Land and Environment Court of New South Wales CITATION : Sydney City Council v Owners of Strata Plan 15629 [2009] NSWLEC 14 APPLICANT PARTIES : Sydney City Council RESPONDENT Owners of Strata Plan 15629 FILE NUMBER(S) : 41070 of 2008 CORAM: Pain J KEY ISSUES: CIVIL ENFORCEMENT :- enforcement of fire safety order - exercise of Court's discretion to enforce order where financial hardship - other fire safety measures in place LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 124 ACR Trading Pty Ltd v Fat-sel Pty Ltd (1987) 11 NSWLR 67 Owners of Strata Plan 15629 v Sydney City Council [2008] NSWLEC 6 CASES CITED: South Sydney City Council v Hexiva Pty Limited (2001) 120 LGERA 146 South Sydney Council v Jaksic-Berger, Ford & Lador Holdings Pty Ltd (1992) 78 LGERA 153 Sydney City Council v Currawong House Pty Ltd (1981) 43 LGRA 121 Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 DATES OF HEARING: 10 February 2009 EX TEMPORE JUDGMENT DATE : 10 February 2009 APPLICANT Ms A Pearman LEGAL REPRESENTATIVES: SOLICITORS Sydney City Council RESPONDENT Ms R Greaves (agent) JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 10 February 2009 41070 of 2008 Sydney City Council v Owners of Strata Plan 15629 EX TEMPORE JUDGMENT 1 Her Honour: The Council has commenced these Class 4 proceedings seeking a declaration that conditions 2.02 and 2.06 of a fire safety order made by Senior Commissioner Roseth on 10 January 2008 in Owners of Strata Plan 15629 v Sydney City Council [2008] NSWLEC 6 have not been complied with and an order that they be complied with. The work required to be done at 80 Bayswater Road, Rushcutters Bay (the building) by the order was the installation of electromagnetic strips on door frames for all units and the design of a sprinkler system (stage 1) within two months and the installation of that sprinkler system (stage 2) within six months of the date of service of the order. Proposed short minutes of order have been provided by the Council with work to be done on stage 1 by 10 March 2009 and stage 2 by 10 May 2009. 2 The Council has relied on affidavits of Mr Tai dated 4 November 2008 and affidavits of Mr Phillips dated 4 November 2008, 21 January 2009 and 9 February 2009 in relation to whether the work required has been carried out. Mr Phillips' February affidavit attests that no design for the sprinkler system has been received by the Council as at 6 February 2009 and no work to commence installation of such a system has commenced in the building. In an inspection in July 2008 he also determined that electromagnetic strips had not been installed on the door frames. In the January affidavit, Mr Phillips does not consider it is necessary to delay the installation of strips on the doors until the shoring up work the Respondent argues is necessary has been carried out. He considered there could be adjustment of the doors without much additional work and that the strips could be repositioned easily by unscrewing and relocating them if movement in the building caused jamming of doors. 3 A bundle of documents produced by the Respondent in answer to a Notice to Produce from the Council was also tendered and this became exhibit A. It includes correspondence between the Respondent and the Council since the making of the court orders in January 2008 concerning the carrying out of the required work. I note that all of the work required by the orders other than conditions 2.02 and 2.06 has been carried out by the Respondents. 4 Ms Greaves, chairperson of the Respondent, appeared for the Respondent at the hearing. She also swore an affidavit dated 19 December 2008 and was cross-examined. The affidavit states that the Respondent has intended to do the work required by conditions 2.02 and 2.06 of the court order but also has to undertake shoring up work due to the landslip on the next door property in 1999. This has caused many of the unit entry doors to jam. She states that the building is continuing to move and there are ongoing problems with doors jamming and internal cracks. The court proceedings for damages for the land slip were only settled in October 2007 and so the Respondent has only been in a financial position to do work since then. A quotation for doing the work of underpinning twelve footings on the western side of the building for $84,000 was attached to her affidavit. Her evidence is also that the roof requires repair as a result of movement resulting from the slippage and this will cost about $20,000. The cost of installing the electromagnetic strips and doors is $17,700 according to a quotation attached to her affidavit. In her oral evidence she stated an additional cost of $450 per door will also be incurred when these are connected to the fire panel. The affidavit identifies efforts made by Ms Greaves to obtain quotations for the electromagnetic strips in July 2008 and the difficulty in getting any company to quote for these. Annexure R to the affidavit is a letter from the Respondent to the Council setting out the fire safety measures that were in place in the building in July 2007 in the context of querying whether a sprinkler system was necessary. 5 Ms Greaves gave oral evidence that she was told by David at Bells Locksmiths that the stages 1 and 2 work should not be implemented until the shoring up work was done. She did not ask David specifically why that was the case but said that commonsense suggests it was because movement in the building may mean the doors would jam and need to be adjusted. There may also be issues with the sprinkler system but no evidence of what those problems might be is identified by her. 6 Mr Otter, the current treasurer of the Respondent, has given oral evidence to the effect that the Respondent currently has $101,000 available immediately for building work. He also advised that the Respondent raised a loan of $81,000 which was paid off in February 2008 to pay for legal fees in a court case. When asked if a further loan could be raised he said inquiries had been made of the same source of the previous loan and they had advised money was "tight". Ms Greaves submitted from the bar table in closing submissions that strata plan owners were limited in their ability to borrow against their collectively owned property and that specialist private lenders loaned to such entities with exorbitant fees and interest charges. 7 The Respondent admits that it has not done the work required by the orders and submits that it has always intended to do it. It is simply a question of having sufficient funds to do all the work required by the orders together with shoring up work required on the building as a result of a landslip on the next door land. 8 The Respondent has decided that new entry doors should be installed in addition to the electromagnetic strips because they have had advice that the existing doors contain asbestos and no-one would be prepared to work on them to install the electromagnetic strips. Further the current doors do not meet current fire safety requirements and replacing them is preferable. That adds to the overall cost of doing the works specified in condition 2.02. 9 There is no evidence of the cost of designing the sprinkler system apart from oral evidence of Ms Greaves that the Respondent spent $10,000 several years ago for a design, now out of date. The cost of installing the sprinkler system is estimated at $125,000 by an independent consultant who gave evidence before Roseth C. That may not include all necessary work such as the erection of scaffolding, according to Ms Greaves in submissions from the bar table. She submits the reason the work has not been done is because of lack of money. Ms Greave's affidavit at par 12 states that at the recent AGM of the Respondent in December 2008 it was resolved to double levies from April 2009. This will raise about $50,000 per year. She also advised orally that a special levy is to be imposed in the quarter after April 2009 but the amount has not been fixed. A special levy will impose severe hardship on more than half of owners, many of whom are on fixed incomes. The Respondent is also investigating the sale of common property to raise funds. It is hoped $80,000 will be raised in this way during the year. The timetable proposed by the Respondent in par 13 of her affidavit is that all works will be completed by 1 December 2009 and the Court is asked to order accordingly. To order the work to be done earlier will cause financial hardship to the Respondent. Council's submissions 10 The Respondent has failed for a considerable period to comply with necessary measures in a fire safety order made by the Court which had to be fully complied with by 10 July 2008. According to the affidavit of Ms Greaves the Respondent does not now dispute that the order should be complied with although the correspondence attached to that affidavit sent during 2008 suggests that the Respondent was reluctant to do the work and has been intransigent. The Respondent has chosen to prioritise doing the shoring up work before complying with the fire safety conditions in the orders. There are sufficient funds to do the work required by the Court's fire safety order and a short time frame to do this should be allowed. 10 March 2009 for stage 1 and 10 May for stage 2 is proposed. 11 There is no evidence to support the Respondent's assertions that the entry doors contain asbestos and need to be replaced (substantially increasing the cost of implementing condition 2.02 requiring the electromagnetic strips). Nor is there evidence establishing why it is necessary to do the shoring up work first. 12 Further there are several decisions of the Court which emphasise the importance of upholding fire safety orders in the interests of public safety, see South Sydney City Council v Hexiva Pty Limited (2001) 120 LGERA 146, South Sydney Council v Jaksic-Berger, Ford & Lador Holdings Pty Ltd (1992) 78 LGERA 153 (where there was a finding that there was a real risk of fire) and Sydney City Council v Currawong House Pty Ltd (1981) 43 LGRA 121 (where the premises were found to be unfit for human habitation) even where there is financial hardship caused to a respondent. Finding 13 The relevant principles applying to the exercise of the Court's discretion to make orders has been considered in Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at [339] and ACR Trading Pty Ltd v Fat-sel Pty Ltd (1987) 11 NSWLR 67 at [82]. Those cases emphasise that the Court is engaged in the enforcement of public laws and in this case the public law concerns the enforcement of fire safety orders designed for the protection of the public. 14 There is no dispute that the court orders which are the subject of these proceedings have not been complied with. It is appropriate that I make a declaration in similar terms to that sought by the Council. The principle issue before me is the exercise of the Court's discretion in making orders to enforce the fire safety order made by Roseth C in circumstances where the Respondent says compliance with the orders in the time frame sought by the Council of 10 March 2009 and 10 May 2009 will impose financial hardship on the property owners. 15 Ms Greaves has not had the benefit of legal representation. She has given some information on which she relies as unsubstantiated submissions from the bar table on matters such as the current fire safety of the building and advice she has received from others about the building. This makes it difficult to weigh up her evidence and submissions. She has submitted that the building is safe for fire purposes, having been certified as fire safe in 1980 and having had regular inspections of fire management facilities including extinguishers and alarms. The existing measures in the building are set out in a letter from the Respondent to the Council dated July 2007 at annexure R to her affidavit. It is necessary to weigh up that essentially untested statement against the fact that a court order has been issued requiring the installation of electromagnetic strips on doors and a fire sprinkler system in an older apartment building (75 years) with extensive timber features. That court order has not been complied with despite being required to be by July 2008. The main reason the Respondent has not implemented the work is lack of funds in large part because the Respondent wishes to undertake the shoring up work necessary as a result of the landslip on the next door land. 16 As submitted by the Council the enforcement of public safety measures is a serious issue particularly in relation to fire safety. There is a court order in place which should have already been complied with. Other decisions of this Court have been referred to where the fact that financial hardship is caused to a particular respondent has not outweighed the need to comply with fire safety orders of various kinds, although the facts of some of those cases suggest the state of the premises in issue was much worse than in this case. Mindful of the need to enforce such orders but also taking into account the particular circumstances of this Respondent, I do not consider I should exercise my discretion in the Respondent's favour which essentially wants to do the shoring up work first before any of the stages 1 and 2 works are carried out. December 2009 is too long a period to allow given that compliance should have been effected by July 2008. The time frames in the orders sought by the Prosecutor should be extended however. 17 The Respondent has access to $101,000. I accept Ms Greaves' submission that it is difficult for the Respondent to obtain a loan. I also note her evidence that the Respondent is currently discussing the sale of common property to raise at least $80,000 hopefully during this year, and is considering the implementation of a special levy and an increase in the general levy on all residents this year. There are currently funds available to the Respondents to undertake the electromagnetic strip installation (and to replace the relevant entry doors as the Respondent has decided it should do in any event) and these works should be carried out as soon as feasible. I note Mr Phillips' evidence that adjustment of the doors can be carried out if these jam without much additional work being required. On inquiries made during the hearing of the relevant contractors who would install the doors and electromagnetic strips the advice received by the Respondent is that the doors will take about four weeks and the strips another six weeks with the connection to the fire panel taking additional unspecified time. The original order made by the Senior Commissioner allowed two months. I will be generous and allow a total of ten weeks for the work in condition 2.02 to be implemented including the connection to the fire panel. The date for compliance with order 2.02 is therefore 21 April 2009. 18 In relation to the fire sprinkler system, I will allow a period of seven months to install that system so that hopefully there is sufficient opportunity to raise enough money for that purpose. That is also a generous time frame in the circumstances where it is not clear that the shoring up work should take precedence. I do so taking into account that the Respondent does have in place other fire safety measures which are checked regularly, according to Ms Greaves, and given the installation of the required electromagnetic strips on the doors in April 2009 and that all other measures in the orders made by the Senior Commissioner have been complied with. The sprinkler system is required to be installed by 8 September 2009. In order to allow the expenditure for the works to be staged the design for the sprinkler system must be provided to the Council by 31 May 2009. Costs 19 The Council seeks an order that its costs be paid by the Respondent as it has had to bring these proceedings, given the failure of the Respondent to comply with the Court's orders. The Respondent argues that costs ought not be payable given that the Respondent was informed of progress in implementing the orders and was aware that the fire safety orders would be complied with once the shoring up work was done. 20 In Class 4 proceedings costs generally follow the event. The Council has been successful in obtaining a declaration and orders for compliance and is entitled to its costs in the absence of disentitling conduct. There is no such conduct. The evidence demonstrates that it was reasonable for the Council to commence these proceedings. There was no compliance with the court order the subject of these proceedings and no clear timetable from the Respondent about when it would be done, before proceedings were commenced in October 2008. As submitted by the Council a timetable for the carrying out of work was not made known by the Respondent until the affidavit of Ms Greaves dated 19 December 2008 was served and par 13 set out a proposed timetable of the work being completed by 1 December 2009. 21 An affidavit of Michael Arch sworn 10 February 2009 identifying the costs incurred by the Council of $13,863 was filed in Court with leave. The solicitor's fees appear reasonable. I consider the costs of counsel should be limited to $5,500. 22 The costs order I make in the Council's favour is limited to the sum of $10,500 including counsel's fees. Given the difficult financial state of the Respondent I will allow a year in which to pay those costs. Order 23 The Court makes the following declaration and orders: 1. A declaration that pursuant to s 124 of the Environmental Planning and Assessment Act 1979, the Respondent has failed to comply with conditions 2.02 and 2.06 of an order made by the Court on 10 January 2008. 2. The Court orders that the Respondent must, by 21 April 2009, install electromagnetic door holders for the entry door of each unit at the building at 80 Bayswater Road, Rushcutters Bay NSW in accordance with condition 2.02 of the orders made by the Court on 10 January 2008. 3. The Court orders that the Respondent must, by 31 May 2009, submit plans for the proposed design of a residential sprinkler system for the building to the Applicant in accordance with condition 2.06 of the orders made by the Court on 10 January 2008. 4. The Court orders that the Respondent must, by 8 September 2009, install a residential sprinkler system throughout the building, in accordance with condition 2.06 of the orders made by the Court on 10 January 2008. 5. The Respondent must pay the Applicant's costs limited to $10,500 including counsel's fees, which order must not be enforced until 10 February 2010. 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