Land and Environment Court of New South Wales CITATION : Marrickville Council v Admark Investments Pty Limited and Another (No 2) [2002] NSWLEC 82 APPLICANT Marrickville Council PARTIES : FIRST RESPONDENT Admark Investments Pty Limited SECOND RESPONDENT Portuguese Marble & Granite Pty Limited t/a Euro Abrasives FILE NUMBER(S) : 40193 of 2000 CORAM: Talbot J KEY ISSUES: Costs :- claim by one respondent for an indemnity by the other respondent LEGISLATION CITED: Land and Environment Court Rules 1979 CASES CITED: Marrickville Council v Admark Investments Pty Ltd and Another (2000) 116 LGERA 312 DATES OF HEARING: 06/05/2002 DATE OF JUDGMENT: 05/24/2002 APPLICANT N/A SOLICITORS N/A FIRST RESPONDENT Mr P C Tomasetti (Barrister) LEGAL REPRESENTATIVES: SOLICITORS J S Pinto & Co SECOND RESPONDENT Ms S A Duggan (Barrister) SOLICITORS Gordon Robilliard Plowman Merton JUDGMENT: IN THE LAND AND Matter No. 40193 of 2000 ENVIRONMENT COURT Coram: Talbot J OF NEW SOUTH WALES Decision Date: 24 May 2002 Marrickville Council Applicant v Admark Investments Pty Limited First Respondent Portuguese Marble & Granite Pty Limited t/a Euro Abrasives Second Respondent REASONS FOR JUDGMENT 1. In a reserved judgment published on 4 October 2001, following discontinuance of the proceedings after the subject property had been vacated, thereby removing the necessity for the making of any orders against either respondent, each of the respondents was ordered to pay one half of the applicant's costs. 2. The second respondent was the occupier of the subject premises whereas the first respondent was the owner at all material times. 3. The first respondent now seeks an order that the second respondent pay the first respondent's costs and that the second respondent indemnify the first respondent against the costs order made on 4 October 2001. 4. The first respondent first sought relief against the second respondent in a notice of motion dated 18 September 2001. The notice of motion was dismissed at the end of the earlier hearing. It had not been served until immediately before the hearing. 5. The present notice of motion is dated 6 November 2001. 6. At the outset, counsel appearing for the second respondent, Ms Duggan, sought to raise an issue that the first respondent's claim had already been dealt with when the original notice of motion was dismissed on 4 October 2001. The Court is satisfied that Mr Tomasetti, who appears for the first respondent, did not formally pursue the notice of motion on the first occasion and that dismissal was a formality as a consequence of the failure to serve it in accordance with the Land and Environment Court Rules 1979. 7. The points of claim enumerated particulars of the alleged breach of ten conditions of development consent granted on 4 February 1993. It was alleged that the first respondent was in breach of seven of these conditions, whereas the second respondent was alleged to have breached each one of the nominated conditions. 8. Condition 13 of the relevant development consent required that storage bins, as well as a gate and a fence, across a dedicated road be removed within one month of the date of the consent. The consent was granted on 4 February 1993, whereas the lease to the second respondent did not commence until 20 February 1998. 9. It is alleged in the points of claim that the first respondent and second respondent had not carried out development substantially in accordance with the plan as amended by the conditions of consent. The first respondent joined issue on this claim to argue that the development consent was not acted upon and accordingly, the conditions of development consent did not apply. 10. The development consent, which related to the use of the ground and the first floor area, required that five off-street parking spaces be provided. The second respondent's lease was confined to the ground floor. A council officer inspected the premises on 11 November 1999 and observed that there were no car-parking spaces. Nor was there any loading dock as required by the conditions of consent. 11. The points of defence filed by the second respondent assert that upon becoming aware that the premises were being used in breach of the conditions of consent it took immediate steps to find another suitable site from which to conduct its business. Paragraph 8 in the second respondent's points of defence states that the second respondent would cease occupation of the premises on 19 April 2001. As a consequence the only real contradicter to the applicant's claim was the first respondent. The Court has found that the liability of the two respondents was not a joint one in all respects ( Marrickville Council v Admark Investments Pty Ltd and Another (2001) 116 LGERA 312 at p 318 [34] ("the earlier judgment")). The responsibility for complying with the terms and conditions of the development consent was held to be arguably severable in respect of the different parts of the land. 12. Mr Tomasetti says that the present dispute is solely between the first respondent and the second respondent and will have no effect on the liability of the first respondent to pay one half of the applicant's costs. He seeks to persuade the Court that although the actual area covered by the lease document is 335m 2 , the second respondent was entitled to occupy the ground floor and additionally the yard areas. Although the lease in evidence commenced on 20 February 1998, the second respondent became a lessee in February 1994 when it purchased the business from previous owners. Other than an assertion by a director of the first respondent, there is no direct evidence of the right of the second respondent to have occupation of areas outside the areas covered by the formal lease. The first respondent seeks to persuade the Court that because the property is the subject of a valuation made for the purposes of the formal lease and is described in the valuation as the ground level of a two-storey brick and re-enforced concrete building with retail and storage use to the ground floor and yard, it is able to find that, notwithstanding the express terms of the lease to the contrary, the rent determined by the valuation was paid as consideration for the exclusive occupation of the total area, including areas beyond the space of 335m 2 . Such a claim is untenable. Even if, as a matter of fact, the second respondent did occupy all areas, the Court is not persuaded that the first respondent was powerless to prevent the unauthorised use in breach of the conditions of development consent. 13. It is the action of the second respondent when it vacated the premises that ultimately led to the settlement of the proceedings. In the meantime, the first respondent maintained a spirited defence beyond maintaining that the sole responsibility lay with the second respondent. 14. The further hearing limited to the question of costs as between the first respondent and second respondent, has not persuaded the Court to change the view expressed in par 34 of the earlier judgment. The council was justified in commencing the proceedings against both respondents. The first respondent has a distinct responsibility for complying with the terms and conditions of the development consent, at least in respect of a part of the subject land. In the circumstances it is not appropriate for the Court to make an order whereby the second respondent indemnifies the first respondent against the liability for payment of costs of the applicant in accordance with the orders made on 4 October 2001. 15. The notice of motion dated 6 November 2001 is dismissed. 16. The second respondent has been entirely successful in resisting the notice of motion and, subject to any argument to the contrary, is therefore prima facie entitled to the exercise of the Court's discretion in its favour on the question of costs. An order that the first respondent pay the costs of the second respondent on the notice of motion will be made unless the first respondent moves the Court to the contrary by notice of motion filed within the next seven days. 17. 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.