Aranda Properties Pty Ltd v Warringah Council

[2010] NSWLEC 263

Land and Environment Court

of New South Wales

CITATION:

Aranda Properties Pty Ltd v Warringah Council [2010] NSWLEC 263

PARTIES:

APPLICANT
Aranda Properties Pty Ltd

RESPONDENT
Warringah Council

FILE NUMBER(S):

40992 of 2010

CORAM:

Craig J

KEY ISSUES:

CIVIL ENFORCEMENT :- declaratory order and order in the nature of mandamus - development consent conditions - requirement to create positive covenants and restriction as to user for on-site stormwater disposal - council refused to endorse and release covenants for registration under the Real Property Act 1900 - on-site stormwater system not constructed in accordance with development consent or construction certificate - interpretion of conditions of consent - withholding of endorsement and release of covenants and restriction justified - relief refused

LEGISLATION CITED:

Civil Procedure Act 2005, s 149B
Conveyancing Act 1919, ss 88E(3), 88F(3)
Environmental Planning and Assessment Act 1979, ss 80, 80A, 109C
Environmental Planning and Assessment Regulation 2000
Land and Environment Court Act 1979, s 72
Real Property Act 1900

CASES CITED:

Hecar Investments No. 6 Pty Ltd v Lake Macquarie Municipal Council (1984) 53 LGRA 322)

DATES OF HEARING:

20 December 2010

 
DATE OF JUDGMENT: 

21 December 2010

LEGAL REPRESENTATIVES:

APPLICANT
J S Van Aalst
SOLICITORS
Williams Woolf & Zuur Solicitors

RESPONDENT
J A Ayling SC

SOLICITORS
Wilshire Webb Staunton Beattie Lawyers

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

CRAIG J

21 December 2010

40992 of 2010 ARANDA PROPERTIES PTY LTD v WARRINGAH COUNCIL

JUDGMENT

1 HIS HONOUR: In proceedings that have been expedited and heard during the law vacation, Aranda Properties Pty Ltd (Aranda) seeks both declaratory relief and a consequential order, in the nature of mandamus, requiring the delivery up of documents. Aranda seeks to found its entitlement to these orders upon the provisions of a development consent granted by Warringah Council (the Council) on 10 March 2010 pursuant to s 80 of the Environmental Planning and Assessment Act 1979 (the Act). The consent then granted sanctioned the development of land known as 1262 Pittwater Road, Narrabeen (the site) by the construction of a residential flat building containing 48 residential units and associated car parking (the Consent).

2 The Consent was granted subject to a number of conditions. Among the conditions imposed were ones requiring both the creation of positive covenants as well as the creation of a restriction as to user relating to the operation and maintenance of an on-site stormwater disposal system. As will become apparent, these conditions required the submission of forms of covenant to the Council for its approval prior to the covenants and restriction as to user respectively being entered on the title to the site. The requisite forms had been submitted to the Council by Aranda but the Council has refused to endorse the requisite requests necessary to permit registration of the covenants and restriction under the provisions of the Real Property Act 1900.

3 For its part, the Council has refused to endorse and release the documents, with the consequence that Aranda is unable to fulfil all conditions of the Consent, thereby jeopardising the settlement of contracts for sale entered into for the sale and purchase of the majority of residential apartments in the newly constructed residential flat building. The Council maintains that the conditions precedent to the release of the requests for registration of these documents have not been fulfilled thereby entitling it to withhold them.

4 In light of the evidence led and arguments advanced on behalf of the parties, the issues calling for determination are as follows:

i. the obligations cast upon Aranda by conditions of the Consent pertaining to the creation of the positive covenants and restriction as to user;
ii. whether that obligation has been fulfilled, and
iii. assuming the obligation has been fulfilled, whether the respondent can be compelled in these proceedings to endorse and release the requests enabling registration of the covenants and restriction as to user respectively.

The proceedings

5 These proceedings were commenced by summons filed in the Supreme Court of New South Wales on 9 December 2010. Time for service of the summons was abridged to 4.00pm that day and the summons made returnable before the Equity Division Duty Judge on 10 December 2010.

6 When the matter came before the Supreme Court on 10 December, orders were made by consent, including an order pursuant to s 72 of the Land and Environment Court Act 1979, that the proceedings be transferred to this Court. That order was made consequential upon short minutes of order prepared by the parties and provided to the Duty Judge at that time. Having regard to the provisions of s 72(2) of the LandandEnvironment Court Act, it is probable that the more appropriate source of power for the transfer was s 149B of the Civil Procedure Act 2005 but nothing for present purposes turns upon the source of power for transfer of the proceedings.

7 The proceedings came before me, as duty judge in this Court, on 10 December, as a consequence of which the hearing of the proceedings was expedited and ultimately took place on Monday last, 20 December 2010.

Factual background

8 The Consent granted on 10 March 2010 was subject to a deferred commencement condition imposed pursuant to s 80(3) of the Act. It required the submission for written approval by the Council of plans “indicating all engineering details” pertaining to the collection and disposal of stormwater “from the site, buildings, and adjacent areas”. It required that stormwater be conveyed by gravity to the on-site disposal system. Submission of the plans necessary to meet the requirements of the deferred commencement condition was required within twelve months from the date of the Consent.

9 The required plans were promptly submitted to the Council. They showed the location, dimension and storage volume of three stormwater absorption tanks to be located on the site. The details appeared on a drawing numbered 26009-2/A prepared by T. J. Taylor Consultants Pty Ltd, a company of consulting civil and structural engineers. A second plan prepared by the same engineers and numbered 26009-3 showed the detail of each of the stormwater absorption tanks. It depicted each of those tanks to be constructed of concrete on concrete footings, with a concrete roof and walls and with floors comprising aggregate encased in geotextile material through which water could seep into the subsoil and sand below. Access to each tank was available through a surface grate, with step irons fixed to the wall of the tank leading down from the grate, thereby allowing the tank to be cleaned and maintained. These two plans were endorsed by the Council’s engineering staff as being satisfactory on 24 March 2010. On 30 March 2010 the applicant for the Consent was advised that the deferred commencement condition had been fulfilled with the result that the Consent was, from that day, an operative consent. The two numbered plans prepared by T. J. Taylor Consultants Pty Ltd were nominated in the letter of advice from the Council.

10 On 28 May 2010, Lyall Dix, an accredited certifier, notified the Council of his appointment as the principal certifying authority for the development and of the construction certificate issued for the construction of the residential flat building that was the subject of the Consent (cf s 81A(2) of the Act). Included among the plans that were the subject of the construction certificate were two plans numbered 26009-2/B and 26009-3 depicting the stormwater drainage system in essentially the same form as had been depicted in the earlier drawings to which I have referred and which were the subject of the Council’s letter of advice to the applicant for development consent dated 30 March 2010. It is convenient to refer to the stormwater drainage drawings that were the subject of the construction certificate as “the approved stormwater drainage plans.”

11 On 21 October 2010 the Council received a copy of a letter dated 20 October 2010 from a firm of consulting engineers known as “C & M Consulting Engineers”, the original of which letter was directed to the principal certifying authority for the development. That letter made reference to the site and to DA 2009/1446. The body of the letter was in the following terms:

“With regards to the stormwater drainage for the above project, we confirm that we have reviewed the Work-As-Executed Survey Drawings prepared by Bee and Lethbridge Pty Ltd (Mr Warren L Bee – Registered Surveyor) and dated 19 October 2010.
We confirm that the stormwater drainage has generally been constructed in accordance with the approved Drawings and that subject to satisfactory routine maintenance, the stormwater drainage system will function as per the design intent.
This certificate shall not be construed as relieving any other party of their legal responsibilities or contractual obligations.”

12 Signatories to the letter included Mr Gary Chan described as an hydraulic engineer.

13 The “Work-as-Executed” drawing referred to in that letter superimposed upon drawing 26009-2/B the location of three stormwater absorption tanks located in similar but not identical locations to those indicated for such tanks on the base plan. The superimposed detail also indicated that the dimensions for each of those tanks had changed, with the result that the storage capacity of each tank was less than that indicated on the approved stormwater drainage plan. Neither of the two plans then submitted with the engineer’s letter identified any constructed section of the stormwater absorption tanks so as to reflect any change from that depicted on drawing 26009-3, being one of the two approved stormwater drainage plans.

14 The constructed stormwater system was inspected by Mr Khoo, a development engineer employed by the Council, on 28 October. That inspection revealed a tank with an access grate at the surface but about one metre below the surface was a geotextile fabric beneath which were a series of cells identified as a modular Atlantis cell system. Given that the space within the tank was filled by these cellular modules, access to the tank for maintenance and cleaning was not available, at least without damaging the cell system.

15 Following the inspection on 28 October, Mr Lyall Dix, the principal certifying authority, was advised that the stormwater drainage system had not been constructed in accordance with the plans that were the subject of the construction certificate and that the position was required to be rectified. The response to this request came in the form of a document headed “Design Certification” dated 30 November 2010 and signed by Dr Anthony Hasham. Dr Hasham is a civil and structural engineer and is an accredited certifier. His design certification is expressed to have been made “pursuant to the provisions of Part 4A of the Environmental Planning and Assessment Regulation 1994” (sic) and the certification that he gave is expressed as follows:

“that the absorption trenches perform as per original design intent done and checked as per drawings listed in Schedule A and comply with:

(a) the relevant Australia Standards listed in the Building Code of Australia (Specification A1.3) as follows: AS3500.3.2:1998 and council’s DA conditions BA 2009/1446 condition no. 1.”

16 Schedule A referred to in Dr Hasham’s certificate is in the following terms:

• “Drainage drawings prepared by T.J. Taylor Consultants Pty Ltd drawing no. 26009-2/B dated October 2009 Revision B marked in red for work as executed done by Warren L Bee dated 29/11/2010 Revision 01.
• Sketch plan done by Cavill Properties Pty Ltd dated 10/11/2010 attached illustrating method of construction.”

17 The sketch last referred to in the Schedule to Dr Hasham’s certificate depicts the pit and tank construction observed by Mr Khoo on 28 October. It shows a precast concrete pit of about one metre in depth beneath which is the tank space filled with Atlantis cells wrapped in geotextile fabric. The walls of the structure are of steel.

18 Dr Hasham’s “Design Certification” was followed by a document in identical terms but headed “Compliance Certificate”.

Positive covenants and restriction as to user: the conditions of the Consent

19 The critical conditions of the Consent pertaining to the creation of positive covenants and restriction as to user directed to stormwater disposal are conditions numbered 39 to 44. Although they are expressed as relating to on-site stormwater disposal, it is accepted by both parties that the correct description is of a system intended to provide for retention and absorption of stormwater on-site. It is necessary that I set out these conditions:

“ 39 Authorisation of Legal Documentation Required for On-site Stormwater Detention
The original completed request forms (Department of Lands standard forms 13PC and/or 13RPA) must be submitted to Council, with a copy of the Works-as-Executed plan (details overdrawn on a copy of the approved drainage plan), hydraulic engineers certification and Compliance Certificate issued by an Accredited Certifier in Civil Works.
Details demonstrating compliance are to be submitted to the Principal Certifying Authority prior to the issue of any interim/final Occupation Certificate.
Reason: To create encumbrances on the land. (DACENF01)
40 Registration of encumbrances for On-site Stormwater Disposal System

A copy of the certificate of title demonstrating the creation of the positive covenant and restriction for on-site storm water disposal as to user is to be submitted.

Details demonstrating compliance are to be submitted to the Principal Certifying Authority prior to the issue of any interim/final Occupation Certificate.
Reason: To identify encumbrances on land. (DACENF02).
41 Restriction as to User for On-site Stormwater Disposal System

A restriction as to user shall be created on the title over the on-site stormwater disposal system, restricting any alteration to the levels and/or any construction on the land. The terms of such restriction are to be prepared to Council’s standard requirements, (available from Warringah Council), at the applicant’s expense and endorsed by Council prior to the lodgement with the Department of Lands. Warringah Council shall be nominated as the party to release, vary or modify such restriction.
Details demonstrating compliance are to be submitted to the Principal Certifying Authority prior to the issue of any interim/final Occupation Certificate.
Reason: To ensure modification to the on-site stormwater disposal structure is not carried out without Council’s approval. (DACENF04)
42. Positive Covenant for the Maintenance of Stormwater Pump-out Facilities
A Positive Covenant (under the provisions of Section 88B of the Conveyancing Act 1919) is to be created on the property title to ensure the on-gong maintenance of the stormwater pump-out facilities on the property being developed.
Warringah Council shall be nominated in the instrument as the only party authorised to release, vary or modify the instrument. Warringah Council’s delegate shall sign these documents prior to the submission to the Land & Property Information Department.
Details demonstrating compliance are to be submitted to the Principle Certifying Authority prior to the issue of any interim/final Occupation Certificate.
Reason: To ensure adequate provision is made for the stormwater pump out system to be maintained to an appropriate operational standard. (DACENF11)
43. Positive Covenant for On-site Stormwater Disposal system
A positive convenant shall be created on the title of the land requiring the proprietor of the land to maintain the on-site stormwater disposal structure in accordance with the standard requirements of Council. The terms of the positive covenant are to be prepared to Council’s standard requirements, (available from Warringah Council), at the applicant’s expense and endorsed by Warringah Council’s delegate prior to lodgement with the Department of Lands. Warringah Council shall be nominated as the party to release, vary or modify such covenant.
Details demonstrating compliance are to be submitted to the Principal Certifying Authority prior to the issue of any interim/final Occupation Certificate.
Reason: To ensure ongoing maintenance of the on-site stormwater disposal system. (DACENF12)
44. Creation of Positive Covenant and Restriction as a User
Where any conditions of this Consent require the creation of a positive convenant and /or restriction as a user, the original completed request forms, (Department of Lands standard forms 13PC and/or 13RPA), shall be submitted to Warringah Council for authorisation.
A certified copy of the documents shall be provided to Warringah Council after final approval and registration has been affected by the “Department of Lands”.
Details demonstrating compliance are to be submitted to the Certifying Authority prior to the issue of a Interim/Final Occupation Certificate.
Reason: To identify encumbrances on land. (DACENF14)”

Documents submitted in purported compliance with the conditions

20 On 29 July 2010, Aranda’s solicitor provided to the Council the forms of request for registration of a positive covenant and restriction as to user as is identified in condition 39 of the Consent. Each was a request for creation of the relevant encumbrance to be created pursuant to s 88E(3) of the Conveyancing Act 1919. Each was in a form registerable under the provisions of the Real Property Act. Further, each form had been completed by Aranda’s solicitor and was executed both by Aranda as registered proprietor and on behalf of National Australia Bank Limited as mortgagee. The terms in which the obligations contained in the positive covenants are, in principle, the same. Relevantly, the primary provisions of the positive covenant is expressed as follows:

“The registered proprietors covenant with the Warringah Council (“Council”) that they will maintain and repair the structure and works on the land in accordance with the following terms and conditions: … ”

21 The conditions upon which the primary obligation is imposed included a requirement to keep “the structure and works” clean and free from silt, rubbish and debris; to maintain and repair “the structure and works”; to allow entry by servants and agents of the Council; to indemnify the Council and adjoining landowners against claims arising from the failure of any component of “the structure and works”; to attend to work that is the subject of notice from the Council and to provide to the Council additional powers pursuant to s 88F(3) of the Conveyancing Act. The covenant also provides that the Council is the only party authorised to release, vary or modify the instrument. The restriction as to user provides a covenant on the part of the registered proprietors that they would not do anything that would prevent “the structure and works” from operating in an efficient manner and would not make alterations or additions to them or allow any development to encroach upon them without the consent of the Council.

22 In each of the three documents of request, the expression “structure and works” is defined in the following way:

“ Structure and Works shall mean the on-site stormwater detention system constructed on the land as detailed on the plans approved by Council No. 2009/1446 including all gutters, pipes, drains, walls, curbs, pits, grates, tanks, chambers, basins and surfaces designed to temporarily detain stormwater on the land.”

23 The solicitor acting for Aranda subsequently sent to the Council the drawings to which I have earlier referred as the “Work-As-Executed Survey Drawings” provided to the Council with the letter of C & M Consulting Engineers dated 20 October 2010 together with the “Compliance Certificate” signed by Dr Hasham on 30 November 2010.

Obligation imposed by conditions 39 to 44 of the Consent

24 The primary submission of Aranda was that the obligation imposed upon it by Condition 39 was to submit to the Council the documents identified in that condition. It said that each of the four categories of documents required, namely the forms of request relating to positive covenants and restriction on use respectively, the plan identifying drainage works as undertaken, the hydraulic engineers certificate and a compliance certificate by an accredited certifier in civil works have all been proved to the Council with the consequence that the requirements of the condition have been met. Once this had been done, so it is further argued, the Council was obliged to “endorse” the requests for registration of the positive covenants and restriction as to user, without that endorsement being conditional upon the drainage works as constructed having been carried out in accordance with the plans that are the subject of the Consent.

25 I do not agree. It seems to me that Conditions 39 to 44 must be read as identifying the regime under which the covenants and restriction are to be created, including the prerequisites for release of those documents. The conditions must also be read subject to the caveat that they are to be construed as a document that is a working planning tool and thus interpreted to give effect to its apparent purpose as distinct from applying a rigid and literal meaning to individual words and phrases (Hecar Investments No. 6 PtyLtd v Lake Macquarie Municipal Council (1984) 53 LGRA 322).

26 It can be accepted that the conditions in question have as their focus the imposition of obligations on the part of the registered proprietors of the land from time to time to keep and maintain a stormwater detention/absorption system. However, critical to the imposition of the obligation is the identification of such a system initially installed against which maintenance and alteration of the system can be measured. It cannot legitimately be said that the purpose was to create positive covenants or restriction as to on-site detention or absorption in the abstract. It was clearly intended that the obligations to be cast and registered on title were obligations founded in the original or any subsequent consent granted by the Council itself.

27 To determine otherwise would give no work to do to the obligation in Condition 39 for the submission of works as executed plans, hydraulic engineering certification or compliance certificate. The imposition of a requirement for submission of those documents can only be meaningful if they were intended to satisfy the Council that the covenants and restriction that it was endorsing reflected the on-site system that it had determined was appropriate.

28 So much appears to have been recognised in the form of the positive covenants and the restriction as to user submitted to the Council by Aranda’s solicitor. It will be remembered from my earlier description of the terms of the submitted documents that the obligations directed to “the structure and works” was the system approved by the Council. The submitted forms of covenant and restriction can be given no effective operation unless they are directed to the approved works and those approved works are the works that have in fact been constructed.

29 To allow the positive covenants and restriction to be registered in the knowledge that the constructed stormwater detention/absorption system comprising the “structure and works” was not as detailed on plans approved by the Council would potentially impose upon the registered proprietors an immediate obligation to undertake remedial works, enforceable by the conditions upon which the covenants are imposed. Such a circumstance would be intolerable and cannot have been intended by the imposition of the conditions in question.

The obligations imposed by Conditions 39 to 44 have not been met

30 Having regard to my determination as to the obligations cast upon Aranda by Conditions 39 to 44, it will be apparent from my earlier recitation of the background facts that the obligation has not been met. Section 76A of the Act proscribes the carrying out of development that requires development consent unless such a consent has been obtained, is in force and, relevantly, the development is carried out in accordance with the consent. It is apparent that the development that is the subject of the Consent has not been carried out in accordance with its conditions.

31 I have earlier referred to the fact that the construction certificate that was issued on 28 May 2010 included the approved stormwater drainage plans. Those plans are thereby taken to form part of the development consent: s 80(12) of the Act. No further consent or approval has been granted for a different stormwater detention/absorption system. Clearly, that which has been constructed does not conform with plans that are the subject of the Consent. Not only is the storage capacity for stormwater reduced in the tanks that have been constructed on-site but, importantly, the system for retention and absorption, together with the provision of access and capacity for maintenance has significantly changed. There is no longer a concrete roof to the tanks and they are no longer concrete walled, but rather are steel walled.

32 Furthermore, the documents identified in Condition 39 have not been provided. The works as executed plan submitted with the report of C & M Consulting Engineers does not include a sectional drawing of the tanks as constructed, depicting details overdrawn on plan 26009-3, being one of the two approved stormwater drainage plans.

33 On the assumption that the “hydraulic engineers certification” referred to in Condition 39 is the letter of 20 October 2010 from C & M Consulting Engineers, it would appear to be deficient in fulfilling the purpose intended for it by the condition. Reference is made in it only to the “work as executed survey drawings” with reference to unidentified “approved Drawings”. Moreover, the statement that the drainage system “will function as per the design intent” can hardly serve as a certification directed to the approved drainage system.

34 Furthermore, the “compliance certificate” signed by Dr Hasham on 30 November 2010 would not meet the requirements of Condition 39. Clearly, the condition was intended to refer to a compliance certificate meeting the description of that expression in s 109C(1) of the Act. That section is in Part 4A of the Act and Dr Hasham’s certificate purports to be given pursuant to that Part. Section 109C(1) relevantly provides as follows:

“(1) The following certificates (known collectively as Part 4A certificates) may be issued for the purposes of this Part:
(a) a compliance certificate , being a certificate to the effect that
(i) specified building work … has been completed as specified in the certificate and complies with specified plans and specifications, or
(ii) a condition with respect to specified building work … (being a condition attached to a development consent or complying development certificate) has been duly complied with … ”.

35 I am unable to discern either in the Act or the Environmental Planning and Assessment Regulation 2000 any provision that identifies the capacity of a compliance certificate issued in accordance with the Act to certify that an aspect of development “performs as per original design intent”. Such a certificate is neither one that certifies compliance with specified plans and specifications, nor is it one that certifies that works have been carried out in accordance with a condition of development consent by reference to, either, plans approved by the Council in satisfaction of the deferred commencement condition or by those that were the subject of the construction certificate. Moreover, the plans identified in Dr Hasham’s “certificate” identify the works as executed drawing together with the sketch illustrating the Atlantis cell system installed without reference to the drawings that were the subject of either the Council’s approval or those that were the subject of the construction certificate.

36 As I have earlier indicated, the conditions in question, in particular Condition 39, cannot, upon their proper construction, have been intended to require the release and registration of positive covenants and a restriction as to user in terms proposed by Aranda when the very subject matter that they address, namely the on-site stormwater detention/absorption system is not that which has been the subject of any approval or consent under the Act.

The Council’s obligation to release the covenants and restriction

37 In light of my finding that Aranda has not met the requirements of the Consent in relation to the construction of the on-site stormwater detention/absorption system and is therefore not entitled to insist upon release of the required forms endorsed by the Council, it is unnecessary to consider the submission on behalf of the Council that there is no power provided to the Court to order the endorsement and release of the covenants and restriction.

38 For the reasons that I have indicated, it is tolerably clear that the intent of Conditions 39 to 44 of the Consent was to create positive covenants and a restriction as to user founded upon construction of the approved stormwater on-site detention/absorption system. Those conditions cannot be construed as obliging the Council to endorse and release documents for registration under the provisions of the Real Property Act when the system constructed is not that which has been approved.

Orders

39 For these reasons I make the following orders:

1. Summons dismissed
2. The applicant is to pay the respondent’s costs, unless within 7 days it notifies the Registrar that it wishes to argue costs, in which case an outline of submissions in accordance with its request should be filed with its notification to the Registrar.
3. Exhibits may be returned.


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