Barton Property Partnership No 2 v Foote
[2015] ACTSC 204
•4 August 2015
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Barton Property Partnership No 2 & Anor v Foote & Ors (No 2) |
Citation: | [2015] ACTSC 204 |
Hearing Date: | 18 May 2015 |
DecisionDate: | 4 August 2015 |
Before: | Mossop AsJ |
Decision: | See [66] |
Category: | Principal Judgment |
Catchwords: | PROPERTY – units plan – interpretation of definition of permissible use in purpose clause – use found to be breach of purpose clause and breach of statutory provision – injunction granted STANDING – Commercial entity seeking to restrain conduct of another commercial entity where breach of statutory provision alleged – special interest found – injunctive relief granted |
Legislation Cited: | Planning and Development Act 2007 (ACT) Unit Titles Act 2001 (ACT) |
Cases Cited: | Argos Pty Ltd v Corbell, Minister for Environment and Sustainable Development (2014) 89 ALJR 189 Australian Conservation Foundation Inc v Commonwealth (1980) 146 CLR 493 Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528 |
Parties: | Barton Property Partnership No 2 (First Plaintiff) Barton General Practice Partnership (Second Plaintiff) Andrew John Foote (First Defendant) Andlyn Barton Property Pty Ltd (Second Defendant) Grace (ACT) Pty Ltd t/as Helen King Hearing Solutions (Third Defendant) |
Representation: | Counsel: Mr D Robens (First and Second Plaintiffs) Mr M Orlov (First and Second Defendants) Ms S Mulherin (Third Defendant) |
| Solicitors: Kamy Saeedi Law (First and Second Plaintiffs) Ken Cush & Associates (First and Second Defendants) Dibbs Barker (Third Defendant) | |
File Number: | SC128 of 2015 |
Introduction
By originating application filed 24 April 2015 the first and second plaintiffs seek injunctive relief against three defendants arising out of allegations of a breach of the provisions of a Crown lease. The proceedings relate to premises which are the subject of a unit title subdivision located at 3 Sydney Avenue Barton (the premises). The dispute relates to the use of a part of the premises referred to as unit 90. The injunction is sought because the plaintiffs contend that unit 90 is being used in a manner which contravenes the purpose permitted under the relevant units plan.
The parties
The first plaintiff, Barton Property Partnership No 2 (BPP2), is a partnership the members of which are the registered proprietors of units 81, 82, 84, 86, 87 and 88 in Unit Plan 3593. These units are located on the ground and first floors of the building on the premises.
The second plaintiff is a partnership which trades as the Barton General Practice at the premises (BGPP). The evidence does not disclose which of the units at the premises it operates from. The affidavit of Jessy McGowan sworn on 22 April 2015 states, obscurely: ‘[BGPP] works in conjunction with [BPP2] to lease rooms to doctors and provide a health facility’. Details of the leasing or licensing arrangements as between BPP2 and the members of BGPP were not in evidence.
The second defendant, Andlyn Barton Property Pty Ltd (Andlyn), is the registered proprietor of unit 90.
The first defendant, Andrew Foote (Dr Foote), is a director and secretary of Andlyn. He holds 50% of the shares in the company.
The third defendant, Grace (ACT) Pty Ltd trading as Helen King Hearing Solutions (Grace), is a sub lessee of the second defendant and leases part of unit 90.
Relief sought
The substantive relief sought in the originating application is:
1.That an injunction be granted over Unit 90, Block 1, Section 42 Barton otherwise known as 11/3 Sydney Avenue, Barton, ACT (the Premises):
a.restraining the Third Defendant from operating a hearing and consultation practice from the Premises;
b.restraining the First and Second Defendants from operating a medical or health facility from the Premises; and
c.restraining the First and Second Defendants from permitting others from operating a medical or health facility from the Premises.
…
3. That the Defendants pay the Plaintiffs [sic] costs of this application.
4. Any other orders that the Court considers appropriate.
Procedural history
The proceedings were commenced on 24 April 2015. On that day the proceedings came before me and the plaintiffs sought an interim injunction in the same terms as the order sought in the originating application. At that stage the Grace had not been served with the proceedings. For reasons which I gave at the time I dismissed the application and made directions relating to the preparation of the matter for a final hearing. Grace filed a notice of intention to respond on 8 May 2015. At the hearing on 18 May 2015 the plaintiffs relied upon a number of affidavits:
(a)Jessy McGowan sworn 22 April 2015;
(b)David Robens sworn 23 April 2015;
(c)Thomas Barrington-Smith affirmed 28 April 2015, 29 April 2015 and 13 May 2015;
(d)Shane Brookman affirmed 29 April 2015;
(e)Suzanne Paterson affirmed 29 April 2015.
Dr Foote and Andlyn did not read any affidavit evidence. Grace read two affidavits of Helen King affirmed 11 May 2015 and 15 May 2015.
None of the deponents were cross-examined. Each party made written and oral submissions.
Facts
The terms of the lease which are incorporated into Units Plan No 3593 provide, in relation to the purpose for which the premises may be used, as follows:
PURPOSE (c) To use the said parcel for one or more of the following purposes:
(i) Units 1-79 for multi-unit housing;
(ii) Units 80, 85, 89, 90 and 92 for non retail commercial use;
(iii)Unit 81 for community use LIMITED TO health facility and shop LIMITED TO a maximum gross floor area of 150 square metres;
(iv)Units 82, 84, 86, 87 and 88 for community use LIMITED TO health facility;
(v)Unit 83 for non retail commercial use and shop LIMITED TO the sale of arts and crafts; and
(vi) Unit 91 for a restaurant;
IN ADDITION the parcel of land may also be used for the purpose of car park provided that a minimum of two hundred and twenty nine (229) car parking spaces shall be allocated to the Units;
PROVIDED THAT the combined maximum gross floor area for non retail commercial use and shop shall not exceed 1,575 square metres; and
FURTHER PROVIDED THAT the combined gross floor area for community use and shop shall not exceed 2,175 square metres;
Of significance in the present case are the definitions for the various terms referred to in the purpose clause. Clause 6 of the lease provides:
6. In this schedule unless the contrary intention appears:
…
(c)“business agency” means the use of the parcel of land for the purpose of providing a commercial service directly and regularly to the public;
…
(e)“community use” means the use of the parcel of land for child care centre, community activity centre, community theatre, cultural facility, educational establishment, health facility, hospital, place of worship and/or religious associated use;
…
(g)“financial establishment” means the use of the parcel of land for the primary purpose of providing finance, investing money, and providing services to lenders, borrowers and investors on a direct and regular basis;
…
(i)“health facility” means the use of the parcel of land for providing health care services (including diagnosis, preventative care or counselling) or medical or surgical treatment to out-patients only;
…
(l)“non retail commercial use” means business agency, financial establishment, office and/or public agency;
(m)“office” means the use of the parcel of land used for the purpose of administration, clerical, technical, professional or like business activities, including a government office, which does not include dealing with members of the public on a direct and regular basis except where this is ancillary to the main purpose of the office;
…
(p)“public agency” means the use of the parcel of land for the purpose of providing a public service directly and regularly to the public and includes a government agency, which provides a commercial service to the public;
…
Events leading up to the commencement of proceedings
In October 2014 an optometrist named Shane Brookman was approached by Dr Foote. At that stage Mr Brookman operated from other premises within the building. Mr Brookman was told by Dr Foote that he was planning on fitting out unit 90 in the near future and was encouraged by Dr Foote to become the first tenant of that new unit. Mr Brookman asked for a copy of the purpose clause. He was provided by Dr Foote with a copy of the purpose clause and the accompanying email which referred to advice from Dr Foote’s solicitor. The quoted portion of that advice appeared to be favourable to the use of the premises by optometrists and audiologists although neither the whole of the advice nor the request for advice was in evidence. Mr Brookman did not pursue the offer because he did not consider that the purpose clause was appropriate for his practice.
Suzanne Paterson (also known as Suzanne Cooney), a podiatrist practising from unit 88 (one of BPP2’s units) was approached by Dr Foote in February 2015 who indicated that he was opening ‘Canberra Specialist Offices’ on 30 March 2015. In April 2015 he wrote to advise that ‘Barton Professional Suites’ would open on 20 April 2015 and offered rooms and support services. Subsequent correspondence sent on behalf of Dr Foote indicated that the new rooms would cost $160 per half day.
On 22 March 2015 the solicitor for the plaintiffs made a complaint to the Environment and Planning Directorate Investigation Unit alleging that Dr Foote had approached several doctors in the Barton General Practice informing them that he was setting up a new practice at unit 90 and that he intended to open that practice on 30 March 2015. The solicitor for the plaintiffs asserted in the complaint that unit 90 was not zoned for a medical practice and was leased as a non-retail commercial use.
On 31 March 2015 the plaintiffs’ solicitor made a complaint in similar terms to the executive committee of the body corporate of the building at 3 Sydney Avenue.
On 2 April 2015 the solicitor for the plaintiffs received a letter from an inspector in the Utilities, Land and Lease Regulation Section of the Environment and Planning Directorate stating that an investigation into the complaint has been conducted which indicated that ‘the conduct complained about may be a breach of the Planning and Development Act 2007’ but that, apart from notifying the lessee of the alleged contravention and completing certain other minor administrative matters, no further enforcement action would be taken. That decision appears to have been reached by application of a policy of the Environment and Sustainable Development Directorate relating to enforcement which balanced the resources required to investigate and undertake enforcement action against the seriousness of the alleged breach.
On 9 April 2015 Helen King made enquiries of Andlyn about the suitability of unit 90 for her business. She received an email on that day from Dr Foote saying:
Here is the legal opinion confirming you are OK for 11/3 Sydney Ave (unit 90 on the units plan).
Onward & upward
The email included an email from a solicitor headed ‘RE: Foote question’. It included a copy of the lease purpose clause and email advice from the solicitor addressing whether or not optometrists and audiologists would fit within a definition of ‘Non-Retail Commercial Use’. Although it is not clear where the definition set out in the email comes from, by the time of the hearing the parties agreed that the definition came from the Territory Plan and was different to the definition which appeared in the units plan.
On 9 April 2015 the solicitor for the plaintiffs spoke to Helen King and identified the position of the first and second plaintiffs namely that the use of the premises by an audiometrist was inconsistent with the terms of the units plan.
On approximately 18 April 2015 Grace entered an agreement with Andlyn, apparently a lease, the details of which were not in evidence, for part of unit 90.
The plaintiffs’ solicitor spoke to Ms King again on 22 April 2015. That day she was in her second day of business on the premises. She indicated that she could not see a problem with her use of the premises and that any further issue should be taken up with Dr Foote. She corresponded with members of the BPP2 partnership complaining about the approach that had been taken by the partnership and its solicitor in raising with her breaches of the purpose clause. The solicitor for BPP2 replied to her on 28 April 2015.
She was also contacted by the chief executive officer of the plaintiffs, Jessy McGowan, who apologised about the events that had taken place. Ms McGowan indicated that the conduct of the plaintiffs was not intended to be personal and offered a lease or licence for rooms in the units controlled by BPP2. Ms King responded that she would not under any circumstances rent rooms from BPP2 having regard to the way in which she had been communicated with in the past.
On 28 April 2015 the solicitor for the plaintiffs made an application for a controlled activity order under s 358 of the Planning and Development Act 2007 (ACT) (PD Act). That order was sought against each of the defendants as well as Helen King personally.
A printout of the web page on 22 April 2015 described the Barton Professional Suites as follows:
The Barton Professional Suites (BPS) are a purpose built modern professional centre that is located in the heart of Canberra, with convenient undercover parking and nearby public transport.
BPS Serviced Offices
BPS also offers serviced offices with secretarial, banking & typing support, starting from $160 per half day. Personalised phone message and internet provided. Ample under building parking. Only 600m from Parliament House. Adjacent to the 5 star Realm Hotel.
When the website was accessed again on 13 May 2015, added to the welcome page was:
Possible Usages:
* legal office
* accountant office
* allied health office
The nature of the use of unit 90 by Grace
The affidavit of Helen King affirmed on 11 May 2015 discloses the nature of the activities undertaken in her part of unit 90. Paragraphs 7 and 8 of her affidavit provide:
7.My business involves the assessment of hearing for the purposes of determining whether a person requires medical investigation or hearing aid assistance. In order to make this assessment, I will:
a.receive an enquiry or booking via telephone or email from a member of the public;
b. arrange a time for the person to attend my office;
c.carry out a series of hearing tests which generally involves [the person putting on headphones and listening to recorded words and sounds and indicating to me when the [sic] can hear certain sounds and what sounds they can hear].
d.subject to the results of those tests, I can indicate whether the person may wish to consider obtaining a hearing aid, consider undertaking a hearing training program at home, or take no further action.
8.I am able to use diagnostic instruments (such as scales and tests) to form a view about a person’s range of hearing, possible aetiology and consider the next steps for the person. If medical intervention is required, I advise the person to see their doctor. I do not directly refer people to specialists because the person would not be entitled to a Medicare rebate unless referred to a specialist by their general practitioner or other appropriately registered medical professional.
In a curriculum vitae which was annexed to her affidavit she describes the process involved in hearing assessment and hearing aid fitting as follows:
1. Client initial contact with us is generally for a hearing assessment (1.5 hours)
2. Should the client require hearing aid/s a recommendation is made and the client can either choose to take up this advice or not.
3. If a client decides to proceed with a hearing aid fitting we order the hearing aids selectively for the client and arrange moulding as required
4. Clients then attend a fitting appointment for approx 1.5 hours
5. Follow ups are also performed from ½ hour up to 1 hour
6. The percentage of hearing aids fitted to the number of clients attending the office varies as not all clients tested will proceed to hearing aids
7. In rare instances clients may purchase hearing aids on line and in these instances we charge a fitting and dispensing fee to the client.
Her affidavit affirmed on 15 May 2015 makes it clear that she has a limited number of demonstration hearing aids in the office which are not for sale but are available to try prior to clients deciding what hearing aid would be suitable.
The units of BPP2
The affidavit of Jessy McGowan sworn on 22 April 2015 identifies, in relation to the units owned by BPP2, the following matters. Unit 88 is fitted out and there are five vacant consulting rooms that are available to be leased and have a purpose clause that allows a ‘health facility’. There is also 220 m² of space in unit 87 which is available to be leased and has a purpose clause that allows a ‘health facility’. The rooms in the units owned by BPP2 (the affidavit says the first defendant but I have assumed that this is an error) are rented out for approximately $2,700-$3,700 per month depending on the room. A tenant will also contribute 15% of its income if it wishes to share the use of the administrative staff that are available.
In January and February of 2015 there were some negotiations with Rachel Deane, an audiologist, to take space in one of the units owned by BPP2. There is no evidence that any lease or licence arrangement was entered into. The most recent communication in evidence was dated 10 February 2015.
Summary of the facts
BPP2 owns units within the building which are subject to a purpose clause which permits the operation of a ‘health facility’. Andlyn owns unit 90 which is permitted to be used for ‘non retail commercial use’. All the units are located on the ground or first floor of a single building. Grace has leased premises that form part of unit 90 from which it operates a business providing the services of an audiometrist. That involves conducting a hearing assessment, making a recommendation about whether hearing aids are appropriate and, if a hearing aid is to be fitted, conducting the fitting as well as any follow up visits.
Some of the units owned by BPP2 have available within them rooms for lease at commercial rates. BPP2 has sought and continues to seek tenants for those premises. Included amongst the prospective tenants has been an audiologist with whom there were some negotiations in February 2015.
Andlyn, by its director Dr Foote, has sought tenants for unit 90 including an optometrist (October 2014), a podiatrist (February 2015) and Grace which operates an audiometry business. Andlyn continues to advertise on the internet under the name ‘Barton Professional Suites’ the availability of accommodation for an ‘allied health office’.
Relevant statutory provisions
Section 33 of the Unit Titles Act 2001 (ACT) provides that on registration of a units plan the lease of the parcel ends and that the former lessee of the parcel becomes the holder of an estate in leasehold in each unit for the term ending when the lease would have ended subject to the provisions in the units plan for each unit ‘as if a separate lease of that unit for that term and subject to those provisions had been granted to the former lessee by the Territory under the Planning and Development Act 2007’.
Section 247 of the PD Act provides:
247 Use of land for leased purpose
(1) Territory land, or a building or structure on the land, in relation to which a lease has been granted, whether before or after the commencement of this part, must not be used for a purpose other than a purpose authorised by the lease.
NoteBeginning a use of land, or a building or structure on the land, is development and may require development approval (see s 7, def development, par (d) and s 8, def use, par (a)).
(2) However, if the lease is a residential lease, the land may also be used for home business.
NoteWhile the use of a residential lease for a home business is authorised, the use of the land for a home business is not exempt from requiring development approval unless the use is an exempt development (see div 7.2.6).
(3) In this section:
home business, carried on on land subject to a residential lease, means a profession, trade or other occupation carried on by a resident of the land.
The PD Act defines the word ‘lease’ so that it includes a lease of Territory land ‘granted or arising under the Unit Titles Act 2001’: s 235. As a consequence, for the purposes of determining whether there has been a breach of s 247 in relation to a property the subject of the Unit Titles Act 2001 (ACT), the relevant question is whether in relation to the unit there has been compliance with the purpose clause in the units plan.
Contentions of the parties
The plaintiffs submitted that the use of the premises by Grace fell within the scope of the definition of ‘health facility’ and hence did not fall within the scope of ‘non retail commercial use’. Therefore they submitted that the use involves a contravention of the purpose clause in the units plan and hence a contravention of s 247 of the PD Act.
Although Dr Foote and Andlyn on the one hand and Grace on the other were separately represented, Grace substantially adopted the submissions made by Dr Foote and Andlyn. I will therefore describe the position adopted by the defendants as a whole. The position adopted by the defendants was to concede that the use of the premises as described in the evidence could be characterised as falling within the definition of ‘health facility’ but that, for the purposes of assessing compliance with the terms of the lease, the relevant question was whether or not the use comprised a ‘non retail commercial use’, in particular, a ‘business agency’. The defendants contended that the uses described in the lease were not necessarily exclusive of each other and hence that a use may be both a ‘health facility’ and a ‘non retail commercial use’. They submitted that the question of characterisation was essentially a matter of impression and that the use described in the evidence was properly within the scope of ‘business agency’ and hence within the scope of ‘non retail commercial use’. They contended that there was at least to some degree an overlap between the activities which would fall within the scope of a ‘health facility’ and a ‘business agency’ and that the precise extent of any overlap did not need to be worked out in the abstract but would need to be determined on the facts of any particular case.
Further, the defendants also submitted that the plaintiffs lacked standing to bring the proceedings, that there was no evidence that damages would not be an adequate remedy and that as a matter of discretion relief should be refused.
How should the use be characterised?
In my view the defendants are correct to concede that the use of unit 90 disclosed by the evidence is one which falls within the scope of the definition of ‘health facility’. The use of unit 90 disclosed by the evidence is one which involves the undertaking of a technical assessment in order to determine whether or not a client has a hearing deficiency, the application of medical related knowledge to the assessment of the results of that test in order to determine whether any deficiency may be appropriately addressed by the use of a hearing aid and, if a hearing aid is obtained, the fitting of that hearing aid. There may also be follow up appointments which, I infer, are necessary to check the continuing adequacy of the hearing aid to address the client’s hearing deficits or to address any issue that arises in relation to the fitting or operation of the hearing aid. In my opinion these activities so described involve providing a health care service within the ordinary meaning of those words in the definition of ‘health facility’. That is made even clearer by the reference in the definition to diagnosis as being one of the activities included in the concept of health care services.
The next issue that arises is whether the use is lawful under the lease by reason of the fact that it can be characterised as a ‘non retail commercial use’ because it is a ‘business agency’. That depends on two propositions which are interrelated. The first is that the uses specified in the lease are not mutually exclusive so that a use which is a ‘health facility’ within the meaning of the lease may also be a ‘business agency’ and hence a ‘non retail commercial use’. The second is that the use described in the evidence may be appropriately characterised as ‘the use of the parcel of land for the purpose of providing a commercial service directly and regularly to the public’ so as to be within the definition of ‘business agency’.
In my view, neither of the propositions can be made good because the uses described are mutually exclusive of one another. The lease precisely allocates between the various units particular uses. It also imposes combined gross floor area restrictions upon different categories of uses namely ‘non retail commercial use and shop’ and ‘community use and shop’ which are designed to pick up the uses in the areas described in (ii) and (v) of the purpose clause on the one hand and (iii) and (iv) on the other. This scheme of control of the uses would be substantially undermined if the uses were not exclusive of one another. If the uses were not treated as being mutually exclusive then the characterisation exercise involved in determining whether a particular use was permissible would involve simply looking at the words of the definition of the permissible use and asking whether the actual use fitted within those words. It would not involve an examination of the other uses contemplated by the lease so as to determine whether the actual use was more appropriately characterised within one of those other defined uses. In the present case it would involve asking whether the proposed use was, relevantly, a ‘business agency’ because it involved ‘providing a commercial service directly and regularly to the public’. There would be no ‘carve out’ from that concept of activities which were clearly involved in the operation of a health facility. Thus health care services provided on a commercial basis directly and regularly to the public would fall within the scope of ‘business agency’ notwithstanding that they would also be a ‘health facility’. On the other hand if the identified uses were mutually exclusive then the interpretation of the scope of ‘business agency’ would have regard to the terms of other definitions that existed in the lease and would be read in a manner that did not incorporate uses elsewhere specified. The exercise would then be one of determining whether the actual use fell within the permitted use namely ‘business agency’, the definition of which would be interpreted so as to exclude those uses which were within the definition of ‘health facility’. Such an interpretation would, in my view, be more consistent with the careful allocation of uses between different units and existence of the gross floor area limits in the lease. It is also consistent with the careful description of different categories of ‘non retail commercial use’. The drafter was clearly aiming to carefully differentiate between different categories of use and that careful differentiation would be undermined if each individual definition was to be interpreted without regard to the content of the others. For example, the defined term ‘business agency’ would be sufficient to encompass significant aspects of other uses if it was not confined by those other uses. It would encompass many types of ‘financial establishment’, ‘health facility’, ‘restaurant’ and those types of ‘public agency’ that provide a commercial service to the public.
As a consequence, because it is appropriately characterised as a ‘health facility’ I do not consider that the actual use disclosed by the evidence can be characterised as a ‘business agency’. It clearly cannot be characterised as a ‘financial establishment’, ‘office’ or ‘public agency’ as those terms are defined in the lease. Therefore, it is a use which is not permitted under the lease to be carried out in unit 90. The carrying out of the actual use is therefore a breach of clause 3(c) of the lease and hence a breach of s 247(1) of the PD Act because it involves a building on land in relation to which a lease has been granted being ‘used for a purpose other than a purpose authorised by the lease’.
I have not accepted the submissions of Grace that were based upon the terms of the Territory Plan in its current form. That is because such extrinsic materials are not able to be used to interpret the terms of a lease: Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528 at 538-541 [35]-[45]; Springrange Pty Ltd v Australian Capital Territory [2010] ACTCA 17 at [12]-[15]. However it is, in my view, open, when interpreting Crown leases or their equivalent in the Australian Capital Territory, to have regard to the fact that, in a general sense, the terms of lease purpose clauses have been used since very early in the development of the Territory both as a mechanism by which land use is regulated for planning purposes as well as part of the means by which increases in the value of land arising from changes in use may be taxed.
Do the plaintiffs have standing?
The defendants submitted that the plaintiffs did not have standing and made separate submissions in relation to BPP2 and BGPP. These submissions were initially based on the possibility that the plaintiffs were seeking to enforce a scheme of development constituted by the allocation of uses under the Crown lease as discussed in Cousin v Grant (1991) 103 FLR 236. Based on that decision the defendants accepted that BPP2 as the owner of units 81, 82, 84, 86, 87 and 88 would have standing to seek relief against Andlyn for alleged infringements of BPP2’s equitable rights under the scheme of development. However they contended that BGPP had no legal or equitable rights against any of the defendants that this Court would enforce.
Insofar as the application was based on the breach of s 247 of the PD Act, the defendants submitted that the plaintiffs had not established that they had standing to restrain a breach of the PD Act because they had not established that they had a special interest in the subject matter of the proceedings for the purposes of the test articulated in Australian Conservation Foundation Inc v Commonwealth (1980) 146 CLR 493 (‘Australian Conservation Foundation’) and cases following that such as Onus v Alcoa of Australia Ltd (1981) 149 CLR 27 (‘Onus’) and Bateman’s Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 (‘Bateman’s Bay’). They submitted that the decision of the High Court in Argos Pty Ltd v Corbell, Minister for Environment and Sustainable Development (2014) 89 ALJR 189 (‘Argos’) was not directly applicable because it arose in the context of a judicial review application rather than an application for an injunction to restrain a breach of the law. Finally they submitted that the question of standing needed to be resolved in the context of the PD Act which provided a scheme that permitted the making of complaints about non-compliance to the executive government and a regime which permitted the executive government to take steps under the PD Act to enforce compliance with the PD Act.
In my view the defendants are correct in considering the positions of BPP2 and BGPP separately.
BPP2 is the owner of units in the same building as, and close to, Andlyn’s unit. It has units or parts of units available for rent and so far as the evidence goes is attempting to secure tenants. It has an ongoing commercial interest in securing available tenants. Insofar as potential lessees are concerned it has an interest in securing leases from persons seeking to use its premises as a ‘health facility’ within the meaning of the lease. The capacity of BPP2 to secure tenants affects the income which it can receive from its property and hence the value of that property. It therefore has an interest in preventing units within the same building and in the immediate proximity of its own units from being unlawfully used for the purpose of a ‘health facility’. It has an immediate commercial interest in compelling compliance with the allocation of uses within the various units within the building and hence ensuring compliance with s 247 of the PD Act. To adapt the words of French CJ and Keane J in Argos (at [35]), BPP2 has an interest in preventing what can be described as ‘a situation of “unfair competition”, rather than mere competition’.
The test in Boyce v Paddington Borough Council [1903] 1 Ch 109 permits a plaintiff to sue to enforce public rights without joining the Attorney General in two circumstances, first where some private right is at the same time interfered with and second where no private right is interfered with but the plaintiff suffers special damage peculiar to himself from the interference with the public right. In Australian Conservation Foundation at 527 Gibbs J reformulated the test as ‘having a special interest in the subject matter of the action’. His Honour stressed that an emotional or merely intellectual interest would not be sufficient to ground standing adding (at 530):
A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails.
The test in Australian Conservation Foundation was applied so as to permit enforcement of public rights in Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (SA) (1995) 183 CLR 552 and in Bateman’s Bay. In the former case a union sought to challenge a ministerial decision to permit Sunday trading in a particular area. In the latter case a commercial competitor who would suffer ‘severe detriment’ if its rival was not restrained was found to have standing to seek to restrain its competitor from carrying on its business on the basis that to do so would be acting beyond its powers under the Aboriginal Land Rights Act 1983 (NSW) and in contravention of the Funeral Funds Act 1979 (NSW). In Bateman’s Bay the High Court upheld the rejection by the New South Wales Court of Appeal of the trial judge’s statement that where the impact on the plaintiff’s commercial interests would be indirect the damage must be within the same class of damage as the public suffers as a whole and not just a side effect of the infringement of the public right.
Recently in Argos the High Court unanimously upheld an appeal from the Australian Capital Territory Court of Appeal which had denied standing to commercial competitors to seek review under the Administrative Decisions (Judicial Review) Act 1989 (ACT) in circumstances where the evidence disclosed that the approval of the development proposal that was being challenged would adversely affect the profitability of the businesses owned and operated by two of the claimants. The decision very much focused upon the particular scope of the Administrative Decisions (Judicial Review) Act 1989 (ACT) and the authorities under that Act and the equivalent Commonwealth Act. However the case is consistent with the decision in Bateman’s Bay in that it does not treat economic impacts differently and more restrictively than other impacts when considering questions of standing to bring proceedings.
While both Bateman’s Bay and Argos involved allegations that public authorities had acted contrary to law, the approach to standing is the same where one citizen seeks to restrain the conduct of another which is in contravention of a statutory provision. Examples of that are provided by Day v Pinglen Pty Ltd (1981) 148 CLR 289 (‘Day’), Onus and Boots Company (Australia) Pty Ltd v Smithkline Beecham Healthcare Pty Ltd (1996) 65 FCR 282. In Day the Court said (at 300):
The existence of an impending detriment threatened by an unlawful act is sufficient to confer standing to seek an injunction to restrain that act, without regard to theoretical possibilities in other circumstances: cf. Campbell v. Paddington Corporation [[1911] 1 K.B. 869, at p. 879].
I am therefore satisfied that BPP2 has a special interest in the subject matter of the proceedings sufficient to permit it to seek to restrain by injunction the unlawful use of unit 90 by Grace.
Further, I am not satisfied that the statutory context in which s 247 of the PD Act appears is sufficient to deny either directly or indirectly the entitlement of BPP2 to seek to restrain a breach of the PD Act. Part 11.2 of the PD Act permits complaints to be made about controlled activities. Section 339 and sch 2 of the PD Act define a ‘controlled activity’ in a manner which includes failing to comply with a provision of a lease. A lease includes a lease granted or arising under the Unit Titles Act 2001 (ACT): s 235. After the investigation of complaints a variety of actions may be taken including the making of a controlled activity order under pt 11.3, or the making of an application for an injunction under pt 11.6. Part 11.3 provides a regime for the making of controlled activity orders either on the application by a third party or on the Planning and Land Authority’s own initiative. A controlled activity order may require the person to whom it is directed to comply with a lease: s 358(3)(c). Where an application for a controlled activity order is made under s 350 and the Planning and Land Authority decides under s 351 not to make a controlled activity order that decision is subject to review: ss 407, 408, 408A, sch 1 items 42-44. Section 381, which is in pt 11.6 of the PD Act, permits the Planning and Land Authority or anyone else to apply to the Supreme Court for an injunction to restrain conduct that is, or would be, a contravention of a controlled activity order. Thus, the capacity to apply for an injunction under s 381 is conditioned upon the existence of a controlled activity order.
I am not satisfied that the existence of these provisions either excludes the capacity of this Court to grant an injunction in its general jurisdiction or that it affects the test for standing in an application for an injunction such as is sought by BPP2. There is nothing in the terms of the legislation which expressly attempts to exclude the general jurisdiction of this Court to grant equitable relief in the form of an injunction. Further, I am not satisfied that such an effect is a necessary implication from those provisions. It is clear that the capacity to make an application for a controlled activity order and, where one is in place, to apply for an injunction, is not constrained by the requirement to establish any special interest and hence it is more difficult to suggest that the legislation, by expanding the scope of persons who, in particular circumstances, may apply for an injunction, thereby intended to exclude the general jurisdiction of the Court which is dependent upon establishing a special interest. In the absence of some statutory qualification on the entitlement of persons to bring proceedings to enforce the terms of the PD Act, I do not consider that the existence of these alternative processes affects the general law test for standing where an injunction is sought to restrain a breach of the statute. As a consequence I do not accept the argument that the provisions of the PD Act preclude or affect the conclusion that I have reached above in relation to the standing of BPP2.
BGPP is a partnership which appears to lease or license premises from BPP2 and conducts, as its name suggests, a medical general practice. As pointed out above, its precise relationship with BPP2 is not made clear by the evidence. The evidence does not disclose how the partnership would be affected positively or negatively as a consequence of other units within the building being used by a health facility such as that conducted by Grace. There was no evidence of any particular consequence of a town planning nature such as inadequacy of parking that might arise from the use of the premises by Grace and I am not prepared to infer from the evidence that there will be such a consequence. Therefore, in my view, BGPP does not have standing to seek relief against the defendants.
Should an injunction be granted?
It is necessary, at this point, to distinguish between the circumstances of Dr Foote, Andlyn and Grace.
Dr Foote is one of the directors of Andlyn. He is not alleged to have been involved in any actual unlawful use of the premises. Insofar as he is undertaking activities as a director of Andlyn then it is the that company which would be subject to restraint. In my view, even leaving aside the other issues which the defendants raise in opposition to the grant of relief, there is no basis for the granting of any relief against Dr Foote.
Andlyn is the owner of unit 90. It has granted a lease to Grace. The terms of that lease are not in evidence and hence it is not possible to say whether the lease compels or even permits Grace to use the premises for a purpose which is contrary to the purpose clause in the units plan. The most that can be said is that Andlyn has not taken any steps to prevent the use which I have found to be contrary to the purpose clause in the units plan and has contended that the use is in fact lawful. To the extent that the lease granted to Grace permits a use which is contrary to the terms of the purpose clause then Andlyn can be said to have permitted such a use.
Insofar as there is evidence of the conduct of Andlyn in promoting the ‘Barton Professional Suites’ including its potential use for an ‘allied health office’ there is, in my view, insufficient evidence to demonstrate that Andlyn will, unless restrained, either use or permit to be used the premises for a use which is contrary to the terms of the lease by any person other than Grace. Although the evidence about the circumstances in which Dr Foote earlier obtained legal advice is not comprehensive, the situation appears to be that he obtained legal advice as to the permitted uses which was not correct and that he now has access to legal advice which is different.
Insofar as BPP2 may be entitled to enforce the scheme of development against Andlyn I would decline to grant an injunction restraining its future conduct because I am not satisfied that it will, unless restrained, act in a manner that would involve a breach of that scheme of development. For similar reasons, I would also decline to grant any injunction arising out of the possible future contravention of s 247 of the PD Act either by it or by a future tenant of it.
Grace is the lessee of part of unit 90 and, upon the findings that I have made above, is using the premises in a manner which is contrary to the lease and amounts to a contravention of s 247 of the PD Act. Grace is, therefore, an appropriate subject of an injunction to restrain the breach of s 247 of the PD Act.
Having regard to the reliance on s 247 of the PD Act I do not consider that it is essential for the plaintiffs to show that damages would not be an appropriate remedy. That is, fundamentally, because the enforcement is of a public law obligation in relation to which the plaintiffs would not have an entitlement to damages. Counsel for the first and second defendants submitted that the plaintiffs would have an entitlement to equitable compensation from the second defendant for breach of the scheme of development although he referred to no particular authority in that regard. Having regard to the reliance upon the terms of s 247 of the PD Act and the limited submissions on the point I do not need to determine that issue. In my view the question is a broader one namely whether or not, and upon what terms, to grant relief. No evidence was led by Grace as to any particular consequences that would flow from the grant of an injunction, in particular any losses that might be associated with the fit out of the premises or costs involved in relocation. I therefore proceed on the basis that there will inevitably be significant dislocation and inconvenience as a result of ceasing to use the premises and having to find alternative premises but nothing out of the ordinary that would particularly tell against the grant of an injunction or influence the terms of the injunction.
In my view it is appropriate to grant an injunction restraining Grace from continuing to use the premises contrary to the terms of the purpose clause in the units plan and contrary to the terms of s 247 of the PD Act. Having regard to the inevitable disruption to Grace’s business that will arise from the grant of the injunction and the absence of any immediate damage to BPP2 I will postpone its effect for a period of six weeks from the date of my orders so as to permit Grace some time to make alternative accommodation arrangements.
Orders
The orders of the Court are:
(1) The third defendant, by itself and by its servants or agents, is restrained from using any part of the premises known as unit 90 of Units Plan 3593 to carry on the business of an audiometrist insofar as it involves the diagnosis of hearing deficiencies, the provision of advice in relation to those deficiencies, or the fitting of hearing aids.
(2) Order 1 does not take effect until 15 September 2015.
(3) Insofar as the originating application is brought by the second plaintiff it is dismissed.
(4) Insofar as the originating application sought relief against the first and second defendants it is dismissed.
(5) The proceedings are listed on 7 August 2015 at 4.00pm for the determination of any application in relation to costs.
| I certify that the preceding sixty-six [66] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Associate Justice Mossop. Associate: Date: 4 August 2015 |
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