Connect Global Limited v Port Stephens Council

[2024] NSWLEC 20

Land and Environment Court

New South Wales

Medium Neutral Citation:

Connect Global Limited v Port Stephens Council [2024] NSWLEC 20

Hearing dates:

15 March 2024

Date of orders:

18 March 2024

Decision date:

18 March 2024

Jurisdiction:

Class 1

Before:

Pain J

Decision:

See below in [34]-[35].

Catchwords:

CIVIL PROCEDURE – application to adjourn Class 1 appeals pending outcome of Class 4 proceeding refused

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56, 66, 67

Environmental Planning and Assessment Act 1979 (NSW), ss 4.65, 4.66, 4.67, 4.68, 4. 70

Cases Cited:

Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685

Auburn Council v Nehme (1999) 106 LGERA 19; [1999] NSWCA 383

Dubois v R & V Bergin Pty Limited [2011] NSWCA 309

Geo DPPB Pty Ltd v Burwood City Council [2023] NSWLEC 129

Port Stephens Shire Council v Booth [2005] NSWCA 323

Snowy Monaro Regional Council v Cmunt (No 3) [2018] NSWLEC 175

Spencer v NSW Minister for Climate Change and the Environment [2010] NSWCA 75

Category:

Procedural rulings

Parties:

Connect Global Limited (Applicant)
Port Stephens Council (Respondent)

Representation:

Counsel:
M Hall SC (Applicant)
M Cottom (Respondent)

Solicitors:
Long Legal Pty Ltd (Applicant)
Local Government Legal (Respondent)

File Number(s):

2022/00259609-003, 2023/125407-003

JUDGMENT

1. The Applicant commenced a Class 1 appeal in relation to a development control order (DCO) dated 30 August 2022 issued by Port Stephens Council (the Council) which restrained the use of parts of a location known as Fisherman’s Village in Swan Bay as a transitional group home. The Applicant also commenced a Class 1 appeal in relation to the refusal by the Council of a development application (DA) seeking consent for a transitional group home used for rehabilitation for drug dependent people in that location.

2. The Applicant has filed two virtually identical notices of motion dated 28 February 2024 in both Class 1 appeals seeking:

1. vacation of hearing dates for both Class 1 appeals on 11 and 12 April 2024;

2. stay of the DCO until final resolution of the Class 4 proceeding; and

3. release of the Applicant and Mr Pene from their obligations to use documents produced on subpoena in these proceedings by Ms Shetab only for the purpose of these proceedings, to the extent necessary to permit the use of those documents for the purposes of the Class 4 proceeding.

3. The reason for the vacation is that the Applicant’s director Mr Pene has commenced a Class 4 proceeding against other owners of units in Fisherman’s Village alleging that they are using their units unlawfully. The Class 4 proceeding referred to in prayer 2 was commenced on 15 February 2024. The Council is not a party in that proceeding.

4. No issues in relation to the subpoenas the subject of prayer 3 have been identified. The Court was informed that the recipient of the subpoena has advised through her solicitor that she is aware of the Applicant’s notice of motion and no submissions have been sought to be made by her. Mr Pene a director of the Applicant raised no issue in relation to the subpoena addressed to him.

5. The parties read, respectively, affidavits of their solicitors which set out the history of Fisherman’s Village and the progress of the two Class 1 proceedings, none of which is disputed.

Background

6. For several generations the land now known as Fisherman’s Village was an oyster farming and oyster processing facility. On 21 April 1993 a 46-lot community title sub-division approval was granted subject to conditions consistent with a tourist development.

7. In late 1995 RAAF aircraft began intensive use of weapons testing and training range situated nearby. The developer and owners of the cabins successfully sued the Council for negligence in approving the development when the Council had advanced notice of the intensification of aircraft noise: Port Stephens Shire Council v Booth [2005] NSWCA 323.

8. In 2013 the Applicant took out a lease over lots in the subdivision. The Applicant commenced using cabins and community facilities on the site to conduct short residential courses as part of an ‘outreach program’ for men dealing with substance abuse and other social issues.

9. On 30 August 2022 the Council issued a DCO to the Applicant to stop using the location for the purposes of a ‘transitional group home’. This is the subject of appeal 2022/259609 which commenced on 31 August 2022.

10. On 14 October 2022 the Applicant lodged a DA seeking consent for the use of existing land and buildings within Fisherman’s Village as a ‘transitional group home’. The DA was refused on 11 April 2023. This refusal of the DA is the subject of appeal 2023/125407 which commenced on 19 April 2023.

11. The Applicant operates on up to 34 lots in Fisherman’s Village owned by different entities/persons. The remaining 9 lots are owned and used by other unrelated individuals.

Council contentions in Class 1 development appeal dated 18 May 2023

12. The Council’s statement of facts and contentions (SOFAC) states as follows:

PART B1 – CONTENTIONS THAT THE APPLICATION BE REFUSED

1. Port Stephens Local Environmental Plan 2013

a. Incompatible Land Uses

i. The proposed dual use of the Site for tourist accommodation and as a transitional group home is incompatible and will result in adverse social impacts.

Particulars

(a) The two proposed uses which are proposed to co-exist on the same site, while permissible under the RU2 zoning individually, have the potential to result in social impacts across different stakeholder groups (particularly residents and visitors of Fisherman’s Village and proximal local residents and landholders) and are therefore not compatible on the same site at the same time.

(b) The adverse social impacts that will be felt by the users of the remaining 10 tourist cabins, dwelling and managers residence, intermixed with the 28 cabins proposed for use as a transitional group home results in the proposed dual uses of the Site being incompatible, particularly arising from the following:

i. The communal facilities including the pool, tennis court and restaurant and kitchen within the oyster barn will be shared between tourists and the transitional group home participants.

ii. There is insufficient information contained in the Social Impact Assessment as to how the Applicant can ensure a residential setting free of non-prescribed drugs and alcohol on the current site, given the dual use. The safety of both clients/patients and residents of Fisherman’s Village may be compromised as a result of a lack of separation between the two uses of the site and potential occupation of communal facilities by both group home clients and residents/visitors.

iii. The hours of the restaurant coincide with the mealtimes for the rehabilitation program which create incongruity between the restaurant being open to the public and using the facility as part of a rehabilitation program such as the use of alcohol by the public at the restaurant. The approved restaurant and the rehabilitation program cannot co-exist in an appropriate manner.

b. Inconsistent with Zone Objectives

i. The proposed development is inconsistent with the objectives of the RU2 – Rural Landscape under PSLEP.

Particulars

(a) The Site is zoned RU2 – Rural Landscape under PSLEP.

(b) Under clause 2.3(2) of PSLEP the consent authority must have regard to the objectives of this RU2 zone when determining the development application.

(c) The proposal contradicts the objectives of the zone relating to facilitating a variety of tourist and visitor-orientated land uses that complement and promote a stronger rural sector, in that the proposal would cause unacceptable social and amenity impacts to the remaining tourist cabins.

(d) There is an inconsistency with the zoning objective to provide for a range of compatible land uses, with the proposed use of the site as a transitional group home (to provide alcohol and drug rehabilitation to participants within the Fishermans Village) being incompatible with the existing approved tourist facility. The proposal would cause unacceptable social and amenity impacts to the remaining tourist cabins, especially given the transient nature of tourists who may visit the site unaware that it is shared with a transitional group home facility.

Applicant’s SOFAC in reply dated 21 June 2023

13. The Applicant’s SOFAC in reply states as follows:

PART B1 – CONTENTIONS IN REPLY

…

Particulars

…

(e) In 2013, the Applicant took out a lease over the lots then owned by the Moffats.

(f) The owners who allege they are using their lots for tourist accommodation purchased their first lot in March 2021, some 23 years after tourist uses ceased on the site. There is no evidence that they have used any of the lots they have purchased for tourist accommodation.

(g) The current owners of the other 9 lots advertise cabins for lease for “6 weeks to 6 months and possibly more.”

(h) Such use is either prohibited or permissible only with development consent in the RU2 zone. There is no development consent for the long term occupation of these cabins or the use of the cabins as dwellings.

(i) The effect of the failure to use the site for tourist accommodation for an extended period being greater than 12 months is that the approved use is presumed to have been abandoned pursuant to s.109 of the EP&A Act.

Class 4 summons

14. The Applicant has commenced a Class 4 proceeding against other individuals owning units alleging they are being used unlawfully as no development consent exists for the current use. The argument underpinning that relief is that the 1993 development consent has been abandoned and no longer operates to permit the use of lots at Fisherman’s Village for short-term letting. Alternatively orders are sought that the current use is not being carried out in accordance with the 1993 development consent as it is not being used for tourist accommodation but rather long stay residential use.

15. The Class 4 summons seeks declarations that:

1. A declaration that DA 80/93 granted on 21 April 1993 (the “Consent”) and modified on 4 April 1995 (the “Modified Consent”) has been abandoned pursuant to s.4.68 (or alternatively, former s.109) of the Environmental Planning & Assessment Act ("the EPA Act") or has otherwise lapsed or ceased to have force or effect.

2. An order, pursuant to s.9.45 of the EPA Act and/or s.20(2) of the Land & Environment Court Act ("LEC Act") that the First Respondent and Second Respondents, by themself, their servants, agents and contractors, be restrained from using Lots 12, 14, 16, 24, 25, 28, 41, 44 and 46 DP 285220:

(a) for any purpose for which consent is required under Port Stephens LEP2013;

(b) as a residence or for residential letting; or

(c) as a residence or for residential letting for any period greater than 42 consecutive nights or a total of 150 nights (per lot) in any 12 month period.

3. In the alternative, an order restraining The First Respondent from using Lots 16 and 41 DP 285220 in any of the manners set out in 2(a) to 2(c).

4. Costs.

16. Prayers 2(a) and (b) and prayer 3 are alternative claims for relief. If no declaration is made that the 1993 development consent has been abandoned then orders restraining the use of the specified lots from residential use (in contrast to a tourist use) are sought.

Applicant’s submissions

17. The notices of motion are made pursuant to s 66 of the Civil Procedure Act 2005 (NSW) (CP Act) seeking an adjournment of the two Class 1 appeals.

18. A proper basis for an adjournment exists where there is a likelihood that another proceeding will determine a common issue that might remove part of the argument underpinning one party’s case and that might remove part of the underpinning of one party’s case in the proceeding to be adjourned, or determine a common issue in such a way as to avoid the risk of contradictory decisions. The resolution of the existence of the 1993 development consent the subject of the Class 4 proceeding is fundamental to the resolution of the development consent appeal. If the 1993 development consent does not exist because it has been abandoned, then the current use of the site for a transitional group home will not be assessed in relation to a lawful use by other owners of units, but in relation to an unlawful use. The Council’s contentions in the development appeal depends on a conflict of uses and assumes a valid and continuing tourist use. The inter-relationship of the two proceedings (Class 4 and development appeal) is similar to the circumstances in Spencer v NSW Minister for Climate Change and the Environment [2010] NSWCA 75 (Spencer) and Dubois v R & V Bergin Pty Limited [2011] NSWCA 309 (Dubois).

19. The Council does not allege any prejudice to it in the affidavit of its solicitor Ms Caban dated 1 March 2024. The delay in the disposition of the two Class 1 appeals is a factor to be taken into account. That is outweighed by the disadvantage caused if the proceedings are determined or then have to be redetermined or set aside on appeal because of the outcome of the Class 4 proceeding. The primary contention of the Applicant in the Class 1 appeals is the abandonment of the tourist use which affects the current use of the other units.

20. The delay in making the application to vacate the Class 1 hearing dates is not excessive with the trial date some six weeks away. The Applicant has moved promptly since the Class 4 summons was commenced on 15 February 2024.

Council’s submissions

21. Prayer 1 is opposed. The Applicant is effectively seeking a stay of the Class 1 appeals. Relevant principles were identified in Geo DPPB Pty Ltd v Burwood City Council [2023] NSWLEC 129 (Geo DPPB) in the context of staying the effect of a DCO.

22. The validity of the 1993 development consent is not central to the contentions raised by the Council in the Class 1 development appeal and is not determinative of the issues in that appeal. The Council identifies a number of planning issues in its contentions not only related to the use of the units not owned by the Applicant.

23. The Class 4 proceeding has no reasonable prospects of success in light of s 4.70 (formerly s 109B) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) and the authority of Auburn Council v Nehme (1999) 106 LGERA 19; [1999] NSWCA 383 (Auburn Council v Nehme (CA)).

24. The Applicant’s delay in commencing the Class 4 proceeding is unexplained and is substantial. The contentions in reply identified abandonment of the development consent in June 2023 and there has been correspondence between solicitors on that matter since. Both Class 1 appeals on 9 October 2023 were set down for hearing on 11-12 April 2024 and preparation has been ongoing with joint reports due 15 March 2023 for the town planners and social impact assessment experts. If postponed pending the Class 4 proceeding the Class 1 appeals which have been on foot for some time will be substantially delayed, likely until 2025.

Consideration of whether to grant stay of Class 1 appeals

25. Although the Applicant sought to cast its application as an adjournment of the Class 1 appeals the legal effect which it seeks is the stay of those appeals pending the outcome of the Class 4 proceeding. The relevant ‘lens’ is s 67 of the CP Act not s 66. The Applicant bears the onus of establishing that the exercise of discretion to grant the orders it seeks should be made in its favour including that a proper basis exists which will be fair between the parties.

26. The principles relevant to a stay were identified in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 693-694 cited in Geo DPPB at [61] as follows:

[61] In Alexander v Cambridge Credit, the Court of Appeal (Kirby P, Hope JA, McHugh JA) said at 693-694 in relation to the principles governing stays inter alia:

The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it: Attorney-General v Emerson (1889) 24 QBD 56. Where there is a risk that if a stay is granted, the assets of the applicant will be disposed of, the Court may, in the exercise of its discretion, refuse to grant a stay: cf Clyne v Deputy Commissioner of Taxation (1982) 56 ALJR 857. …

27. Snowy Monaro Regional Council v Cmunt (No 3) [2018] NSWLEC 175 at [17] also cited in Geo DPPB at [35] identifies the following principles in relation to the grant of a stay:

(a) first, it is not necessary for the grant of a stay that special or exceptional circumstances be made out. It is sufficient that the applicants for the stay demonstrate a reason or an appropriate case to warrant the exercise of discretion in their favour;

(b) second, the onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties;

(c) third, the mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case, nor will it discharge the onus which the applicant bears;

(d) fourth, the Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it;

(e) fifth, where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay; and

(f) sixth, although courts approaching applications for a stay will not generally speculate about the appellant's prospects of success, given that argument concerning the substance of the appeal is typically and necessarily attenuated, this does not prevent them from making a preliminary assessment about whether the appellant has an arguable case.

28. The Applicant submitted that the issues in the Class 1 development appeal and the Class 4 proceeding overlapped such that there is potential for inconsistent findings on legal matters. I disagree. I agree with the Council that the Class 1 appeals do not require resolution of the legal status of the 1993 development consent to be resolved in order to deal with the merits issues which will arise for determination. Some of the issues the Council will seek to agitate at the merits appeal are identified in its SOFAC extracted in part above in [12] relating to incompatible land uses and inconsistency with zone objectives. It is apparent from the number of units the Applicant is able to access that it is the dominant land user in Fisherman’s Village. The Council’s case is that regardless of whether the units within Fisherman’s Village not used by the Applicant are being used for short or long term residential occupancy they are being used for a residential purpose which conflicts with the transitional group home use of the Applicant. Conflicting land uses can be considered in the Class 1 appeals regardless of the outcome of the Class 4 proceeding. I do not consider the Class 1 appeals will prove abortive if the Class 4 proceeding does not proceed first. The examples of Spencer and Dubois relied on by the Applicant are not relevant in the circumstances of these matters. Strictly speaking, no competing rights are in play in light of my finding.

29. In light of that finding it is not strictly necessary to consider the parties’ conflicting submissions about prospects of success. The Council submits that the Applicant’s case lacks reasonable prospects of success because it is not possible to abandon the approved use of the units for tourist accommodation under the 1993 development consent as the structures for that use continue to exist. That use according to the Council is preserved by s 4.70 (former s 109B) of the EPA Act supported by Auburn Council v Nehme (CA). The Applicant submits that s 109B as considered in Auburn Council v Nehme (CA) does not apply as the Council submits. If I understood the Applicant’s submissions correctly, as a result of transitional provisions there is the capacity for lapsing of development consents and the Applicant will submit that this applies to the 1993 development consent. The Court of Appeal in Auburn Council v Nehme (CA) contemplates such a circumstance, it was submitted. The Class 4 summons refers to s 4.68 of the EPA Act in prayer 1 which deals with the continuance of lawful uses. This section was not addressed by the Applicant before me. It appears in Div 4.11 Existing uses in which ss 4.65-4.67 address existing uses expressly. Section 4.70, the section the Council refers to, also appears in this Division and is expressly directed to saving existing consents. It is difficult on the limited argument provided by the Applicant to form any view about what prospects of success may exist in a complex legal area. I do not assume that the Applicant’s case lacks any prospects of success but nor am I able to form a view about the strength of those prospects. No compelling basis to have the Class 4 proceeding addressed before the Class 1 appeals arises from this consideration.

28. I consider there is substantial unexplained delay in commencing the Class 4 proceeding on 15 February 2023 given the lengthy progression of the DCO appeal in particular since October 2022. The hearing dates in April 2024 are imminent, were set down several months ago with most of the evidence preparation now carried out.

29. The exercise of discretion in light of the above matters suggests that no stay of the Class 1 appeals ought be granted pending the outcome of the Class 4 proceeding in the interests of just, quick and cheap considerations identified in s 56 of the CP Act. No basis for a stay that is fair to all parties has been demonstrated. The balance of convenience does not favour the grant of a stay. It follows that I will not vacate the hearing dates of the Class 1 appeals and will not therefore make prayer 1.

Stay of Development Control Order

32. The Applicant’s notices of motion prayer 2 seek the stay of the DCO until the resolution of the Class 4 proceeding. While I am not making such an order, the stay of the DCO needs to be considered nevertheless as there is not presently a formal stay order in place. Rather the Council has indicated informally that it will not seek to give effect to the DCO pending the outcome of the Class 1 appeals. The Council indicated that it does not oppose the stay of the DCO pending the outcome of the Class 1 appeals. An order to that effect will be made.

Costs of the Applicant’s notices of motion

33. The parties agreed that costs of the Applicant’s notices of motion should be reserved.

Orders

34. The Court orders in the Applicant’s notice of motion 2022/259609 dated 28 February 2024 that:

1. Prayer 1 is dismissed.

2. Stay of development control order until final resolution of both Class 1 appeals 2022/259609 and 2023/125407.

3. Costs are reserved.

35. The Court orders in the Applicant’s notice of motion 2023/125407 dated 28 February 2024 that:

1. Prayer 1 is dismissed.

2. The Applicant and Mr Pene and their solicitors and counsel each be released from their respective obligations to use documents produced on subpoena in these proceedings by Ms Shetab and contained in document package 2023/00125407001-S-1 only for the purpose of these proceedings, to the extent necessary to permit the use of those documents for the purposes of Class 4 proceeding 2024/0057350.

3. Costs are reserved.

**********

Decision last updated: 19 March 2024