Land and Environment Court of New South Wales CITATION : Newcastle City Council v Bellevale Homes Pty Ltd [2000] NSWLEC 9 APPLICANT: Newcastle City Council PARTIES : RESPONDENT: Bellevale Homes Pty Ltd FILE NUMBER(S) : 40203 of 1999 CORAM: Talbot J KEY ISSUES: Injunctions and Declarations :- discretion LEGISLATION CITED: Environmental Planning and Assessment Act 1979 Warringah Shire Council v Jennings Group Ltd (1992) 75 LGRA 402; CASES CITED: Warringah Shire Council v Sedevcic (1987) 63 LGRA 361; Fatsel Pty Ltd and Anor v ACR Trading Pty Ltd and Anor [No 3] (1987) 64 LGRA 177 DATES OF HEARING: 24/01/2000, 25/01/2000 DATE OF JUDGMENT: 01/28/2000 APPLICANT: Mr J B Maston (Barrister) SOLICITORS: Sparke Helmore LEGAL REPRESENTATIVES: RESPONDENT: Mr P C Tomasetti (Barrister) SOLICITORS: Colin Biggers & Paisley JUDGMENT: IN THE LAND AND Matter No. 40203 of 1999 ENVIRONMENT COURT Coram: Talbot J OF NEW SOUTH WALES Decision Date: 28 January 2000 Newcastle City Council Applicant v Bellevale Homes Pty Ltd Respondent REASONS FOR JUDGMENT 1. The respondent is a company which is in the business of building homes. For the purpose of promoting its business, it constructs exhibition homes and invites inspection by members of the public. Two such exhibition homes are open in Maryland Drive, Maryland, west of Newcastle near Minmi. 2. The land is in zone 2(a) under Newcastle LEP where dwelling houses are permissible without consent. Commercial premises are prohibited in the zone. The Court of Appeal decided in Warringah Shire Council v Jennings Group Ltd (1992) 75 LGRA 402 that exhibition homes were commercial premises within the meaning of a definition common to the applicable definition in the Newcastle LEP. 3. The council is seeking a declaration that the use of the land for the purpose of an exhibition home is prohibited and consequential orders requiring the use to cease forthwith. 4. The respondent admits that there is no defence and that the council is entitled to the declaration, but seeks the exercise of the Court's discretion either not to make an order or, if an order is made, to postpone its operation. 5. The remaining issue is whether the relief should be withheld in the exercise of the Court's discretion on the grounds stated by the parties as follows:- I.(a) that there are two employees and whether they are likely to lose their employment if orders are made and whether they will suffer hardship thereby; (b) that the council has in the past granted development consents which are current (though of limited duration) for exhibition homes in Maryland Drive, Maryland and in the suburb of Fletcher; (c) that the breach of the EP&A Act is technical. II. assuming that the use had been permissible with consent, whether it would be environmentally acceptable and in particular whether traffic and pedestrian safety issues are acceptable or alternatively whether they can be addressed by a conditional order requiring traffic calming and pedestrian safety works/measures in the public domain such as pedestrian refuge island, road threshold and additional speed limit signs. 6. It is necessary to appreciate the circumstances under which the buildings were constructed and how the use for the purpose of exhibition homes commenced. The history of the development 7. The respondent lodged an application for building approval to the erection of a new building to be used for the purpose of a dwelling on Lot 1302, 311 Maryland Drive on 8 December 1997. Approval was granted on 18 February 1998. 8. A further application was lodged in respect of Lot 1301, 309 Maryland Drive on 29 April 1998 and approved by council on 20 July 1998. 9. The approval for the building at No 311 was subject to the following condition:- 21 The dwelling not being used for "Exhibition" purposes without a Development Application being submitted to and approved by Council. 10. A development application for consent to the use of the dwellings as exhibition homes was lodged with council on 20 October 1998. 11. The use of the buildings as exhibition homes commenced in April 1999. 12. The development consent was determined by refusal of consent on 7 July 1999 on the following grounds:- 1. The proposed development would create a pedestrian desire line across Maryland Drive between the site and the existing carpark and display homes on the opposite side of the road which would give rise to increased pedestrian/vehicle conflict and accident potential [Section 79C(1)(b)]. 2. The increased traffic generation and parking demand along Maryland Drive generated by the proposed development would detract from general traffic safety and amenity of the neighbourhood [Section 79C(1)(b)]. 3. In view of the foregoing circumstances, it is considered that approval of the application would not be in the public interest [Section 79C(1)(e)]. 13. The use continues, with the homes open for inspection seven days a week between the hours of 9.00 am and 5.00 pm. 14. A class 1 appeal against refusal of development consent, lodged on 9 August 1999 has not been heard. Notice to the respondent by council 15. In addition to the express condition in the building approval for No 311, the council has made it clear to the respondent on a number of occasions that the use for the purpose of an exhibition home should not be carried out or should cease until development consent is obtained. 16. In a letter dated 25 January 1999 requesting further information from the respondent in respect of the development application, the council noted that under no circumstance was the respondent to use the dwellings as exhibition homes without prior approval of council. 17. On 16 February 1999 a stop work order was issued by a council building inspector requiring that work on the conversion of a garage to office cease. 18. By a letter which accompanied the Notice of Determination of the development consent on 7 July 1999, the respondent was directed to cease the use of the premises as exhibition homes within 14 days. 19. Council's solicitors notified the respondent's present solicitors on 19 November 1999 that unless an undertaking to cease using the premises for display homes was forthcoming, class 4 proceedings would be commenced. Other development consents for exhibition homes 20. Notwithstanding the decision of the Court of Appeal in Jennings , the Newcastle City Council has since then approved approximately 60 development applications for the purpose of exhibition homes in the 2(a) zone, including three buildings owned by Mirvac immediately opposite the subject site in Maryland Drive. 21. Reports to council show that council officers recommended approval of other development applications on the basis that exhibition homes and villages are appropriate short term uses in residential zones provided the premises were not used to operate businesses from the exhibition homes and the proposal is satisfactory having regard to the relevant heads of consideration. 22. No action by the council to cause the operation of the other approved exhibition homes to cease has been taken to date, nor so far as the Court knows, is it proposed. Council planners who gave evidence said that they regard the consents as valid until declared otherwise by the Court, but in any event it was not their particular area of responsibility to take any action in that regard. 23. The duration of the development consents vary but, generally speaking, they expire within the period of the next two years. 24. The Mirvac consent expires on 18 September 2000. 25. There is a concentration of exhibition homes and villages in the vicinity of the subject site, at Maryland and Fletcher in particular, which are both developing areas. The environmental issues 26. The respondent has negotiated the right for its customers to park on an allotment of land owned by Landcom on the eastern side of Maryland Drive, next door to the Mirvac site. Mirvac also has that right. 27. The main traffic flow into this part of Maryland is north along Maryland Drive off Minmi Road. Maryland Drive is a connector loop road which has two intersections with Minmi Road. 28. Council's traffic consultant, Mark David Taylor, explained to the Court that some potential customers are likely to park along the kerb on the western side of Maryland Drive outside the subject site and then cross the road to inspect the Mirvac homes before returning across the road to visit the respondent's exhibition. Many of the visitors are families with young children. 29. Mr Taylor gave evidence that, depending on how far cars were parked from the kerb on the western side, there is a real potential that the sight lines for drivers of cars travelling north will be less than the required standard. Further, pedestrians will not always have a clear view of oncoming traffic and the parked cars will reduce the sight distance for cars turning right out of Yapug Close into Maryland Drive, north of the site. 30. On the other hand, the respondent's traffic consultant, Ronald Gordon Brown, expressed the view that, if a more practical and realistic approach is taken to the likely parking positions, the potential for danger was not as great as Mr Taylor suggests. 31. The actual survey information is limited, and accordingly it is quite difficult for the Court to be entirely satisfied either way in this regard. However, the presence of a vertical and horizontal curve at the location does not provide an ideal situation for casual pedestrian crossing. It is not certain that cessation of the respondent's activities will necessarily remove the propensity for visitors to the Mirvac exhibition to park on the western side of the road. 32. Although Maryland Drive is not, at this stage, an intensely busy road, nevertheless, the data which is available suggests that little heed is paid by motorists to the traffic speed limit applicable in this area. 33. If the Court was faced with a permanent proposal, it could be more comfortable if some type of traffic calming device was built to constrain the passage and speed of vehicles. 34. In a case such as this where the Court is being asked to exercise its discretion not to make an order requiring cessation of prohibited development, it is appropriate that Mr Taylor's more cautious approach be preferred, particularly as the Traffic Integration Committee, comprising representatives of the police and the RTA, the council traffic committee and council's engineering planner all expressed concern about the potential traffic hazard and recommended refusal of the development application when the respondent's development application was referred to them for consideration. 35. The Court will therefore take into account the prospective danger to pedestrians congregating and crossing the road at this point as being a real one. The respondent company's approach 36. A company director, Kevin Whitehead, and its Land Manager, Stephen Choy, both gave evidence on behalf of the respondent. 37. Neither could explain, in a satisfactory way, why the company commenced the use of the exhibition homes before the development application had been determined. Nor did they justify, on any rational basis, the failure of the company to take heed of the council's directions to cease the use. They both seemed to think that obtaining development consent would be a mere formality in the light of the other approvals. They seemed to be taken by surprise when the council raised the issue of prohibited development, yet Mr Whitehead was associated with Jennings after the Court of Appeal made its decision and Mr Choy was not unaware of its significance and knew about advice from the Department of Planning in a circular issued shortly after the decision. 38. It is difficult to discount the probability that the company embarked on a deliberate predetermined course to proceed with the development while paying only nominal respect to the requirements of the law. The building application referred to a dwelling house use and the approval condition was so specific that the Court is entitled to infer the responsible company officers were either careless to the point of negligence or elected to proceed regardless of the law. This company, after all, is in the development business and could not be regarded as ill-informed, inexperienced or naive about the requirements for complying with the provisions of the Environmental Planning and Assessment Act 1979 (the EP&A Act). 39. After a development application had been lodged, the company still elected to proceed before it was determined. As it turned out the application was determined by refusal on merit grounds. It was only subsequently that legal advice that the development was prohibited was received by council. 40. Even written representations made by the respondent to the Department of Urban Affairs and Planning, Landcom and the Urban Development Institute of Australia seeking support in the proceedings and for amendments to be made to the Newcastle LEP in order to allow the development of its exhibition homes, fail to mention that the company's development application was refused on the traffic issue. 41. The Court concludes that commercial interests have prevailed and the company has been prepared to take the risk that ultimately the council would not intervene and insist that the use be terminated, at least until it had served its purpose. The council's role 42. The Court is not in a position to determine whether the development consents already granted by the council are valid. Indeed it would not be proper to do so in these proceedings. 43. The most that might be said is that council heretofore seems to have taken an innovative and expedient approach to the development of exhibition homes which it obviously believed was beneficial to the community. 44. The Court will not be seen to be encouraging councils to avoid their duty to act in accordance with their own planning instruments. 45. Generally it might be expected that a council will be vigorous in policing the provisions of its LEP and be consistent in the application of its DCPs and planning policies. 46. Despite the strong stand taken by the council in this case, there may be distinguishing facts applicable to the other approved exhibition homes. Irrespective of whether that is correct, the council is now acting on the basis of legal advice which it received in October 1999. 47. The company may have had some cause for complaint if there was evidence it had been singled out for special treatment. However, this case does not involve the council seeking a declaration that a development consent granted by itself is invalid. No consent has ever been granted to the respondent. The facts show that the question of permissibility was not raised as an issue in the council's consideration of the development application. Discretion 48. Mr Tomasetti relies on the tests for the exercise of the Court's discretion propounded by Kirby P (as he then was) in Warringah Shire Council v Sedevcic (1987) 63 LGRA 361 and Fatsel Pty Ltd and Anor v ACR Trading Pty Ltd and Anor [No 3] (1987) 64 LGRA 177 49. Mr Maston, on behalf of council quite correctly concedes that the Court should be guided by the comprehensive outline by the former President of the Court of Appeal, but disputes the approach to the application of it taken by Mr Tomasetti. 50. The discretionary power under s 124 of the EP&A Act is a wide one. It is not to the point that, as Mr Tomasetti points out, following the Jennings decision the Department issued Circular 24 encouraging amendments to LEPs to allow exhibition homes as development permissible with consent in residential zones or that the use is consistent with the objectives of the 2(a) zone. In this case the development application has been refused by the council on the basis of merit, upon grounds which the Court does not find insupportable. 51. The breach is not purely technical and cannot be categorised as unnoticeable other than to a person well versed in the relevant law. Most persons would know that development carried on after development consent is refused is illegal development. The respondent furthermore had been reminded time and time again that the development should not proceed until consent was forthcoming or that it should cease. 52. The public interest in the orderly development and use of the environment means not only that prohibited development should not be allowed, but also that development permissible with consent can only be permitted after the appropriate assessment process has been completed. 53. The Court is not persuaded that the public benefit of having multiple choice opportunities in the market place outweighs the legislative purpose of upholding the integrated and coordinated nature of planning law identified by Kirby P at 340 in Sedevcic . Here the respondent is seeking the private advantage of being allowed to carry out its commercial purpose without the necessary development consent irrespective of any issue in respect of prohibition. 54. As Kirby P confirmed in Sedevcic , the obvious intention of the Act is that normally those concerned in development and use of the environment will comply with the terms of the legislation. 55. This is not a static development in the sense that the breach can only be remedied at great cost or inconvenience. The Court heard evidence to suggest that the two employees of the company who are employed on the site may lose their jobs. However, further investigation and examination of the company records did not support the contention that this will necessarily occur if the Court makes an order. The term of one young employee's engagement is week to week and the other employee continues to live in the Blue Mountains and rents casual accommodation in Newcastle during the week, preferring to commute home on his days off. The very essence of the exhibition home use is in itself of a temporary nature. The company has wide interests in Newcastle, the Central Coast and Sydney. Mr Whitehead confirmed that every effort would be made to place the employees elsewhere in the organisation if they became displaced, although no vacancies were available at the present time to his knowledge. 56. There is no suggestion that the market value of the buildings will be diminished if the use ceases before the company's preferred date of January 2002. 57. The Court is not satisfied that in the whole of the circumstances, it will be unjust for the company to be required to cease the use within a short time. It was suggested by Mr Tomasetti that at the earliest this should be 30 June 2000, but in fairness at least not before September 2000 when the Mirvac consent expires. 58. This is not a case where the development has carried over an extended period of time without complaint by the council or members of the public. There were two objections lodged with council in response to the exhibition of the development application. Both of these persons gave affidavit evidence in these proceedings. Both expressed concerns about the safety of pedestrians and young children who use the cycleway adjacent to Maryland Drive. 59. The council has initiated the proceedings upon its own volition only after it was unable to extract an acceptable undertaking from the respondent. 60. The injustice to the respondent if it is required to cease the use within a short time, if any, will not, in my opinion, be disproportionate to the benefit of enforcing the legislation in circumstances where there is a potential traffic hazard. 61. Some suggestions were made during the hearing that traffic calming devices could be constructed to control the speed and flow of traffic or that temporary street signage to warn drivers of the existence of the display homes and the possibility of pedestrians crossing the road could be erected at the respondent's expense. The council does not agree with this course and there is not sufficient specification available to make a conditional order in that respect, even if the Court was disposed to do so. 62. The company has already had the benefit of the use since April last year. The Court is prepared to allow a short period so that the company can wind down the use in an orderly fashion and seek to relocate its employees to another site. In the meantime arrangements can be instigated for the realisation of the capital investments by selling the properties, if that is the desired course. 63. The operation of the order restraining the respondent from using the land as an exhibition or display home will be deferred until 30 April 2000. Costs 64. The question of costs was not argued. The council has been generally successful in the litigation. Although it was formally seeking immediate relief, Mr Maston conceded in final submissions on behalf of the council that the range of reasonableness for the period of enforcement was between three and six months. 65. Subject to hearing formal submissions if required, it is prima facie appropriate that the respondent pay the council's costs. The question of costs will be formally reserved to enable either party to make an application if necessary. Formal orders 66. The Court makes the following orders:- 1. A declaration that the use of the land in Lots 1301 and 1302 in Deposited Plan 817682 known as 309 and 311 Maryland Drive, Maryland (the land) as an exhibition or display home is prohibited by Newcastle Local Environmental Plan 1987. 2. An order that the respondent, by itself, its servants or agents be restrained from using the land as an exhibition or display home otherwise than in accordance with the Environmental Planning and Assessment Act 1979 after 30 April 2000. 3. Costs reserved. 4. The exhibits may be returned. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.