The Business Permits: ‘Transformation’ transformed…

The decision by the Victorian Supreme Court in Mondib Group Pty Ltd v Moonee Valley City Council [2021] VSC 722 has provided long awaited clarity on the scope of the power available to amend a planning permit under section 72 of the Planning and Environment Act 1987 (Act).

The Court’s decision considers the principle of ‘transformation’ which has evolved over the last decade or so to amount to a constraint on a decision maker’s power to amend a permit under section 72 of the Act.

Here’s some background…

On 21 July 2016, Moonee Valley City Council (Council) granted the applicant with a permit to construct a multi-storey building accommodating ground floor retail, dwellings, reduction in the car parking requirement and works within a road reserve in respect of land in Moonee Ponds.

The applicant subsequently sought to amend the permit to allow for the construction of a multi-storey building containing a ground floor restaurant, residential hotel and works within the road zone.

The amendment was sought pursuant to section 72 of the Act which provides that:

“72 Application for amendment of permit

(1) A person who is entitled to use or develop land in accordance with a permit may apply to the responsible authority for an amendment to the permit.

The amendments proposed to the permit included changes to the permit as follows (amongst various others):

1. 335 residential hotel rooms and a ground floor restaurant. The permit contemplated 187 dwellings and commercial premises (including 4 retail premises at ground level);

2. 15 storey mixed use building sought instead of the approved 14 storeys;

3. maximum building height of 46.55m sought instead of the approved maximum building height of 50.07m;

4. a total of 94 car parking spaces, 3 pick-up and drop-off spaces, 6 motor bike spaces and 86 bicycle spaces. The permit required a total of 212 car parking spaces and 67 bicycle spaces; and

5. substantial consequential amendments to the permit conditions.

The Tribunal’s decision was…

The Tribunal dismissed the application for review summarily and concluded as follows (at [36]):

1. the proposed amendment is a transformation of what is allowed under the permit rather than an amendment to the permit. The Tribunal therefore considered that it did not have power to consider the application under section 72 of the Act; and

2. the application for review was misconceived or lacking in substance since the Tribunal cannot exercise its power under section 72 of the Act because the amendments sought would transform (instead of amend) the permit.

The Grounds of Appeal were…

The Appellant appealed the Tribunal’s decision to the Supreme Court on two grounds. The first ground is more relevant to the consideration of transformation. The appellant claimed in this regard that the Tribunal:

1. adopted a concept - that of ‘transforming’ a permit –which is not found in, or to be implied by, the text, context or purpose of the Act and which is based upon common law principles developed in a different context;

2. failed to give proper effect to, and to properly consider, the meaning of the word ‘amendment’ in section 72(1) of the Act; and

3. failed to construe the words ‘amendment to the permit’ in accordance with the text, context and purpose of section 72(1) of the Act, including by failing to properly consider the intent of section 72(1) of the Act that a person who is entitled to use or develop land in accordance with a planning permit should be permitted to apply for an amendment comprising the addition of elements, the deletion of elements and the substitution of elements.

The second ground of appeal challenged the Tribunal’s ability to strike out an application pursuant to the power in section 75(1)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (which contemplates the summary dismissal of unjustified proceedings).

What is ‘Transformation’ Principle?

The case of Addicoat v Fox (No 2) [1979] VR 347 (Addicoat) was one of the early cases to contemplate the concept of ‘transformation’. The case concerned whether a permit could be granted that differed from that sought in the original application.

The Court in that case held that (at [363]):

“In my opinion, a power to grant a permit subject to conditions authorizes the responsible authority to grant a permit for a use or development which differs from the use or development the subject of the application for a permit, provided that the difference is not so radical as to enable it to be said, viewing the matter broadly and fairly, that to grant a permit on the supposed conditions would not be to grant the permit applied for with modifications, but to grant a different permit. This is plainly a matter of degree, and indeed it is almost one of impression. In my view, the changes made may be considerable without necessarily bringing it about that the permit granted is a different as opposed to a modified permit. Whether more may be countenanced by way of limiting the development or use, as opposed to extending it, before the point is reached at which alteration ceases to be modification and becomes transformation, is a question which I find it unnecessary to decide

(underlined for emphasis)

A general principle arose from the Addicoat decision that the power to amend a permit pursuant to section 72 of the Act does not extend to an amendment that would ‘transform’ the permit.

However, in the recent Mondib decision, the Court formed the view that the Addicoat decision is of little assistance in interpreting the meaning of section 72 of the Act for the following reasons:

• the decision is not concerned with an amendment power; and

• the Court in that instance was concerned with a permit being granted which had not gone through the processes of public notice and objection. Since the Act requires an amendment application to undergo the same process as a new permit application, a decision concerning an amendment application would not be one where the rights of third parties to participate in planning processes had been denied, avoided or overlooked.

The Court’s Decision was….

In exploring the intention of section 72 of the Act, the Court considered the meaning of the word ‘amendment’, which is central to that provision.

Section 3 of the Act defines amendment to mean: amendment includes addition, deletion or substitution”

The Court noted the following in respect of this definition (at [71]):

“Rather than limiting the width of the word ‘amendment’, the Act defines the term in a non-exhaustive way so as to include an ‘addition, deletion or substitution’. That strongly suggests that, within the Act, unless a contrary intention can be discerned, the word is to have a wide meaning that includes replacing the existing text with a different text. It is true that these words describe a mechanism by which a change to a permit may be effected, however, the process of substitution suggests the capacity to bring about a substantial change free of the existing text. I can discern no contrary intention in division 1A that would avoid the definition”.

(underlined

for emphasis)

In view of the broader interpretation of the word ‘amendment’, and the Court’s views about the ‘transformation’ concept, the first ground of appeal was upheld on the following basis (at [88] and [89]):

“Section 72 allows a person to use or develop land in accordance with a permit to apply for an amendment to the permit. An amendment is an alteration to the terms of the permit. The text, purpose and context of the provision does not support a limitation on the power of the kind adopted by the Tribunal. The word amendment does not carry any particular limitation of the kind ascribed by the Tribunal and neither the purpose or overall scheme of the Act requires a limitation to be applied. A so called transformative change would, if made, still be an amendment to the permit The changes in an application to amend may be profound and entail a different use or a different development of the same land but they do not, for that reason, fall outside the power contemplated by s 72.

The Tribunal erred in dismissing the application on the basis that the proposed changes were transformative. The nature and extent of the changes were properly a matter to be assessed on the merits of the application and not at the threshold. I would uphold ground 1.”

(underlined for emphasis)

And the implications are….

It is clear that many decision makers, including the Tribunal, will now need to change their approach to decisions concerning amendments under section 72 of the Act, noting that the Court’s decision is binding on the Tribunal.

The Court has made it clear that a request for an amendment to a permit cannot be rejected on the basis that the changes would ‘transform’ a permit as those matters go to the merits of the application rather than the scope of the power to amend. Therefore while the merits of the application in those circumstances will still need to be assessed in the usual manner, the Tribunal will not be able to summarily dismiss an amendment application on the grounds that the proposed amendments constitute a ‘transformation’ of the type described by the Court in Mondib.

Article prepared by Tamara Brezzi, Partner; Nick Sutton, Partner; and Sashank Krishnamoorthy, Associate, Norton Rose Fulbright