Land and Environment Court New South Wales Medium Neutral Citation: Penrith City Council v Dincel Construction System Pty Limited and Gaonor Pty Limited (OSSM case) [2019] NSWLEC 198 Hearing dates: 4 and 13 December 2019 Date of orders: 19 December 2019 Decision date: 19 December 2019 Jurisdiction: Class 4 Before: Robson J Decision: See orders at [20], [21] Catchwords: CIVIL ENFORCEMENT – unlawful installation and construction of an On-Site Sewage Management System in contravention of conditions of an approval granted under the Local Government Act 1993 (NSW) – unlawful continual operation of On-Site Sewage Management System in contravention of conditions of an approval granted under the Local Government Act 1993 (NSW) – whether appropriate to grant declaratory and consequential injunctive relief by consent – relief granted Legislation Cited: Local Government Act 1993 (NSW) ss 94, 99, 124, 672 Local Government (General) Regulation 2005 (NSW) Cases Cited: Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378; [2012] FCAFC 56 Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421; [1972] HCA 61 Gedeon v Commissioner of the New South Wales Crime Commission; Dowe v Commissioner of NSW Crime Commission (2008) 236 CLR 120; [2008] HCA 43 Great Lakes Council v Lani [2007] NSWLEC 681; (2007) 158 LGERA 1 Hill Top Residents Action Group Inc v Minister Administering the Sporting Venues Authorities Act 2008 (No 4) [2011] NSWLEC 6 IMF (Australia) Ltd v Sons of Gwalia Ltd (administrator appointed) [2004] FCA 1390; (2004) 211 ALR 231 In the Matter of Beechworth Land Estates Pty Ltd (administrators appointed) [2017] NSWSC 1447 Inner West Council v Balmain Rentals Pty Ltd [2019] NSWLEC 24 Marshall Rural Pty Ltd v Basscave Pty Ltd (No 3) [2018] NSWLEC 62 Oil Basins Ltd v Commonwealth of Australia (1993) 178 CLR 643; [1993] HCA 60 Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 Zetting v Müller [2017] NSWSC 659 Category: Principal judgment Parties: Penrith City Council (Applicant) Dincel Construction System Pty Limited (First Respondent) Gaonor Pty Limited (Second Respondent) Representation: Counsel: R White (Applicant) H Grace (First and Second Respondents) Solicitors: Dentons Australia Pty Ltd (Applicant) Addisons (First and Second Respondents) File Number(s): 2019/00157082 Publication restriction: Nil Judgment 1. By summons filed 20 May 2019, Penrith City Council ('Council') seeks declaratory and consequential injunctive relief against Dincel Construction System Pty Limited ('first respondent') and Gaonor Pty Limited ('second respondent') in connection with the unlawful installation and construction of an On-Site Sewage Management System ('OSSM') at 919 – 929 Mamre Road, Kemps Creek, being Lot 35 in DP 258414 ('premises'). 2. The hearing commenced on 4 December 2019 and further evidence and submissions were received on 13 December 2019. Mr R White of counsel appeared for Council and Mr H Grace of counsel appeared for the respondents. 3. In summary, the summons seeks the following relief: 1. A declaration that the first respondent (or alternatively, the second respondent) has installed and constructed an OSSM at the premises in contravention of conditions of an approval granted by Council on 25 June 2018 ('Installation Approval') in breach of s 672 of the Local Government Act 1993 (NSW) ('LGA'); 2. A declaration that the first respondent is continuing to operate the OSSM in contravention of conditions of a further approval granted by Council on 5 October 2018 ('Operational Approval') in breach of s 672 of the LGA; 3. Orders that the first respondent immediately ceases the operation of the OSSM; 4. Orders that the first respondent (or alternatively, the second respondent) remove all imported fill from the premises and restore the ground level of the premises; install and construct the OSSM in accordance with the Installation Approval; and operate the OSSM in accordance with the Operational Approval; and 5. A declaration and consequential order that the second respondent is in breach of the LGA by failing to comply with the order issued to it by Council pursuant to s 124 of the LGA dated 20 February 2019. 1. On 4 December 2019, the first day of the hearing of these proceedings which were set down for hearing for seven days concurrently with related proceedings (being proceedings 157051 of 2019), the Court was informed that as a result of the respondents seeking a new approval for an OSSM located in a different area on the premises, the parties had reached an agreement resolving these proceedings. The parties requested that the Court receive and consider the evidence filed in these proceedings, including expert evidence and a statement of agreed facts, and grant the declaratory and injunctive relief in terms that had been agreed between the parties. The hearing in proceedings 157051 of 2019 has commenced and is continuing. 2. As a result of a number of concerns expressed by the Court on the first day of the hearing, at the further hearing on 13 December 2019, the parties tendered further evidence and informed the Court that on 5 December 2019 Council had granted an approval to the second respondent pursuant to s 94 of the LGA (noting that notice requirements are contained in s 99 of the LGA, the provision stated on the cover of the approval), subject to conditions, for the installation and operation of an OSSM at a different location to that the subject of these proceedings. 3. For the reasons below, I consider that Council is entitled to relief generally in the form agreed between the parties. Evidence 1. Council relies upon the following evidence: 1. Expert report of Paul Reynolds dated 5 August 2019; 2. Expert report of Paul Reynolds dated 30 September 2019; 3. Expert report of David Bristow dated 30 August 2019; 4. Expert report of Simmonds & Bristow Pty Ltd dated 31 October 2019; and 5. A statement of agreed facts. Background 1. The salient background facts may be summarised as follows: 1. On 8 May 2018, Council received an application (DA18/0464) from the second respondent for the installation and construction of an OSSM at the south western corner of the premises. 2. On 25 June 2018, Council issued the Installation Approval for DA18/0464 to the second respondent to install and construct an OSSM, subject to conditions including: No fill material is to be imported to the site without the prior approval of Penrith City Council in accordance with Sydney Regional Environmental Plan No 20 – Hawkesbury-Nepean River (no 2 – 1997). No recycling of material for use as fill material shall be carried out on the site without the prior approval of Council. and The [OSSM] system and effluent management area shall be installed and operated in accordance with the: ... Conditions of this consent. 1. On 17 July 2018, a Council officer inspected the OSSM installation at the premises and reported as follows: fixed irrigation installed 3 sprinkler heads attached 4 lines installed (1) Area needs to be turfed (2) Installer to send certification for installation of irrigation Lyndsey.cannell@penrith.city 1. On 19 July 2018, at a further inspection by a Council officer, the following was reported: tank installed and connected Irrigation not set up yet Large pile of fill next to tanks. Owner will remove today Oztech is installing irrigation tomorrow Advised Chris can backfill but can't sign off final till irrigation installed. 1. On 5 October 2018, Council issued the Operational Approval to the second respondent under the Local Government (General) Regulation 2005 (NSW) to operate the OSSM at the premises subject to conditions, including condition 4, which provided: No alterations or additions to the on-site sewage management system are permitted without the written approval of Council. 1. Between July and December 2018, an OSSM and an associated effluent disposal area was installed at the premises, however it was not installed or operated in accordance with the approvals. 2. On or about 18 December 2018, Council officers inspected the OSSM at the premises and observed that fill material had been imported onto the premises and placed temporarily within the site of the OSSM. The effluent disposal area was covered with fill and subsequently turfed. 3. On 21 December 2018, Council issued a Notice of Intention to Serve an Order to the second respondent pursuant to s 124 of the LGA, requiring the second respondent to, inter alia: Remove all unauthorised fill imported to the land and placed within the Council approved effluent disposal area (see attached approval – DA18/0464), so that natural ground level is restored. 1. On 15 January 2019, Council received a modification application from the second respondent in relation to DA18/0464 seeking approval for relocation of the OSSM ('Modification Application'). 2. By 20 February 2019, the fill material that had been placed within the site of the OSSM had not been removed and on 21 February 2019, Council issued an Order No 30 to the second respondent under s 124 of the LGA ('Order') requiring the second respondent to: By 14 March 2019, remove all unauthorised fill imported to the land and placed within the Council approved effluent disposal area (see attached approval – DA 18/0464), so that natural ground level is restored. 1. No appeal was commenced in relation to the Order and the second respondent did not, by 14 March 2019, remove all unauthorised fill imported to the land and placed within the Council approved effluent disposal area so that natural ground level was restored. 2. On 28 March 2019, Council determined the Modification Application by way of refusal. 3. On 8 April 2019, Council officers inspected the premises and observed that additional fill had been brought onto the premises within the site of the OSSM. 4. In October 2019, the parties agreed that the respondents would provide a new design for the OSSM at a new location on the premises in accordance with the Wastewater Report and design specifications prepared by Simmonds & Bristow Pty Ltd dated 31 October 2019. 5. On 5 December 2019, Council granted approval pursuant to s 94 of the LGA to DA 18/0464.02 for the installation of an OSSM at a different location at the premises, subject to conditions. Consideration 1. The essential question is whether the Court should accede to the parties' request to make declarations and orders in accordance with the agreement now reached between the parties. 2. The Court has jurisdiction to make the declarations the parties seek. It is clear, and I find, that there has been a breach of the LGA. I also accept the uncontested expert evidence of Council's Senior Environmental Health Officer in relation to the potential for off-site environmental and human health impacts to occur as a result of impacted fill material being placed within the effluent disposal area. However, the mere fact that a statutory breach has occurred does not automatically result in the Court granting declaratory relief, notwithstanding the wide discretion the Court has to grant this form of relief. 3. The principles in relation to the granting of declaratory relief are well established: see Marshall Rural Pty Ltd v Basscave Pty Ltd (No 3) [2018] NSWLEC 62 ('Marshall') at [25]-[30]. 4. In Great Lakes Council v Lani [2007] NSWLEC 681; (2007) 158 LGERA 1 ('Lani'), Preston CJ of LEC considered the Court's position in relation to the making of declarations. He found that, whilst the Court had jurisdiction to make declarations where the respondents had breached planning and environmental statutes, on the facts before him, as a matter of discretion, a declaration would not be appropriate because first, the making of a declaration would not have any practical effect in the circumstances; second, declarations of breach are not necessary in order for the Court to have jurisdiction to make orders, including injunctive orders; third, a declaration of breach by itself neither remedies past breaches nor restrains future breaches; fourth, care must be taken not to use a declaration as a substitute for criminal prosecution; and fifth, whilst a legitimate purpose of civil enforcement is for there to be a finding by the Court and through its judgment, a public pronouncement that a breach of the law has occurred, this effect can be equally achieved by the Court making findings in its judgment which is a public document. 5. His Honour's remarks have been considered in a number of subsequent cases: see Hill Top Residents Action Group Inc v Minister Administering the Sporting Venues Authorities Act 2008 (No 4) [2011] NSWLEC 6, Marshall and Inner West Council v Balmain Rentals Pty Ltd [2019] NSWLEC 24 ('Inner West'). 6. It has been held that a condition precedent to granting declaratory relief is that, inter alia, the plaintiff must be able to secure a proper contradictor, that is, someone presently existing who has a true interest to oppose the declaration sought: Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448 and Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421; [1972] HCA 61 at 438. 7. In Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378; [2012] FCAFC 56 ('MSY'), the question that arose was whether, having regard to the consent of the parties to the granting of the declaratory relief proposed, the primary judge was prevented from granting that relief. Put another way, the question was whether consent to the relief sought precluded the respondent from being a "proper contradictor". The Full Federal Court (Greenwood, Logan and Yates JJ) held, at [30], that the correct position could be found in the judgments of Dawson J in Oil Basins Ltd v Commonwealth of Australia (1993) 178 CLR 643; [1993] HCA 60 at 648 and French J in IMF (Australia) Ltd v Sons of Gwalia Ltd (administrator appointed) [2004] FCA 1390; (2004) 211 ALR 231 at [47]. The Court stated that if a party had a true interest in the plaintiff's claim, even if they saw that interest served by not opposing the relief claimed, that would be sufficient to render them a "proper contradictor": MSY at [16]. Similar sentiments were expressed in Zetting v Müller [2017] NSWSC 659 and In the matter of Beechworth Land Estates Pty Ltd (administrators appointed) [2017] NSWSC 1447. 8. I have considered the principles in Lani, Hilltop and Inner West, and I find that in circumstances where there has been agreement between the parties to the making of declarations, and where I have discretely determined on the uncontested evidence that there has been and continues to be conduct at the premises by the second respondent in breach of the LGA, to achieve the purpose of exposure and denouncement of the conduct, the mere pronouncement of this judgment alone would not constitute sufficient relief. I also take into account that in this case, unlike the situation in Lani, there is agreement between the parties that declaratory and consequential relief should be ordered. 9. Whilst I am conscious that a declaration for breach of a statute in civil proceedings should not be used as akin to or as a substitute for criminal proceedings for breach of environmental statues (Lani at [23] and Gedeon v Commissioner of the New South Wales Crime Commission; Dowe v Commissioner of NSW Crime Commission (2008) 236 CLR 120; [2008] HCA 43 at [23]), the continuing nature of the breach, the various efforts of Council over time to bring to the attention of the respondents the need to remedy the breach, and the agreement now reached between the parties, are matters which I consider relevant in determining that there is utility in granting the relief sought. In light of the above, I find that there is utility in making declarations in the present circumstances. My reasons may be shortly stated. 10. First, it is clear that the second respondent has engaged in conduct which is in breach of both the Installation Approval granted by Council on 25 June 2018 and the Operational Approval granted by Council on 5 October 2018; second, the OSSM at the premises was neither constructed nor operated in accordance with the approvals issued and involved the importation and deposition of fill (about which there has been some proper concern); and third, the second respondent failed to comply with the Order issued pursuant to s 124 of the LGA. As there has clearly been a breach of the LGA, Council was entitled to bring proceedings in this Court to remedy or restrain the breach. In these circumstances, I consider the making of declarations at least marks the disapproval of the Court of the conduct that Parliament has proscribed. It also serves to discourage others from acting in a similar way and therefore can be seen to be a deterrent and have an educative effect. 11. I am also of the opinion that in addition to the declarations agreed to be made, in accordance with the evidence before the Court in relation to the respondents' prior conduct, it is appropriate to make the agreed orders in the nature of mandatory injunctive relief. The orders will ensure that the new OSSM is installed, and that the structures, including pipes and other components unlawfully installed, are removed. Orders 1. Consistent with the reasoning above, the Court makes the following declarations: 1. A declaration that Gaonor Pty Limited by itself, its contractors, servants or agents has installed and constructed an On-Site Sewage Management System ('OSSM') at 919 – 929 Mamre Road, Kemps Creek, being Lot 35 in DP 258414 ('premises') in contravention of the approval granted by Penrith City Council on 25 June 2018 to application DA18/0464 in breach of s 672 of the Local Government Act 1993 (NSW), specifically the following condition of approval: No fill material is to be imported to the site without the prior approval of Penrith City Council in accordance with Sydney Regional Environmental Plan No 20 (Hawkesbury-Nepean River) (No.2-1997). No recycling of material for use as fill material shall be carried out on the site without the prior approval of Council. 1. A declaration that Gaonor Pty Limited by itself, its contractors, servants or agents operated and is continuing to operate the OSSM at the premises in contravention of an approval granted by Penrith City Council on 5 October 2018 to application OSSM 0045/18 in breach of s 672 of the Local Government Act 1993 (NSW), specifically condition 4 of the approval which provides: No alterations or additions to the on-site sewage management system are permitted without written approval of Council. 1. The Court makes the following orders: 1. By 30 January 2020, Dincel Construction System Pty Limited and Gaonor Pty Limited are to install an evapotranspiration absorption bed ('ETA') in accordance with the terms and conditions of approval no. DA18/0464.02 dated 5 December 2019 attached as Annexure "A" to these orders. 2. By 30 January 2020, Dincel Construction System Pty Limited and Gaonor Pty Limited are to remove the existing effluent disposal area pipes and components from the area identified on the 'Storage Site Plan and Details' Plan drawing number 17076-C21 Rev D contained in Exhibit F. 3. Dincel Construction System Pty Limited and Gaonor Pty Limited are to pay Penrith City Council's costs of the proceedings in the amount of $40,000 inclusive of GST within 4 weeks of these orders. ********** Annexure A (1.14 MB, pdf) 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 December 2019