Land and Environment Court of New South Wales CITATION : Lawrence Waterhouse Pty Limited v Port Stephens Council [2007] NSWLEC 605 APPLICANT: Lawrence Waterhouse Pty Limited PARTIES : RESPONDENT: Port Stephens Council FILE NUMBER(S) : 41101 of 2006 CORAM: Lloyd J KEY ISSUES: Injunctions and Declarations :- lapsing of development consent - whether there has been substantial commencement of development - whether concreting of driveway constitutes substantial commencement - whether approval and registration of strata plan is commencement of development - costs LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 95(4) Local Government Act 1919 Day v Pinglen Pty Limited (1981) 148 CLR 289; Iron Gates Developments Pty Ltd v Richmond-Evans Environmental Society Inc (1992) 81 LGERA 132; CASES CITED: North Sydney Municipal Council v Middle Harbour Investments Pty Ltd [1964] NSWR 934; (1965) 10 LGRA 41; Oshlack v Richmond River Council (1998) 193 CLR 72; Smith v Wyong Shire Council (No. 3) (1984) 53 LGRA 170; Ward v Griffiths (1987) 9 NSWLR 458 DATES OF HEARING: 30/05/2007 EX TEMPORE JUDGMENT DATE : 30 May 2007 APPLICANT: W Lawrence (principal) SOLICITORS: N/A LEGAL REPRESENTATIVES: RESPONDENT: M C Fraser (barrister) SOLICITORS: Sparke Helmore Building JUDGMENT: - 6 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Lloyd J Wednesday, 30 May 2007 LEC No. 41101 of 2006 LAWRENCE WATERHOUSE PTY LIMITED v PORT STEPHENS COUNCIL [2007] NSWLEC 605 EX TEMPORE JUDGMENT 1 HIS HONOUR: The applicant, Lawrence Waterhouse Pty Limited, seeks a declaration that a development consent, granted by the respondent, Port Stephens Council, on 23 October 1973 has not lapsed on the ground that there has been substantial commencement of the development 2 The relevant facts are not really in dispute and are of a fairly limited nature. For that reason, I am prepared to deliver judgment now, so that the parties know where they stand, even though the judgment may not be as complete as would otherwise be the case. 3 The relevant facts commence in 1959, when the council granted a building approval for "7 flats" on the land comprising lots 15, 16 and 17 in deposited plan 15998, Magnus Street, Nelson Bay. 4 In 1968, the council granted a building approval for an additional four units, on the land. It appears that the residential flat building was duly constructed in accordance with the two building approvals. 5 In August 1973, a development application was lodged for "motel extension to flats". The development application describes the then existing development as "8 brick flats - 2 storeys". 6 On 23 October 1973, the council granted development consent, to the development application, for "additions of motel units". The consent states: This consent becomes void if the development is not substantially commenced or the consent is not renewed within twelve (12) months from the date of this notification. This approval relates to development consent only and a current Building Permit must be held before work commences on any structure. 7 On 4 September 1974, the council granted a twelve-month extension of the consent, so that the consent had to be substantially commenced on or before 4 September 1975 to save it from lapsing. 8 In the meantime, that is, before 4 September 1975, the council approved a strata plan, which was then registered in November 1974, being a strata plan of the existing residential flat building and creating a lot, lot 9, which was the lot upon which the additional motel units were to be constructed. 9 The evidence also shows that some work was done before the cut off date of 4 September 1975. 10 It seems that there was an existing gravel driveway servicing the residential flat building. According to the expert evidence of Mr B Moriatti, aerial photography demonstrates that this gravel driveway was concreted over, with additional parking spaces provided on each side. An aerial photo of 25 January 1976, shows the driveway had been by then covered with concrete, with concrete parking spaces on each side. 11 The applicant relies upon this concreting as being substantial commencement of the development, which was the subject of the consent granted on 23 October 1973 and which was the subject of the twelve-month extension granted on 4 September 1974. It is said that this provides not only access but car parking areas, which are part of the motel building, which was the subject of that consent. 12 I should observe that s 95(4) of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") - which provides for the lapsing of a consent unless building engineering or construction work is physically commenced on the land, to which the consent applies - is a provision that does not apply in this case. That provision only applies to development consents granted under the EP&A Act. The consent in the present case was granted in 1973, and is a development consent granted under the Local Government Act 1919. It follows that the question is not whether or not building engineering or construction work was physically commenced but whether or not the work, the subject of the consent, was substantially commenced on or before the relevant date 4 September 1975. 13 In considering whether or not there has been substantial commencement of the work that was the subject of the development consent, a number of principles may be stated. These have been identified by the courts over a period of some years. 14 The first principle is explained by Hardie J in North Sydney Municipal Council v Middle Harbour Investments Pty Ltd [1964] NSWR 934; (1965) 10 LGRA 41 at 45: The use of the adverb "substantially", in the context, in my view, emphasizes two points, or perhaps two different approaches to the one point. One is that the commencement must be some positive unequivocal step indicating that the building for which consent or approval has been obtained has actually commenced; in other words, that some work has been done on the site which is referable to and only referable to the particular building or structure that has been approved; in that sense, it emphasizes that the commencement must be a real or actual one as distinct from preparatory work and as distinct from a notional or equivocal or sham commencement. 15 The next principle emerges from the decision of the High Court in Day v Pinglen Pty Ltd (1981) 148 CLR 289 in which the High Court said, at 299: We come then to this question of substantial commencement. As has been said, it is a question of degree. The facts must be such as to lead naturally to the conclusion that the commencement is not merely evident, but is substantial, that is, of considerable amount. 16 In that case, a concrete slab had been poured for a residential flat building and the High Court held that that did not amount, in the circumstances of that case, to substantial commencement. 17 The final authority to which I should refer is Smith v Wyong Shire Council (No 3) (1984) 53 LGRA 170, in which Cripps J said, at 178: What the section requires is that the development the subject of the consent is commenced within a period of two years. That commencement occurs when the building, engineering or construction work relating to the development the subject of the consent is physically commenced. (I interpolate that two years was the relevant period in that case.) 18 In the present case, the question is whether the concreting work that was done satisfies the requirement of substantial commencement. For reasons which I will shortly state, in my view it does not amount to substantial commencement. The work done was not referable only to the proposed development but also, apparently, to facilitate access and parking to the existing residential flat building. That is, the concreting work is not referable only to the particular development that had been approved. Importantly, in my view, the concreting work that had been done, was not "of considerable amount" as described by the High Court in Day v Pinglen Pty Ltd. It only related to perhaps two of the twelve of the required parking spaces for the proposed motel. Moreover, insofar as the work related to the proposed motel, it appears that it was unlawful in the absence of a building approval, which was required in addition to the development consent. 19 Section 311 of the Local Government Act 1919, which applied at the time, states: A building shall not be erected or altered unless the approval of the council is obtained therefor beforehand… 20 A concrete driveway has been held to be a building: see Ward v Griffiths (1987) 9 NSWLR 458 at 460. 21 There is evidence from two of council's health and building surveyors who were employed by the council in the 1970s. According to them, the council in the 1970s did not require building applications for the pouring of concrete slabs on ground which was to be used for driveways and car parking areas where no building structures were to be erected over such driveways and car parking areas. 22 In the present case the car parking areas to be provided for the motel units, the subject of the development consent, were to have structures erected over them, being the motel building itself and would thus appear to be outside the practice that had been then adopted by the council. 23 A condition of the development consent which I have described, stated that that approval relates to development consent only and a current building permit must be held before work commences on any structure. That condition has not been complied with. It follows that the concreting work, insofar as it purports to provide for car parking for the motel units, was done unlawfully. In order to constitute substantial commencement of development, the works relied upon must be lawful: Iron Gates Developments Pty Ltd v Richmond-Evans Environmental Society Inc (1992) 81 LGERA 132. 24 The applicant also relies upon the approval and registration of the strata plan. As I have noted, that was approved by the council on 26 September 1974 and was registered in November 1974. 25 In my view, approval and registration of the strata plan is not commencement of the development in the relevant sense. It only created the lot on which the development was to be carried out. Even if I am wrong in so concluding I have already found that what had occurred does not amount to substantial commencement. Those then, shortly stated, are the reasons for my finding that the claim for declaratory relief must be refused. FRASER: Your Honour, the council would seek an order for costs, that naturally follow the outcome of that decision of yours. 26 HIS HONOUR: Mr Lawrence? LAWRENCE: I'd object to that, of course your Honour. I had no choice to do that but if there were going to be costs, I'd seek that you determine the costs or the registrar, preferably you, if you could. 27 HIS HONOUR: I do not determine the costs. If there is no agreement on costs, then it goes to a costs assessor, but I note that you oppose the application. LAWRENCE: Thank you. 28 HIS HONOUR: On the question of costs, the court has a discretion. However, the discretion must be exercised judicially. In exercising the discretion judicially, the principle is that a successful party in litigation is entitled to an order of costs in its favour. The principle is grounded in reasons of fairness and policy and costs are not awarded to punish an unsuccessful party. If the litigation had not been brought by the unsuccessful party the successful party would not have incurred the expense which it did and, as between the parties, fairness dictates that the unsuccessful party typically bears the liability for costs of the unsuccessful party. This is a principle which has been stated many times and I need go no further than the decision of the high court in Oshlack v Richmond River Council (1998) 193 CLR 72 at 97. If those costs are not agreed, of course, then they will go to a costs assessor. 29 The formal orders of the court therefore are: 1. The application is dismissed. 2. The applicant must pay the respondent's costs. 3. The exhibits may be returned. I hereby certify that the preceding 29 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd. Associate ********** 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.