional corporations.

Councils as constitutional corporations

Most managers in Local Government in South Australia will recall the significance of the question as to whether councils are ‘constitutional corporations’, which arose some years ago.

A constitutional corporation is a corporation captured by the ‘corporations power’ under Section 51(xx) of the Commonwealth Constitution, and therefore able to be regulated by the Federal Parliament. A corporation will be so captured if it is a ‘trading or financial corporation formed within the limits of the Commonwealth’. The sole fact that Local Government councils are established under State legislation does not exclude them from the above definition.

The law regarding whether councils are constitutional corporations is unsettled. Whether any individual council is a constitutional corporation has been decided by the courts on a case-by-case basis. The nature and extent of a council’s business-like ventures (such as the provision of services and facilities relating to hospitality, recreation and utilities) will prove highly relevant to whether a court will consider a council to be a constitutional corporation.

Until a court expresses a definitive view that Local Government councils be dealt with in a particular way, the constitutional character of councils will continue to be an issue.

Can an employee make an FWC bullying application against my council?

Any employee of any council may lodge an FWC bullying application after 1 January 2014. Whether the application is able to be sustained is a separate question.

When an employee lodges such an application, the council will become a party to the proceedings. If the council seeks to rely on the absence of constitutional character to nullify the proceedings, this will need to be raised as a jurisdictional objection.

In other words, employees will make applications and councils will be required to respond to those applications. Any council that can successfully demonstrate that it is not a constitutional corporation may then have the application dismissed for a lack of jurisdiction.

Take home message

The FWC bullying jurisdiction represents a new avenue through which employees may pursue bullying-related claims. We anticipate that employees and their representatives will seek to test the application of the FWC bullying jurisdiction to Local Government employers in South Australia. Where this occurs, the constitutional character of councils (and thus the application of the jurisdiction to them) will be decided on a case-by-case basis. We are ready to assist councils to respond to FWC bullying applications should they arise.

However, it should also be noted that FWC applications will not be the only avenue for employees allegedly subject to workplace bullying. All presently existing avenues for venting bullying-related grievances will continue to exist. Furthermore, the release of Safe Work Australia’s Guide for Preventing and Responding to Workplace Bullying may lead to an increase in SafeWork SA’s interest and activity in relation to alleged bullying claims. While this guide will not have ‘Code of Practice’ status as originally envisioned, employers should nonetheless endeavour to read the guide and adhere to its main principles.

Whether constitutional corporations or not, it is imperative that councils are proactive in preventing bullying in the workplace. A proactive approach will minimise the risk of an employee making a claim, and will be of significant value in the defence of any such claim.

For more specific information on any of the material contained in this article please contact Sathish Dasan on 08 8210 1253 or sdasan@normans.com.au.


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Joint report: Governance and Planning – Changes regarding CDAP member conflicts of interest

An examination of the interaction between the Development Act 1993 (SA) (Development Act) and the Local Government Act 1999 (SA) (LG Act) reveals some important, recent changes to the way in which conflicts of interest of members of council development assessment panels (CDAP) may be investigated and addressed.

This article sets out how all CDAP member conflicts of interest may now be investigated by the Ombudsman, and how CDAPs may impose disciplinary measures upon their members as a result of Ombudsman investigations.

The starting point – importation of LG Act provisions into the Development Act

Section 56A(9) of the Development Act provides that the provisions of Chapter 13 Part 1 of the LG Act (the Imported LG Act Provisions) extend to CDAPs as though references to councils and council members were references to CDAPs and CDAP members respectively.

The Imported LG Act Provisions underwent significant amendments as a result of the Independent Commissioner Against Corruption Act 2012 (SA) (ICAC Act). However, there was no corresponding change to the Development Act, and thus the operation of Section 56A(9) of the Development Act now imports those recent LG Act amendments and applies them to CDAP members.

The former position

Prior to 1 September 2013, Imported LG Act Provisions (once applied to and adapted for CDAPs) simply provided that complaints could be made to the District Court for breaches by CDAP members of the relevant conflict of interest provisions, namely Sections 56A(7)–(8) of the Development Act. The Imported LG Act Provisions also prescribed the procedure and potential consequences of such a complaint to the District Court.

Amendments to the LG Act

The ICAC Act made various amendments to the LG Act which came into effect on 1 September 2013. This included the insertion of new Sections 263A and 263B and the amendment of Section 264, all of which fall within the Imported LG Act Provisions.

The amendments to the LG Act extend the Ombudsman’s jurisdiction to virtually all conduct issues of council members. However, when the provisions are imported into the Development Act, they (for statutory interpretation reasons) only apply to conflicts of interest of CDAP members and not other conduct issues. Nevertheless, the effect of the importation is significant.

Effect of the amendments when imported into the Development Act

When the new Section 263A of the LG Act is applied to CDAPs, the effect is that the Ombudsman may investigate any CDAP member for a potential breach of the conflict of interest provisions at Sections 56A(7)–(8) of the Development Act. Such an investigation may be initiated by a complaint, a Ministerial referral or at the Ombudsman’s own initiative.

It was previously arguable that the Ombudsman could investigate CDAP members who were also council members or officers or employees of a council for any potential conflicts of interest in their role as CDAP members. However, it is now unambiguous that the Ombudsman can investigate all CDAP members for potential conflicts of interest, including independent members.

New Section 263B of the LG Act has the effect that, upon the conclusion of an investigation into a CDAP member conflict of interest, the Ombudsman can recommend to the CDAP that it take certain disciplinary actions in respect of the CDAP member. Specifically, the Ombudsman can recommend that the CDAP:

  • Reprimand the member (including by means of public statement);
  • Require the member to take any steps (including issuing an apology or attending a course of training);
  • Require the member to reimburse the CDAP a specified amount; or
  • Ensure that a complaint is lodged against the member in the District Court.

While the CDAP does not normally have this breadth of power, Section 263B specifically enables the CDAP to act in accordance with the Ombudsman’s recommendations. Whether the Ombudsman would in practice issue some or any of the recommendations is a different question.

If a CDAP implements a disciplinary recommendation of the Ombudsman in respect of a CDAP member, the CDAP member must comply with the requirement. If the CDAP member fails to comply, the CDAP must ensure that a complaint is lodged against the member in the District Court.

An amendment to Section 264 of the LG Act prevents any complaint being lodged by a public official in the District Court against a CDAP member until the matter has first been investigated by the Ombudsman. This marks yet a further difference to the way in which CDAP member conflicts of interest are now to be addressed.

The bottom line

The Ombudsman can now investigate potential conflicts of interest of all CDAP members, including at his own initiative. The Ombudsman can then recommend that the CDAP take various disciplinary measures against a CDAP member, and the CDAP will be taken to have the power to implement those recommendations. If a CDAP member does not adhere to any such requirement of the CDAP, then the CDAP must ensure that a complaint is lodged in the District Court against the member.

This represents a significant change in the way CDAP member conflict of interest issues are dealt with. It remains to be seen how this new framework will operate in practice, as some elements extend significantly beyond the traditional scope of the CDAP’s functions and powers.

For more specific information on any of the material contained in this article please contact Felice D'Agostino on 8210 1202 or fdagostino@normans.com.au or Gavin Leydon on 8210 1225 or gleydon@normans.com.au.


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Environment - Case Law Update

Environment Protection Authority – Is the tiger baring Its teeth?

Two relatively recent court decisions involving enforcement action brought by the EPA highlight the need for local government to remain vigilant about its environmental responsibilities, and ever-mindful about the potential risks associated with pollution and contaminated land.

1. Weeroona Holdings Pty Ltd v Environment Protection Authority [2013] SAERDC 41

This case involved an appeal against a site remediation order issued by the EPA to the lessee of a petrol service station in the Adelaide Hills. 

It is the first appeal against a site remediation order which has gone to hearing since the site contamination provisions were inserted into the Environment Protection Act 1993.

Weeroona’s lease commenced in 2009.

In late 2011, petrol was found to have leaked from an underground fuel pipeline. The leak was discovered after an employee reported noticing a smell of fuel and an oily film in water in a creek running behind the site.

After the source of leak had been identified and the underground pipe was repaired, the EPA issued a site contamination assessment order requiring Weeroona to engage a site contamination consultant to prepare a detailed risk assessment arising from the leak. A site remediation order was also issued requiring Weeroona to prepare a written plan of action to eliminate or prevent discharge of fuel into the creek.

Weeroona’s lease of the site ended on 1 May 2013.

Notwithstanding that Weeroona no longer had any interest in the land, the EPA proceeded to issue a further site remediation order requiring it to engage a site contamination auditor to carry out a site contamination audit and to remediate the site “and the vicinity of the site” in accordance with the audit.

Weeroona appealed on several bases, including that it was not an “appropriate person” to have been issued with such an order.

Her Honour Judge Cole disagreed. She found that the Environment Protection Act gave the EPA very broad powers to take action against anyone who “caused” site contamination. This included an “occupier” of land when there was an activity that caused or contributed to the site contamination.

Her Honour also noted that there will frequently be more than one person capable of being the “appropriate person”. In those cases, the EPA may choose which “appropriate person” to issue with an enforcement order. 

In this instance, the fact that the EPA chose to direct its order at Weeroona, rather than the owners, was not a reason impugn the validity of the order.

This decision reinforces that the EPA’s powers for dealing with site contamination and remediation are very broad and potentially far reaching.

The risks for owners and occupiers of land on which actual or potentially contaminating activities are occurring are very real. Local government, as owner and occupier of many parcels of land that are actually or potentially contaminated or upon which potentially contaminating activities are occurring, needs to be ever-mindful of the potential risks, particularly when entering into transactions or dealing with land. 

2. Circelli v District Council of the Copper Coast [2013] SAERDC 26

This matter concerned a prosecution brought by Mr Circelli (who is an authorised officer of the EPA and the complainant in the matter) against the District Council of the Copper Coast.

The charges related to two contraventions of a mandatory provision of the Environment Protection (Water Quality) Policy 2003 (“the Policy”).

The relevant provision in the Policy (which was introduced in 2003) made it an offence to discharge or deposit a pollutant on to land in a place where it is reasonably likely to enter any waters.

The charges related to a long-standing practice within the Council of allowing its contractors to deposit sewage sludge removed from certain septic tanks into a pit during periods of the year when it was too wet to dispose of it in other ways. The manner in which sludge in the pit posed risk to waters is not apparent from the Court’s sentencing remarks, but presumably it was agreed that it did pose risk.

This method of sludge disposal was apparently established in the 1980s upon advice from the then Department of Health. Until the Policy was introduced in 2003, the practice was not unlawful. However, the practice continued for a long time after introduction of the Policy, with the Council failing to adapt to the changing regulatory environment. 

Despite an early guilty plea and full co-operation with the EPA in its investigation, the Council was convicted on each offence, and fined a total of $45,000 (which, after discounts, was reduced to $31,500) plus prosecution costs.  The maximum penalty for each offence was $30,000, or a total of $60,000.  Thus, the final penalty was in excess of 50% of the maximum which indicates the seriousness of the breach.

The Court’s sentencing remarks confirmed that the Council’s offending was serious. The judge made particular reference to the fact that the offences had come about because of management failures of a previous administration over a long period of time.

Duty to notify the EPA in relation to pollution incidents

In a recent investigation, a council has been criticised by the Ombudsman for failing to notify the EPA in accordance with Section 83 of the Environment Protection Act 1993 about an incident which occurred at a community waste water management scheme.

The incident involved damage to a sub-surface drip irrigation system, which resulted in untreated wastewater discharging into a council reserve.  The council was advised by its contractor about the incident and had taken steps to minimise the risk it posed. However, the incident wasn’t reported to the EPA for some 15 months.

It therefore seems timely to remind councils about the legal obligations arising under Section 83 of the EP Act.

All councils are obliged to notify the EPA in relation to any pollution which occurs in the course of any activity taken by that council, where the pollution causes or threatens to cause serious or material environmental harm.

“Environmental harm” is defined to mean any harm, or potential harm, to the environment of whatever degree or duration and includes an environmental nuisance.

Material environmental harm includes any environmental harm that:

  • consists of an environment nuisance of a high impact or on a wide scale;
  • involves actual or potential harm to human health or safety, or other environmental harm that is not trivial; or
  • results in actual or potential loss or property damage exceeding $5,000, where “loss” includes the costs and expenses to mitigate the environmental harm and make good resulting environmental damage. 

As is apparent, this definition involves a very low threshold.

“Serious environmental harm” involves environmental harm of greater severity.

The reporting obligation in Section 83 rests with the person who has undertaken the relevant activity. This includes any person who has “caused, suffered or permitted” the activity to occur.

Importantly, the obligation is to report as soon as reasonably practicable after becoming aware of the harm or threatened harm. The EPA must be notified about the harm or threatened harm, its nature, the circumstances in which it occurred and the action taken to deal with it.

The obligation to report ceases to apply if the person has reason to believe that the harm or threatened harm has already come to the attention of the EPA.

Failure to comply with the requirements of Section 83 is a criminal offence. The maximum penalty for a body corporate is $250,000, which makes it a potentially serious matter.

Under the officer and director liability provisions of the Act, senior managers and elected members of a council may also be criminally liable if they cannot bring themselves within the “general defence” in Section 124.

The Act goes on to provide protection for the reporting party, in that any information provided under Section 83 cannot be used against the person in any enforcement proceedings under the Act.

Section 83A of the EP Act imposes a similar obligation on owners or occupiers of land to notify the EPA as soon as reasonably practicable on becoming aware of the existence of site contamination at a site or in the vicinity of a site that affects or threatens underground water.

Take home message

The above cases demonstrate that significant risks arise in relation to matters of environmental protection.

It seems that the EPA is no longer afraid to bare its regulatory teeth. When it does, the ramifications are usually serious. 

Unfortunately, the risks for local government are heightened. In its capacity as the holder of many EPA licences, the undertaker of many potentially polluting activities, and the owner and occupier of many parcels of land that are or may be contaminated, its exposure is multi-faceted and potentially complex.

Local government authorities should be ever-mindful of the legal duty to notify the EPA in relation to pollution incidents which cause or threaten to cause environmental harm or nuisance, and in relation to site contamination which threatens underground water. Failure to do so could attract criminal liability.

For more specific information on any of the material contained in this article please contact Peter Psaltis on 8210 1297 or ppsaltis@normans.com.au.


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Local Government – Progress made on 'super-tribunal': an update on SACAT

We previously informed our readers of the South Australian Civil and Administrative Tribunal (SACAT) at the time when the Bill seeking to establish that tribunal was introduced into Parliament. Since that time, two important steps have been made towards the realisation of the SACAT.

Progress to towards a centralised administrative tribunal

Firstly, the South Australian Civil and Administrative Tribunal Act 2013 has passed Parliament and received assent. While many technical amendments were made on the Bill’s passage through Parliament, it enjoyed a relative absence of any opposition and was dealt with in a short period of time. Readers will recall that this Act establishes only the organisational structure of the SACAT and does not confer any jurisdiction on the SACAT.

Secondly, the President of the SACAT has been appointed. The Hon. Justice Greg Parker, previously the South Australian Crown Solicitor, was appointed to the role on 14 November 2013 (the same day he took up a position on the Supreme Court bench). The President will be integrally involved in consultation and determination as to what the jurisdiction of the SACAT will be. Future legislation will be passed to transfer various existing administrative and disciplinary jurisdictions to the SACAT.

At this stage, it appears that the first jurisdictions to be transferred to the SACAT will be those of the Residential Tenancies Tribunal and the Guardianship Board. Relevantly for Local Government, these will most likely be followed by the transfer to the SACAT of matters currently heard in the District Court’s Administrative and Disciplinary Division. The effect of this would be that all matters presently heard in that Division – including the review of certain council administrative decisions related to Local Government Act 1999 compliance, public health safety and animal management, and the hearing of complaints against council members – will be heard in the SACAT.

Proceedings in the SACAT — what to expect

The hearing of matters in the SACAT will represent a marked departure from present arrangements. The SACAT is not merely a referee, but rather may take an active part in proceedings – it can demand the production of information and documents from any person, conduct site visits and engage experts to conduct investigations and produce reports. Furthermore, where a decision is being reviewed, the original decision-maker will be required to provide reasons for their original decision, to provide documents or other evidence, and to generally use their ‘best endeavours’ to assist the SACAT.

After reviewing an administrative decision, the SACAT will be able to make a variety of orders. These include the varying of the original decision, and the substitution of an entirely new decision. A varied or substituted decision made by the SACAT will be taken to be a decision of the original decision-maker. The original decision-maker will be required to give effect to that decision.

Norman Waterhouse possesses a wealth of administrative law expertise, and regularly represents councils in the jurisdictions which will be ‘rolled in’ to the SACAT. We are uniquely equipped to assist local government in South Australia in any proceedings before the SACAT, and look forward to assisting your council with the transition to the new review jurisdiction.

For more specific information on any of the material contained in this article please contact Paul Kelly on 8210 1248 or pkelly@normans.com.au, or Dale Mazzachi on 8210 1221 or dmazzachi@normans.com.au.


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Employment – Intercourse not “in the course” of employment

The recent majority decision handed down by the High Court of Australia (“High Court”) in the case of Comcare v PVYW [2013] HCA 41 overturned the decision of the Full Court of the Federal Court (“Full Federal Court”). In the judgment from the High Court it has been found an employer is not liable for compensation to an employee who suffered injuries during sexual intercourse in a motel while on a business trip. The Full Federal Court previously found it is sufficient for an employer to be liable for an employee if an injury occurred at a place the employer had required or encouraged the employee to attend. It was found to be unnecessary to show the activity through which the injury occurred was encouraged or required by the employee.

Facts

Ms PVYW (“PVYW”) was sent to a regional office of her employer for the purpose of conducting budget reviews and personnel training.

For this reason she was forced to stay overnight at a motel booked by her employer. It was here that she engaged in sexual relations with an individual she met. During this activity a glass light fitting was pulled from the wall mount and struck PVYW resulting in physical injuries and a claimed subsequent psychological injury.

PVYW launched a claim for workers compensation on the basis that the injury was “arising out of, or in the course of the employees’ employment”. The claim was initially accepted by Comcare, before revoking it, leading to PVYW’s application to the Administrative Appeals Tribunal (“AAT”).

AAT delivered a verdict in favour of Comcare, this decision was overturned on appeal to the Federal Court, finding in favour of and awarding compensation to the employee. This was upheld by the Full Federal Court, but appealed again by Comcare to the High Court. 

Issues

The issue considered by the High Court was whether an injury was within the “course of employment” (no matter the causation) if the injury occurs:

  • during an interval or interlude in an overall work period; and
  • at a location the employer has induced or encouraged the employee to spend the interval or interlude; and
  • where there is no dissenting behaviour on behalf of the employee (gross misconduct).

In previous cases to satisfy “in the course of employment” aspect, all that was required was the injury had to have occurred at a place the employer encouraged the employee to be during an interval of actual periods of work. This has been replaced through the judgment delivered by the High Court, in which a new three-stage test has been established.

An employer is not necessarily liable for injury to an employee simply because they were authorised or encouraged to be at the particular place.

Take home message

While the decision handed down has provided some clarity in regards to the potential liability of an employer it, has not categorically defined the scope for situations of an employers’ liability. It has classified that an employer is not liable for injuries suffered during sexual relations while on a business trip as it was not encouraged by the employer, it does not help clarify the extent of a business’s liability if an injury occurs during ‘normal social activities’.

While some clarity has been expressed, there will always be arguments pertaining to whether particular behaviour and activities are encouraged by the employer. For a business to protect themselves and their employees risk assessment and risk mitigation should be conducted when travelling for work purposes or participating in social activities. Ways for this to occur include:

  • Choosing appropriate travel options for regional, interstate and international travel;
  • Providing acceptable accommodation;
  • If a work encouraged activity, observe the safety record of the provider;
  • If considered a risk, advise employees not to engage in the behaviour; and
  • Remind staff the business’s code of conduct or policy regarding appropriate workplace behaviour extends to locations away from the regular place of work if you are present at that location for the work purposes.

For more specific information on any of the material contained in this article please contact Lincoln Smith on 08 8210 1203 or lsmith@normans.com.au.


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Retail and Commercial Leases (Miscellaneous) Amendment Bill

The Retail and Commercial Leases (Miscellaneous) Amendment Bill 2013 (SA) (Bill) was introduced into the Legislative Council by the Honourable John Darley MLC on 13 November 2013.  The Bill proposes to alter the current position under the Retail and Commercial Leases Act 1995 (SA) (Act) in relation to landlords recovering land tax from their tenants.  The Bill also makes a minor amendment to the section of the Act that prescribes when the Act applies to a lease. 

Currently section 30 of the Act prohibits a retail shop lease from requiring a tenant to pay land tax to a landlord.  The Bill, if passed, will change this position and will provide that:

  • a landlord may require a tenant under a retail shop lease to pay an amount of land tax to the landlord provided that the amount does not exceed the ‘single holding rate’ for the premises;
  • where the premises are the only premises owned by the landlord then the ‘single holding rate’ is an amount equal to the amount of land tax payable under the Land Tax Act 1936 (SA) in relation to the premises;
  • where the landlord owns more than one premises, the ‘single holding rate’ will not be based on the aggregated land tax payable for all of the landlord’s premises, but rather will be an amount equal to the amount that would have been payable under the Land Tax Act 1936 (SA) had the premises been the only premises owned by the landlord.

Leases which are entered into on or after the commencement of this Bill will be subject to the new land tax recovery provisions. All existing leases will not be affected by the Bill and the current legislative provisions will apply.

The Bill also provides that the monetary threshold set for the purpose of determining whether the Act applies to a retail shop lease (where the threshold is currently $400,000) may be indexed in accordance with a schedule prescribed by regulation.

As the Bill has been introduced by a private member rather than the Government, and given that there are only a handful of Parliamentary sitting days left this year, it is unlikely that the Bill will progress far in the near future.  Unfortunately, the Bill fails to address some of the more pressing concerns of landlords and tenants in relation to the operation of the Act. Hopefully, we will see more wide ranging Government legislation introduced shortly to address these concerns.

For more specific information on any of the material contained in this article please contact Lisa Hubbard on 8217 1369 or lhubbard@normans.com.au.


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Town Planning & Development – the Supreme Court on gross leasable area, pad sites, variations, delegations and more

Recent judicial review proceedings brought by the proprietors of an existing shopping centre in relation to a competitor’s proposed shopping centre have caused the Supreme Court to examine a number of issues arising under the Development Act 1993.

Background

Parabanks Shopping Centre Pty Ltd v The City of Salisbury [2013] SASC 168 concerned two development plan consents granted for the construction of a shopping centre in a newly rezoned neighbourhood centre.  The second consent was granted some time after the first for a slightly varied scheme. 

The validity of each consent was challenged on a number of technical grounds, including that:

  • the gross leasable area of the proposed shopping centre exceeded a 5,500 square metre cap and was therefore non-complying;
  • the Council was obliged to seek further information from the applicant to satisfy itself that each tenancy nominated as a restaurant or personal services establishment would be used as such (or at least that this would be likely);
  • the development was hypothetical because the proposed mix of tenancy types could not be achieved;
  • the Council had impermissibly permitted a variation to the application without having received a formal application to vary;
  • the Council had impermissibly delegated its power to grant approvals to both its CEO and its Development Assessment Panel simultaneously;
  • the Council had not correctly characterised the nature of the proposal by failing to identify that it would require the removal of three regulated trees.

Ultimately the Court quashed the first consent, but upheld the validity of the second.

Interesting Findings

Gross leasable area

The plaintiff argued that a 457 sq m covered receiving bay was part of the “total floor area” of the proposed building, and was accordingly to be counted as part of the gross leasable area.  The Court held that, as a roofed area akin to a verandah, the receiving bay (or at least the covered portion) was part of the total floor area.

The Court also held that the receiving bay was located so close to, and was obviously functionally associated with, the proposed supermarket that it was not a common area.  It was thus held to be part of the gross leasable area and did result in the development breaching the 5,500 sq m non-complying cap.

Obligation to seek information

The Court rejected the argument that, when processing the development applications relevant to each consent, the Council was obliged to seek further information as to whether the mix of tenancy types specified by the developer could or would be achieved.  The Council was entitled to accept the proposed mix and siting of the various tenancies at face value.

The Court did, however, find that two tenancies of 37 sq m and 30 sq m were too small to be restaurants.

Hypothetical development

The Court took the view that neither the first nor second consent was a ‘hypothetical development’ in the legal sense identified in the case of Hackney Hotel (1984) 36 SASR 265.

In this case there was no reason to believe the developer in the present case would be unable to construct the proposed shopping centre.  The fact that some tenancies might remain vacant did not make the proposal hypothetical, and it was not necessary for the Council to assess the development’s prospects of economic success.

Impermissible variation

In this case the first consent was the subject of two variations which the Court found to be invalid.

First, the original plans had shown a “pad site” within the proposed car park.  The pad site was apparently to accommodate a future fast food development with drive-thru.  In the course of processing the developer verbally advised the Council that it wished to delete that component.  No amended plans were provided and the plans which were approved continue to show the pad site.  The decision notification form included a note to the effect that the pad site “does not form part of this application”.

The Court held that that a formal variation application was required, particularly to clarify what was proposed to occur on site in lieu of the deleted pad site.  It also held that the deletion was a change to the essential nature of the proposal.

Section 39(4)(a) of the Act requires a formal application be made to vary a proposal, which must clearly set out the nature and scope of the variation.  A relevant authority must then turn its mind to whether the variation would change the essential nature of the proposal, and if not, whether the variation is substantial enough to require public re-notification pursuant to Regulation 20(4).

Second, the first consent was granted subject to 19 conditions.  After the decision notification form was received, the developer asked the Council to remove two of those conditions.  A council officer simply issued a new decision notification form without the two conditions but bearing the same date as the initial form and provided it to the developer.

The Court held that this process was not a variation but a purported re-issue.  Once a planning authority issues a development plan consent it cannot re-issue that consent.  Its power is spent.  Any variation should have been processed in accordance with the requirements of Section 39(6) and (7), and if granted, a further decision notification form issued bearing the date of the decision pertaining to the variation.

Concurrent delegations

The Court held that Section 34(23) of the Act, which requires the Council to delegate its power to decide whether to grant development plan consent to its Development Assessment Panel “or” a person occupying a particular office, was to be read as “one or the other or both”.  As such, the Council’s delegations were not invalid for the fact that the power was delegated to both the DAP and the Council’s CEO simultaneously.

The Court noted that simultaneous delegations under Section 34(23) were permissible and would not lead to the possibility of conflicting decisions.

Unnoticed development

In granting the first consent, the Council was unaware that three regulated trees would have to be removed in order to permit construction of the shopping centre.  Removal of those trees was not part of the first development application.

The Court took the view that the removal of the trees was not part of the proposal, and the Council therefore had not failed to have regard to a relevant matter.  The approval did not implicitly authorise their removal, and a separate approval to that effect would be required before the shopping centre proposal could be lawfully implemented.

This appears to be a change in the law relating to such matters.  Historically, as set out in Brown Falconer Group Pty Ltd v Mount Gambier City Council [1998] EDLR 818, “an unconditional planning approval embraces everything necessary to lawfully undertake the approved development under the relevant legislation”.  The historic position appears to be supported by High Court authority (Drummoyne Municipal Council v Lebnan (1974) 131 CLR 350) and a previous Supreme Court decision (Foura v City of Henley and Grange (1977) 17 SASR 10).

Conclusion

The issues that arise in this case were numerous and complex.  The first consent was invalid for a number of reasons.  However, all of those invalidities were avoided when the Council processed the second application and granted the second consent.

Readers who are interested in finding out more about the implications of this case, or judicial review proceedings generally, are encouraged to contact either James Nicolson on 82171342 or jnicolson@normans.com.au or Gavin Leydon on 82101225 or gleydon@normans.com.au.


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Development and Town Planning – Urban Renewal Amendment Bill 2013 update

In our June 2013 Briefly we discussed the Housing and Urban Development (Administrative Arrangements) (Urban Renewal) Amendment Bill 2013 (Bill) (see here), in which the State Government proposed new powers and processes to facilitate the delivery of urban renewal projects on a precinct-by-precinct basis.

On 24 October 2013, the Bill was granted Royal Assent, having been passed by both Houses of Parliament, and became the Housing and Urban Development (Administrative Arrangements) (Urban Renewal) Amendment Act 2013 (Act).

During the course of parliamentary debate, several aspects of the Bill were amended. The most significant of these changes are summarised below.

The commencement date for the Act is unknown and the accompanying regulations, which are expected to contain much of the detail relating to the powers and administration of precinct authorities, are yet to be released.

Establishment of a precinct

One notable change to the Bill is that the Act does not permit the Minister to establish a precinct on their own initiative; rather, the Minister may only establish a precinct at the request of “a council or other person or body”.

Any such request must now be accompanied by a “business case” containing certain details, including:

  • the area, name and objectives of the proposed “precinct”;
  • the body proposed to constitute the precinct authority;
  • how public consultation is proposed to be conducted;
  • identification of assets and infrastructure which might be transferred to other entities during or after the project; and
  • proposed arrangements for the provision of services within the precinct by the relevant local council.

An additional level of control has been added in relation to the Adelaide Parklands.  No land within the Adelaide Parklands may now be established as a precinct without the consent of the Adelaide Parklands Authority.

If the establishment of a precinct is revoked, the Minister must consult with the relevant local council(s) on the transfer of assets and infrastructure from the precinct authority, and any other relevant matters.

Powers and obligations of the precinct authority

The statutory powers that a precinct authority may be authorised to exercise under the accompanying (but yet to be released) regulations remain as previously proposed under the Bill.  Readers will recall that such powers may include the power: to grant approvals, consents, licences or exemptions; to provide services or infrastructure; and impose and recover rates, levies or charges.

Additionally, the Act now contemplates that a precinct authority may be authorised to exercise the statutory powers under the Local Government Acts to make and revoke by-laws, and impose rates which are collected and passed-on by the relevant local council.

Another amendment is that a precinct authority must (except where exempted by regulation) establish a Design Review Panel (to advise on design elements and issues, and practices and procedures for innovative design solutions in relation to planning and development of the precinct) and a Community Reference Panel (comprising representatives of residents in or around the precinct to advise the precinct authority of their views in relation to a precinct).  Previously such panels were optional.

The precinct authority may further establish any other panel(s) it considers appropriate in relation to planning and development within the precinct.

Preparation of precinct plans

The Act continues to propose two types of precinct plans - precinct master plans and precinct implementation plans.

A precinct master plan may, among other things:

  • specify design guidelines for development (which may include specific design criteria relating to buildings or classes of buildings);
  • make provision in relation to any matter which a Development Plan may provide for, including specifying classes of development within the area that will be complying development; and
  • provide for open space or the making of payments.

A precinct implementation plan may apply to all or only a part of a precinct, and may specify details with respect to roads, allotment configurations, buildings heights and density, and public places.  It may also set out an implementation framework for the provision of infrastructure.

In preparing either precinct plan, the precinct authority must now have regard to the Development Plan and the Strategic Directions Report of the relevant local council.  It must also take reasonable steps to consult with the relevant local council, and, in relation to a precinct master plan, undertake public consultation.

To give effect to a precinct implementation plan, the Minister must amend the relevant Development Plan using the “fast-track” process under Section 29 of the Development Act 1993.

For more specific information on any of the material contained in this article please contact John Watson on 8210 1245 or jwatson@normans.com.au.


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