Land and Environment Court New South Wales Medium Neutral Citation: Wollongong City Council v Vic Vellar Nominees Pty Ltd [2011] NSWLEC 60 Hearing dates: 3 March 2011 Decision date: 07 April 2011 Jurisdiction: Class 4 Before: Biscoe J Decision: (1) Council's notice of motion dismissed; (2) orders made on Vic Vellar's notice of motion; (3) costs of both notices of motion to be costs in enforcement proceedings. Catchwords: PRACTICE AND PROCEDURE:- whether Council obtaining favourable answer to preliminary question should have summary judgment in Class 4 enforcement proceedings and Class 1 subdivision appeal - whether other party should have opportunity to pursue pending application to modify development consent, carry out works if modification granted, and pursue pending subdivision appeal Legislation Cited: Civil Procedure Act 2005 s 149B Environmental Planning and Assessment Act 1979 ss 76A, 76B, 124 Uniform Civil Procedure Rules 2005 rr 13.1, 28.4 Wollongong Local Environmental Plan 1990 Cases Cited: Wollongong City Council v Vic Vellar Nominees Pty Ltd [2010] NSWLEC 266 Category: Procedural and other rulings Parties: 40838/09 Wollongong City Council (Applicant) Vic Vellar Nominees Pty Ltd (Respondent) 10434/09, 10384/10, 40712/10 Vic Vellar Nominees Pty Ltd (Applicant) Wollongong City Council (Respondent) Representation: 40838/09 Mr J Lazarus (Applicant) Mr J Webster SC with Mr N Eastman (Respondent) 10434/09, 10384/10, 40712/10 Mr J Webster SC with Mr N Eastman (Applicant) Mr J Lazarus (Respondent) 40838/09 Sparke Helmore (Applicant) Wilshire Webb Staunton Beattie (Respondent) 10434/09, 10384/10, 40712/10 Wilshire Webb Staunton Beattie (Applicant) Sparke Helmore (Respondent) File Number(s): 10434/09, 40838/09, 10384/10, 40712/10 Judgment 1The parties, Wollongong City Council and Vic Vellar Nominees Pty Ltd ( Vic Vellar ), are engaged in a legal struggle over whether Vic Vellar can lawfully complete the construction of two dwellings on its land and then subdivide the land into two lots with one dwelling on each. 2There are four related proceedings in the Court, three brought by Vic Vellar and one by the Council. On 31 December 2010 I answered two preliminary questions: Wollongong City Council v Vic Vellar Nominees Pty Ltd [2010] NSWLEC 266. 3I am now determining two contested notices of motion. In the first notice of motion Vic Vellar seeks orders that one of the proceedings it brought be set down for hearing and that the other three proceedings be adjourned. The other is a competing notice of motion by the Council seeking summary judgment in two of the proceedings, which is said to be consequential upon determination of the preliminary question. BACKGROUND 4In August 1991 the Council resolved to amend the Wollongong Local Environmental Plan 1990 ( WLEP 1990 ) to allow two dwellings to be constructed on land owned by Vic Vellar adjacent to the Illawarra escarpment, being Lot 21 in DP 838636 ( the Land ) in accordance with a written agreement between the Council and Vic Vellar. Part of that agreement required Vic Vellar to dedicate Lot 22 DP 838636 to the public. At that time the Land was zoned 7(b) under WLEP 1990 in which dwelling houses were permitted. 5On 1 October 1993 amendment No 38 to WLEP 1990 was gazetted. The amendment rezoned the land zone 7(a), in which dwelling houses were prohibited, except for two semicircular areas. Accordingly, development of dwelling houses was still permissible in these semicircular areas. 6On 29 October 1993 amendment No 53 to WLEP 1990 was gazetted. This amendment enabled two dwellings to be constructed on the Land. 7On 3 November 1993 the Council granted consent to Vic Vellar's development application for the construction of those two dwellings. 8On 23 August 1994 the Council granted building approval for the two dwellings. 9On 24 August 1994, Vic Vellar dedicated Lot 22 to the Council. 10Construction commenced in late 1994 and ceased in about late 1998. 11On 2 September 2008 the Council refused Vic Vellar's request to recommence construction. 12On 26 February 2010 WLEP 1990 commenced. Pending proceedings 13The four pending proceedings between the parties are as follows: (a)Class 1 proceedings 10434 of 2009 ( Subdivision Appeal ). On 1 July 2009 Vic Vellar filed an appeal against the Council's refusal of DA 2009/353 for a two lot subdivision of the Land. (b)Class 4 proceedings 40838 of 2009 ( Enforcement Proceedings ). On 6 November 2009 the Council filed a summons against Vic Vellar seeking a declaration that the two partially constructed buildings on the Land are not "existing dwelling houses" for the purposes of 13(2)(a) of WLEP 1990. The Council also seeks a declaration that subdivision of the Land would, if carried out, result in a contravention of WLEP 1990 and the Environmental Planning and Assessment Act 1979 ( EPA Act ) and must be refused. In its filed defence against these Enforcement Proceedings Vic Vellar claims that the buildings are "existing dwelling houses". Vic Vellar also contends that the Council is estopped from acting contrary to the written agreement that the parties entered into. (c)Class 1 proceedings 10384 of 2010 ( Modification Appeal ). On 21 May 2010 Vic Vellar filed an appeal against the Council's deemed refusal of an application to modify development consent DA 1992/772. Vic Vellar seeks modification in respect of the approved location of the southern and northern dwellings on the Land, so that the development consent and the building approval authorise the construction of the buildings. (d)Class 4 proceedings 40712 of 2010 ( Damages Claim ). On 2 July 2010 Vic Vellar filed a claim against the Council in the Supreme Court of New South Wales for damages for breach of contract, negligence and misrepresentation. On 1 September 2010 the Supreme Court ordered that those proceedings be transferred to this Court pursuant to s 149B of the Civil Procedure Act 2005. 14On 31 December 2010 I answered separate and preliminary questions as follows in Wollongong City Council v Vic Vellar Nominees Pty Ltd [2010] NSWLEC 266 at [86]: (a) Each of the northern building and southern building on Lot 21 in DP 838638 is not an "existing dwelling-house" for the purpose of cl 13(2) of the Wollongong Local Environmental Plan 1990 because of: (i) the reasons identified in paragraphs 24(a) and (b) of the Council's Second Further Amended Points of Claim in its Class 4 proceedings; (ii) the reasons identified in paragraph 25(a) and (b) of the Council's Second Further Amended Points of Claim in its Class 4 proceedings; (b) On the assumption that the Council was to prove the matters identified in paragraphs 24(d) and 25(e) of its Second Further Amended Points of Claim in its Class 4 proceedings, the northern building and the southern building on Lot 21 in DP 838638 are not "existing dwelling-houses" for the purpose of cl 13(2) of the Wollongong Local Environmental Plan 1990. 15I ordered Vic Vellar to pay the Council's costs of the preliminary questions. 16I held that the two buildings were not existing dwelling-houses for three reasons: (a)their state of incompleteness: at [64] - [66]; (b)assuming they were built in the wrong location, this was contrary to the development consent and the building approval at [84] - [86]; (c)assuming they were constructed at least partially in a zone in which dwelling houses were prohibited: at [84] - [86]. notices of motion 17I am determining Vic Vellar's notice of motion filed on 18 February 2011 which seeks the following orders: (1)The Modification Appeal be listed for hearing. This is not opposed; (2)The Subdivision Appeal be adjourned pending redetermination of the Modification Appeal and the completion of works to the southern building. This is opposed. (3)The Enforcement Proceedings be adjourned pending determination of the Modification Appeal, completion of the works to the southern building, and the determination of the Subdivision Appeal. This is opposed. (4)The Damages Claim be adjourned pending outcome of the determination of the Modifications Appeal, completion of works to the southern building, the outcome of the determination of the Subdivision Appeal and the outcome of the Enforcement Proceedings. This is not opposed but the terms of the adjournment may be in issue. (5)My order that Vic Vellar pay the Council's costs of the preliminary questions be set aside. This is opposed. 18Although these proposed orders refer only to works to the southern building, in submissions Vic Vellar clarifies that it also intends to complete the works to the northern building if the Modification Appeal is successful. 19The Council's notice of motion dated 22 February 2011, which I am also determining, seeks orders relating to the final disposition of the Enforcement Proceedings and the Subdivision Appeal, in addition to an order for costs of the Enforcement Proceedings. These orders are as follows: (1) Pursuant to r 13.1 of the Uniform Civil Procedure Rules ( UCPR ) or otherwise, the Court give judgment for the Council in the Enforcement Proceedings by declaring that: (a) Neither building on the Land is an "existing dwelling house" for the purposes of cl 13(2)(a) of WLEP 1990. (b) The subdivision of the Land would, if carried out, result in a contravention of WLEP 1990 and the EPA Act and must be refused. (2) Vic Vellar is to pay the costs of the Council of the Enforcement Proceedings and of the notice of motion. (3) The Subdivision Appeal be determined by the Court dismissing it and refusing consent to development application DA-2009/353. 20In its reply submissions, the Council alternatively relies on UCPR 28.4 which empowers a court to make an order, as the nature of the case requires, if the decision of a separate question substantially disposes of proceedings on the whole or any part of any claim for relief; or renders unnecessary any trial or further trial in the proceedings on the whole or any part of any claim for relief in the proceedings. Submissions 21The Council submits that, having succeeded on the preliminary question, it is entitled to summary judgment in both the Enforcement Proceedings and the Subdivision Appeal under UCPR 28.4. 22However, in the Enforcement Proceedings there are two unresolved issues. First, the estoppel defence raised by Vic Vellar; and secondly, the argument whether the Court should exercise its discretion to grant relief. Vic Vellar says that the discretionary issues include: (a)the manner in which the zoning error, and therefore potentially one of the grounds upon which the dwellings are not "existing dwelling houses", arose; (b)the fact that the Council has refused to allow any building work to be completed; (c)by the method proposed in Vic Vellar's motion, the potential exists for the circumstances to be cured if (i) the Modification Appeal is determined by granting consent; and (ii) building works ensue. 23The Council seeks a declaration that neither building is an "existing dwelling house" for the purposes of the WLEP 1990. Vic Vellar submits that it ought to be entitled to argue that there is no utility in that declaration because: (a)the matter could have been dealt with in the Subdivision Appeal rather than as separate proceedings; (b)no consequential relief is sought, nor would it be appropriate given the course proposed by Vic Vellar; (c)the preliminary questions proceeded in part on assumed facts; and (d)the dispute should be resolved by the outcomes of the other three cases in which Vic Vellar is the applicant. 24The Council also seeks a declaration that the proposed subdivision of land would contravene the WLEP 1990 and the EPA Act. Vic Vellar submits that declaration cannot or should not be made because: (a)it is subject to consideration of the defence; (b)it is also dependent upon a state of affairs at a given time; and (c)that state of affairs can change and Vic Vellar proposes a mechanism to do so. 25As for the Subdivision Appeal, Vic Vellar submits that it should not be deprived of the opportunity to subdivide the land because: (a)it ought to have the opportunity to respond to the ruling on the preliminary point, which is within the spirit of s 124(3)(a) of the EPA Act; (b)it proposes to do so without delay; (c)the only reason the buildings are not complete is because the Council told Vic Vellar to stop the works; (d)the legal difficulties have arisen because the dwellings have not been completed and because of a zoning error; (e)the course proposed by Vic Vellar would be dispositive of the need to determine the residue of the Enforcement Proceedings and the whole of the Damages Claim. 26Vic Vellar submits that it is appropriate to make the orders it seeks, including adjournment of the Enforcement Proceedings and the Subdivision Appeal, because: (a)based on the determination of the preliminary questions, if certain steps were taken, the subject dwelling houses could be "existing dwelling houses" for the purposes of cl 13(2) of WLEP 1990. (b)the first step is to have the Modification Appeal determined in its favour to meet the "wrong location" issue (noting that the Council will not currently tolerate work on the dwellings). The modification consent would be for a development permissible within the new zone and within the modified building footprints. It would make lawful what otherwise might be unlawful. (c)the second step, if the Modification Appeal is determined in its favour, would be to complete the building work so that they would be uncontroversially existing dwelling houses. This course would make lawful what otherwise might not be so. (d)the third step, on completion of the work, is for the Subdivision Appeal to proceed. 27The Council submits that Vic Vellar's application to adjourn the Enforcement Proceedings and the Subdivision Appeal should be refused for the following reasons: (a)Vic Vellar is bound by my judgment on the preliminary question and Vic Vellar's proposal is an attempt to circumvent that judgment; (b)there is no longer any issue remaining to be determined between the parties in the Enforcement Proceedings; (c)the fundamental basis for the Court ordering the separate question was that, if resolved in Council's favour, it would leave only Vic Vellar's pleaded defences remaining; (d)Vic Vellar, having elected to have its subdivision application determined on the basis of the facts as they then existed, cannot now resile from that election; (e)Vic Vellar's proposal is contrary to the important principle of finality in litigation; (f)there is no evidence of any prejudice to Vic Vellar; (g)an adjournment would result in a very long delay; (h)the Vic Vellar proposal does not work because it does not account for the need for the estoppel defence to be resolved, and it takes no account of the unfinished state of construction of the northern dwelling; and (i)permitting Vic Vellar to proceed in the manner for which it now contends would not be conducive to the just, quick and cheap resolution of the real issues in dispute. conclusion 28In my opinion, there is sufficient weight in Vic Vellar's submissions to justify the conclusion that it ought to have the opportunity to achieve the outcome it seeks by the course that it has proposed and that summary judgment or judgment under UCPR 28.4 should be refused. A very clear case is required before summary judgment is granted and the power is sparingly employed. In the Enforcement Proceedings, the estoppel defence and discretionary considerations have not yet been determined. It is premature to give judgment in those proceedings. 29When the order to determine the preliminary questions was made I had understood, based upon what I was told, that if they were to be determined in favour of the Council, the only two remaining matters would be the pleaded defence in the Enforcement Proceedings and the Damages Claim. However, I am persuaded on the material now put before me that Vic Vellar did not intend to abandon its other pending proceedings and that this was communicated to the Council. 30Vic Vellar disputes the Council's contention that Vic Vellar has to succeed in its estoppel defence in the Enforcement Proceedings in relation to the "wrong zoning" issue. Vic Vellar says that if it is successful in the course it proposes the Enforcement Proceedings would relate to a period of time that had become irrelevant. For present purposes it is unnecessary to resolve that issue. 31Vic Vellar's analogy with s 124(3) of the EPA Act carries some weight. Section 124(3)(a) provides: 124 Orders of the Court (3) Where a breach of this Act would not have been committed but for the failure to obtain a consent under Part 4, the Court, upon application being made by the defendant, may: (a) adjourn the proceedings to enable a development application to be made under Part 4 to obtain that consent. 32The section gives the Court the power to adjourn, and is a strong legislative indication that it should generally be inclined to adjourn Enforcement Proceedings where a breach of the Act would not have been committed but for the failure to obtain a development consent under Part 4. The adjournment is granted to enable a development application to be made under Part 4 and to obtain that consent thereby resolving the proceedings in question. Independently of that provision, the Court has power to grant an adjournment where the breach is of a different character. Here Vic Vellar has allegedly breached the EPA Act in two ways. First, by constructing dwellings in the wrong location, thereby breaching a condition of consent, contrary to s 76A(1)(b). Secondly, by breaching s 76B because of the prohibition on dwelling houses in the 7(a) zone in WLEP 1990. 33The prejudice to Vic Vellar is clear if it does not have an opportunity to pursue the course it proposes. 34Accordingly, I propose to dismiss the Council's notice of motion and to make orders similar to some of the orders proposed in Vic Vellar's notice of motion. 35The pending proceedings should be case managed to ensure that there is no unreasonable delay in pursuing the course proposed by Vic Vellar. Orders may be made progressively during the case management process according to the outcome, in the first instance, of the Modification Appeal. 36The residual issue is whether my order that Vic Vellar pay the Council's costs of the preliminary question should be set aside. I can see no sufficient reason for doing so. I decline to do so. ORDERS 37The orders of the Court are as follows: 1. Wollongong City Council's notice of motion dated 22 February 2011 is dismissed. 2. The Modification Appeal (10384 of 2010) is to be listed for hearing before a Commissioner as soon as practicable on a date to be appointed by the Registrar. The parties are to approach the Registrar within one working day to obtain a hearing date. 3. The Subdivision Appeal (10434 of 2009), the Enforcement Proceedings (40838 of 2009) and the Damages Claim (40712 of 2010) are adjourned pending determination of the Modification Appeal. 4. Promptly after determination of the Modification Appeal, the parties are to arrange for all four proceedings to be listed for case management before Justice Biscoe or, if he is unavailable, before the List Judge. In any event, they are to be so listed by no later than 1 July 2011. 5. The costs of Wollongong City Council's notice of motion dated 22 February 2011 are to be costs in the cause in the Enforcement Proceedings. 6. Liberty to apply. Amendments 07 March 2012 - omission of jurisdiction field Amended paragraphs: cover page 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. Decision last updated: 07 March 2012