Mallik Rees lawyers

This paper is intended for the Qualified Solicitors of the Hunter Valley law Society. It is not intended to be a definitive analysis of legislative or other changes and competent professional advice should be taken before any course of action is pursued.

CLEAVES MALLIK GIBBS and the author of the paper do not accept any liability for anything contained in the paper and do not warrant the accuracy of the contents. All users of this paper must acknowledge that CLEAVES MALLIK GIBBS and the author of the paper ( R.P. Mallik) do not owe them any duty of care and they indemnify CLEAVES MALLIK GIBBS and the author of the paper from all claims demands suits actions and proceedings for damages and consequential loss howsoever arising from their use of this paper and its contents.

The purpose of this Seminar is to make Solicitors aware of how the Local Government Act, the Environmental Planning and Assessment Act and various other Local Government or Planning considerations affect their practices as Conveyancers.

This paper is not intended to be a comprehensive study of the Local Government Act or the Environmental Planning and Assessment Act or indeed any other Act, but is merely intended to be a reminder to Solicitors of some of the matters that they need to consider in conveyancing matters.

Every one in this room will be aware of and familiar with the Planning Certificate that is normally attached to the Contract. I do, however, question whether anybody has recently gone back to the Act to see what is suppose to be contained in a Planning Certificate or to consider the ramification of information that is contained in the Planning Certificate.

Most Conveyancers believe that there are in fact two Planning Certificates, namely a 149(2) Certificate and a 149(5) Certificate. This is in fact not correct. The Act provides for one Planning Certificate under Section 149.

Section 149 of the Environmental Planning and Assessment Act is in the following terms:

(7) For the purpose of any proceedings for an offence against this Act or the regulations which may be taken against a person who has obtained a planning certificate or who might reasonably be expected to rely on that certificate, that certificate shall, in favour of that person, be conclusively presumed to be true and correct.

Section 149(1) makes it clear that any person may on payment of the prescribed fee apply for a 149 Certificate called a "Planning Certificate".

Section 149(2) makes it clear that Council must provide such a Certificate and must specify such matters relating to the land to which the Certificate relates as are prescribed.

Regulation 279 of the Environmental Planning and Assessment Regulations (and Schedule 4 of the Regulations) prescribes the matters that must be specified in a Certificate. Those matters are enumerated in Schedule 4 of the Environmental Planning and Assessment Regulations and are summarised as follows.

The Planning Certificate must specify the names of relevant State Environmental Planning Policies (SEPPs), Regional Environmental Plans (REPs), Local Environmental Plans (LEPs) and Development Control Plans (DCPs) that apply to the land.

In my experience many Solicitors skip over this information and go to the information relating to the zoning of the land, being the information required to be provided in paragraph 2 of Schedule 4.

I believe that this a very dangerous course, as paragraph 2 of Schedule 4 only requires Council to provide certain information relating to the LEPs and does not require Council to flag or warn in relation to the affects of the REPs or SEPPs that might apply to the land.

There is a hierarchy of Planning instruments that apply to any land in New South Wales.

At the top of the hierarchy is usually the State Environmental Planning Policy. It normally overrides any provisions in the Regional Environmental Plans or the Local Environmental Plans that conflict with its provisions.

The next instrument in the hierarchy is the Regional Environmental Plans. In the Hunter, for example, there are two Regional Environmental Plans being the Hunter Regional Environmental Plan and the Hunter Regional Environmental Plan (Heritage).

The Regional Environmental Plans again usually provide that their provisions override any contradictory provisions in the LEP and accordingly, you will readily see that simply relying on the information as to what can or cannot be done pursuant to the LEP will not give you a full picture of the restrictions or constraints that might apply to the land and its use.

The next instrument in the hierarchy is the Local Environmental Plan however it mainly specifies the general planning frame work and restrictions and does not specify the details.

Many of you will be aware of the fact that very often the devil is in the detail.

Development Control Plans are where the detail is contained. Yet most Conveyancers go on happily advising their clients in relation to a Contract, without being aware of the provisions of any SEPP, the REP or the DCPs that might apply to the land. In my view this a dangerous practise, especially if Conveyancers do not warn their clients of the necessity of their clients making their own independent enquiries as to the effect of those other instruments on their plans.

In relation to the Development Control Plans for instance, I have known of some provisions in Development Control Plans that specify the shape and colour of the building that can go up. Some Development Control Plans in Sydney are so restrictive that it would be fool hardy for anybody to purchase land in a Sydney suburb without looking at the Development Control Plans as they apply to that land where they intend to develop the land.

I would think that as a first step a prudent Conveyancer would advise his or her clients that they should obtain from the Council the relevant Planning instruments and read them themselves to satisfy themselves that they are aware of the restrictions that may apply to their plans for the land.

I am not suggesting for a minute that Conveyancers themselves should obtain every instrument and read it, as the cost of conveyancing would then be prohibitive, however, I do suggest that a prudent Conveyancer, to protect himself or herself and his client, should advise the client that the client should become familiar and be aware of the provisions of the Planning Instruments that apply to the land before signing any Contract, as to do otherwise would potentially put the Solicitor at the risk of the client claiming that the whole purpose of the 149 Planning Certificate containing the names of the relevant Planning instruments was to alert them to the instruments that apply to the land and as the Solicitor did not advise them to look at these instruments they were completely unaware of the restraints or restrictions the instruments imposed on the land they intend to purchase.

The next group of information that is prescribed under Schedule 4 is certain information relating to each Local Environmental Plan, Deemed Environmental Planning instrument and Draft Local Environmental Plan applying to the land.

In my experience most Solicitors simply look at the 149 Certificate to establish the identity of the zone; to find out what activity can be carried out within the zone with or without Development Consent and what activity is prohibited. Some Solicitors also look to find out whether a development standard applies to the land, but I think that most would not be aware of the consequence of a statement that the land includes or comprises a critical habitat, that the land is in a conservation area or that an item of environmental heritage is situated on the land.

The term "critical habitat" is described in the Environmental Planning and Assessment Act as having the same meaning as in Threatened Species Conservation Management Act 1995 or (subject to Section 5C) Parts 7A of the Fisheries Management Act 1994. A critical habitat is defined in the Threatened Species Conservation Management Act as being a habitat declared to be critical habitat under Part 3 of that Act and in regard to fish and marine vegetation the term has the same meaning as in Part 7A of the Fisheries Management Act.

The immediate consequence of land being a critical habitat is that any development on that land, no matter how small, cannot be a complying development and hence all development requires consent, even erecting a fence or a TV Aerial will require consent.

If the 149 Certificate specifies that land is within a critical habitat, your client should be advised to proceed cautiously. Your client will likely have to incur substantial expense each time he plans a development on the land or intends to carry out a development on the land in attempting to satisfy the eight point test contained in Section 5A of the Threatened Species Conservation Management Act. The result will be that your client will be put to the expense of having to employ expensive Ecologists to try and satisfy the Council that a development does not have a significant effect on threatened species population or ecological communities and the chances are that your client will spend a large amount of money and at the end of the day will not succeed in persuading the relevant Planning Authority, be it the Court or otherwise, that there will be no significant effect on threatened species population or ecological communities or their habitats.

The Planning Authority, as a minimum, consult the National Parks and Wildlife Services before they will give the green light to a development and they almost always require extensive, lengthy and expensive ecological research to be done on the land.

Similarly if the land is in a conservation area, you should proceed with caution. There are many types of conservation areas specified. A conservation area can be scenic conservation area, a heritage conservation area, an aboriginal heritage conservation area or one of a numerous types of conservation areas. If land is shown to be within a conservation area it would be prudent to advise your client to seek town planning advice as to the impact that has on your client's intentions for future land use.

Similarly if you find that there is a suggestion that an item of environmental heritage is situated on the land, this should again be a warning sign for you to advise your client to tread carefully. There are many types of environmental heritage constraints. There could be an item of environmental heritage situated on the land. Alternately the land might fall within the precinct of an environmental heritage area and further enquiries as to the effect of these restrictions should be made before your client proceeds. Do not assume that simply because your client knows that the he or she buying is an item of heritage significance means that your client is fully aware of the constraints that apply.

I will deal with the problems in relation to heritage items later in this paper, however, suffice to say that I have been consulted in the last five years by at least three Solicitors whose staff have not properly read or interpreted the provisions of the 149 Certificate so far as it applies to environmental heritage. It is a complex area and if there is any suggestion that an item of environmental heritage is present, you should warn your client and suggest that they obtain expert advice.

The next part of the Schedule relates to State Significant Development. Unless you are acting for a large developer who develops a state significant type development, this item should not really concern you in, for example, the case of a normal dwelling house. Similarly most Conveyancers will be aware of the provisions in the 149 Certificate relating to coastal protection and mine subsidence.

The question in relation to road widening is again something that I expect most Conveyancers would not understand.

Division 2 of Part 3 of the Roads Act 1993 relates to actions by a Road Authority for the widening of a public road. The information that is required to be disclosed only applies when the Road Authority has decided to widened the road by, for instance, publishing its intention in the local newspaper and taking the other steps prescribed in the Roads Act. There is no obligation by Council to disclosure plans that might be on the "drawing board" in relation to road widening, unless the road widening activity is sufficiently advanced as to fall within Division 2 of part 3 of the Roads Act, or such road widening is specified in environmental planning instruments (rarely) or where Council has adopted a resolution. It should also be remembered that the information that is required to be provided is only in relation to road widening and road realignment and not the construction of new roads. In an appropriate case it would be prudent to make relevant enquiries from other Authorities other than the Council.

The next item that has to be in the 149(2) Certificate is, of course, information as to whether or not the land is effected by a policy adopted by Council or another public authority and notified to Council that restricts development for various specified risks.

You should be aware that Council is only required to notify where the land is affected by a policy adopted by the Council or other public authorities and notified to Council. Very often Councils will commission various types of studies, including flooding studies, and those studies might contain information that would restrict any consent that Council would grant in respect of the land, but as Council has not adopted a policy it is not obliged to reveal the contents of any such study to anyone. I know of numerous cases where flood studies have been done but have not bee adopted by Council as a policy, but when an applicant lodges a Development Application Council applies the contents of that policy in refusing the application or imposing onerous conditions. Once again I would think it wise for prudent Conveyancers to advise their client that they cannot solely rely on the information contained in the 149 Certificate as to flooding and other risks and that they should make their own enquiry from neighbours and others.

Councils can, of course, include information under Section 149(5) relating to studies, but for reasons canvassed elsewhere in this paper they very often do not do so.

The next most frequently overlooked matter is a question of whether a Contribution Plan applies to the land.

Section 94 of the Environmental Planning and Assessment Act provides that before a consent authority can impose a contribution on a development, there must be a Contribution Plan in place. If a Contribution Plan is in place it is likely that any development falling within the ambit of that Plan will attract a significant contribution to the embellishment of community resources. If there is a Contribution Plan in place and your client is intending to do any works on the land, it would be prudent for you to advise your client to attend the Council's Chambers and inspect the Contribution Plan (which should be available for inspection without charge) and decide for themselves the financial cost of carrying out that development.

Section 149(5) provides that a Council may in a Planning Certificate include advice on such other relevant matter affecting the land of which it may be aware.

149(6) of the EPA Act limits Council's liability in respect of any advice provided in good faith under sub-section 5 and for this reason I understand that many Conveyancers take the view that they should not apply for a Section 149(5) Certificate, as the information that is often provided is useless and in any case, Council is not liable for any information provided and hence it is of no benefit.

As I have previously indicated Section 149(2) only requires the Council to include in the Certificate "whether or not the Council has by resolution adopted a policy to restrict the development of the land because of the likelihood of land slip, bushfire, flooding, tidal inundation and subsidence or any other risks". As I have mentioned before many Councils use other information, such as flooding studies and other studies, to control development without "by resolution adopting a policy to restrict the development of the land" because of those risks.

If the Councils use the information in studies etc to control development on the land, some Councils will disclosure this information in a Section 149(5) Certificate and some will not. However, without a Section 149(5) Certificate the purchaser will be completely unaware of the contents of a relevant study or other information that Council has which could restrict future activities on the land, but where Council has not adopted a resolution to restrict the development but merely applies the information to control development in appropriate cases.

If you read Section 149(5) you will note that Council can choose to include advice on such other relevant matters affecting the land of which it may be aware. There is one school of thought (including me) which holds that if Council decides to provide some information under Section 149(5) of the Act, it must provide all information it has on anything that affects the land that it may be aware of. Thus if Council, for instance, provides information on its outdoor lighting policy so far as it effects the land and Council has information of which it is aware relating to flooding, it must provide all such information.

There is, however, the other school of thought (which most Council adhere to) which says that this is too wide an interpretation and reads down the clause to allow Council to pick and choose what information it will give. Unfortunately this issue remains unresolved at this stage owing to the absence of decided cases on this point.

Most Councils that I know of take the view that they can pick and choose what information they will provide in a Section 149(5) Certificate and seem to take a cavalier attitude towards the provision of such information on the basis that even if the information is inaccurate they are immune from suit pursuant to Section 149(6) of the EPA Act.

However, it should be remembered that the immunity from suit provided in Section 149(6) only applies if Council provides the information in good faith.

Section 733 of the Local Government Act similarly provides that Council obtains immunity from suit when it provides certain flooding information in good faith.

In Mid Density Developments Pty Ltd –v- Rockdale Municipal Council the Full Court of the Federal Court of Australia found the Rockdale Council liable for negligence for information provided under Section 149(5) of the EPA Act in relation to the potential flooding of land despite a disclaimer of liability contained in the Certificate and despite the provisions of Section 149(6) of the EPA Act.

The Court held that where Council has information in its possession indicating that land was flood liable, Council does not act in good faith when the person providing that information did not check Council's records to verify the flooding status of the land. In other words, good faith was not merely a lack of mala fides but even "honest ineptitude" amounted to a lack of good faith.

The Certificate in question had the following question "Has the Council information which would indicate that the land is subject to the risk of flooding or tidal inundation?". The answer that was provided by Council was "No". The Certificate had a disclaimer to the following effect:

"The above information has been taken from Council's records, but Council cannot accept any responsibility for any omission or inadequacy".

At the hearing the Council Officer (who completed the 149 Certificate) admitted that he had completed the Certificate without familiarising himself with details of a number of the flood studies. The person was a qualified Civil Engineer and the Judge said:

"For such a person not to read and give close attention to the two flood studies, was, in my opinion, negligent, and negligence ultimately lead to the appellant's loss".

"The statutory concept of 'good faith' with which the legislation on this case is concerned, calls for more than honest ineptitude. There must be a real attempt by the authority to answer the question for information at least by recourse to the material available to the authority. In this case there was a failure to meet that standard".

It can therefore be readily seen that an application for a 149(5) Certificate might give a prospective purchaser greater protection than most Solicitors think.

The question that really needs to be asked is whether for $60.00 should prudent purchasers take the risk of not obtaining information that could be very relevant to the land being purchased by them.

There is one odd case that I think I should mention and that is especially where you are acting for a Vendor. Councils very often will seek to disclose in a Section 149(5) Certificate information that does not affect the land but they believe potential purchasers should be aware of.

A classic example of this was in the case of LLD Precinct 2 Pty Ltd & Ors –v- Auburn City Council. In this matter the Court was faced with the Council inserting under Section 149(5) of the EPA Act a notice to the effect that Council is unable to subsidise certain facilities and, that as future residents in the area, the purchaser should be aware that they will not have access to services and facilities they might normally expect.

The Court granted an injunction preventing the Council from inserting such a clause in the Planning Certificate on the basis that Council can only insert information under Section 149(5) in relation to matters "effecting the land" and Council could not include in that advice matters relating to external considerations which might effect the quality of life of persons who might choose to live on the land. The Court concluded that as the proposed advice did not effect the use to which the land could be put, neither did it effect the land in any physical sense, it was outside the ambit of Section 149(5) of the EPA Act.

This decision would be a handy decision to have in your armory if you are ever found in the position where Council is threatening to or is in fact inserting in 149(5) Certificates this type of information where the Certificates relate to land owned by your client which your client is trying to sell.

All of you would be well aware of the existence of Building Certificates under Section 149B to 149G of the Environmental Planning and Assessment Act.

I will not therefore go into the details as to how to apply for a Certificate etc, but I will amplify on some aspects of 149 Building Certificates that you may not be aware of:

1 There is no requirement for the owner's consent to an Application for a 149 Building Certificate if the applicant is a purchaser under a Contract for the sale of property.

Accordingly, even if the vendor does not consent you can still apply for a Building Certificate, although there will of course be the practical problem of gaining entry for the Council Officer to inspect the premises. Provided you can get around this problem, there is nothing that can stop the purchaser under a Contract from applying for a Building Certificate.

2 The Council cannot require a Survey if the Applicant is able to provide evidence that there has been no material change in relation to the building since the date of another Survey. The Act (149C(2)) provides that the Council cannot require the Applicant to supply a more recent Survey.

3 The rights of the Council to refuse to issue a Building Certificate are very limited.

(a) there is no matter discernible by the exercise of reasonable care and skill that would entitle the council, under this Act or the Local Government Act 1993 :

(i) to order the building to be demolished, altered, added to or rebuilt, or

One would think that the terms of this Section were perfectly clear and that in the event where the Land and Environment Court has ordered the demolition of a building, built without Council's consent, a Building Certificate cannot be issued. If you were to think this you are wrong. In the case of Ireland -v- Cessnock City Council (1999) NSWLEC 153 Bignold J upheld an appeal against Council's refusal to grant a Building Certificate where the facts were that the Applicant had built a building without Council's consent. The Council Officer had told him to cease building and in defiance of this request he continued to build. The Council was required to commence injunction proceedings in the Land and Environment Court to stop him. The Class 4 proceedings (which preceded this appeal) were determined by Sheehan J and in that Judgment his Honour made an order requiring the demolition of the unauthorised building.

Sheehan J granted a stay of execution to allow the Applicant to try and regularise the building.

It is settled law that Council cannot grant consent to a building that has already been partially built or completed, as the requirement for a Building Consent is prospective and hence consent cannot be granted retrospectively. The only option that was available to the Applicant was to apply for a Section 149 Building Certificate in the hope that it would prevent Council from proceeding to enforce the demolition made by the Land and Environment Court.

The Council argued that there was "a matter discernible by the exercise of reasonable care and skill that would entitle the Council under the Act to order the building to be demolished, altered, added to or rebuilt" and in fact, proceedings had been taken for an order requiring the building to be demolished and such an order had been made and accordingly Council was entitled to refuse to issue a Building Certificate.

The Council argued that the relevant Sections of 149 of the EPA Act are to the effect that since the obligation imposed upon Council to issue a Building Certificate is predicated upon the absence of entitlement of the Council "to order the building to be demolished etc" or "to take proceedings for an injunction requiring the building to be demolished etc" the entitlement not only exists, but it in fact had been exercised and accordingly the legislature must be taken as not having intended to impose upon the Council the obligation to issue a Building Certificate preventing it from taking action which it had already taken.

The Court took the view that there was a discretion to issue a Building Certificate, even in circumstances where Council was not obliged to issue a Certificate and accordingly the Council (and on appeal the Court) had a right to issue a Building Certificate even in circumstances where it was not bound to issue such a Certificate under the Act.

The Council further argued that the issue of a Building Certificate in relation to a building that already exists would serve no useful purpose because of the limitations created by Section 149E of the EPA Act on Council's powers to take remedial action against the existing building would be entirely unavailing in relation to the action that Council had already taken in obtaining the mandatory injunction requiring the demolition of the offending building. The Council argued that the Legislator could not have intended to confer on Council a discretion to issue a Building Certificate in circumstances where it would serve no useful purpose.

The Court took the view that it was not convinced that the issue of a Building Certificate in the current circumstances would serve no purpose. The effect of the issue of the Building Certificate in the Court's view was expressly declared by Section 149E and the statutory effect was not neutralised or diminished by the fact that there was already in existence a mandatory injunction requiring the demolition of the building.

The effect of this decision is to greatly widen the effect of a Section 149 Building Certificate. It is clear that a Section 149 Building Certificate can be obtained even where Council would be entitled to order the demolition of the building or to take proceedings for the building to be demolished etc and is still available even where such proceedings have been taken and have been successful.

Accordingly a Building Certificate can be a very powerful weapon in the armoury of any Solicitor seeking to regularise unlawfully constructed buildings or buildings containing additions which have been unlawfully constructed.

It should, however, be remembered that Section 149E only operates to prevent the Council from seeking a demolition or rectification order, it does not stop third parties (such as next door neighbours) from seeking such an order. This is something that a lot of Solicitors are not aware of and I believe there is a potential, especially in unlawfully constructed buildings or parts of buildings, for an officious next door neighbour or in fact an officious stranger to commence proceedings requiring demolition or rectification of the building so that it is no longer unlawful and there is a good chance that the Courts will grant such an injunction.

A perfect example of this is the case of Tynan –v- Meharg (1998) 101 LGERA 255 where the Court of Appeal confirmed a demolition order made by the Land and Environment Court for a building which was constructed too close to the boundary and not in accordance with a Consent granted by the Newcastle City Council. During argument before the Court of Appeal, Stein JA indicated that he did not believe that it was possible to retrospectively rectify a building which has not been built in compliance with an approval and in fact, in an subsequent Application for stay before Handley JA (sitting singularly in the Court of Appeal) his Honour refused an application by the home owner to extend the period of time stipulated in the injunction made by the Court of Appeal for demolition of the building to enable him to "obtain from Newcastle City Council a Development Consent and a Building Consent" by holding that the process was "fatally flawed" and was an "attempt to re-litigate a question finally decided by Sheehan J, subject to appeal to the Court and now finally decided by this Court".

It is clear by the terms of Section 149E that while a Building Certificate can be used as a shield to protect the building owner from proceedings for demolition or rectification being brought by the Council, it cannot act as a shield for similar proceedings being brought by strangers or neighbours, although it could perhaps be argued that as a mandatory injunction is a discretionary remedy that the Court should refuse such a remedy when a Building Certificate has been granted, however, this is a question that will be left for future decisions, but I do feel that I should caution you so that you know that a Section 149 Building Certificate is not an absolute bar against proceedings being brought for a rectification or a demolition of an illegally constructed building.

Publications

The question in relation to road widening is again something that I expect most Conveyancers would not understand.