The recent decision of the NSW Court of Appeal in c [2023] NSWCA 183 (McMillan) has built upon the role of the Commissioner in conciliation conferences of the Land and Environment Court (LEC), a judicial mechanism commonly used in development appeal proceedings.
The Court deliberated on the construction of section 34(3) of the Land and Environment Court Act 1979 (NSW) (LEC Act), which imposes a duty on the presiding Commissioner to dispose of the proceedings if an agreement is reached between the parties, so long as the decision is one “that the Court could have made in the proper exercise of its functions”.
Background
On 3 March 2022, Woollahra Municipal Council (Council) refused a development application for the demolition of an existing dwelling and construction of a residential dwelling in Vaucluse.
On 15 February 2022, the owners of the land (Owners) appealed the Council’s decision in the LEC.
On 9 June 2022, the parties participated in a mandatory on-site conciliation conference conducted by the Commissioner of the LEC, pursuant to s34AA of the LEC Act.
Five resident objectors (Applicants) appeared at the on-site conciliation conference, with their respective lawyers and experts, and made oral submissions against the development application.
The next day after the on-site conciliation conference, the conciliation conference commenced with only the parties and the Commissioner. The Council and developer came to an in-principle agreement and the matter was settled based upon agreed terms and conditions of consent.
Grounds for Review Sought
The Applicants were dissatisfied with the outcome of the agreement reached, but because they were not parties to the proceedings they had no right to appeal to the LEC. Instead, they sought to challenge the outcome by judicial review on four grounds, pursuant to section 69 of the Supreme Court Act 1970 (NSW). In this article we focus on two grounds, in relation to whether the Commissioner:
- failed to consider terminating the conciliation conference; and
- denied the Applicants procedural fairness by not addressing their concerns.
These grounds were made pursuant to section 34(3) of the LEC Act, which states (emphasis added):
(3) If, either at or after a conciliation conference, agreement is reached between the parties or their representatives as to the terms of a decision in the proceedings that would be acceptable to the parties (being a decision that the Court could have made in the proper exercise of its functions), the Commissioner—
(a) must dispose of the proceedings in accordance with the decision, and
(b) must set out in writing the terms of the decision.
Ground 1 – Whether the Commissioner Failed to Consider Terminating the Conciliation Conference
The Applicants claimed that although the Commissioner was not obliged to terminate the conference, there is a duty to consider doing so, and if the Commissioner had considered terminating the conciliation conference, she might have done so.
The Court dismissed the ground, and found that the purpose of s34(3) of the LEC Act was to provide a degree of flexibility for the Commissioner, considering that the conciliation conference was mandated under subsection (2). It was therefore neither necessary nor appropriate for the Court to explore the circumstances in which the power to terminate might or should have been exercised.
However, the Court noted the following four points:
- firstly, the power for a Commissioner to terminate a conciliation conference would usually be invoked by a party of the proceedings, and if no such application is sought then a party could not complain of a failure of the Commissioner to terminate;
- secondly, it would be an “exceptional step” for the Commissioner to terminate a conciliation conference on his or her own motion, if neither party sought such termination;
- thirdly, the Commissioner knew that the developer sought for the conciliation conference to be terminated and it was not motioned solely by the Commissioner; and
- lastly, this ground assumed that the Commissioner did not consider the Applicants’ views throughout the course of the conciliation conference process (which is discussed in the second ground below).
Ground 2 – Whether the Commissioner Denied the Applicants Procedural Fairness
The Court acknowledged that procedural fairness requires that a person who may be adversely affected by a decision should be given an opportunity to be heard. In McMillan, procedural fairness to the Applicants is derived from object 1.3(j) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act), which states:
“to provide increased opportunity for community participation in environmental planning and assessment”
The Applicants alleged that the Commissioner denied them of procedural fairness in two ways, namely:
- disappointment of the Applicants’ legitimate expectations that their evidence and submissions would be considered on the merits of the case; and
- failure to address the Applicants’ evidence and submissions on the merits.
The Court dismissed both arguments. Firstly, the Court referred to the High Court’s deliberation that a “legitimate expectation” is to be abstained as an element of procedural fairness. The Court concluded that this expectation focuses on the opportunity expected by the Applicants and detract from the true inquiry into the opportunity that a reasonable administrator ought fairly to have given, and eventuates in posing more questions than it answers.
Secondly, the Court purported that object 1.3(j) was satisfied by the Council’s initial notification of the development application to the Applicants and allowing them to make submissions, and providing them with the opportunity to participate in the on-site conciliation conference.
The Court found that the statutory scheme does not provide further opportunities to the Applicants when they are not parties to the proceedings, and there is no right in general law for a non-party to be heard or otherwise participate in proceedings. The Court found at [49]-[50] that:
“Unless they enjoyed a statutory right for their objections to be treated in a particular way, the applicants could not assert jurisdictional error on the part of the Commissioner in failing to address their objections.
In court proceedings, procedural fairness is an obligation owed by the court to the parties, as is the obligation to consider material before the court…”
Role of the Commissioner
The Court deliberated extensively on the role of the commissioner at conciliation conferences, and concluded that there are two criteria that must be satisfied for a commissioner to dispose of the proceedings at a conciliation conference, namely:
- there is an agreement between the parties; and
- that it is an agreement that “the [LEC] could have made in the proper exercise of its functions”.
The Court affirmed that the words “could have made” and “proper excised of its function” under section 34(3) of the LEC Act restrict the commissioner from disposing of any proceedings at a conciliation conference unless the disposal, in accordance with the agreed terms between the parties, is within the jurisdictional power of the LEC. The Court provided examples of statutory constraints on the power of the Court to grant consent to such a development application, including examples that:
- the development was not prohibited development;
- the development was permissible with consent in accordance with the zoning of the land;
- the applicant had the consent of the owner of the land; and
- the development did not contravene a requirement of, for example, a development control plan.
The Court also specified that the word “could” under the section imposes no obligation on a commissioner to assess the evaluative matters that would otherwise be required to be addressed at a full hearing, such as section 4.15(1) considerations under the EPA Act.
As such, the commissioner’s role in the context of a conciliation conference is to simply be satisfied that there are no jurisdictional constraints on the LEC which would preclude an order being made in accordance with the agreement between the parties.
Implications
In McMillan, the Court has affirmed the following key points:
- As a non-party to the proceedings, objectors are afforded procedural fairness to the extent that they can make written submissions and subsequent submissions at an on-site conciliation conference, but does not mean objectors are provided with any further opportunities to be heard.
- A commissioner when disposing proceedings at a conciliation conference pursuant to an agreement between the parties, is required to consider only whether there are any jurisdictional constraints on the LEC to make such disposal orders.
- The commissioner is not required to consider whether the concerns raised by objectors have been addressed before proceedings are disposed of pursuant to an agreement between the parties.
- As may be surprising to practitioners involved regularly in class 1 proceedings, the Court of Appeal noted that it would be an “exceptional step” for a commissioner to terminate a conciliation conference on their own motion if neither party sought such a termination. In our view, commissioners terminating conferences on their own motion is a regular occurrence in conciliation conferences, particularly where parties seek further extensions of time for the parties to continue positively deliberating on the outstanding contentions of the application.
