Horizons Corporations Law Pty Limited v Rizons Pty Limited [1999] NSWSC 691

New South Wales Supreme Court CITATION : Horizons Corporations Law Pty Limited v Rizons Pty Limited [1999] NSWSC 691 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 4894/97 HEARING DATE(S) : 7 July 1999 JUDGMENT DATE : 7 July 1999

Horizons Corporations Pty Limited (P) Rizons Pty Limited (D1) PARTIES : The Proprietors Community Association D.P. 270021 (D2) Port Stephens Council (D3) Director of the Land Titles Office and Registrar General (D4) JUDGMENT OF : Master McLaughlin

Mr. M. J. Cohen (P) COUNSEL : Mr. W. R. Davison S.C. (D1) Mr. J.E. Robson (D3) Vandeness & Scott (P) SOLICITORS : Paul Hines (D1) Abbott Tout (D3) CATCHWORDS : DECISION :

- 13 - SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER McLAUGHLIN

Wednesday, 7 July 1999

4894/97 HORIZONS CORPORATION PTY LIMITED -v- RIZONS PTY LIMITED AND ORS JUDGMENT

1 MASTER: There are presently before the Court two notices of motion. The first in point of time is that which was filed by the first defendant Rizons Pty Ltd on 23 March 1999. The precise relief sought in paragraph 1 of that notice of motion was, during the course of today's hearing, by leave of the Court amended. 2 By that notice of motion the first defendant now seeks substantively an order pursuant to Part 13 rule 5 of the Supreme Court Rules that the claims for relief in paragraphs 1 to 8 inclusive, 11 and 12 in the summons filed by the plaintiff Horizons Corporation Pty Ltd be dismissed on the grounds that they disclose no reasonable cause of action and are an abuse of the process of the Court. 3 The second notice of motion is that which was filed by leave of the Court this day by the third defendant, Port Stephens Council. That notice of motion was made returnable instanter and was heard at the same time as was heard the notice of motion filed on behalf of the first defendant. 4 By its notice of motion filed this day, 7 July 1999, the third defendant seeks substantively an order pursuant to Part 13 rule 5 of the Supreme Court Rules that the claims for relief in paragraphs 5, 6, 11 and 12 in the summons be dismissed on the ground that they are an abuse of the process of the Court. 5 The substantive proceedings were instituted by summons filed by the plaintiff on 26 November 1997. That summons names four defendants, being Rizons Pty Ltd., the Proprietors Community Association DP270021, Port Stephens Council, and Director of the Land Titles Office and Registrar General. Neither the second defendant nor the fourth defendant has participated in the hearing before me. 6 By that summons the plaintiff claims a number of items of relief. The first five prayers for relief seek declarations, prayer 9 also seeks declaratory relief, and prayers 6, 7, 8 and 10 seek orders. By prayer 11 and prayer 12 the plaintiff seeks, respectively, damages and interest; prayer 13 seeks costs. 7 The present parties were all parties to proceedings in the Land and Environment Court of New South Wales No 40191 of 1997, in which the present plaintiff was the applicant and the present defendants were the respondents. On 14 November 1997 Acting Justice Cowdroy (as his Honour then was), delivered his reasons for judgment. The relief which was sought in those proceedings was essentially relief of the nature which is sought in the present proceedings in the Supreme Court. Justice Cowdroy held that the Land and Environment Court lacked the jurisdiction to grant the relief which was sought by the plaintiff against the first respondent in the proceedings before him, Rizons Pty Ltd. (which is the first defendant in the Supreme Court proceedings). 8 It was, as I understand it, essentially as a result of the decision by his Honour in the Land and Environment Court on 14 November 1997 that the present proceedings were instituted by the plaintiff in the Supreme Court on 26 November 1997. The substantive order made by Justice Cowdroy in the Land and Environment Court was that the proceedings against the first respondent be dismissed. Subsequently the proceedings against the third respondent, Port Stephens Council, were, by consent of that party, discontinued. 9 The substantive proceedings relate to a consent which was granted by the third defendant, Port Stephens Council, to a development application at Salamander Bay. The title to the land in respect of which that development consent was granted is title which arises under what has been described as the Community Titles legislation, being, in particular, the Community Land Development Act 1989 and the Community Land Management Act 1989. 10 It would appear that there is a dispute between the plaintiff on the one hand and the first defendant on the other arising out of an agreement for sale of the land in respect of which the consent has been granted. That agreement for sale has been placed in evidence before me as exhibit A. It will be observed that the vendor named therein is Australia NID Pty Limited. It would appear that that company is identical with the present plaintiff, and that it has, since the date of the agreement for sale, changed its name to Horizons Corporation Pty Ltd. 11 Essentially it is the case for the plaintiff that the implementation for the consent which has been granted by the third defendant to the first defendant is precluded by covenant and by agreement, such covenant arising under the appropriate management statement and agreement arising expressly as a result of the agreement for sale of land. 12 The dispute between the parties is, so I am informed, that the plaintiff asserts that there was an agreement between itself and the first defendant that on the relevant parcel of land (referred to as lot 4) there would be constructed sixteen villa units, whilst the terms of the consent which was granted by the third defendant to the first defendant allowed for the construction of nine villa units. The plaintiff, by the various prayers for declaratory relief in the summons, seeks to enforce the operation of the management statement which is incorporated in the agreement for sale between itself and the first defendant. 13 The present applicants bring their respective applications pursuant to the provisions of Part 13 of the Supreme Court Rules, in particular Division 2 of that Part, relating to summary stay or dismissal. Rule 5 provides, relevantly, in subsection (1) thereof, Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings --- (a) no reasonable cause of action is disclosed; (b) the proceedings are frivolous or vexatious; or (c) the proceedings are an abuse of the process of the Court, the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings. 14 The principles in relation to the exercise of the discretion of the Court under that rule are well known. They are most conveniently referred to in the judgment of Barwick CJ in General Steel Industries Incorporated v Commissioner for Railways (1964) 112 CLR 125. 15 On behalf of the first defendant it is submitted that neither the management statement nor any purported agreement to the effect that the plaintiff asserts can stand in the way of the implementation of the consent which was given by the third defendant. 16 For the purposes of an application of this nature, the Court proceeds upon the basis that the plaintiff would be able at a final hearing to establish any factual matter upon which it relies; that is, that the plaintiff at a final hearing would, in the instant case, be able to establish that both the management statement and an express agreement between itself and the first defendant were to the effect that upon lot 4 there would be erected sixteen villa units and that such agreement envisaged that the first defendant would seek the approval of the third defendant to such a development. 17 But it is submitted on behalf of the first defendant that, whether or not there was such an agreement, the effect of the consent which has been granted by the third defendant is to override any such agreement to the contrary or the operation of the management statement. 18 The consent was granted pursuant to the provisions of section 34 of the Port Stephens Local Environmental Plan ("the LEP"). That plan has effect consequent upon the provisions of section 28(2) of the Environmental Planning and Assessment Act 1979. That subsection provides: For the purposes of enabling development to be carried out in accordance with an environmental planning instrument or in accordance with a consent granted under this Act, an environmental planning instrument may provide that to the extent necessary to serve that purpose, a regulatory instrument specified in that environmental planning instrument shall not apply to any such development or shall apply subject to the modifications specified in that environmental planning instrument. 19 The phrase "regulatory instrument" is defined in subsection (1) of that section to mean: Any act (other than this Act), rule, regulation, by-law, ordinance, proclamation, agreement, covenant or instrument by or under whatever authority made. 20 Section 34(1) of the Port Stephens Local Environmental Plan is in the following terms: For the purpose of enabling development to be carried out in accordance with this plan as in force at the time the development is carried out or in accordance with the consent granted under the Act, any agreement, covenant or instrument imposing restrictions on the carrying out of that development on land to which this plan applies to the extent necessary to serve that purpose shall not apply to the development. 21 The foregoing provision in the LEP in wide terms and would, upon its reading, appear to cover and to be intended to cover a situation such as that which is presently before the Court, where the plaintiff attempts to assert an agreement which, on its face, appears to be inconsistent with the consent ultimately granted by the third defendant. 22 The effect of section 28 of the Act was considered by the Court of Appeal of New South Wales in Coshott v Ludwig (1997) NSW Conv. Rep. 55-810. Meagher JA, with whom Giles and Simos JJA agreed, said: The self-evident purpose of section 28 of the Act and clause 32 of LEP27 is to nullify and remove all obstacles to the planning principles decided on by the Council or the Minister. In this context section 28 of the Act is stating, in effect, "an environmental planning instrument may state what documents should be disregarded", and clause 32 of LEP27 is stating that one type of document to be disregarded is a document creating a restrictive covenant. As to the argument about the words "by or under whatever authority made", I am of the view that, although chosen without conspicuous felicity, they mean no more than "howsoever created". 23 That decision of the Court of Appeal in my view clearly has the effect that the consent granted by the third defendant can in no way be impeded, neither can the implementation of that consent be prevented, by any agreement which the parties to the sale might have concluded between themselves or under any agreement arising out of the management statement which was incorporated in the written agreement for sale. 24 It would appear, therefore, upon the basis of the statutory foundation giving rise to the LEP and the consent granted by the third defendant thereunder, that the plaintiff is absolutely precluded from obtaining the relief which it seeks in the present proceedings to the extent that such relief is inconsistent with that consent. 25 The plaintiff, however, submits that the terms of the consent and the terms of clause 34(1) of the LEP are not conclusive in defeating the plaintiff's claim. The plaintiff submits that, as a result of the enactment of the Community Lands legislation in 1989, and in particular the Community Land Development Act 1989, there has been an implied repeal of section 28 of the Environmental Planning and Assessment Act 1979 so far as that section relates to community title. In that regard the plaintiff has, as it is entitled to, relied upon the Second Reading Speech made by the Minister for Natural Resources in introducing that legislation into the Legislative Assembly on 21 November 1989. In that Second Reading Speech the Minister said: Generally known as the community titles legislation, the bills will introduce a new form of land subdivision in New South Wales and will permit greater innovation in subdivision design and greater flexibility in residential, commercial and industrial development. 26 I have been taken to section 4 of the Community Land Development Act which sets forth the object and application of the Act. I have also been taken to a number of what might be described as machinery provisions in that Act. For example, it has been submitted that the provisions of section 26 of the Act dealing with a development contract would be of no effect whatsoever if they were to be subject to section 28 of the Environmental Planning and Assessment Act. Indeed, it has been submitted on behalf of the plaintiff that if the effect of section 28 of the Environmental Planning and Assessment Act and of the consent granted by the third defendant under its Local Environmental Plan are as now asserted by the first defendant, then the entire object of the scheme relating to community title would be rendered nugatory. 27 It has been submitted on behalf of the plaintiff that it is appropriate that where (as is submitted to be the situation in the instant case) there is some doubt as to whether or not the 1979 legislative provision, being section 28, has been impliedly repealed by the 1989 statute, then it is appropriate that the matter should go to a final hearing. 28 I gained the impression from what has been said by Counsel that there has been no decision of any superior court concerning the submission that is now being made on behalf of the plaintiff in respect to such an implied repeal of section 28. The decision in Coshott v Ludwig proceeded upon the basis that there was no challenge to the legislative efficacy of section 28 and that what was being considered in that case by the Court of Appeal was the effect of that provision of the Act. The Community Titles legislation appears to have been no relevance to what the Court of Appeal was deciding in that case. 29 I have been taken to a very considerable number of authorities concerning the circumstances in which the Court should or should not consider that the effect of a later piece of legislation is that an earlier piece of legislation has been impliedly repealed. It is unnecessary for me, for the purposes of the present applications, to do more than refer to the names of some of those cases to which I was taken. They included Budanski v Jones both at first instance (1986) 11 NSWLR 666 and in the Court of Appeal (1987) 11 NSWLR 677; Googoorewon Pty Ltd v Amatek Ltd (1991) 25 NSWLR 330, a decision of the Court of Appeal; Nikolovsky v Government Insurance Office of New South Wales (1992) 28 NSWLR 549, also a decision of the Court of Appeal; Totalisator Agency Board v TAB Agents Association of New South Wales (1995) 36 NSWLR 594, a decision of the Full Bench of the Industrial Court of New South Wales; and the decision of the High Court of Australia in Rose v Hvric (1963) 108 CLR 353, in particular the joint judgment of Kitto, Taylor and Owen JJ at 360. 30 I am not persuaded that there is any collision between the Environmental Planning and Assessment Act, on the one hand, and the community titles legislation, on the other. The later legislation created a system of title. The earlier legislation created public rights and duties by regulating development throughout New South Wales upon all systems of title. The fact that there are certain provisions relating to machinery in the 1989 legislation which go beyond the creation of a system of title does not seem to me of itself to put in conflict that legislation with the Environmental Planning and Assessment Act. 31 I am not persuaded that it is arguable that there has by the 1989 legislation been an implied repeal of section 28 of the Environmental Planning and Assessment Act, either generally or in particular, insofar as it is applicable to community title. That being so, I have reached the conclusion that the plaintiff is not entitled to have the claims for relief grounded upon the alleged agreement or covenant brought to a final hearing. Those claims for relief are, in my conclusion, defeated by the grant of consent given by the third defendant. 32 Accordingly, I propose to make the orders which are sought in the notice of motion filed by the first defendant, dismissing the claims of the plaintiff in paragraphs 1 to 8 inclusive, 11 and 12. 33 The notice of motion filed by the third defendant, Port Stephens Council, has been brought upon the ground that the relief claimed in the summons against that defendant, being the prayers 5, 6, 11 and 12 in the summons, constitutes an abuse of the process of the Court. The basis of that submission is that the Land and Environment Court of New South Wales is the appropriate, and indeed the only, jurisdiction which can entertain the claim for relief of the nature made by the plaintiff against the third defendant in the summons. 34 The plaintiff by prayers 5 and 6 in the summons attacks the validity of the consent given by the third defendant to the first defendant. Section 71 of the Land and Environment Court Act deprives the Supreme Court of jurisdiction in regard to certain kinds of proceedings. Subject to an exception not here relevant, subsections (1) of section 71 of that Act provides that proceedings of the kind referred to in section 20(1)(e) may not be commenced or entertained in the Supreme Court. That subsection includes, as paragraph (e) thereof, proceedings referred to in subsection (2) of that section. 35 Subsection (2) gives to the Land and Environment Court the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of proceedings of certain kinds; and one of those proceedings is, in paragraph (b) of that subsection, to review or command the exercise of a function conferred or imposed by a planning or environmental law or a development contract. 36 It seems to me that that is precisely what the plaintiff is, by its summons, seeking against the third defendant. I am satisfied that the Supreme Court does not have that jurisdiction and that the jurisdiction is vested exclusively in the Land and Environment Court. To that extent, therefore, the claim of the plaintiff against the third defendant constitutes an abuse of the process of the Supreme Court and must therefore be dismissed. 37 There will still remain on foot, however, the claim of the plaintiff in prayers 9 and 10 of the summons seeking a declaration that the community scheme has become impracticable and an order that the community scheme be varied by the registration of an amended community scheme. 38 The plaintiff also seeks damages and interest. I have very considerable doubt as to whether damages are available in proceedings of the nature of those presently before the Court. The decision of Acting Justice Cowdroy, as his Honour then was, in Doe v Cogente 94 LGERA is to the effect that damages are not so available. That matter has not, however, been fully argued before me, and I am not disposed at this stage of the proceedings to dismiss the claim for relief by way of damages or interest. But any entitlement which the plaintiff might have to damages or interest would be only as a consequence to any substantive entitlement which the plaintiff might otherwise be able to establish. 39 It follows therefore from my foregoing views that I propose to order that the claim of the plaintiff against the first defendant be dismissed and the claim of the plaintiff against the third defendant be dismissed. There will remain only the items of relief sought in prayers 9 and 10, which essentially are relief against the second defendant. 40 I make the following orders: 1. I order that the proceedings against the first defendant be dismissed. 2. I order that the proceedings against the third defendant be dismissed. 3. I order that the plaintiff pay the costs of the first defendant of the notice of motion filed by the first defendant on 23 March 1999 and of the proceedings. 4. I order that the plaintiff pay the costs of the third defendant of the notice of motion filed by the third defendant on 7 July 1999 and of the proceedings. 5. I stand the matter over to Monday 9 August 1999 before the Registrar for directions. The exhibits may be returned.