Land and Environment Court New South Wales Medium Neutral Citation: Shoal Bay Developments Pty Limited v Port Stephens Council (No 2) [2015] NSWLEC 36 Hearing dates: 11 March 2015 Decision date: 11 March 2015 Jurisdiction: Class 1 Before: Pain J Decision: 1. The Notice of Motion filed 10 February 2015 is dismissed. 2. Each party to pay its own costs. Catchwords: REVIEW – review of decision of registrar that monitoring reports sought under notices to produce should be produced – notice of motion dismissed Legislation Cited: Land and Environment Court Act s 38 Uniform Civil Procedure Rules 2005 r 49.19 Cases Cited: Australian Competition & Consumer Commission v Australian Safeway Stores (1998) 153 ALR 393 Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 64; (1999) 201 CLR 49 Golden Max Pty Limited v Hurstville City Council [2015] NSWLEC 16 Groeneveld v Wollongong City Council [2009] NSWLEC 149; (2009) 168 LGERA 260 Melaleuca Estate Pty Ltd v Port Stephens Council [2006] NSWCA 31; (2006) 143 LGERA 319 Shoal Bay Developments Pty Ltd v Port Stephens Council (Registrar Gray, NSWLEC, 6 February 2015, unreported) Sparnon v Apand Pty Ltd [1996] FCA 684 Tomko v Plasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 Category: Procedural and other rulings Parties: Shoal Bay Developments Pty Limited (Applicant) Port Stephens Council (Respondent) Representation: Counsel: Mr M Green with Mr MF Fozzard (Applicant) Mr Connors (Respondent) Solicitors: David A Vitnell Property Lawyer (Applicant) Local Government Legal (Respondent) File Number(s): 10732 of 2014 EX TEMPORE Judgment 1. The Respondent Port Stephens Council (the Council) has filed a Notice of Motion dated 10 February 2015 seeking review of the decision of the Registrar in Shoal Bay Developments Pty Ltd v Port Stephens Council (Registrar Gray, NSWLEC, 6 February 2015, unreported) and an order that the decision be set aside. At issue is access to numerous monitoring reports identified in Annexure B to the affidavit of Mr Pickup solicitor dated 28 January 2014 the subject of two notices to produce issued by the Applicant Shoal Bay Developments Pty Ltd dated 13 November 2014 and 24 January 2015. The Registrar held that the monitoring reports can be provided to the Applicant. At issue are the Registrar's findings that these reports are relevant to these proceedings and are not subject to legal professional privilege. Review of the Registrar's decision is provided for under r 49.19 of the Uniform Civil Procedure Rules 2005 (UCPR). 2. The Registrar's judgment helpfully sets out the background to this matter at [2]-[5] and I adopt those paragraphs. In brief, the monitoring reports are based on measurements taken on land known as the Seabreeze Estate controlled by the Council which land is uphill of the Applicant's land the subject of these Class 1 proceedings. Following Supreme Court litigation resulting in the Court of Appeal decision and orders in Melaleuca Estate Pty Ltd v Port Stephens Council [2006] NSWCA 31; (2006) 143 LGERA 319 on 1 March 2006, the Council was required to divert and manage water which had been flowing from the Seabreeze Estate onto the Applicant's land so that only the natural amount of flow would enter on to the Applicant's land. The orders were suspended for 18 months to enable work to be undertaken by the Council. 3. No review of the Registrar's decision that peer reviewed reports should not be disclosed to the Applicant is sought. 4. The principles to be applied in the review of a registrar's decision were considered in Tomko v Plasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 at [6]-[9] per Hodgson JA (Ipp JA agreeing), which stated: 6 I agree that a review of a decision of a registrar is not an appeal, subject to s.75A of the Supreme Court Act; and that in such a review a court must exercise its own discretion. 7 In my opinion, this discretion extends to a discretion as to whether, and if so how, to intervene; and in my opinion, there is an onus on a person seeking to have a court set aside or vary a registrar's decision to make out a case that the court, in the interests of justice, should exercise its discretion to do so. 8 In the case of a decision on practice or procedure, this will normally require at least demonstration of an error of law, or a House v. The King error, or a material change of circumstances, or evidence satisfying the strict requirements for fresh evidence. Even then, a court may not think that the interests of justice require intervention. This could be so, for example, if the error of law is a deficiency of reasons and the result is on its face not an unreasonable one. 9 In the case of a decision which finally determines a party's rights, or which (albeit one of practice or procedure) has a decisive impact on those rights, a court may be more willing to intervene. It may permit further evidence to be led which does not satisfy the strict requirements for fresh evidence, if it is satisfied that the interests of justice require this. It may decide to substitute its own discretionary decision for that of the registrar, even though no House v. The King error is shown, again if it is satisfied that the interests of justice require this. To that extent, the review may be considered a de novo hearing. (and Basten JA at [52]). 1. Tomko (No 2) been referred to in numerous decisions of this Court, see most recently Golden Max Pty Limited v Hurstville City Council [2015] NSWLEC 16 citing Groeneveld v Wollongong City Council [2009] NSWLEC 149; (2009) 168 LGERA 260 at [12]-[13]. I must exercise my judicial discretion in the circumstances mindful of the qualifications identified in Tomko (No 2) at [8] in relation to matters of practice or procedure, as this matter is. 2. This is a hearing de novo. The parties relied on most of the evidence read before the Registrar which included: 1. The affidavit of Mr Anthony John Pickup solicitor for the Council sworn 28 January 2015 which refers to threats of litigation by the former owner of the Applicant's land for alleged failures to comply with the Court of Appeal's orders and providing his opinion that the monitoring reports were commissioned solely or at least for the dominant purpose of the threatened contempt proceedings. Annexure A to his affidavit contains a number of letters and emails which identify such threats. 2. The affidavit of Mr David Ashley Vitnell director of the Applicant sworn 3 February 2015 attesting that the advice of drainage experts in these proceedings is that they be provided with the raw data the subject of the monitoring of water that has entered the lagoon and particularly the results following the Council's remediation works. 1. New evidence is permissible as this is a hearing de novo and I considered that it was in the interests of justice that the Council be permitted to read two additional affidavits before me. An additional affidavit of Mr Pickup sworn 3 February 2015 annexed several extracts of expert reports filed in the proceedings which were marked for identification before the Registrar. The affidavit otherwise sets out background and submits that the monitoring results referred to in contention 2(a)(i) of the Council's statement of facts and contentions relate to the Applicant's development consent, not the Council's drainage works on the neighbouring land. Additional submissions are made that in the Council's and Mr Pickup's view no dispute regarding compliance with the Court of Appeal orders is raised in these proceedings so that question does not arise and consequently the documents requested are not relevant to the determination of these proceedings. 2. An affidavit of Ms Lisa Marshall sworn 10 February 2015, the Council's in-house solicitor, was also read. Ms Marshall's affidavit identified the Supreme Court litigation commenced by the previous owner of the Applicant's land, the Council's response to the requirements of the Court of Appeal's order that work be done to prevent water above the natural flow entering the Applicant's land, that a number of threats of litigation were made by the director of the previous owner to commence court proceedings because he alleged the Council was not complying with the Court of Appeal orders, that GHD was employed to monitor the drainage system for the Seabreeze Estate and provide reports so that the Council would be in the position to rebut the allegations the system did not place the Council in breach of the Court of Appeal orders, and that the monitoring data was provided direct to that firm. Harris Wheeler was employed so that firm could provide on-going advice to the Council about compliance with the orders. Correspondence/file notes dated 13 April 2007, 22 January 2008 and 3 April 2012 annexed to the affidavit identify that the previous owner or the Applicant continued to threaten legal proceedings. 3. Ms Marshall was briefly cross-examined about the arrangements made within the Council for the provision of legal advice, the legal unit falling within the General Manager's office and that when she was asked to provide legal advice this was locked to all but a few people in the Council. Ms Marshall was aware that the Department of Natural Resources (DNR) required monitoring which she thought had been done pursuant to a review of environmental factors. She was not personally involved in implementation of the infiltration process for Seabreeze Estate as that was an engineering matter. She understood DNR's requirements relating to nutrient monitoring. GHD was paid for the monitoring from the drainage reserve budget of the Council. 4. The Applicant relied on the affidavits before the Registrar and also tendered exhibit A, an internal Council email from a senior development planner which refers to the Council's monitoring program being conducted on the Seabreeze Estate in 2009-2011. Exhibit B is a letter dated 31 January 2007 from DNR to the Council responding to a letter from the Council dated 12 January 2007 proposing to install infiltration units throughout the Seabreeze Estate to collect, store and filter stormwater. DNR's letter states that the Council is required to develop a monitoring and contingency plan as part of its project implementation. The requirement by DNR for monitoring is also referred to in a letter to a councillor dated 30 January 2007 (exhibit C). Relevance ground 1. The Council submits that the material sought in the notices to produce is not relevant to these proceedings because no relevant issue is identified in the statement of facts and contentions by the Council. The failure identified in the statement of facts and contentions to provide monitoring data relates to the Applicant's land not the Seabreeze Estate. 2. It is clear from the affidavit of Mr Vitnell at par 6 which is unchallenged by the Council that the drainage experts consider the Council's monitoring reports are potentially useful and relevant to their consideration of the issues in this Class 1 matter relating to the Applicant's land. Given the location of the Seabreeze Estate uphill from the Applicant's land this appears obvious. These are Class 1 proceedings seeking modification of conditions of development consent for wicks to be placed in the ground to drain excess water, some of which normally runs off the Seabreeze Estate land onto the Applicant's land. 3. It is highly desirable that the actual circumstances surrounding the Applicant's land should be known rather than experts forming opinions on hypothetical modelling alone. The extracts of the experts' reports attached to Mr Pickup's affidavit acknowledge that monitoring has been carried out but do not state conclusively that the absence of monitoring data is satisfactory. I note that one report identifies the Council's monitoring as being discontinued in 2008 which is not in fact the case. It appears that the full extent of the Council's monitoring program was unknown by the Applicant (and I infer by the Applicant's expert) until informal discovery in early December 2014 which included the email now in exhibit A, followed by the response to the notices to produce. The full extent of the monitoring reports was identified it appears for the first time in Annexure B to Mr Pickup's affidavit sworn 28 January 2015. The experts filed their reports, no doubt doing the best they could, in December 2014. 4. The statement of facts and contentions in reply refers to the issue of diversion of water from the Seabreeze Estate by the Council in par 19(b), as the Registrar also identified, suggesting the flow of water from uphill is potentially relevant. 5. There is no basis for setting aside the Registrar's findings that the monitoring reports are relevant. None of the matters referred to in Tomko (No 2) at [8] have been established. Legal professional privilege 1. The Council argues the monitoring reports are also subject to legal professional privilege. By virtue of s 38 of the Land and Environment Court Act 1979 the Evidence Act 1995 does not apply in these proceedings. The common law test of legal professional privilege applies which, since Esso Australia Resources Limited v Commissioner of Taxation (1999) 201 CLR 49, means that the dominant purpose test must be satisfied. The parties agree that is the relevant test. As submitted by the Applicant the dominant purpose must exist at the time the communication was brought into existence per Sparnon v Apand Pty Ltd [1996] FCA 684at [27]. In Australian Competition & Consumer Commission v Australian Safeway Stores (1998) 153 ALR 393 at [32] possible use of documents in litigation as a secondary or contingent purpose did not satisfy the dominant purpose test. I agree with the Applicant's submission that the only plausible dominant purpose for the monitoring was to check compliance with its obligations as the owner and operator of a drainage system to ensure it is operating within relevant statutory constraints. That is supported by the requirements in the DNR letter dated 31 January 2007 in exhibit B. 2. The legal proceedings about which the Council was and remains concerned according to Ms Marshall and Mr Pickup's evidence are not pending. They have been threatened and have been the subject of correspondence since 2007. It is now 2015. According to Australian Competition & Consumer Commission v Safeway Stores there must be a probability or likelihood proceedings will be commenced in order for a claim of privilege to arise. Recent statements by the current director of the Applicant identified in Mr Pickup's latest affidavit sworn 3 February 2015 do not take the matter any further. I do not consider there is litigation pending or which can be anticipated to which the dominant purpose test can be directed. 3. I also agree with the submissions of the Applicant that data, which is what the monitoring reports are, is not material usually the subject of legal professional privilege claims and it is difficult to see how on its own data in this circumstance is material to which privilege of this kind should attach, in contrast to material containing admissions for example. 4. If the information was privileged I also agree with the Applicant's submission that this has been waived given the use apparently made of the data by the Council's staff as disclosed in the evidence, particularly exhibit A. 5. There is no basis established by the Council to disturb the Registrar's finding on this aspect of her judgment. 6. Accordingly the Council's Notice of Motion should be dismissed. Orders 1. For the reasons that I have stated the orders that I make are as follows: 1. The Notice of Motion filed 10 February 2015 is dismissed. 2. Each party to pay its own costs. ********** 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: 25 March 2015