On 30 July 2016, the Minister for Heritage (Minister) made a decision not to direct that the Sirius Apartment Building (Sirius) at Millers Point, Sydney be listed on the State Heritage Register. This decision was made despite a recommendation from the Heritage Council of New South Wales (Heritage Council) that Sirius be listed on the Register.
Sirius was built in the 1980s and since then has become a well-known and significant building in Sydney. It has been used predominantly as social housing up until the NSW Government announced in March 2014 that it intends to sell Sirius and then re-invest the proceeds of sale into social housing across the state.
Minister’s Determination
On 14 March 2016, the Heritage Council made its recommendation that it be listed on the Register under section 33 of the Heritage Act 1977 (NSW) (the Act). Once the Heritage Council makes a recommendation, the Minister can direct listing on the Register in accordance with section 32 of the Act.
On 30 July 2016 however, the Minister made a decision not to direct that Sirius is listed on the Register and cited the following as part of his reasoning:
“the heritage significance of the Building…is outweighed by the undue financial hardship its listing would cause to its owners.”
Appeal to the Land and Environment Court
Judicial review proceedings were commenced in the Land and Environment Court by the Millers Point Community Association Incorporated (Applicant). The proceedings were commenced on the basis that the Minister had not fulfilled what is required of him under s32(1) of the Act, thereby constructively failing to exercise jurisdiction. Particularly, the Applicant submitted that he had failed to consider properly section 32(1)(d). Section 32(1)(d) of the Act states the following:
‘(1) The Minister may direct the listing on the State Heritage Register of a place, building, work, relic, moveable object or precinct that the Minister considers is of State heritage significance, but only if the Heritage Council has recommended that the item be listed and the Minister has considered the following:
……
(d) whether the listing would cause undue financial hardship to the owner, mortgagee or lessee of the item or the land on which the item is situated.’
The Applicant submitted that the Minister misconstrued the words “would cause undue financial hardship to the owner” and thus had fallen into error in making his decision.
Decision of the Court
The Court held that there are two ‘yardsticks’ that the Minister was required to contemplate comparatively when considering section 32(1)(d).
Yardstick One: Whether the listing would cause the owner to experience or suffer financial hardship?
The Minister submitted that to suffer financial hardship it is simply a matter of determining whether the owner suffers a financial loss. The Court rejected this and held that the financial loss must have a “nexus” to the status of the owner. That is, the Minister was required to consider subjectively whether the owner would suffer financial hardship. The owner in this instance was Property New South Wales which for example would be less likely to suffer hardship than an individual.
The Court held that the Minister “erroneously equated financial hardship with a diminution in the sale value of Sirius.
Yardstick Two: The context within which that financial hardship is to be considered– whether that financial hardship would be “undue” when assessed against the contextual heritage values of the building recommended for listing.
The Court held that any financial hardship determined under yardstick one must be considered within the heritage values context. In this instance, the Minister was required to weigh up the heritage significance of Sirius with any financial hardship suffered by the Owner. If the heritage significance of a particular building is large, there would need to be more significant hardship suffered by the owner.
The Court held that the Minister had ‘side-stepped’ this requirement.
Ultimately, the Court made its determination that the Minister’s decision was invalid and of no legal effect. The Minister was directed to re-make his decision.
