Lester Land Holdings Pty Ltd v DAC – Judicial Review quashes decision of the DAC to grant consent to proposed re-development of the Newmarket Hotel

In a recent judgment of the Supreme Court of South Australia – Lester Land Holdings Pty Ltd & Ors v the Development Assessment Commission & Anor [2020] SASC 170 – His Honour Justice Parker quashed a 2016 decision of the Development Assessment Commission (DAC) to grant Development Plan consent to the proposed re-development and expansion of the Newmarket Hotel.

The decision was quashed because the DAC had failed to take into account a relevant consideration – namely the set-back distances under Council-wide Principle of Development Control 67 (PDC 67) in the City of Adelaide Development Plan (Development Plan) – as required by section 33 of the Development Act 1993 (Development Act).

Background

On 21 January 2016 the Inner Metropolitan Development Assessment Commission (IMDAC), as a delegate of the DAC, granted Development Plan consent under section 33(2) of the Development Act to One North Terrace for the ‘partial demolition of a State Heritage Place and conversion to a hotel’, as well as the ‘construction of a mixed-use development comprising retail, consulting rooms and residential apartments, supported by basement car parking’.

Judicial review proceedings were brought by the plaintiffs, the owners of land adjacent to the proposed development, contesting the validity of the DAC’s grant of Development Plan consent on numerous grounds, including the failure to take into account a relevant matter and taking into account irrelevant factors; failure to comply with statutory duties and processes; exercising functions that were beyond its power; and making a decision that was legally unreasonable. Ultimately, only the first ground was successful.

What is a ‘Heritage Place’

The plaintiffs argued that the DAC had not properly considered the impact of the development on the State Heritage Place. It was argued that the Newmarket Hotel complex – which included two historic outbuildings – did not represent the State Heritage Place as a whole, but that each of the buildings was a discrete heritage place in its own right. This meant that the development did not call for the ‘partial’ demolition of a heritage place, but the complete demolition of two heritage places.

This argument was unsuccessful. It was acknowledged that heritage value can attach to discrete and specific parts of a site, and that the term ‘place’ is afforded a wide construction by the Heritage Places Act 1993, but that was not the case here. The entry in the Heritage Register referred only to the Newmarket Hotel as set out in the Certificate of Title and did not make specific reference to individual buildings on the site. The development was therefore correctly classified by the DAC with respect to the impacts on the State Heritage Place.

Failure to follow statutory referral processes

The plaintiffs argued that the DAC had failed to follow the statutory process as it had not referred the full application to the principal conservation architect, Mr Peter Wells (a delegate of the Minister) as required by section 37(1)(a) of the Development Act and by regulations 24 and 27 of the Development Regulations 2008 (Development Regulations).

Mr Wells had reviewed the initial plans but not the amended proposal plans nor had he been present at any meetings of the DAC discussing the amended proposal plans.

The Court found that the DAC had failed to properly consult with Mr Wells in respect of matters to which it should have referred its assessment. However, whether this was enough to invalidate a decision made under section 37(1)(a) rested upon the construction of regulation 27(1) .

Establishing jurisdictional facts under regulation 27(1) – objective or subjective test?

In the context of establishing jurisdictional facts – that is, the facts that the decision-maker must ascertain and have regard to before making a decision – the Court found that an objective test was the correct test to be applied.

This reasoning depended upon the construction of regulation 27(1) of the Development Regulations in the context of whether the DAC needed to consider the information provided by another agency.

Regulation 27(1) provides –

“If a relevant authority has referred an application to a prescribed body under this Part and the relevant authority subsequently receives additional information, or an amended plan, drawing or specification, which is materially relevant to the referral, or to any report obtained as part of the referral process, it may repeat the referral process, and must do so if it appears that the additional information or amendment is significant.” [emphasis added]

The Court found that the words of regulation 27(1) did not clearly suggest that any degree of opinion or belief was required in order for the DAC to determine if material was “significant” therefore, matters of “significance” could be objectively assessed by an independent body such as the Court. Further to this, the term “significant” did not appear to carry any special legal meaning but was instead afforded meaning by way of its ordinary usage. Thus, the DAC had failed to appropriately exercise its power, as it had not considered the significance of materials that should have been put before it. However, despite the invalidity of the decision, His Honour exercised the discretionary power of the Court to refuse relief, on the basis that it would be futile to do so.

Failure to exercise jurisdiction – set-back distances

The factor that ultimately determined this case was the failure of the DAC to consider the appropriate set-back distances under the Development Plan.

The Court found that the plans before the DAC were inconsistent and incorrect in their representation of the set-back distances. The DAC had not identified these inaccuracies and had granted Development Plan consent to all the plans submitted, including those that infringed upon the required set-back distances under the PDC 67 of the Development Plan. As such, the DAC had not appropriately exercised its jurisdiction as it had not given proper consideration to these set-back distances.

The Court held that, the failure to consider the set-back distances was so significant to warrant the original decision to be quashed.

What does this mean for future decisions?

It is likely that more applications for judicial review will be brought as a result of the transition from the old planning regime to the new regime under the Planning, Development and Infrastructure Act 2016 (PDI Act). In particular, judicial review is the only avenue available for third parties to appeal decisions of a relevant authority for many categories of development under the new regime.

CAPs should be cognisant to the need to properly exercise their statutory duties under the PDI Act, especially with respect of the referral processes contained in section 122, so as to avoid costly judicial review proceedings.

For more specific information on any of the material contained in this article please contact Rebecca McAulay on 8210 1278 or rmcaulay@normans.com.au, or Gavin Leydon on 8210 1225 or gleydon@normans.com.au.