Ricky Development Pty Ltd v Sydney City Council & Ors [2005] NSWLEC 729

Land and Environment Court of New South Wales

CITATION : Ricky Development Pty Ltd v Sydney City Council & Ors [2005] NSWLEC 729

APPLICANT: Ricky Development Pty Ltd

FIRST RESPONDENT: Sydney City Council PARTIES : SECOND RESPONDENT: Bernleigh Developments Pty Ltd

THIRD RESPONDENT: Empire Talkies Pty Ltd

FILE NUMBER(S) : 40801 of 2005

CORAM: Bignold J

KEY ISSUES: Development Application - Existing Use Rights - Injunctions and Declarations :- Basis of decision-making process challenged in a quia timet injunction application

LEGISLATION CITED: Environmental Planning and Assessment Act, s106

DATES OF HEARING: 25/11/2005 EX TEMPORE JUDGMENT DATE : 11/25/2005

APPLICANT: Peter McEwan SC SOLICITORS: Pike Pike & Fenwick

LEGAL REPRESENTATIVES: FIRST RESPONDENT: Jayne Jagot SOLICITORS: Maddocks

SECOND & THIRD RESPONDENTS: Ian Hemmings SOLICITORS: Minter Ellison

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

BIGNOLD J

25 November 2005

40801 of 2005 RICKY DEVELOPMENTS PTY LTD v SYDNEY CITY COUNCIL & ORS

JUDGMENT HIS HONOUR: 1 These were class 4 proceedings commenced in the Court on 20 July 2005 in which the Applicant, an owner of land in Quay Street, Haymarket, sought declaratory and injunctive relief in respect of a development application made on an adjoining or nearby property in Quay Street by or on behalf of the second and third Respondents to the City Council, the first Respondent. 2 The declaration claimed in par 1 was to the effect that an identified development application made to the Council by or on behalf of the second and third Respondents was void and of no effect. The declaration claimed in par 2 was a declaration that the land the subject of the development application does not have existing use rights for the purpose of a public car park within the meaning of the Environmental Planning and Assessment Act, s 106. 3 Paragraph 3 claimed an alternative declaration if declaration 2 were not granted which sought a confinement physically and spatially of any existing use entitlement that might be found to exist and par 4 claimed an injunction restraining the Council from determining the said development application. The class 4 application was supported by Points of Claim which themselves were amended on 30 August, the original points of claim having been filed on 19 August, and before me today there was a further amended points of claim filed on 17 October. All that I need note in relation to the second set of points of claim, that is, the first amended points of claim, is that the claim to the declaration confining any existing use spatially and physically was abandoned. 4 In the points of defence filed on behalf of the second and third Respondents and the Council on 16 September the second and third Respondents admitted in answer to the Points of Claim that the development application that they had lodged with the Council on 7 April did rely upon the benefit of existing use rights appertaining to the subject land. However, the defence goes on to say: However, in answer to the whole of the claim the second and third Respondents plead the matters referred to in par 12. 5 In par 12 of the Points of Defence it is said in the alternative that the proposed development is permissible with consent if the development application is supported by well founded objection made pursuant to State Environmental Planning Policy No 1 Development Standards and on 16 September 2005 the second Respondent lodged an objection pursuant to SEPP 1. Upon that basis, the points of defence stated that the Applicant was not entitled to any relief either claimed or at all. 6 The Council's Points of Defence significantly raised as an overall defence that the Points of Claim challenging the validity of the development application and restraining the Council from determining the application raised matters which were premature and that the declarations and orders sought would be premature and would serve little or no utility. 7 On the hearing of the case today the Council tendered at the invitation of the Applicant a draft report prepared by Council officers on the development application. That document became Exhibit A1. Paragraph 19 and following contain a detailed assessment of the development application and, as par 20 makes clear, the detailed assessment at officer level proceeds on an alternative basis: The assessment of this application considers the application on the basis that the site for proposed development may have existing use rights and, in the alternative, if the Court finds against this that the Council's Local Environmental Plan and Development Control Plan apply and that the non-compliance with the floor space ratio controls is addressed by the SEPP 1 objection. In both alternatives it is concluded that the proposal is acceptable and recommended for consent. 8 Thereafter there is a detailed assessment of both alternative bases for consideration of the development application, that is, firstly, on the basis that relevant existing use entitlements apply and, secondly, on the basis that they do not and that the development is made conformable to the LEP controls once there is factored into the application the objection under SEPP 1. 9 On that basis the Applicant sought an amendment to be made to the statement of agreed facts which had been filed by the parties on 18 October to augment what is said in par 27 of that statement which states: The Council is assessing the development application on the basis that the site enjoys existing use rights within the meaning of division 10 of part 4 of the Environmental Planning and Assessment Act. 10 All of the parties agreed in light of the contents of the draft planning report (exhibit A1) that it would be appropriate for the Statement of Agreed Facts to include an additional fact along the lines and consistent with the contents of exhibit A1 that the Council is additionally assessing the development application upon the basis that the LEP and DCP apply to the development which has invoked the dispensational powers available under SEPP 1. 11 Additionally, the Applicant sought leave to amend the application in par 4 insofar as the claim to injunctive relief against the Council is concerned. The application for leave to amend was that par 4 which states, "An injunction restraining the Council from determining the purported development application" be amended by adding the words "from determining by the granting of consent on the basis that the subject land enjoys existing use entitlements." 12 Both the Council and the second and third Respondents oppose the grant of leave and it was in the course of debate on the leave application that it became apparent that the whole of the proceedings remaining and agitated on behalf of the Applicant before the Court today were doomed to fail. What remained was simply the declaration that the subject land did not enjoy relevant existing use entitlements together with the injunction claimed in par 4 either in its original form or in the form to be amended. In opposing the application to amend par 4 all Respondents submitted that, even as amended, the application was doomed to fail. 13 A real question of the jurisdiction of the Court to entertain the Applicant's application emerged in the course of the debate and it was made clear by the Applicant that the jurisdictional foundation for what remained in the case was sourced in the Environmental Planning and Assessment Act, ss 122 to 124 that is, the restraining or remedying of a breach or threatened breach of the Act, the Applicant claiming that the application claiming the declaration and the injunction was in support of the restraint of what it was contending would be a breach of the Act and that the relief claimed was of course in the nature of an injunction quia timet. 14 However, as the debate unfolded it was apparent that there was insurmountable difficulty lying in the way of the Applicant to make good its claims and to attract the jurisdiction of the Court because it was apparent given the fact that the Council and the Applicant for development consent were promoting and processing the application on an alternative basis, one of which is untouched by anything raised in the current proceedings, that the outcome of such a process, assuming that development consent were to be the ultimate outcome, could not be said to have been infected by any breach of the Act. It would be impossible to say in advance in a quia timet application that the outcome, that is, the assumed outcome, the grant of development consent, was sourced in the imperfect source of existing use entitlements rather than the perfect source of the LEP, DCP, SEPP 1, in other words, conformable development. It was for that reason in particular that I ruled that the application not only to amend but the application substantively, whether or not amended, was doomed to fail and for those reasons I indicated that the application must fail and be dismissed. 15 Thereafter, there was debate and comprehensive submissions on the question of costs in the proceedings. The Applicant submitted that the Court should not order it to pay the costs of the parties because of the emergence during the pendency of the case of the alternative source for processing the second and third Respondents' development application, namely, as conformable development in terms of the LEP augmented by the dispensational powers based upon the objection under SEPP 1. Indeed, Senior Counsel for the Applicant drew attention to par 27 of the Statement of Agreed Facts which I earlier recited indicating that the Council was assessing the application on the basis that it had relative existing use entitlements and that document had been subscribed to by all parties and filed on 18 October, more than a month after the question of the SEPP 1 objection, and the reliance by the second and third Respondents upon the SEPP 1 objection as an alternative source of power had been raised in the defence filed on 16 September. 16 Having regard to the history of the litigation I am of the opinion that the costs order that is fair and reasonable in the present case in the light of the outcome of the litigation is that the application must be dismissed with costs. The question of the extent of the costs order, as I say, was keenly debated and I have been assisted by the submissions that have been advanced. 17 The Applicant's reliance upon the statement in par 27 of the Statement of Agreed Facts as to the manner in which the Council was assessing the development application, namely, on the basis that existing use entitlements applied, is an arguing point but is in my view to be understood in the light of the pleadings and the plain fact that from 16 September when the second and third Respondents filed their Points of Defence they drew attention to and placed ultimate reliance upon the SEPP 1 objection and the attendant amendment of the development application to provide an alternative source of power for its processing and determination including a determination favourable to the second and third Respondents. 18 In my view, there is force in what was put on behalf of the Council by Ms Jagot that there were, at least incipiently, risks involved of a denouement such as has occurred in the history of this case when the Applicant commenced its proceedings. I of course accept the force of her criticism of that part of the application which principally attracted the Council to active participation in the proceedings, namely, an injunction restraining the Council from determining the purported development application, and what she has said about the question of available powers to a decision-maker such as the Council has obvious force and cannot be gainsaid. 19 In other words, in a situation such as this present case has demonstrated, there is an apparent and obvious alternative source of power available to the Council in the determination of a development application. Any claim that the outcome of that process would involve a breach of the Act if another source of power had been exercised and invoked is a futile argument and certainly a futile argument at the stage of a quia timet injunction application. It may be as the facts unravel if development consent is granted that it may be possible for the Applicant or someone else to say "you have based it upon this" and that basis might be questioned but in the absence of evidence and facts capable of being elicited to that effect that sort of outcome is entirely speculative and from the vantage point of a quia timet injunction application it is of course simply not good enough to say that an outcome of a decision-making process might happen to rely upon a source of power which is of dubious substance. 20 In the circumstances, the extent of the costs order which the failed Applicant must pay in my view is fairly limited in the present case to the circumstances essentially arising on and from the delivery of the second and third Respondents' defences which raise reliance upon the SEPP 1 objection. However, I accept that in limiting the costs order in the proceedings on and from that time that there should also be included costs earlier incurred, namely, the costs in preparing that defence and also the costs incurred in the amendments to the Points of Claim, in particular the costs incurred in the amendment that occurred on 30 August when one of the claims for relief, that set forth in par 3 of the originating process, was abandoned. 21 For all those reasons I make the following orders: