IGA loses test case against new Coles development

On 29 May 2013, the Western Australian Supreme Court handed down judgment in Aloi v Bertola [2013] WASC 214. The Court rejected the plaintiffs application for an injunction to prevent the determination of a planning application for a Coles Supermarket.

BACKGROUND

On 10 April 2012, the Shire of Mundaring (The Shire) entered into a contract with Morrison 232 Pty Ltd (a subsidiary of Devwest) to sell two blocks of vacant land for $5.75 million. A condition precedent of the contract required Devwest to obtain planning approval to build a shopping centre on the land within 180 days.

To satisfy this condition, Devwest lodged a Development Application to construct a Coles shopping centre on the vacant land. The proposed development had a value of $10 million, bringing it under the jurisdiction of the Metro-East Joint Development Assessment Panel (MEJDAP). The plaintiffs (operating a nearby IGA) made submissions opposing this Development Application and instituted Supreme Court proceedings against the MEJDAP.

THE APPLICATION

IGA sought an injunction against the MEJDAP to prevent them from hearing the application, alleging reasonable apprehension of bias. The basis for the claim was that two members of the MEJDAP hearing the application were also councillors from the Shire of Mundaring. The Shire had a financial interest in the approval of the Development Application as it stood to earn $5.75 million as proceeds of the sale.  

The Western Australian Government intervened in these proceedings (through the Minister for Planning) due to the importance of the issues raised concerning the constitution and functionality of the new Development Assessment Panel framework.

ISSUE

The primary issue to be determined by the Supreme Court was whether the requirement for local government members to participate in the MEJDAP gave rise to a reasonable apprehension of bias in circumstances where the local council has a direct financial interest in the outcome of the application.

DECISION

The Supreme Court held that the decision of the local government members of the MEJDAP not to withdraw from the review of this Development Application did not give rise to a reasonable apprehension of bias in this case. The Supreme Court held that local government members of Development Assessment Panels can discharge their duty to avoid a reasonable apprehension of bias by:

  1. not participating in any decision in which they have a personal interest; and
  2. considering each application on its merits; and
  3. exercising their own individual judgment (independent of the views of the local government body which they represent) in relation to each Development Application. 

REASONS FOR DECISON

The Supreme Court concluded that a fair minded person would not hold local government members of a Development Assessment Panel to the same standards of impartiality and detachment expected of a judicial officer for the following reasons:

  1. The statutory planning context intended that councils, as the responsible authority administering a planning scheme, could approve an application in which the council had a financial interest.
  2. The Development Assessment Panel Regulations (DAP Regulations) explicitly require participation of local government members in the decision making process. The DAP Regulations contemplate that the local government members have an association with the local government, and require that the local government’s views be taken into account.
  3. The DAP Regulations regulate the conduct of members of a Development Assessment Panel in relation to conflicts of interest. The DAP Regulations require that all members declare conflicts of interest and use their own independent judgement to consider each Development Application on its merits.

IMPLICATIONS

The decision has answered questions relating to bias and the proper role of local government members in the Development Assessment Panel’s assessment and approval process. By clarifying the scope of a local government members duty to prevent a reasonable apprehension of bias, this decision provides guidance for Development Assessment Panels to manage conflicts of interest and reduce potential legal challenges.

The decision also highlights the difficulties faced by third party objectors who object to Development Applications under the Planning and Development Act. Without a statutory right of third party appeal, the opportunities for interested third parties who may be adversely affected by a decision of a Development Assessment Panel are extremely limited. 




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