Bankstown City Council v Alamdo Holdings Pty Ltd

Bankstown City Council (the appellant) and Alamdo Holdings Pty Ltd (the respondent) were parties to litigation concerning a nuisance claim arising from flooding caused by the continued operation of a storm water drainage system, exacerbated by increased urbanisation. The matter came before the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the appellant council was entitled to immunity from liability under section 733 of the *Local Government Act 1993* (NSW) for acts done in good faith, and whether this immunity extended to protect the council from an injunction directed at future acts or omissions, particularly in the context of a *quia timet* injunction.

The Court of Appeal, in dismissing the appeal and cross-appeal, affirmed the principles that section 733 of the *Local Government Act 1993* (NSW) does not provide a blanket immunity for councils from liability for nuisance, especially where the nuisance arises from the continued operation of a system that causes ongoing harm. The court reasoned that the statutory protection for acts done in good faith does not extend to authorising or indemnifying a council against liability for continuing to operate a system that causes a nuisance, nor does it preclude the grant of injunctive relief to prevent future harm. The court also considered the appropriate form of a *quia timet* injunction in such circumstances.

The Court of Appeal varied the orders of Gzell J by substituting 6 June 2005 for 6 May 2005 as the compliance date for remedial measures, and otherwise dismissed the appeal and cross-appeal with costs.