Who is the "Applicant" in a Class 1 LEC Appeal?
Who is the “Applicant” in Class 1 LEC Appeals?
A person whose application for development consent has been refused may appeal that decision to the NSW Land and Environment Court – but only if they are the “applicant”. Correctly identifying the applicant in an appeal is critical. That sounds like it should be obvious, but often it is not. Development applications are frequently lodged by a town planner, architect, or a related company acting on behalf of another party, and by the time an appeal is contemplated, the land in question may have changed hands.
This article considers how the courts have dealt with this issue — and why getting it wrong can be fatal to an appeal.
Who counts as the “applicant”?
The person entitled to bring the appeal is the person or entity that lodged the development application – or, where the application was lodged by an agent (such as a planner or an architect), the principal on whose behalf it was lodged. A person who acquires a business, lease or property after a development application has already been refused cannot ordinarily be substituted as the applicant for the purpose of an appeal, unless that person was in truth the principal for whom the application was originally made.
The NSW Land and Environment Court is separated into several different classes of proceedings, and the requirements as to standing are not the same across each class. This article is concerned specifically with a Class 1 merits appeal against a council's determination of a development application, brought under s 8.7 of the Environmental Planning and Assessment Act 1979 (EPA Act).
This article begins with Miller v Sutherland Shire Council [2008] NSWLEC 158, which does not itself concern an appeal, but establishes the underlying principle upon which the later decisions are based.
Miller v Sutherland Shire Council [2008] NSWLEC 158 (“Miller”)
Biscoe J
Facts
A neighbour, Miller, had successfully challenged the validity of a development consent for a jetty at a property at Lilli Pilli owned by Fairclough. The Court's orders required Fairclough to demolish the jetty within six months unless Fairclough took steps to regularise the development within that period, including by amending the development application so that the jetty was properly authorised. The development application had been lodged by Fairclough’s builder, Smythe, trading as Brook & Byrne Waterfront Constructions.
Smythe wrote to the local council stating that she was unable to continue to act as the applicant and requested that her name be removed from the application. Smythe subsequently adopted an obstructive position, at one point declining outright to withdraw. Fairclough sought orders that they be substituted for Smythe as the applicant on the development application.
Issues
Smythe had lodged the development application as agent for Fairclough, who were undisclosed principals. The question was whether, once Smythe resigned as agent, Fairclough was entitled to be substituted as the applicant on the existing development application, or whether Fairclough was required to lodge an entirely new application.
Decision
- Biscoe J found that Smythe had been acting as agent for Fairclough throughout, and that Smythe’s correspondence to the local council, amounted to an effective resignation of that agency.
- His Honour held that, once an agent ceases to act for any reason, the principal on whose behalf the agent acted is entitled to be substituted as the applicant on the existing application. His Honour illustrated the point by reference to the example of an agent who dies before an application is determined, in which circumstances the principal may still take over the application.
- The Court made orders declaring that the development application had, in truth, been lodged by Smythe as agent for Fairclough, and directed the council to deal with the application on that basis.
Key Takeaways
This decision is the source of the principle relied upon in later decisions, Betohuwisa and Ryan. Craig J in Betohuwisa referred to Miller directly, noting that substitution of a principal for an agent who has lodged a development application had already been sanctioned by the Court. Sheahan J applied Miller again in Ryan.
The underlying principle is that the acts of an agent, acting within the scope of the agent's authority, are treated as the acts of the principal, such that the principal is entitled to be substituted for the agent, whether at the development application stage (as in this case) or, as the following two decisions demonstrate, at the appeal stage.
This principle does not, however, extend to a person who was never the principal for whom the original application was made – a distinction that proved fatal in the next case.
Betohuwisa Investments Pty Ltd v Kiama Municipal Council [2010] NSWLEC 223 (“Betohuwisa”)
Craig J
This decision illustrates the limit of the principle established in Miller. The mere acquisition of a business or property after a development application has been refused does not, of itself, entitle the acquirer to be regarded as the applicant in a Class 1 appeal.
Facts
The Cargo Shed at Kiama Harbour accommodates a restaurant known as Cargo's Restaurant, together with an associated take-away seafood facility. Old Kiama Wharf Company Pty Ltd (OKW) sought development consent from Kiama Municipal Council for improvements to the bitumen-paved car park surrounding the Cargo Shed. The Council refused the development application. Betohuwisa bought the business and took over the lease from OKW. A resolution for the voluntary winding up of OKW was later passed and a liquidator appointed. Betohuwisa had no common directors or shareholders with OKW. Betohuwisa wanted to pursue the earlier development application by OKW for improvements to the car park. So, Betohuwisa commenced a Class 1 appeal under s 97 of the EPA Act (now s 8.7) against the refusal of the earlier development application in its own name as applicant.
Issues
Whether Betohuwisa was an “applicant” for the purposes of s 97 (now s 8.7) of the EPA Act and accordingly entitled to bring the appeal.
Decision
- The term “applicant” is not defined in the EPA Act, and the Act draws no distinction between an applicant for the purpose of lodging a development application and an applicant for the purpose of an appeal.
- The term is not confined to the person or entity that physically signed the development application form. It extends to the principal on whose behalf an agent – such as a town planner, architect or builder – lodged the application.
- It does not, however, extend to a person who subsequently acquires the land, lease or business, after the development application has been lodged.
- Reading s 97 (now s 8.7) in its statutory context, the Court held that the applicant entitled to institute an appeal must be the person or entity that lodged the development application, or that person's true principal, and not simply whoever currently holds a commercial interest in the outcome.
Ryan v Coffs Harbour City Council [2014] NSWLEC 159 (“Ryan”)
Sheahan J
This decision illustrates the converse position – a technical error in identifying the applicant that, unlike in Betohuwisa, did not undermine the appeal.
Facts
Red Rock Property Co Pty Ltd (Red Rock), the registered owner of the land, lodged a development application for a five-lot subdivision, engaging GHD Pty Ltd to prepare and lodge the application on its behalf. Mr Ryan, the sole director, shareholder and secretary of Red Rock, signed the owner's consent section of the application as director. The application was refused. The appeal was subsequently filed in Ryan's name rather than in the name of Red Rock. By the time this error was identified, the six-month period within which to appeal the refusal had already expired, such that Red Rock could not itself file a fresh appeal. Ryan sought an order substituting Red Rock for himself. The Council contended that only Red Rock, or its agent GHD, could properly be regarded as the applicant, and that an error of this kind could not be cured, with the consequence that the appeal was incompetent.
Issues
Whether Ryan was himself a proper applicant, and if not, whether Red Rock could be substituted for Ryan.
Decisions
- Sheahan J found that Ryan had, in substance, been acting as agent for Red Rock throughout. On that basis, Ryan's acts were properly regarded as Red Rock's acts, and the difficulty identified in Betohuwisa did not arise.
- It followed that the appeal, although filed in Ryan's name, had been validly commenced from the outset and was not incompetent. The application to substitute Red Rock was unnecessary.
- His Honour noted, however, that had Ryan not genuinely been acting as agent for Red Rock, the error could not have been cured and the appeal would have failed.
Supporting Authority
Sheahan J's reasoning drew upon a broader body of authority concerning errors in the naming of parties to litigation. In McInnes v Wingecarribee Shire Council (1987) 10 NSWLR 660, the Court of Appeal permitted a wrongly named appellant to be replaced by the true objectors, adopting a liberal construction of the relevant amendment rules so that the matter could be determined on its merits rather than dismissed on a technicality. By contrast, in Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 (Bridge Shipping), the High Court held that a mistake as to which entity answered a given description – the shipowner rather than the charterer – could not be corrected. Sheahan J also had regard to Miller, and to Craig J's approach in Betohuwisa. Having weighed these authorities, His Honour concluded that Ryan's position was analogous to McInnes and Miller rather than to Bridge Shipping: because Ryan had genuinely been acting as agent for Red Rock throughout, the filing of the appeal in his own name remained, in substance, the company's appeal, rather than a case of the wrong entity altogether having been named.
Rialto Sports Pty Ltd v Cancer Care Associates Pty Ltd [2022] NSWCA 146 (“Rialto Sports”)
Gleeson JA (Bell CJ and Macfarlan JA agreeing)
This final decision is not a development appeal – it is a decision of the Court of Appeal concerning a dispute over defective strata building work – but it addresses a closely related question: the position where the correct party to proceedings changes after those proceedings have been commenced
Facts
The owner of a lot in a strata development, SRProp Investments No 1 Pty Ltd (SRProp), commenced proceedings in the District Court against the developer, Rialto Sports Pty Ltd (Rialto), for breach of contract arising from defects in the common property. While those proceedings were on foot, SRProp sold its lot to CCA Estates Pty Ltd and, on the same day, assigned its cause of action against Rialto to CCA Estates by deed. The District Court subsequently ordered that CCA Estates be substituted as plaintiff in place of SRProp. Rialto contended that the assignment was ineffective, and that, in any event, CCA Estates' claim was statute-barred, on the basis that the order substituting it as plaintiff was made after the relevant limitation period had expired.
Issues
Whether the assignment from SRProp to CCA Estates was effective, and if so, whether CCA Estates' claim was statute-barred by reason of the substitution having occurred after the limitation period had expired.
Decisions
- The assignment was effective.
- CCA Estates had a genuine and substantial commercial interest in the proceedings, having already completed its purchase of the lot by the date of the deed, and having entered into the contract of sale before that date. This was the kind of real commercial
- interest required for the assignment of a bare cause of action to be valid, as distinct from a nebulous or contrived interest.
- The claim was not statute-barred. Under UCPR r 6.32(2), where a party is substituted for another party, as distinct from merely being added, the new party is placed in exactly the same position as the party replaced. Substitution does not give rise to a new cause of action, but continues the existing one, such that no question of limitation arises.
- The Court distinguished this position from cases in which a party is merely added to proceedings (which, under UCPR r 6.28, is treated as commencing on the date of that order), and from situations where a party with no genuine pre-existing interest in the claim attempts to be substituted into the claim.
Key Takeaways
A change in the party named to proceedings does not, of itself, defeat an otherwise valid claim, provided the new party is genuinely stepping into the position of a party that always had a real interest in the outcome, rather than a stranger seeking to adopt another's claim as its own, as occurred in Betohuwisa.
The practical lesson extends to planning matters: where a business, lease or lot changes hands while a matter remains on foot, it is prudent to consider at an early stage whether a formal substitution or assignment is required, and to attend to this before any relevant limitation period expires.
Conclusion
These four decisions illustrate a single, consistent principle. Miller establishes the starting point: the acts of an agent are treated as the acts of the principal, such that a principal may always be substituted for an agent on a development application. Betohuwisa demonstrates the limit of that principle: Betohuwisa had never been OKW's principal in that sense, but merely a subsequent purchaser of its business and lease, and was accordingly not entitled to appeal in its own name. Ryan confirms that the principle continues to operate at the appeal stage: a director who signs personally on behalf of a company remains, in substance, an agent of that company, such that the appeal was validly instituted. Rialto Sports, decided in a different court under different rules, illustrates the same underlying principle from another perspective: a genuine change in the true party to a claim, effected by a lawful assignment and substitution, does not undermine that claim, whereas an error in identifying a party with no real connection to the original claim will.
The contents of this article are a general guide and intended for educational purposes only. Determination of issues of the kind discussed in this article is often complex and varies greatly from case to case. Each individual case is different and requires a detailed understanding of matters of fact and degree upon which reasonable minds may differ.
DO NOT RELY ON THIS ARTICLE AS A SUBSTITUTE FOR COMPETENT LEGAL ADVICE.
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