Land and Environment Court New South Wales Medium Neutral Citation: Fobitu Pty Ltd v Marrickville Council [2012] NSWLEC 81 Hearing dates: 17 April 2012 Decision date: 17 April 2012 Jurisdiction: Class 1 Before: Biscoe J Decision: Respondent's notice of motion for determination of preliminary questions dismissed without costs. Catchwords: PRACTICE AND PROCEDURE:- whether orders should be made for decision of two questions separately from any other question before the final hearing. Legislation Cited: Civil Procedure Act 2005 s 56(2) Land and Environment Court Rules 2007 r 3.7 Uniform Civil Procedure Rules 2005 r 28.2 State Environmental Planning Policy (Affordable Rental Housing) 2009 cll 10(2)(c), 11(a)(i), 54A(2) State Environmental Planning Policy (Affordable Rental Housing) Amendment 2011 State Environmental Planning Policy No 1 - Development Standards Cases Cited: Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 Johnson v Trustees of the Roman Catholic Church [2009] NSWSC 309 Metropolitan Local Aboriginal Land Council v Minister Administering the Crown Lands Act [2006] NSWLEC 57, 145 LGERA 276 Save the Ridge Inc v Commonwealth [2005] FCAFC 203, 142 LGERA 18 Tepko Pty Ltd v Water Board [2001] HCA 19, 206 CLR 1 The Owners Corporation of Strata Plan 61390 v Multiplex Corporate Agency Pty Ltd (No 2) [2012] NSWSC 322 Tuscany Farm Holdings v Hawkesbury City Council [2011] NSWLEC 18 Wollongong City Council v Vic Vellar Nominees Pty Ltd [2011] NSWLEC 138 Young v Parramatta City Council [2006] NSWLEC 116, 144 LGERA 193 Category: Interlocutory applications Parties: Fobitu Pty Ltd (Applicant) Marrickville Council (Respondent) Representation: COUNSEL: Mr C. Norton (Applicant) Mr J. Strati, solicitor (Respondent) SOLICITORS: Sattler and Associates (Applicant) Marrickville Council (Respondent) File Number(s): 10872 of 2011 EX TEMPORE JUDGMENT 1This is a contested motion by the respondent, Marrickville Council, in a Class 1 appeal against refusal of a development application to have the following two questions decided as preliminary questions before the final hearing: (i)Will the proposed development result in a building with a building height of more than 8.5 metres for the purposes of cl 11(a)(i) of State Environmental Planning Policy (Affordable Rental Housing) 2009 (Affordable Housing SEPP)? (ii)If the answer to question (i) is yes, is cl 11(a)(i) of the Affordable Housing SEPP a development standard amenable to State Environmental Planning Policy No 1 - Development Standards (SEPP 1)? 2These questions relate to contentions 1(e) - (g) of the Council's Amended Statement of Facts and Contentions dated 13 April 2012. BACKGROUND 3The development application the subject of the appeal seeks consent to demolish the existing dwellings at 34 and 36 Pigott Street, Dulwich Hill; carry out restoration works in "Brook Lodge" at 174 Denison Road, Dulwich Hill; consolidate those three existing lots; construct an in-fill affordable rental housing residential flat building development scheme consisting of 20 units with associated carparking and other services divided between "Brook Lodge" and a new building to be constructed over the consolidated lots; and strata-subdivide the development into 21 residential lots. 4To establish the permissibility of the development, the applicant relies on Division 1 of Part 2 of the Affordable Housing SEPP. Since the development application was submitted on 20 April 2011, the applicable version of the Affordable Housing SEPP is that which was in force prior to the commencement of State Environmental Planning Policy (Affordable Rental Housing) Amendment 2011, that is prior to 20 May 2011, save for the application of certain clauses (see cl 54A(2) of the Affordable Housing SEPP). 5The Council's contentions as expressed in its Amended Statement of Facts and Contentions raise two contentions going to permissibility and four merits contentions, which may be summarised as follows: Permissibility 1) The development is not permissible as it would "result in" a building on the land with a building height of more than 8.5 metres (that is, Brook Lodge), and thus is not development to which the Affordable Housing SEPP applies. (Contentions 1(e)-(g)) 2) The development is not permissible as the development site is more than 400m walking distance from a bus stop (as defined), and thus is not development to which the Affordable Housing SEPP applies. (Contentions 1(h)-(j)) Merits-based contentions 3) Distance from transport services: Some of the proposed dwellings are between 400m and 500m walking distance from the nearest Bus Stop and therefore the walking distances involved make the land unsuitable for the proposed development. (Contention 2) 4) Character The development is out of character with its surrounds in respect of the Pigott Street Frontage and view from Hoskins Park; and does not comply with design quality principles in State Environmental Planning Policy No. 65. (Contention 3) 5) Solar access The solar access to 7 of the units is unacceptable, in particular considering the effect of overshadowing of existing vegetation. (Contention 4) 6) Location of mailboxes Mailboxes are not located at the major pedestrian entry to the building. (Contention 5 - Council concedes this can be addressed by conditions) 6Two clauses of the Affordable Housing SEPP at the relevant date form the basis of the Council's permissibility contentions: 10. Land to which Division applies ... (2) Despite subclause (1), this Division does not apply to a development site in the Sydney region unless all or part of the development site is within: ... (c) 400 metres walking distance of a bus stop used by a regular bus service (within the meaning of the Passenger Transport Act 1990) that has at least one bus per hour servicing the bus stop between 06.00 and 18.00 each day from Monday to Friday (both days inclusive). 11. Development to which Division applies This Division applies to the following development on land to which this Division applies: (a) development for the purposes of dual occupancies, multi dwelling housing or residential flat buildings where at least 50 per cent of the dwellings in the proposed development will be used for affordable housing, but only if: (i) the development does not result in a building on the land with a building height of more than 8.5 metres... 7Relevantly to the proposed preliminary questions, the applicant's position is that: (a)the proposed development will not "result in" a building on the land with a building height of more than 8.5 metres; and (b)alternatively, the relevant permissibility provisions of the Affordable Housing SEPP are development standards amenable to variation under SEPP 1. LEGAL PRINCIPLES 8The Court may make orders for the decision of any question separately from any other question: Uniform Civil Procedure Rules 2005 r 28.2. In deciding whether to make such an order, the Court is under an obligation to seek to give effect to the overriding purpose of the Civil Procedure Act 2005 and of rules of court to facilitate the just, quick and cheap resolution of the real issues in the proceedings: Civil Procedure Act s 56(2). 9The dangers inherent in ordering a separate determination of questions are well known and were enunciated, for example, in Tepko Pty Ltd v Water Board [2001] HCA 19, 206 CLR 1 at [168]-[170] as follows: 168. The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap. ... 170. ...Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question. 10In Save the Ridge Inc v Commonwealth [2005] FCAFC 203, 142 LGERA 18 at [15], Black CJ and Moore J said that the procedure was one "that should be adopted with caution and can be fraught with difficulties". 11In this Court, the principles to guide the exercise of the discretion to order the decision of any question separately from any other question in proceedings were identified by Jagot J in Metropolitan Local Aboriginal Land Council v Minister Administering the Crown Lands Act [2006] NSWLEC 57, 145 LGERA 276 at [12], and have been affirmed in Young v Parramatta City Council [2006] NSWLEC 116, 144 LGERA 193 (Jagot J) and Wollongong City Council v Vic Vellar Nominees Pty Ltd [2011] NSWLEC 138 (Craig J). They may be summarised as follows: (a)Generally speaking, all issues should be tried at the same time. If an issue of law or fact is raised which, if decided in one way, will dispose of the claim then a separate determination of that issue may be appropriate. (b)Care must be taken to ensure that any such question is "ripe" for separate and preliminary determination. This will be so where the matter is a central issue in contention between the parties, the resolution of which will either obviate the necessity of litigation altogether or substantially narrow the field of controversy. (c)Where the issue sought to be separated involves a question of law, there should be a clear definition of what the point of law raised is and the facts upon which that question has to be considered should be clearly ascertainable. (d)Special problems can arise where the question sought to be separated is one of mixed fact and law. (e)In order to dispose of what may first appear to be a pure question of law, the inquiry might range round questions of fact and the proper inferences to be drawn from the primary facts. Hence, it should be able to be seen with clarity that the determination of the separate question will be beneficial to the conduct of the proceedings and resolution of the dispute. 12In Young, Jagot J sought to draw these cautionary principles together in a manner which Craig J embraced in Vic Vellar at [22]. Her Honour said in Young at [11]: A number of the decisions referred to above identify the appropriate degree of confidence (that the procedure will be fair and involve real savings in time and cost) to warrant the making of an order for separate determination. In Tallglen, the criterion was described as one where the beneficial results should be able to be seen "with clarity". In Poynting, the formula adopted was that the procedure ought "far more likely than not be convenient and save significant expense". In Tepko, the standard identified as appropriate was that the "utility, economy and fairness to the parties" of the making of the order ought to be "beyond question". 13The warnings in Tepko preceded the introduction in New South Wales of the Civil Procedure Act. There is a stream of Supreme Court decisions that the overriding purpose of that Act justifies a more interventionist approach in the ordering of separate questions. The stream has its source in Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 where Brereton J said at [6]: While much has been said against the resolution of separate questions in Courts of high authority, nonetheless, since the (NSW) Civil Procedure Act 2005, it is my view that the Court should take a more interventionist role in identifying and separating important issues which can resolve significant parts of the litigation expeditiously. 14That passage was cited with approval by Hoeben J in Johnson v Trustees of the Roman Catholic Church [2009] NSWSC 309 at [20]. His Honour at [21] noted that the comments of Brereton J had been adopted and applied in a number of other first instance Supreme Court decisions that Hoeben J cited. Recently, in The Owners Corporation of Strata Plan 61390 v Multiplex Corporate Agency Pty Ltd (No 2) [2012] NSWSC 322 at [3] - [4], Pembroke J said: 3. I am, of course, conscious of warnings such as those enunciated in Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at [168] - [170] about the dangers inherent in ordering the separate determination of questions. Ultimately however, the question of whether it is appropriate to order a separate question in any particular case is a matter for the discretion, judgment and experience of the trial judge having regard to the unique circumstances of each particular case. Significantly, the warnings in Tepko v Water Board (supra) preceded the introduction in New South Wales of the Civil Procedure Act 2005. The statutory objective that now governs the conduct of proceedings in New South Wales, namely the just and expeditious resolution of the real issues in dispute, intersects with those warnings and dilutes their effect. 4. Brereton J has stated that courts should now adopt a more interventionist role in relation to, among other things, the ordering of separate questions: Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 at [6]. I agree. And there is a prevailing view among judges of the Commercial Technology & Construction List, which I share, that the judicious use of the power to order separate questions may considerably advance the interests of justice in some complex cases. UNCONTROVERSIAL MATTERS 15The parties agree that the hearing of the whole proceedings would be likely to take two or three days, and that the hearing of the proposed preliminary questions would be likely to take half a day. 16The Council acknowledges that if the matter were to proceed to a full hearing and the applicant were unsuccessful, the applicant would be likely to appeal in any event on the permissibility issues and the related development standard issue. 17The applicant accepts that: (a)determination of the proposed preliminary questions would involve limited fact finding in evidence and may be able to proceed on the basis of an agreed statement of facts; and (b)if both questions were determined adversely to the applicant, the Court would be required to determine the appeal by refusal, obviating the need for a hearing on the merits. 18Insofar as the Council may be contending that the applicant's proposed development would physically exceed 8.5 metres, the applicant indicates that that is not its intention and that, if necessary, it would accept an amendment that would make that clear. Insofar as it may be of any relevance, the applicant says that it also has no intention of using the rooftop area above 8.5 metres other than in the sense of any necessary use by tradesmen for maintenance purposes and the like. SUBMISSIONS 19The Council's submissions build on the following findings of Pain J in Tuscany Farm Holdings v Hawkesbury City Council [2011] NSWLEC 18 at [8]: The necessary issues of fact can be agreed by the parties..., the question posed is clearly identified and is discrete from the merit issues...and the preliminary question is potentially determinative of the proceedings and can be dealt with at a short hearing. If the determination of the preliminary question results in the matter being resolved there will be substantial savings in preparation and hearing costs on the merit issues. 20The Council submits that determination of the proposed preliminary questions will achieve the overriding purpose of the Civil Procedure Act as follows: (a)the proceedings will be disposed of without recourse to a trial on the merits if the questions are determined in the Council's favour; (b)the facts underpinning the questions are easily ascertainable; and (c)the hearing of the proposed preliminary questions will not involve significant time or expense, whereas the hearing of the merits of the balance of the proceedings will. In relation to the balance of the proceedings, expert evidence most likely would be called by the Council. 21The applicant opposes the proposed preliminary questions for the following reasons: (a)There would not be significant savings in time and cost. The Council raises a relatively small range of merit issues that would not take a significant amount of time to determine as they do not involve substantial factual controversy. If either or both of the proposed preliminary questions were determined adversely to the Council, the process of separation of those questions would have delayed the preparation and hearing of the remainder of the proceedings, and is likely to add to the overall cost due to the preparation for a separate hearing. (b)There is an overlap with other Council contentions. The applicant would seek to argue that if either cl 10(2)(c) or cl 11(a)(i) of the Affordable Housing SEPP should be applied in the way submitted by the Council, then both of those clauses are development standards amenable to variation under SEPP 1. However, the contentions in relation to cl 10(2)(c) are clearly not suitable for a preliminary determination as they involve detailed factual inquiry. It would be more appropriate for the arguments relating to the construction of those clauses to take place together. (c)If the preliminary questions are determined adversely to the applicant and the applicant seeks to exercise its appeal rights and ultimately succeeds on appeal, hearing of the merits will have been delayed substantially. DECISION 22The points made by both parties in their competing submissions have weight, subject to the following. On balance, I consider that two factors in combination tend to tilt the scale against the Council's motion. First, the savings in estimated time and costs are relatively small: a half day hearing for the preliminary questions compared with a two (or three) day hearing to determine the whole proceedings. I take into account that there is also preparation time. Secondly, there is a perceived likelihood, as the Council fairly acknowledges, of an appeal on the permissibility and development standard issues in any event. 23Accordingly, I propose to dismiss the Council's notice of motion. 24The applicant applies for its costs of the motion. Costs in Class 1 proceedings are governed by r 3.7 of the Land and Environment Court Rules 2007. The Court is prohibited from making an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances. I do not consider that the making of a costs order against the Council is fair and reasonable in the circumstances of this case. The Council's motion concerned a matter of case management; it was reasonable for the Council to ventilate whether determination of the proposed preliminary questions would be the efficient and preferable way forward in the interests of the parties and in the interest of saving the time of the Court; and in the end the determination of that issue was finely balanced. 25The orders of the Court are as follows: (1)The respondent's notice of motion filed on 11 April 2012 is dismissed without costs. (2)The proceedings are stood over before the Registrar for directions on Friday, 20 April 2012. 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: 19 April 2012