Lavender View v North Sydney Council [1999] NSWSC 699

Reported Decision : 104 LGERA 255

New South Wales Supreme Court CITATION : Lavender View v North Sydney Council [1999] NSWSC 699 CURRENT JURISDICTION : Construction FILE NUMBER(S) : 55045/97 HEARING DATE(S) : 08/03/99, 09/03/99. 10/03/99, 11/03/99, 12/03/99, 15/03/99 Dates of Mention: 25/03/99, 09/04/99, 16/04/99, 30/04/99, 07/05/99, 15/05/99, 21/05/99, 04/06/99, 12/07/99 JUDGMENT DATE : 14 July 1999

PARTIES : Lavender View Regency Pty Limited - Plaintiff North Sydney Council - Defendant JUDGMENT OF : Rolfe J

COUNSEL : Mr M.H. Tobias QC/Mr R.C. McDougall QC/Mr T.J. Davie - Plaintiff Mr B.W. Walker SC/Mr B.J. Preston/Mr I.R. Pike - Defendant SOLICITORS : Norton Smith/Coudert Partners - Plaintiff Phillips Fox - Defendant CATCHWORDS : Assessment of Damages where the defendant admitted liability for negligence; Held, in the particular circumstances, the plaintiff had acted as it would, if there had been no negligence; Held not a case in which it is appropriate to apply the test for damages in Armory v Delamiri [1722] 1 Stra 505; Houghton & Anor v Immer (No 155) Pty Limited & Anor (1997) 44 NSWLR 46 considered DECISION : Judgment for plaintiff for $224,321.51 exclusive of interest.

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION CONSTRUCTION LIST

ROLFE J

WEDNESDAY, 14 JULY 1999

55045/1997 - LAVENDER VIEW REGENCY PTY LIMITED v NORTH SYDNEY COUNCIL

JUDGMENT

HIS HONOUR: Introduction 1 Milsons Point is one of several suburbs in the Municipality of North Sydney on the northern foreshores of Sydney Harbour adjacent to the Sydney Harbour Bridge, and hence close to the Central Business District of Sydney via that Bridge. During the last fifteen years or so it has been the subject of considerable commercial and residential property development, and it is regarded by many as a desirable area in which to live. 2 The defendant, North Sydney Council, ("the Council"), for which Mr B.W. Walker of Senior Counsel, Mr B.J. Preston of Counsel and Mr I.R. Pike of Counsel appeared, is the authority primarily responsible for considering and either granting or refusing development and building applications within the Municipality pursuant to the provisions of the Environmental and Planning Assessment Act 1979, ("the Act"), the Local Government Act and various other Acts, statutory codes and planning schemes. Applications to the Council to exercise these powers, and the manner in which the Council does so, create, in many cases, intense interest from local residents and a conflict of views between them and developers as to the extent to which further development should be allowed and the form of it. The resolution of such conflicts is a matter, in the first instance, for the elected councillors, who may properly have regard to what they perceive to be appropriate local considerations, as well as professional and planning advice, in reaching their conclusions. Their decisions, which become the Council's, can be, in most cases, the subject of appeal to the Land and Environment Court, ("the Court"). Relevantly for present purposes there are Class I appeals, which are concerned, generally speaking, with the Council's decisions on the merits of such applications, and Class IV appeals, which cover, once again speaking generally, questions as to the legal validity of such decisions. 3 The plaintiff, Lavender View Regency Pty Limited, for which Mr M.H. Tobias of Queen's Counsel, Mr R.C. McDougall of Queen's Counsel and Mr T.J. Davie of Counsel appeared, began, under its former name, to acquire adjacent properties with frontages to Glen and Cliff Streets, Milsons Point, the whole area acquired being known as 26 - 30 Glen Street, Milsons Point. There was erected, on part of the land, a building known as the SBS Building. In 1988 the Council had given approval to a development application, DA1011/88, for the erection of a sixteen storey building at 28 - 30 Glen Street comprising fourteen storeys of sixty residential units and two storeys of retail/restaurant accommodation. In 1990 the Council gave approval to a further development application, DA1268/90, for the erection of a fourteen storey residential building at 28 - 30 Glen Street. 4 The plaintiff was, at all material times, controlled from a practical point of view by its managing director, Dr Stanley Quek, who is highly experienced in the acquisition and development of real estate, through various companies, in Australia and elsewhere. His aim was to erect a block of high quality home units on the land to be known as "The Colonnades", with some retail and other facilities, and to sell them. Not unnaturally he wished to maximise the development so that the plaintiff would enjoy as high a profit as possible. This led to tension between the plaintiff, on the one hand, and some local residents and councillors, on the other, because, in an attempt to achieve this objective, the plaintiff proposed a building the bulk and size of which caused concern and led to opposition to the development. 5 On 17 February 1994 Dr Quek caused the plaintiff's initial architects, Bruce Swalwell Architects, to lodge a development application, DA1082/94, with the Council. This development application was referred to in the proceedings as "DA1" and, after extensive negotiations and various amendments to the plans, it was approved by the Council on 8 February 1995 subject to conditions. The conditions included that the building was to be built "strictly" in accordance with the plans submitted with DA1, which could not be done lawfully because they did not comply with certain relevant building requirements, and that an application be made to modify DA1 pursuant to s.102 of the Act. These requirements obliged the plaintiff to make at least two further applications to the Council before it would have final approval to build. Each application would have required the councillors to exercise their discretion in granting or refusing it. 6 It was not in issue that the Council, in granting DA1 on the terms and in the circumstances which it did, acted contrary to law so that a challenge to it in Class IV proceedings would, almost inevitably, result in its being declared invalid and void, subject to a matter to which I shall now refer. Nor was it in issue that on 6 April 1995 the Council caused notice of its decision to grant DA1 to be published in purported compliance with s.104A of the Act; that the notice did not comply with the requirements of that section; and that if it had DA1 would have been impervious to challenge, in the sense that the validity of the consent could not be questioned in any legal proceedings except those commenced in the Court by any person at any time before the expiration of three months from the date on which such public notice was given. Further, it was not in issue that the persons, who ultimately challenged DA1 successfully, would not have done so within the period of three months from 6 April 1995, their objections and challenge manifesting themselves well after the expiry of that period. 7 In October 1995, before the plaintiff submitted its final building plans and its request for a modification of DA1 pursuant to s.102, the triennial local government elections were held. They resulted in changes in the composition of the Council in that a number of councillors, who ran on a policy that new development in the Municipality, and particularly in Milsons Point, was excessive in size and bulk, were elected. Thereafter, the plaintiff was confronted with a Council at least potentially less sympathetic to the development than its predecessor. 8 On 24 November 1995 the solicitors for various objectors gave notice of their intention to challenge the validity of DA1 and, on 1 February 1996, they commenced Class IV proceedings in relation to it. This application could not have been pursued if the notice published by the Council, in purported compliance with s.104A, had been valid. 9 In due course the Court held DA1 to be invalid and void. It was not in issue that any modification of DA1 pursuant to s.102 would have fallen with that finding, because the modification could have no greater validity than the development application on which it was founded; nor that the plaintiff understood that from the time the challenge was mooted. In these circumstances the plaintiff lost the benefit of DA1, a result it had understood was probable at least from the commencement of the Class IV proceedings. It had, therefore, after becoming aware of the challenge, undertaken various other steps to obtain a development approval and, ultimately, on 15 June 1998, the Council resolved to determine DA74/98 by consenting to it. This development application was referred to in the proceedings as "DA4". Between DA1 and DA4 there were two further development applications, which were referred to in the proceedings as "DA2" and "DA3". DA4 provided for a smaller development than that proposed in DA1, DA2 and DA3 and, accordingly, the plaintiff will have less units to sell than it potentially would have had but for the invalidity of DA1. I say "potentially" because the plaintiff was not assured that the further consents necessary to develop conformably with DA1 would be granted. The building work has now commenced, although it is not anticipated that it will be finished until late 2000.