Land and Environment Court of New South Wales CITATION : Di Francesco & Ors v Blantrix Pty Limited & Ors [No 2] [2005] NSWLEC 120 APPLICANTS: Elwyn Di Francesco Kenneth Laing Andrew Paton Sarina Russo Voltraint No 1019 Pty Limited PARTIES : FIRST RESPONDENT: Blantrix Pty Limited SECOND RESPONDENT: Bive Pty Limited THIRD RESPONDENT: Kovelan Bangaru FILE NUMBER(S) : 41439 of 2004 CORAM: Pain J KEY ISSUES: Costs :- whether the Applicants prolonged the hearing - whether the Applicants were successful in the substantive proceedings Environmental Planning and Assessment Act 1979 s 124 Land and Environment Court Act 1979 s 69 LEGISLATION CITED: State Environmental Planning Policy No 56 - Sydney Harbour Foreshore and Tributaries State Environmental Planning Policy No 60 - Exempt and Complying Development CASES CITED: Di Francesco & Ors v Blantrix Pty Limited & Ors [2004] NSWLEC 669 DATES OF HEARING: 16/03/2005 EX TEMPORE JUDGMENT DATE : 03/16/2005 APPLICANTS: Mr P Tomasetti (barrister) SOLICITORS: Andreones Pty Ltd LEGAL REPRESENTATIVES: RESPONDENTS: Mr J Whyte (barrister) SOLICITORS: Wordsworth Lawyers JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 16 March 2005 41439 of 2004 Elwyn Di Francesco & Ors v Blantrix Pty Limited & Ors [No 2] EX TEMPORE JUDGMENT 1 Her Honour: The Applicants seek an order in their Notice of Motion dated 24 December 2004 ("the Applicants' Notice of Motion") that the Second and Third Respondents pay their costs of these proceedings. 2 The First Respondent seeks an order in its Notice of Motion dated 8 March 2004 ("the First Respondent's Notice of Motion") that its costs be paid by the Applicants. 3 The Applicants' amended Class 4 application sought the following relief: 1. A declaration that the respondents have carried out or caused to be carried "development" in contravention of the provisions of the Environmental Planning and Assessment Act 1979 in carrying out the building work described in schedule 2 hereto at the premises described in schedule 1 hereto. 2. An order restraining the respondent forthwith from carrying out any or all development described in schedule 2 hereto except in accordance with the Environmental Planning and Assessment Act 1979 . 3. Costs 4 In Di Francesco & Ors v Blantrix Pty Limited & Ors [2004] NSWLEC 669 I set out the background at [2] – [15] as follows: On 22 November 2004 the Applicants filed a Notice of Motion seeking an ex parte interlocutory injunction restraining the Respondents from carrying out building work in Lot 213 (apartment 4301) and Lot 214 (apartment 4302) without development consent until further order. On 22 November 2004 I declined to grant the interlocutory injunction sought by the Applicants in their Notice of Motion on an ex parte basis but granted the Applicants leave for short service of their Class 4 Application and supporting affidavits and ordered that the matter come back before me on 23 November 2004. When the matter came back before me on 23 November 2004 the Respondents were represented and requested further time to respond to the Applicants' notice of motion. I granted this request and stood the matter over to 25 November 2004. On 25 November 2004 I declined to grant the interlocutory orders sought by the Applicants. Instead, I set the matter down for hearing before me on an expedited basis and made the following orders which, inter alia: (a) prohibited the carrying out of coring work in apartment 4302 until further order; and (b) otherwise limited the hours during which work could be carried out at the apartments to 7am to 4pm Monday to Saturday with no work to be carried out on Sunday. The proceedings were heard on 2, 3, 6, 7 and 9 December 2004. On 6 December 2004 the Applicants sought leave, which I granted, to file an Amended Class 4 Application seeking the following relief: (1) A declaration that the respondents have carried out or caused to be carried out "development" in contravention of the provisions of the Environmental Planning and Assessment Act 1979 in carrying out the works described in the schedule 2 hereto at the premises described in schedule 1 hereto. (2) An order restraining the respondent (sic) forthwith from carrying out any or all development described in schedule 2 hereto except in accordance with the Environmental Planning and Assessment Act 1979. (3) Costs. Schedule 1 of the Amended Class 4 Application contains the title details for apartments 4301 and 4302 in the building. Schedule 2 of the Amended Class 4 Application lists the following works: · Core drilling · Construction of the rotating dining floor including penetration of concrete to install motor for dining platform · [Jack hammering] · Concrete topping of slabs · Penetrating the floor slab · Construction, plastering and gyprocking of new and existing walls and ceiling · Demolition of masonry walls · Alteration of door openings and installation of doors · Chasing of masonry walls to provide for service connections · Construction of fire places · Building pipe work for sewer, gas and water connections · Tiling of walls and floors and laying of new surfaces to walls or floors other than carpet coverings · Joinery · [Construction of stairs] · [Removal of walls] · Removal and construction of foyer ceilings, walls and partitions · Construction of doorway entrances · [Pouring concrete seating around pools] · [Installation of glass walls and doors] · [Installation of electric screens] · [Construction of plant/shower rooms on level 45] · Construction of reflection pool · [Building works that are likely to create noise and dust for other residents within the building viz. beyond the boundaries of the two units] Three matters were not pressed by the Applicants' counsel in final submissions being the removal of walls, building works likely to create dust and installation of electric screens. Because of my findings in this judgment I consider that certain other matters either cannot be pressed or must be amended to reflect the work carried out or now intended to be carried out. All of the matters which the Applicants did not press or which I consider, for the reasons set out below, that the Applicants cannot press or must be amended are in square brackets above. I will refer to the works set out in Sch 2 of the Amended Class 4 Application collectively as "the works". The land on which the building is located is zoned part "Residential", part "Commercial" and part "Special Uses" under the Sydney Cove Authority Redevelopment Scheme. State Environmental Planning Policy No 56 – Sydney Harbour Foreshores and Tributaries ("SEPP 56") and State Environmental Planning Policy No 60 – Exempt and Complying Development ("SEPP 60") apply to the land on which the building is located. On 30 December 1999 the Minister granted a development consent, subject to conditions, to a development application lodged by Grocon International for consent to erect a 40 level residential tower development with over 200 apartments, retail and commercial uses in a podium of up to 5 levels, underground carparking, and the conservation and re-use of an existing heritage building ("the DA"). A copy of the development consent and the development consent plans are attached to the affidavit of Maysaa Sayed sworn on 23 November 2004. The DA plans show levels 43, 44, and 45 as empty shells, depicting only the external walls, internal staircases and balconies of apartments 4301 and 4302 and the common areas not associated with apartments 4301 and 4302. The parties do not dispute that the development consent did not grant consent to the works. Work done in Apartments 4301 and 4302 I had the benefit of a view of apartments 4301 and 4302 and the relevant common areas of the building on 3 December 2004. Apartments 4301 and 4302 are located on the top three floors of the building, being levels 43 to 45. Apartments 4301 and 4302 are the only apartments located on these floors. Inside apartments 4301 and 4302 access to levels 44 and 45 is via spiral staircases located in both apartments. In both apartment 4301 and 4302: (a) level 43 consists of kitchen, dining and media areas and a powder room; (b) level 44 consists of bedrooms and bathrooms; and (c) level 45 consists of an outside entertaining area, which includes a plunge pool, plant room and possibly other facilities such as a bathroom and gym. Work in apartment 4301 is very well advanced with the evidence being that it is intended to be finished by the end of December 2004. Much more work remains to be done in apartment 4302. The parties produced numerous sets of plans which show the building works done by Grocon International and the work done or to be done by the Respondents for the fitout of apartments 4301 and 4302. The development consent plans were MS1 attached to the affidavit of Ms Sayed dated 22 November 2004. A two page extract from these plans was exhibit DY1 to the affidavit of Mr Young dated 24 November 2004. Similar but not identical plans marked DY5 were exhibited to the affidavit of Mr Young sworn 1 December 2004 which show the building work done by Grocon International, completed before the Respondents took possession. DY5 shows that load bearing structural features such as the internal concrete stairs and the plant and shower rooms on level 45 were complete at the point the Respondents took possession so that I do not consider the Applicants can maintain their case in relation to these items. A further set of "as built" plans, marked DY6, is exhibited to Mr Young's affidavit dated 1 December 2004. This shows the work already done by the Respondents in apartment 4301 and work yet to be done in apartment 4302. The plans in DY6 are replicated in other plans, marked DY2 for apartment 4301 and DY3 for apartment 4302, which are exhibited to Mr Young's affidavit dated 24 November 2004. The "construction of stairs" identified in Sch 2 of the Applicants' amended Class 4 application can refer only to the replacement of the wooden treads on the stairs and not to the concrete structure which supports them. I therefore limit my consideration of this item to the replacement of the wooden stair treads. Similarly, "construction of plant/shower rooms on level 45" identified in Sch 2 of the Applicants' amended Class 4 application cannot be maintained by the Applicants as this was done by Grocon International. It does, however, appear that the Respondents have demolished the shower rooms which Grocon International built on level 45 and I will include this work in my findings. It also became clear during the course of the hearing that the nature of the works has evolved since the date on which the plans were produced so that the Respondents have not strictly adhered to the DY6 plans and presumably may amend them again in the future. For example, the Third Respondent's evidence is that he no longer intends to install glass walls and doors on level 45 or pour concrete seating around the pools which were initially constructed, but not finished in all details, by Grocon International. 5 In relation to apartment 4301 I made the finding at [61] that: It follows … that I consider that a number of the items identified in Sch 2 of the Applicants' amended Class 4 application which have been carried out in apartment 4301 were not, given the scale of the works undertaken and the resulting impacts identified in cl 7(2)(b)(iii), exempt development so that these works did, collectively, require development consent. I did not make any declaration or order for the reasons set out at [63] – [64] as follows: Given my findings above, the issue arises as to whether I should make any order granting injunctive relief in relation to the building work yet to be done in apartments 4301 and 4302. Section 124(1) of the EP&A Act states: Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach. The Applicants' counsel argued that I should make the general orders sought in the amended Class 4 application in relation to both apartments 4301 and 4302. However, the evidence suggests that the work in apartment 4301 is virtually complete and this is conceded by the Applicants. I accept the Respondents' submission that orders should not be made where they would have no utility. Accordingly, an injunctive order is not, in my view, warranted in relation to apartment 4301. 6 In relation to apartment 4302 I made the following orders in relation to specified works at [72] of my judgment: The Respondents are restrained forthwith from carrying out any or all works in apartment 4302 described below except in accordance with the Environmental Planning and Assessment Act 1979: · Core drilling · Penetrating the floor slab/concrete topping · Concrete topping of slabs · Construction, plastering and gyprocking of new walls and ceiling · Demolition of masonry walls · Chasing of masonry walls to provide for service connections · Construction of fire places · Tiling of walls and floors and laying of new surfaces to walls or floors other than carpet coverings of levels 43 and 44 · Removal and construction of foyer walls and partitions · Construction of doorway entrances · Alteration of door openings and installation of doors No declarations were made in relation to these works. Applicants' arguments 7 The Applicants argued they had been largely successful in the proceedings and the usual rule that costs follow the event should apply to them. Respondents' arguments In relation to the Applicants' Notice of Motion 8 The Respondents argued that because the Applicants made late amendments to the pleadings requiring new arguments and evidence to be heard in relation to noise, and initially relied on State Environmental Planning Policy No 56 – Sydney Harbour Foreshore and Tributaries ("SEPP 56") before changing to State Environmental Planning Policy No 60 – Exempt and Complying Development ("SEPP 60"), the proceedings were prolonged. Further the Applicants were largely unsuccessful as they failed to obtain any declarations or orders in relation to past work being the whole of the work in apartment 4301. The appropriate order was that the Applicants were entitled to only half their costs. In relation to the First Respondent's Notice of Motion 9 The First Respondent argued that all of its costs ought be paid by the Applicants as no declaration or order was made in relation to the property it owned, being apartment 4301. Counsel for all three Respondents emphasised that the First Respondent was a separate legal entity from the Second and Third Respondents. While the Third Respondent was the sole director and secretary of the First and Second Respondents, the shareholder was another entity, Colosseum Nominees Pty Ltd, and it was this entity which enjoyed the proprietary ownership of apartment 4301. Finding In relation to the Applicants' Notice of Motion (i) Prolonging the Hearing 10 While the originating documents filed for the interlocutory injunction referred to SEPP 56 and were amended during the substantive hearing to refer to SEPP 60, no time was taken up at the substantive hearing by argument on SEPP 56 in my view. 11 Further in relation to the amendments to the pleadings so that noise became an issue in the course of the hearing, I do not think this caused unnecessary prolongation of the proceedings and was an important issue considered by me in the judgment and resolved largely in the Applicants' favour. (ii) Whether the Applicants were successful in the substantive proceedings 12 The major issue in the proceedings was the application of SEPP 60 to the building works being undertaken or intended to be undertaken in apartments 4301 and 4302 and the common foyer. The Respondents maintained throughout the proceedings that the works were exempt development. While I did not agree with all of the Applicants' arguments, I consider they were largely successful in the legal arguments in the case in that I held that a substantial part of the works already undertaken in apartment 4301 and yet to be undertaken in apartment 4302 were not exempt development under SEPP 60, and therefore required development consent. 13 The relief sought by the Applicants was a declaration in relation to past and present work to the effect that it had been carried out unlawfully but injunctive orders were sought in relation to future work only. I did not make any declaration as I considered more precise detail was needed for such a declaration. I did find however that part of the work in apartment 4301 did require development consent (at [61]). 14 I did not make any injunctive orders in relation to apartment 4301 because by the time the matter was finally heard the work was essentially complete. There was no utility in making any injunctive order and no order for demolition was sought. I had not issued an interlocutory injunction in relation to the work but rather had expedited the hearing of the matter. Work in apartment 4301 therefore continued during the hearing, as was clear on the view. 15 I do not agree that substantial hearing time was spent on issues related to past building work and certainly not half the time, as was put in submissions by the Respondents' counsel. In relation to the First Respondent's Notice of Motion 16 I do not accept the submission that the First Respondent was effectively a separate entity from the other Respondents for this costs application and would separately incur legal costs from the Second and Third Respondents. While it is legally correct to say that the First Respondent is a separate entity, correspondence in evidence suggests that the Chief Executive Officer and shareholder of Colosseum Nominees Pty Ltd, the sole shareholder of the First and Second Respondents, was in any event the Third Respondent. In other words the primary decision-maker and beneficiary in relation to the First and Second Respondents was the Third Respondent. Given that all the Respondents were represented by the same legal team and that Mr Bangaru alone gave evidence on behalf of all three Respondents, in addition to the Respondents' advisers and employees, I see no basis for regarding the First Respondent as separate for the purposes of this costs application. 17 It was also not clear how the costs directly attributable to apartment 4301 in the proceedings could in any event be separated out, given that the same legal issues applied to both apartments and the foyer work. I do not consider a great deal of hearing time was taken up with itemising the work done in apartment 4301. 18 I have broad discretion in awarding costs under s 69 of the Land and Environment Court Act 1979 but must of course act judicially in awarding costs. I have been referred by the parties to a number of cases but essentially given my conclusion that the Applicants should be considered to be largely successful in the proceedings when viewed as a whole, and that there is no basis for attempting to apportion costs because of the way the matter was run, the appropriate order is that the Applicants' costs should be paid by the Second and Third Respondents. 19 The Applicants are therefore successful on their Notice of Motion and should also have their costs of the proceedings heard today. 20 The First Respondent is unsuccessful in its application and its Notice of Motion is dismissed. Orders 21 The Court orders that in relation to the Applicants' Notice of Motion dated 24 December 2004: 1. The Second and Third Respondents pay the Applicants' costs of the proceedings; and 2. The Second and Third Respondents pay the Applicants' costs of the motion. 22 The Court orders that in relation to the First Respondent's Notice of Motion dated 8 March 2005: 1. The motion is dismissed; and 2. No orders as to costs. 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.