TYNAN v MEHARG [1999] NSWCA 27

New South Wales Court of Appeal CITATION : TYNAN v MEHARG [1999] NSWCA 27 FILE NUMBER(S) : CA 40119/98 HEARING DATE(S) : 15 February 1999 JUDGMENT DATE : 24 February 1999

PARTIES : TYNAN & ORS v MEHARG & ANOR JUDGMENT OF : Priestley JA; Handley JA; Stein JA

LOWER COURT JURISDICTION : Land & Environment Court LOWER COURT FILE NUMBER(S) : LEC 40242/96 LOWER COURT JUDICIAL OFFICER : Sheahan J

Claimant/Respondent (1) - J. Blackman / L. Byrne COUNSEL : Opponent (1)/Appellant - P.J. McEwan SC Opponent (2)/Respondent (2) - M. Baird Claimant/Respondent (1) - Cleaves Mallik Gibbs, Cessnock SOLICITORS : Opponent (1)/Appellants - Emery Partners, Newcastle West Opponent (2)/Respondent (2) - Harris Wheeler, Newcastle CATCHWORDS : Contempt proceedings - order by Land & Environment Court for removal of house DECISION : Interim orders in aid of court's consideration of appropriate enforcement and penalty orders

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40119/98 LEC 40242/96

PRIESTLEY JA HANDLEY JA STEIN JA

Wednesday, 24 February 1999

TYNAN & ORS v MEHARG & ANOR

ORDER MADE BY LAND & ENVIRONMENT COURT FOR REMOVAL OF HOUSE - appeal against order in Court of Appeal fails - non compliance with order - contempt proceedings - interim orders made in aid of court's consideration of appropriate enforcement and penalty orders. ------------------------------ THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40119/98 LEC 40242/96

PRIESTLEY JA HANDLEY JA STEIN JA

Wednesday, 24 February 1999

TYNAN & ORS v MEHARG & ANOR

REASONS FOR INTERIM ORDERS

1 THE COURT: Mr P. Meharg (as claimant) has sought orders that Messrs H.A. J.J. and M.J. Tynan (the Tynans) (the first opponents) be found guilty of contempt of court, and that they be dealt with according to law, for disobedience of a court order to remove a house from Lot 6 in Deposited Plan 850020. The Tynans are brothers. They own Lot 6, which is at Black Hill in the local government area of the Newcastle City Council (the Council). Mr Meharg owns adjoining land. Mr Meharg joined the Council as the second opponent in the contempt proceedings. 2 The contempt proceedings are the consequence of proceedings brought by Mr Meharg against the Tynans and the Council in the Land & Environment Court. In that court Sheahan J made orders and declarations on 13 February 1998 in favour of Mr Meharg. One of the orders was that a second house built on the Tynan's land be removed by 30 April 1998. 3 The Tynans appealed against Sheahan J's judgment and pending the decision of the appeal the time for compliance with the removal order was extended to 1 October 1998. On 30 September 1998 the appeal against the removal order was dismissed. The time for compliance with the removal order was extended to 30 November 1998. 4 On 17 November 1998 the Tynans filed a notice of motion in this court seeking an extension of the time within which the house was to be removed. The application was heard and decided by Handley JA on 23 November 1998. The application was expressed to be for the purpose of obtaining development consent from the Council for the building subject to the removal order. As Handley JA pointed out, the extension of time was not sought so that the order might be complied with, or challenged on appeal, but in aid of a process intended to secure the reversal of the order. Handley JA dismissed the application, for reasons which he gave in some detail. 5 By letter dated 24 November 1998 the solicitors for Mr Meharg wrote to the solicitors for the Tynans pointing out that the building must be removed by 30 November 1998 and warning that in the event it was not so removed, Mr Meharg would commence contempt proceedings against the Tynans. 6 The building was not removed by 30 November 1998. Mr Meharg then, by notice of motion filed on 2 December 1998, commenced these contempt proceedings. 7 The contempt motion came on for hearing on 21 December 1998. The house had not been removed. After hearing evidence and submissions, the court said that in its opinion contempt by the Tynans had been established. The court did not make formal orders but adjourned the proceedings to 15 February 1999 for the purpose of then hearing any evidence and submissions any party wished to put before the court concerning the penalties to be imposed upon the Tynans. The proceedings duly came on for further hearing on 15 February 1999. The house had not been removed. Considerable evidence was given relevant both to penalty and to the manner of securing compliance with the court's removal order. 8 Since the contempt the court is concerned with is the disobedience of the order made on 30 September 1998 extending the time for removal of the building to 30 November 1998, the facts relevant to the contempt are those occurring after 30 September. The details of the earlier facts are set out in the reasons of Sheahan J of 15 February 1998 and in this court's reasons of 30 September 1998. 9 The essential matter from the period before 30 September 1998 which needs to be mentioned here is that in 1993 the Tynans obtained development approval for the erection of a second house on their land to be at a distance no less than 12.4 metres from their common boundary with Mr Meharg's land. They built a house which at its closest point to the boundary was .64 metres from it. By the time the proceedings began in the Land & Environment Court the house consisted of a concrete slab on which masonry supports had been built, on top of which a prefabricated house structure (brought to the site by truck), had been placed. The area within the masonry supports had been enclosed and divided into rooms, two of which were used as bedrooms. 10 For various reasons, no longer relevant after this court made its orders on 30 September 1998, the Tynans claimed they should not be obliged to remove the house, notwithstanding that it had been built without development approval. Both Sheahan J and this court held against them in regard to that. Thus, as from 30 September 1998 there was a valid court order ordering that the house be removed no later than 30 November 1998. There was no appeal against that order, nor any appeal against the refusal of Handley JA to extend the time to comply with it. The Tynans were at all times after 30 September 1998 legally obliged to comply with the order within the extended time. 11 The court therefore had little difficulty on 21 December 1998 in coming to the conclusion that the Tynans were in contempt of court. They had not complied with the removal order. The court indicated that it would not proceed to make formal orders on that day but would give the parties an opportunity to put any evidence they wished before the court on the question of appropriate penalty, although some evidence directed to penalty had already been given. 12 One of the matters that had been mentioned was that the Tynans were hopeful that if they lodged a new development application they would be granted development approval for the building of a house, the same as that to be removed, on Lot 6 at a distance greater than 12.4 metres from their boundary with Mr Meharg. Evidence was put before the court that if such approval could be obtained, the contravening house could be removed and re-erected at a cost of $109,000, whereas if it were simply removed in accordance with the court's order the cost of later re-building it elsewhere would be $145,000. The court was told that it had been intended that a new development application would be filed by the Tynans that day (21 December 1998) seeking development approval for, in effect, the relocation of the contravening house to a point on the Tynans' land at least 12.4 metres from the boundary with Mr Meharg's land. However, by the time the proceedings on that day were adjourned, it was late in the afternoon. The court recognised it was unlikely the development application could be filed that day but noted that the court had been proceeding on the basis that the development application would be filed during the week. 13 The discussion about the contemplated development application had been initiated by counsel for the Tynans on the basis that the court should give weight, in deciding upon appropriate penalties, to the claimed fact that the Tynans were genuinely undertaking a course of action aimed at compliance with the court's order but in a way which would enable them to make reasonable use of the house which had to be removed, after its removal. In regard to this, the court said to counsel for the Tynans: "... our finding today, although not yet embodied in a formal order, makes it plain that there has been contempt continuing since 30 November, and which will continue until such time as either the building is demolished or some step is taken on your side of the record to obtain an extension of time for compliance with the court's order to demolish the existing building. Not an extension of time to try and seek approval from the council to leave the building where it is, but an extension of time to comply with the existing order. Until either the building is demolished or an extension of time has been obtained then contempt continues on the part of all of your clients. That of course will be something that will be taken into account in deciding what is the appropriate order to make in the end." The hearing was then adjourned to 15 February 1999. 14 The Tynans did not take any step to obtain an extension of time for compliance with the court's order. On 31 December 1998 they lodged two development applications with the Council. One was for development approval for the construction of a building on the site of the building to be removed, the other was for the construction of a building on Lot 6 not less than 12.4 metres from Mr Meharg's boundary. The idea behind the first of these applications was that if approval were obtained, the subject house would be removed and afterwards relocated on the same spot. 15 The fullest explanation of what was done by the Tyans in regard to the removal order following this court's confirmation on 30 September 1998 of Sheahan J's removal order, subject to the extension of time for compliance with it to 30 November 1998, was given by Mr J.E. McNaughton. He was engaged, following Sheahan J's decision of 13 February 1998, to assist the Tynans in obtaining necessary Council approvals for the reconstruction of the house and to advise on protecting their interests. Mr McNaughton appeared well qualified for these tasks. He was a member of a firm of surveyors which had much experience in dealing with councils on behalf of clients in regard to development and building applications. He had been a member of the Council, and Lord Mayor of Newcastle from 1986 to 1995. 16 In his affidavit of 29 January 1999 Mr McNaughton said that immediately following the decision of this court on 30 September 1998 he advised the Tynans to prepare for the demolition of the building; his advice was that the Tynans should try to get development consent for the site on which the house was located and all other necessary approvals before 30 November 1998 and then apply to the court for an extension of time for compliance with the court's order. A development application for approval of the building upon its existing site was lodged on 14 October 1998. Mr Meharg lodged an objection to the development application. It would have been against all ordinary human understanding if he did not. Also in his affidavit sworn 29 January 1999 Mr McNaughton said that the effect of Mr Meharg's objection was to delay the processing of the development application and had the objection not been lodged Council would have been able to determine the development application on 10 November 1998. We think that a person with Mr McNaughton's experience would have realised that if Mr Meharg objected to the development application, delay in its consideration by the Council was very likely. 17 Mr McNaughton further said in his affidavit of 29 January 1999 that Mr Meharg's objection to the development application was lodged before 29 October 1998. His affidavit then continued: "24. On or about 29 October, 1998, I advised Jason Tynan that we would have to call tenders for the demolition of the building before the end of October and he would have to make domestic arrangements about where to live and moving out of the home before the end of November. 25. By early November, 1998, Tynan had obtained prices for the relevant demolition varying from total destruction and removal to dismantling the house and storing the materials for reuse on the site both with the removal of the concrete slab and footings and leaving the concrete slab and footings in the ground. At that stage, we hoped for a decision of Council at its meeting of 10 November, 1998, which would have allowed us time to apply to the Court for an extension of time for the removal of the building in an orderly fashion. 26. The quotes and estimates obtained were from Doug Fraser Pty Ltd, Civibuild Pty Ltd and Wise & Horton Pty Ltd which costed various ways of removing the building from the land. There were three options available for the removal of the house. Under the first option, the house could be lifted from the existing footings and those footings destroyed. Consent could then be obtained from the Council for a building on this site whereupon new footings could be put in place and the house could be put back on these new footings and this would be in conformity with Council requirements. This option would cost approximately fifty thousand dollars ($50,000.00). Annexed hereto and marked 'E' is a true copy of a fax which Neil Fraser sent me at my request on 25 January, 1999 confirming the quote provided by Doug Fraser Pty Ltd. 27. The reason for the difference between the cost of approximately $50,000 referred to in the previous paragraph and the cost of approximately $110,000 referred to in the affidavit of Raymond Wood, sworn on 11 December, 1998 and filed in this matter (page 54 of Application Book) is that the higher quote covers the cost of hiring two cranes, the preparation of a great deal of earthworks and the preparation of earthworks to get the cranes into position. In respect of the lower amount, this is costed on the basis that the house would be jacked up off the ground rather than lifted up by cranes. This option, the second option, was to obtain Council consent for a building to be located on a sire 12.4 metres from the boundary of the property, build new footings on this location, lift the house from its existing footings and place the house on these new footing and destroy the existing footings. 28. The third option would be to demolish the building and the existing footings entirely and rebuild the house on a different location. The cost of this option would be approximately one hundred and forty-five thousand dollars ($145,000). This was the estimate provided by Wise & Horton Pty Ltd which is Annexure 'D' of the affidavit of Jason Tynan, sworn 11 December, 1998, in these proceedings." 18 By letter dated 30 November 1998 from the Council to Mr J. Tynan, the Council notified him that advice from the Council's solicitor was that the Council could not issue a retrospective development consent for the building and that that was what the development application was requesting Council to do. 19 At some point which is not fully clear from his evidence, Mr McNaughton had begun working on an alternative development application for a dwelling to be located 12.4 metres from the boundary with Mr Meharg's land. Also, following receipt of the Council's view it could not grant the development application lodged on 14 October 1998, Mr McNaughton began to prepare a third development application which involved removal of the existing building and rebuilding on the same site. These latter two applications were those lodged on 31 December 1998. That lodged on 14 October 1998 was not pursued. Mr McNaughton made efforts to have the latter two applications dealt with as matter of urgency. A special, urgent meeting of the Council was called for 27 January 1999, pursuant to delegated authority to deal with urgent matters. However, that meeting was not held, for reasons stated in a fax dated 27 January 1999 from the Lord Mayor to Mr McNaughton: "... I wish to advise that it is not appropriate to convene this meeting to consider the determination of the subject applications for the following reasons: 1. Additional information is still required from the applicant. 2. Advice is awaited from Council's solicitor. 3. The matter should not be dealt with under the terms of delegation issued by Council due to its controversial nature. Council staff are currently working on reports addressing these applications. It is expected that a report will be available for Council on 2 February 1999, either making a recommendation in respect of these applications or, if information remains outstanding, providing a status report. Reports will be available on completion to Mr Tynan and Mr Meharg and persons acting on their behalf." 20 What happened after that was the subject of evidence at the adjourned hearing on 15 February 1999. The way in which decisions were made was described by Mr McNaughton. He was cross-examined about what instructions had been given to him by the Tynans, in particular Mr J. Tynan. (It had become clear in the evidence that Mr J. Tynan acted on behalf of his two brothers and himself in all matters relating to the house and the court proceedings.) Mr McNaughton emphasised that Mr Tynan acted on his advice. He said: "... I had discussions with him as a client about how to go about it. I suggested how to do it and he said yes, go ahead and do it. Q. So that your suggestions are what you understand your instructions to be, is that correct? A. Yes. Q. So your suggestions are that the top storey should be lifted and removed from the site? A. Eventually removed from the site. Q. When are they to be removed from the site according to your instructions and your understanding of the correct method of removal? A. When? Immediately. Q. So that how will they be removed from the site? A. They'll be lifted on RSJ girders, wheels put underneath it and it will be simply transported the way you move any house onto another block of ground. Q. Do you know when those instructions were given to the person who is to be engaged to move it? A. Finally it was last Monday, that's when we couldn't get any approvals from council, we didn't - the only thing left to do was shift the house. Q. So that on last Monday you gave instructions to someone to shift the house completely, that is take the top floor, lift it, put it on RSJs, take it off the site to somewhere else and then to demolish the underneath? A. No, that wasn't it. What we wanted them to do was lift the building so that what was underneath it could be demolished. That was what the instructions were as the first stage. The one thing that had to be done and we knew that we couldn't get more than that done, it ws pouring with rain, the place was an absolute boghole out there, we knew we couldn't get equipment onto it. I said well you've got to do it, the council won't even deal with this matter until 9 March, you've got no option but to do that. That was attempted to be done, the equipment is now bogged on the site, to try and do it, but it was - I want to make it quite clear that it was at my recommendation and my discussions with Jason about how to go about it. Q. So far as you're concerned, you said that you gave instructions that the top was to be removed from the site, that correct? A. I gave instructions only that the equipment was to be brought to the site and the building was to be lifted in readiness for moving it to another block of ground." 21 And later: "Q. Just to make clear what your instructions to the people are, these instructions are ones that you have suggested to Jason Tynan and he has agreed to, is that correct? A. Yes. Q. And they are first of all to Mr Burley to come onto the site and to lift the house, that correct? A. Yes. Q. But not at this stage to remove it? A. No, that's correct. Q. And they are to Mr Fraser to come onto the site and remove part of the ground floor? A. All of the ground floor except the pad is the price I'm asking for. Q. The slab and what is underneath the slab? A. No, not the slab, the slab I told him I wanted to remain. Q. Just let me say that. Your instructions to Mr Fraser are to come onto the site and remove or to demolish the ground floor except for the slab -- A. Yes. Q. – and what's underneath the slab? A. That's - underneath the foundations. Q. Underneath the foundations? A. Yes, that's correct. Q. When did you give those instructions to Mr Fraser? A. Last Monday. Q. When did you give those instructions to Mr Burley? A. Last Monday." 22 "Last Monday" was 8 February 1999, seven days before the further hearing of the contempt proceedings. The position thus revealed is most unsatisfactory. The Tynans, acting on Mr McNaughton's advice, have spent the greater part of the time since 30 September 1998 in attempting to bring about what, in practical terms, would be the reversal of the removal order. Speaking again in practical terms, that effort should have been recognised as very unlikely to succeed. Remarks made by Handley JA in his decision of 23 November 1998 should have made this even more obvious to Mr McNaughton and his clients. Nevertheless, no step towards removal had been taken when the contempt proceedings came on for hearing on 21 December 1998. Of the two development applications lodged on 31 December 1998, one appeared to have some practical point in it, but should also have been recognised as being unlikely to be dealt with finally by the Council for some time ahead, in view of various matters the Council was by then requiring to be clarified before it could decide the application. The other development application filed on 31 December 1998 was a somewhat more refined version of that lodged on 14 October 1998 and not pursued, and would have been foreseen, by most lawyers and most practical people, as doomed to failure. Still nothing was done towards compliance with the court order. No instructions towards the carrying out of the court's order were given until 8 February 1999, and those instructions, if carried out, would have brought about only partial compliance with the court's order. The three Tynan brothers are the persons legally responsible for this unsatisfactory state of affairs. 23 In the course of argument on 15 February 1999, the court indicated that the final orders in the contempt proceedings would need to do two things: ensure compliance with the court's order, and impose suitable penalties upon the Tynans. The court also indicated that it did not wish the proceedings to be prolonged and that one possible way of bringing matters to finality would be to make a declaration of the contempt that had been committed, announce penalties and make orders accordingly and further order a writ of sequestration to issue, to lie in the office until a date to be fixed by the court, so that if the house had not been removed by the date when the writ of sequestration would become available, then a sequestrator would be effectively appointed who could put in hand the removal of the house at the expense of the Tynans. (Mr Meharg had filed a notice of motion seeking such a writ of sequestration; the motion was listed for hearing on 15 February 1999 and was then dealt together with the contempt proceedings.) 24 For the assistance of the court if it decided to follow this course, the parties were directed to file an agreed form of sequestration order, or if not agreed, their competing versions, by 9.30 am on 19 February 1999. This direction was complied with. (In speaking of the parties we are referring to Mr Meharg and the Tynans. The court raised the question on 15 February 1999 whether it was appropriate for the Council to have been joined in the contempt proceedings. As no objection was then raised by the Tynans, the position was allowed to stand without examination.) The parties agreed on the form of sequestration order with the exception of the length of time during which it should lie in the office. In connection with this issue, the court was informed by the Tynans that removal of the house had begun. 25 However, the material supplied to the court in this respect shows what we think is still a too leisurely approach (in the circumstances) to the removal of the house. What was sought was in effect an extension to 19 March 1999 of the time within which the house may be removed. We think this is too long. Further, we think, on reflection, that the penalties to be imposed upon the Tynans should be arrived at after taking into consideration both the fact of eventual compliance with the court order (if that position should be reached) and the length of time it took for the order to be complied with. The longer the delay the more severe the penalty is likely to be. 26 We therefore think it appropriate for the court to delay the making of its final orders a little further and to make an order today requiring the filing of an affidavit on behalf of the Tynans no later than 4.30 pm on 3 March 1999, made by some person with first hand knowledge of the facts concerning the removal of the house, stating the facts concerning its removal. A copy of such affidavit must be served on the solicitor for Mr Meharg immediately after the affidavit is filed. If there is any disagreement from Mr Meharg's side with the facts asserted in the affidavit then an affidavit from a person with direct knowledge of the facts in dispute is to be filed by 4.30 pm on 8 March 1999, stating the position concerning those facts. After the time has elapsed for the filing of those affidavits the court will consider the position revealed by them and either proceed directly to the making and publication of final orders or, if, regrettably, it becomes necessary for further steps to be taken, will give directions for such further steps. 27 The question of what final orders will be made thus stands reserved until the court considers the outcome of the interim orders made today. ----------------------