Court of Appeal Clarifies Statutory Protections Against Civil Liability for Planning Authorities

18 July 2016

A recent decision of the NSW Court of Appeal has clarified important provisions of the Civil Liability Act 2002 with respect to limitations on the liability of planning authorities. These will be of interest to State and local planning authorities alike.

Bankstown City Council v Zraika; Roads and Maritime Services v Zraika [2016] NSWCA 51 involved an appeal by both the Council and Roads and Maritime┬áServices (RMS) against the granting of compensation to the infant plaintiff, who was born with birth defects resulting from the mother being a passenger in a car accident while pregnant. Proceedings had been commenced against the Council, RMS and the driver of the other car involved in the accident, with the trial court having found each defendant liable and apportioned the liability of each defendant according to the trial judge’s assessment of their respective culpabilities for the accident.

The claim against the Council was based on an allegation that it was negligent in failing to impose a condition requiring drivers to turn left out of the exit driveway to a factory complex when granting development consent in 1997. The driver of the other car had slowly driven out of the driveway and (contrary to a “left turn only” sign) then straight across a four-way intersection at a time when traffic on her left and right was at a standstill, except for the plaintiff’s car which had illegally travelled along a “left turn only” lane and attempted to travel straight through the intersection. These actions of both drivers resulted in the subject car accident. The other driver’s evidence (accepted by the courts) was that she had not seen the “left turn only” sign, and accordingly she also claimed that RMS had been negligent in not installing additional signage to prevent the accident (which RMS had subsequently done after it occurred).

After deciding that the trial judge’s assessment of the respective culpabilities of both drivers was mistaken according to the facts, the Court of Appeal then turned to questions of law by considering two relevant provisions of the Civil Liability Act. In summary, the relevant provisions (sections 43A and 44) prevent a “public or other authority” (which includes local councils and State government authorities such as RMS) from having a civil liability based on:

  • Its exercise of, or failure to exercise, a “special statutory power” – unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power (section 43A); or
  • The failure of the authority to exercise or to consider exercising any function of the authority to prohibit or regulate an activity if the authority could not have been required to exercise the function in proceedings instituted by the plaintiff (section 44).

In respect of the Council’s liability under section 44, the Court of Appeal closely analysed the Council’s “function” of assessing and determining a development application. In the Court of Appeal, RMS had abandoned any reliance on section 44 to protect it against liability. In this case the claim against the Council relied on the Council’s failure to impose a condition of consent, rather than any failure to determine the development application relating to the factory complex. On that basis the Court found that section 44 did not apply as a protection against liability for the Council.

However, the Court found that the power exercised by the Council to grant consent conditionally was a “special statutory power” of the nature referred to in section 43A of the Civil Liability Act. Further, the claim against the Council was “based on” its exercise of that power for the purposes of that section. This meant that the section protected the Council. In this case the Court found that the evidence fell short of establishing that no local council could properly have approved the development application without imposing conditions such as those stated by the primary judge.

Accordingly the original court decision was set aside. Further, on a factual basis the Court found that RMS was not liable for the car accident because on the evidence (contrary to the other driver’s claim) a decision was not made by RMS to install additional signage until after the accident (not in the months before, as was claimed). Section 43A was thus not considered by the Court of Appeal in relation to RMS, however the detailed consideration of both sections 43A and 44 by the Court in relation to the Council’s liability will create an important precedent for later cases, and will be of interest particularly for planning authorities in relation to civil liability in relation to their function of determining development applications and their “special statutory power” of imposing conditions of consent.

This article was written by Jane Hewitt, Partner and Mark Cottom, Senior Associate.

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