Legal Unreasonableness and Invalidity of Inconsistent Construction Certificates

Where a construction certificate differs substantially from a development consent, is the decision to issue that certificate legally unreasonable and invalid? This was the question before the NSW Court of Appeal in Cameron v Woollahra Municipal Council [2024] NSWCA 216.

In April 2021, Woollahra Municipal Council granted consent for a development in Bellevue Hill, which involved demolishing a pre-existing dwelling and replacing it with a three-storey house. The registered proprietors, Mr Cameron and Ms Green, made an application to modify the consent, including by adding a cellar level with lift and stairs access. In June 2022, the Local Planning Panel, modified the consent (as sought) however refused the construction of a new cellar level as part of the approval of the modification application, which was identified in condition C.1(d). In August 2022, the accredited certifier, issued a construction certificate which included excavation and construction works for a lower level, in the location of the cellar proposed in the modification application.

The Council commenced proceedings in the Land and Environment Court challenging the validity of the construction certificate. Aside from an ground of appeal regarding whether the Court should extend time to commence the proceedings (which is not discussed here) the central issue in the case arose “from the inconsistency between condition C.1(d) of the development consent, which deleted the cellar  and store and Cellar Level from the proposed consent and the construction certificate which permitted excavation of the area where the Cellar Level had been proposed, for the purposes of building a crane base and installing a crane.”

At first instance, the primary judge found it was legally unreasonable for the certifier to determine that the construction certificate was consistent with the modified development consent, ruling the certificate to be partly invalid. The decision was appealed to the NSW Court of Appeal before Payne JA, White JA and Price AJA. All three judges dismissed the appeal, largely agreeing that the decision to issue a construction certificate in the form provided was legally unreasonable and as a result, the construction certificate was partly invalid.

The Court noted there was no dispute that the construction certificate and development consent were inconsistent. Thus, the Court moved to the question of legal unreasonableness, noting that an inconsistency between a development consent and a construction certificate does not itself mean the decision to issue a construction certificate was legally unreasonable. The test for legal unreasonableness is largely discretionary and must satisfy a high bar of manifest unreasonableness. The Court looked to the explicit nature of condition C.1(d), the approved plans which clearly removed the cellar level and the fact that there was no evidence adduced from the builder, architect and structural engineer that excavation and construction of a cellar level were necessary structural elements of the approved development. Not being able to conclude a rational basis for the excavation of the cellar level on the evidence provided, the Court held that the certifier’s decision to issue a construction certificate was legally unreasonable. It followed that there had been a jurisdictional error for legal unreasonableness.

With this finding of legal unreasonableness and jurisdictional error, the Court considered whether the construction certificate was invalid and should be set aside (whether wholly or in part). Noting that there was acceptance by the parties and the Court that the decision to issue the construction certificate by the certifier was amenable to judicial review for jurisdictional error, the Court determined that (with the establishment of jurisdictional error) it was appropriate to set the certifier’s decision to issue the certificate aside, in part.

The judgment serves as an important reminder that a finding of legal unreasonableness in relation to the exercise of a certifier’s functions (which, in certain circumstances, includes where a certifier has issued a construction certificate that is inconsistent with a consent) can result in significant legal consequences, including full or partial invalidation of construction certificates.

If you need assistance or further information, or you would like to find out further information, please contact Peta Hudson at phudson@marsdens.net.au.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.