Edwards v Sutherland Shire Council

[2006] NSWLEC 128

Reported Decision: (2006) 146 LGERA 199

Land and Environment Court

of New South Wales

CITATION:

Edwards v Sutherland Shire Council [2006] NSWLEC 128

PARTIES:

APPLICANT:
Edwards, R H

RESPONDENT:
Sutherland Shire Council

FILE NUMBER(S):

41033 of 2005

CORAM:

Biscoe J

KEY ISSUES:

Discretion :- whether there is a discretion to refuse to make a compulsory acquisition order under s 124(1) of the Environmental Planning and Assessment Act 1979 (NSW)

LEGISLATION CITED:

Contaminated Land Management Act 1997 (NSW), ss 11, 12(1), 12(2), 15, 15(2), 17, 23
Environmental Planning and Assessment Act 1979 (NSW), s 124(1)
Interpretation Act 1897 (NSW), s 23
Interpretation Act 1987 (NSW), s 9(1)
Land and Environment Court Act 1979 (NSW), ss 20(1)(c), 20(2), 20(2)(a), 20(3)(a), 20(3)(b)

CASES CITED:

ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67;
Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208;
Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937;
Byron Shire Council v Greenfields Mountain Pty Ltd (1999) 105 LGERA 445;
Cosmos E-C Commerce Pty Ltd v Bidwell Associates Pty Ltd [2005] NSWCA 81;
Derisi v Vaughan [1983] 3 NSWLR 17;
Dickinson v Perrignon [1973] 1 NSWLR 72;
Ex parte Mullin; Re Wigley (1970) 91 WN (NSW) 497;
F Hannan Pty Ltd v Electricity Commission of NSW (No 3) (1985) 66 LGRA 306;
Fatsel Pty Ltd v ACR Trading Pty Ltd (1984) 54 LGRA 291;
General Steel Industries Inc v The Commissioner for Railways (NSW) (1964) 112 CLR 125;
Greenfields Mountain Pty Ltd v Byron Shire Council (1998) 100 LGERA 409;
Hepburn v TCN Channel 9 Pty Ltd [1984] 1 NSWLR 386;
Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472;
Nedoni Pty Ltd v NSW Minister for Roads [2004] NSWLEC 56;
Pancho Properties Pty Ltd v Wingecarribee Shire Council (1999) 110 LGERA 352;
Port Stephens Council v Fidler (1997) 94 LGERA 298;
Proctor v Jetway Aviation Pty Ltd [1984] NSWLR 166;
Re Refugee Review Tribunal; Ex parte AALA (2000) 204 CLR 82;
Swane v Marsh (unreported, NSW CA 18 October 1978, No CA 297 of 1977);
Vaisey v Parramatta City Council (2002) 124 LGERA 270 Warringah Shire Council v Sedevcic (1987) 63 LGRA 361;
Wickstead v Browne (1992) 30 NSWLR 1 (CA);
Wilson Bros (Printers) Pty Ltd v South Sydney City Council [1992] NSWLEC 72;
Wykanak v Rockdale City Council (2001) 113 LGERA 335

DATES OF HEARING:

20/03/06

 
DATE OF JUDGMENT: 

04/05/2006

LEGAL REPRESENTATIVES:

APPLICANT:
Mr S Berveling (Barrister)
SOLICITORS
Willis and Bowring

RESPONDENT:
Mr J Webster SC
SOLICITORS
Abbott Tout

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BISCOE J

5 April 2006

41033 of 2005 RUTH HEATHER EDWARDS v SUTHERLAND SHIRE COUNCIL

JUDGMENT

HIS HONOUR

:

A. INTRODUCTION

1 The applicant claims to be the owner of land located at 98 Woodlands Road, Taren Point (the Land). The land is zoned 6(a) Public Recreation under the Sutherland Shire Local Environmental Plan 2000. Clause 63(1) of this Local Environmental Plan requires the respondent, Sutherland Shire Council (council), to acquire land so zoned upon receipt of a written request from the owner. The council has received such a written request from the applicant but has advised that it will not acquire the Land. The applicant seeks a declaration under the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act), s 124 that the council is bound to acquire the Land, a consequential compulsory acquisition order and other consequential orders. The only pleaded defences are that the Court, in the exercise of its discretion, would not grant the relief sought, and that the council does not know and cannot admit that the applicant owns the Land.

2 The matter before me is the hearing of a preliminary issue as to “whether or not there is available an exercise of discretion by the Court under the Environmental Planning and Assessment Act 1979 (NSW), s 124 in the circumstances of this case”. Counsel for the parties agreed that “available” in this context means arguably available. I have proceeded on that basis.

3 Clause 63(1) of the said Local Environmental Plan states:

The owner of land in the (6)(a) Public Recreation zone may request the Council to acquire the land. The request must be in writing. On receipt of the request, the Council shall acquire the land

4 The genesis of cl 63 is to be found in the EP&A Act, ss 26(1)(c) and 27. Section 26(1)(c) provides that an environmental planning instrument may make provision for, or with respect to, reserving land for (among other things) use for the purposes of open space, a public place or public reserve within the meaning of the Local Government Act 1993 (NSW), or any other purpose that is prescribed as a public purposes for the purposes of this section. Section 27 provides as follows:

(1) Where an environmental planning instrument reserves land for use exclusively for a purpose referred to in section 26(1)(c), that environmental planning instrument shall make provision for or with respect to the acquisition of that land by a public authority unless the land is owned by a public authority and is held by that public authority for that purpose.

(2) Nothing in this section shall be construed as authorising or requiring an environmental planning instrument to contain a provision empowering or purporting to empower the compulsory acquisition of land.

5 Section 124 of the EP&A Act provides as follows:

124 Orders of the Court

(1) Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach.

(2) Without limiting the powers of the Court under subsection (1), an order made under that subsection may:

(a) where the breach of this Act comprises a use of any building, work or land—restrain that use,

(b) where the breach of this Act comprises the erection of a building or the carrying out of a work—require the demolition or removal of that building or work, or

(c) where the breach of this Act has the effect of altering the condition or state of any building, work or land—require the reinstatement, so far as is practicable, of that building, work or land to the condition or state the building, work or land was in immediately before the breach was committed.

(3) Where a breach of this Act would not have been committed but for the failure to obtain a consent under Part 4, the Court, upon application being made by the defendant, may:
(a) adjourn the proceedings to enable a development application to be made under Part 4 to obtain that consent, and

(b) in its discretion, by interlocutory order, restrain the continuance of the commission of the breach while the proceedings are adjourned.

(4) The functions of the Court under this Division are in addition to and not in derogation from any other functions of the Court.

(5) Nothing in this section affects the provisions of Division 3 of Part 3 of the Land and Environment Court Act 1979.

6 The reference in s 124(1) to “a breach of this Act” includes a contravention of or failure to comply with an environmental planning instrument: s 122(a)(1) and (b)(ii). An environmental planning instrument is defined to include a local environmental plan: s 4. According to the EP&A Act, s 123, any person may bring proceedings for an order to remedy or restrain a breach of the Act, as defined. The Court has jurisdiction to hear and dispose of proceedings under s 123 of the EP&A Act: Land and Environment Court Act 1979 (NSW), s 20(1)(c). The Court has the same jurisdiction as the Supreme Court would, but for s 71, to enforce any right, obligation or duty conferred or imposed by a “planning or environmental law”, which includes the EP&A Act, and any statutory instrument made or having effect thereunder or made for the purposes thereof, including an environmental planning instrument: Land and Environment Court Act1979 (NSW), s 20(2)(a), 3(a) and (b).

7 It is common ground that the preliminary issue is to be decided on the basis of the allegations in the Points of Claim; the allegations in the Points of Defence, which largely admit the allegations in the Points of Claim, with the exception that the applicant’s ownership of the land is not admitted; the particulars in a letter dated 7 February 2006 from the council’s solicitors to the applicant’s solicitors; and an agreed fact referred to below.

8 The applicant’s Points of Claim allege the following:

1. The Applicant is the owner of Lot A in DP 308062 -situated at 98 Woodlands Road Taren Point ( “the Applicant’s land ” ).

2. The Applicant’s Land is within the Respondent’s local government area.

3. Sutherland Shire Local Environmental Plan 2000 (“the LEP”) applies to the Applicant’s Land.

4. The Applicant’s Land is zoned part 2(e1) Residential and Part 6(a) Public Recreation pursuant to the LEP.

5. By reason of clause 63(1) of the LEP, the Respondent Council is required to acquire land in the 6(a) Public Recreation zone upon receipt of a request in writing from the owner of such land that the Respondent Council acquire the land.

6. By letter dated 8 July 2005 to the Respondent, the Applicant requested in writing that the Respondent acquire that part of the Applicant’s Land zoned 6(a) Public Recreation (“the 6(a) Land”).

7. The Respondent has advised that it will not proceed with an acquisition of the 6(a) Land.

Particulars
Letter from the Respondent dated 14 July 2005.
8. Further:
(a) Between at least about April 1991 and 28 July 2004, the Respondent has consistently and continuously sought to acquire the 6(a) Land.
Particulars
Communications from the Respondent including but not limited to those dated 23 April 1991, 25 November 2002, 18 December 2002, 3 March 2003, 22 July 2003, 14 July 2004, and 28 July 2004.
(b) The 6(a) Land was zoned 6(a) Public Recreation pursuant to
(i) Sutherland Local Environmental Plan (gazetted 27 March 1992), clause 44(1) of which was in terms identical to cl 63 of the LEP;

(ii) Sutherland Local Environmental Plan 1993 (gazetted 12 November 1993), clause 48(1) of which was in terms identical to cl 63 of the LEP;

9. The Applicant claims
(a) Declarations as follows:
(i) that the Applicant, by notice in writing dated 8 July 2005 (“the Notice”) requested the Respondent to acquire the 6(a) Land; and

(ii) that the Respondent, upon receipt of the Notice, was and is bound to acquire the 6(a) Land.

(b) Orders as follows:
(i) that the Respondent acquire the 6(a) Land pursuant to the provisions of the Land Acquisition (Just Terms Compensation) Act 1991.

(ii) that the Respondent initiate the acquisition process within twenty one (21) days.

(iii) costs; and

(iv) such further or other order as the Court thinks fit.

9 The council’s Points of Defence are as follows:

1. The Respondent does not know and cannot admit paragraph 1 of the Points of Claim.

2. The Respondent admits paragraphs 2, 3, 4, 5, 6, 7 and 8 of the Points of Claim.

3. The Respondent says that in the exercise of its discretion, the Court would not make the declaration and orders as sought in the applicant’s Class 4 Application.

10 Pursuant to a direction made by the Court on 3 February 2006, the council’s solicitors by letter dated 7 February 2006 provided the applicant’s solicitors with the following particulars of paragraph 3 of the Points of Defence:

Please note that the issues of discretion our client proposed to raise at the hearing of this matter are:
1. Public interest
(a) Whether or not it is in the public interest that the ratepayers of Sutherland Council pay the cost of remediation of contaminated land when they are not liable for such contamination.

(b) Whether a landowner should be able to avoid the consequences of a Notice issued by the Environment Protection Authority by taking advantage of an acquisition clause in a Local Environmental Plan.

2. The discretion of the Land and Environment Court in Class 4 Proceedings seeking declaratory relief and consequential orders is at large.

3. It is clear that the level of contamination and proposals for remediation, which it is anticipated will be dealt with by the Coffeys report, must be available so that evidence in support of the discretionary issues raised may be able to be relied upon by our client in the proceedings.

11 Before me, the council expanded on its position by indicating that it would ask the Court in the exercise of its discretion, to either:

(a) dismiss the application (ie make no order); or


(b) make it a term of any compulsory acquisition order that the applicant give an undertaking to the Court that she will be responsible for any action or liability that might be determined by the Environment Protection Authority pursuant to the Contaminated Land Management Act 1997 (NSW) or for any contamination of the Land; or


(c) adjourn the proceedings for six months or until such time as the Environment Protection Authority makes its determination of contamination of the Land pursuant to the Contaminated Land Management Act 1997 (NSW), ss 11 and 12, whichever is the lesser.

12 The agreed fact to which I previously referred, is that the Land has recently been declared an investigation area by the Environment Protection Authority (“EPA”) under the Contaminated Land Management Act 1997 (NSW), s 15. Section 15 provides that:

The EPA may declare land to be an investigation area if it has reasonable grounds to believe that the land is contaminated with a substance in such as way as to present a significant risk of harm.

13 Subsection 15(2) provides that once land has been declared an investigation area, the EPA must, with reasonable expedition, carry out an investigation of the land or order an investigation of the land. Section 17 provides that the EPA may, by notice in writing served on a person who is an “appropriate person” or a “public authority”, order the person to investigate land declared to be an investigation area and to report on a number of matters, including the nature and extent of the contamination of the land. Under s 23, the EPA may, by notice in writing served on a person who is an “appropriate person” or a “public authority”, order the person to do one or both of the following within such reasonable time as is specified in the order in respect of land declared to be a remediation site: (a) carry out such remediation and other action as may be specified in the order; (b) submit for the EPA’s approval a plan of remediation.

14 Under s 12, if the EPA makes an investigation or remediation order in respect of land contaminated with a substance in such a way as to present a significant risk of harm, it must specify an “appropriate person” (or a public authority that is not an “appropriate person”) as the subject of the order. Under s 12(2), an “appropriate person” is to be chosen from among the following interested persons in the following order: (a) the person who had principal responsibility for such contamination of the land with the substance, or, if that is not practicable (b) an owner of the land (whether or not the person had any responsibility for such contamination of the land with the substance) or, if that is not practicable, (c) a notional owner of the land (whether or not the person had any responsibility for such contamination of the land with the substance). A “public authority” means a public or local authority constituted by or under an Act: s 5.

15 Thus, an investigation or remediation order potentially may be made either against the applicant as an “appropriate person” or against the council as a “public authority”.

16 The applicant submitted that:

(a) the Court has no discretion under s 124 to refuse to make a compulsory acquisition order: Port Stephens Council v Fidler (1997) 94 LGERA 298 (NSWCA) at 303; Greenfields Mountain Pty Ltd v Byron Shire Council (1998) 100 LGERA 409 at 430 (Sheahan J); and Vaisey v Parramatta City Council (2002) 124 LGERA 270 at 278 (Lloyd J). Reference was also made to Wilson Bros (Printers) Pty Ltd v of South Sydney City Council [1992] NSWLEC 72.


(b) alternatively to (a), if the Court has a discretion to refuse an order for compulsory acquisition, the respondent’s particulars regarding discretion do not disclose any reason for exercising the discretion other than in the applicant’s favour.


(c) although the Court has a discretion to attach terms to an order for compulsory acquisition, it would not exercise its discretion to impose the terms suggested by the respondent.

C. RESPONDENT COUNCIL’S SUBMISSIONS

17 The council submitted that the Court should answer the preliminary question in the affirmative both as to the availability of a discretion to refuse to make a compulsory acquisition order and as to the attaching of terms to any order that might be made under s 124. The terms proposed by the council were that the applicant give an undertaking to the Court that she will be responsible for any action or liability that might be determined by the EPA pursuant to the Contaminated Land Management Act 1997 (NSW) or for any contamination of the Land.

18 Alternatively, the council submitted that the Court should adjourn these proceedings for six months, or until such time as the EPA makes its determination of contamination of the land pursuant to the Contaminated Land Management Act 1997 (NSW), ss 11 and 12, whichever is the lesser. I will not adjourn the hearing of the preliminary issue before me. On an earlier occasion, the parties agreed that there should be a determination of the preliminary issue and have expended money and time on preparing for the hearing of that issue. I consider that I should proceed to determine it.

19 The council submitted that there is a discretion under the EP&A Act, s 124 to refuse to make an order or to make an order on terms: F Hannan v Electricity Commission of NSW [No 3] (1985) 66 LGRA 306 (NSWCA); followed in Wykanak v Rockdale City Council (2001) 113 LGERA 335 at 377 (Bignold J); approved in Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472 at 496 [72] per Kirby J. It was submitted that the dicta in Fidler to the effect that there was no discretion to refuse to make a compulsory acquisition order, was obiter. Reference was also made to Fatsel Pty Ltd v ACR Trading Pty Ltd (1984) 54 LGRA 291 at 296 (Bignold AJ).

20 The council drew an analogy between the relief sought under s 124 and a prerogative writ of mandamus where there is a discretion to refuse relief or to make such order as meets the justice of the case: Aronson, Dyer and Groves, Judicial Review of Administrative Action (3rd ed 2000) at 739 to 751 and authorities cited therein. Other support for this proposition was said to be drawn from, amongst other sources, Re Refugee Review Tribunal; Ex parte AALA (2000) 204 CLR 82 at 136-7 and Spry, The Principles of Equitable Remedies (4th ed 1990) pp 23-26.

21 Section 124(1) of the EP&A Act, states that:

Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach.

22 In my opinion, the word “may” in s 124(1) indicates that the power to make an order may be exercised or not, at the discretion of the Court. The Interpretation Act 1987 (NSW), s 9(1) says:

In any Act or instrument, the word “may ”, if used to confer a power, indicates that the power may be exercised or not , at discretion.

(emphasis added).

23 An equivalent definition appeared in the earlier Interpretation Act 1897 (NSW), in respect of which it was said that: “This section puts into statutory form what is the ordinary rule of construction in regard to the word ‘may’ when appearing in statutes”: Derisi v Vaughan [1983] 3 NSWLR 17 at 19 (CA).

24 The breadth of the discretion under the EP&A Act, s 124(1), including the existence of a discretion to refuse relief, is clear from the judgment of Street CJ in F Hannan v Electricity Commission of NSW [No 3] (1985) 66 LGRA 306 at 310-311. In that case, Street CJ, after referring to the statutory scheme and quoting the EP&A Act, ss 124(1) and (2), said at 311:

Well-established canons of construction require a mandatory significance to be placed upon the phrase in subs (1) "may make such order as it thinks fit to remedy or restrain the breach". Where an actual or threatened breach has been established the Court is obliged to consider what should be done to remedy or restrain the breach. In determining this, the Court is given an extremely wide charter. Falling expressly within that charter are the powers in subs (2) to restrain an infringing use, to require demolition or removal of an infringing building or work and to require reinstatement so as to efface the consequences of the infringement. These are but three ways open to the Court to discharge its duty under s 124(1) to make such order as it thinks fit . This last-mentioned phrase empowers the Court to mould the manner of its intervention in such a way as will best meet the practicalities as well as the justice of the situation before it. In Re Victorian Farmers' Loan and Agency Co Ltd (1897) 22 VLR 629 it was stated (at 635):
It must be remembered that under s 145 the Court may make such order as to it may seem fit, which means, as I understand it such an order as the Court thinks just.
This was quoted with approval in Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd [1969] Qd R 150 at 157. If, in a particular case, there is an actual or threatened breach, but either within its discretion or for other valid reasons, the court does not think that any order is “fit ” to remedy or restrain such breach, then relief will be withheld . Its obligation to make such order as it thinks fit necessarily postulates being able to formulate such an order. If the court ultimately decides that there is no order fit or just to meet the case, a decision to this effect will be a proper discharge by the court of its jurisdictional duty under s 124.

(emphasis added)

25 Street CJ referred at 312 to the Land and Environment Court Act 1979, (NSW) s 20(2), which provides that that court has the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of proceedings—

(a) to enforce any right, obligation or duty conferred or imposed by a planning or environmental law;

(b) to review, or command, the exercise of a function conferred to imposed by a planning or environmental law; and

(c) to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function.

26 As to this, Street CJ said:

In confirmation of my earlier observation that the Land and Environment Court may withhold relief under s 124 either within its discretion or for other valid reasons, I point out the Supreme Court's jurisdiction to hear and dispose of proceedings, described in these three pars (a), (b) and (c), extends to withholding relief for discretionary or other valid reasons.

(emphasis added)

27 The discretion to refuse relief under s 124 is consistent with the width of the adjudicative responsibilities of this Court, including its responsibility to administer social justice, which are apparent from the objects provision of the EP&A Act (s 5) and the Act’s open standing provision (s 123). In Hannan, Street CJ said (at 313):

It is the duty of [the Land and Environment] Court, in formulating such order “ as it thinks fit ” , to have regard at all times to the pursuit of the objects of the Environmental Planning and Assessment Act as set out in s 5. This involves, in appropriate cases, the evaluation of matters extending beyond the mere determination of the rights and matters in dispute between the immediate parties. It involves due weight being given to the public interest and the interests of other affected persons in the overall context of the pursuit of the objects broadly set out in s 5. It is at this point that I revert to s 123 of the Environmental Planning and Assessment Act…

This provision read in the context of the objects of the Act as set down in s 5 makes it apparent that the task of the Court is to administer social justice in the enforcement of the legislative scheme of the Act. It is a task that travels far beyond administering justice inter partes. Section 123 totally removes the conventional requirement that relief is normally only granted at the wish of a person having a sufficient interest in the matters sought to be litigated. It is open to any person to bring proceedings to remedy or restrain a breach of the Act. There could hardly be a clearer indication of the width of the adjudicative responsibilities of the Court. The precise manner in which the Court will frame its orders in the context of particular disputes is ultimately the discretionary province of the Court to determine in the light of all of the factors falling within the purview of the dispute.

28 In Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472 at 496 [72], Kirby J said that Street CJ’s analysis in Hannan is “generally accepted as the classic exposition of the nature and scope of the jurisdiction and powers of the Land and Environment Court to grant remedies for breaches of the EPAA Act.”

29 Confirmation that s 124 gives the Court a discretion to refuse relief is provided by the decision of the Court of Appeal in Warringah Shire Council v Sedevcic (1987) 63 LGRA 361. Here, Cripps CJ at first instance had found that the respondent’s use of the premises as a shop was in breach of the EP&A Act, but refused, on discretionary grounds, to grant an injunction restraining that use. An appeal against this exercise of discretion was dismissed. Kirby P, at 365-367, set out a number of useful guidelines relevant to the exercise of the Court’s discretion. They included the following:

(1) The discretionary power conferred on the Court by s 124 of the Act is wide. Relevantly to the present case, it is as wide as the discretion enjoyed by the Supreme Court in its equitable jurisdiction…..

(2) It is undesirable to endeavour, by drawing upon decisions in differing fact situations which have presented in earlier cases, to attempt to catalogue or classify all of the circumstances which will enliven the exercise of the discretion in cases yet to come. By the statute, the discretion is not fettered. It is not limited either to particular classes of cases or to limited or special cases.

………
(4) In exercising the discretion, it must be kept in mind that the restraint sought is not, in its nature, the enforcement of a private right, whether in equity or otherwise. It is the enforcement of a public duty imposed by or under an act of parliament, by which parliament has expressed itself on the public interest which exists in the orderly development and use of the environment…..

(5) …..There is nothing in the Act by which the discretion is fettered or limited to “special cases”, as Mahoney J, as he then was, pointed out in analogous circumstances in Blacktown Municipal Council v Friend (1974) 29 LGRA 192 (at 197). But the obvious intention of the Act is that, normally, those concerned in development and use of the environment will comply with the terms of the legislation. Otherwise, if unlawful exceptions and exemptions became a frequent occurrence, condoned by the exercise of the discretion under s 124, the equal and orderly enforcement of the Act could be undermined. A sense of inequity could then be felt by those complied with the requirements of the Act or who failed to secure the favourable exercise of the discretion under s 124.

………..
(8) The wide discretion has been described as an “ adequate safeguard against abuse of a salutary procedure” : see Menzies J in Cooney v Ku-Ring Gai Municipal Council (1964) 114 CLR 582 at 605. It permits the court to soften, according to the justice of particular circumstances, the application of rules which, though right in the general, may produce an unjust result in the particular case. Sometimes this “softening ” can be achieved by postponing the effect of injunctive relief….Sometimes that evidence will not achieve a just result…
(emphasis added)

30 Mahoney JA at 372 said “…the court has the power to refuse to enforce by injunction the prohibition of a use in an individual case. That discretion was, no doubt, maintained under the existing planning regime to permit the hardship which otherwise will result from the generality of a planning scheme being appropriately modified… But it should be understood that each case depends upon its own facts and particularly is this so where what is involved is the exercise of such a discretion as this” (emphasis added). Clarke AJA at 373 also emphasised that the exercise of the judicial discretion was governed by the facts of the particular case under consideration.

31 Sedevcic was followed and applied by the Court of Appeal in ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67.

32 In Wykanak v Rockdale City Council (2001) 113 LGERA 335 at 337 [9], Bignold J, following Hannan, said that s 124 “confers a broad power, including a wide judicial discretion, upon the Court as to whether relief is to be granted and if so, as to the nature of the relief to be granted”. Earlier, in Fatsel Pty Ltd v ACR Trading Pty Ltd (1984) 54 LGRA 291 at 296, Bignold AJ had said that the discretionary nature of the statutory remedy results from the express language of s 124(1), which provides that where the Court is satisfied that a breach of the Act has been committed it “may” make an order, rather than by virtue of the application of general equitable principles.

33 A similar case to the present was Wilson Bros (Printers) Pty Ltd v South Sydney City Council [1992] NSWLEC 72. In that case a Local Environmental Plan provided that where land was zoned as Reservation (Open Space) the owner “may by notice in writing require the council to acquire the land”, and specified that, on receipt of the notice, the relevant public authority “shall acquire the land”. The land in Wilson was so zoned. The applicant gave notice in writing to the council requiring it to acquire the land. Despite repeated requests, the council took no steps to do so. The applicant then commenced proceedings seeking a declaration compelling the council to acquire the land and consequential orders. Bannon J granted the relief sought. He pointed out that the terms of the Local Environmental Plan were imperative and gave no hint of a discretion to disregard the duty of acquisition. However, he did accept that the EP&A Act, s 124 gave the Court a general discretion to refuse to order the council to comply with the Local Environmental Plan. He decided that he would not exercise that discretion in favour of the Council. In that regard he held:

While I take into consideration subsequent resolution by the council to rezone the land, and the financial problems facing the council, I do not consider that a proper case has been made out, such as that I should exercise the Court’s discretion so as to refuse the relief sought.

34 The cases analysed thus far (Hannan, Sedevcic, ACR, Wykanak) including in a case upon similar facts to those presently before me (Wilson), confirm that there is a discretion under s 124 to refuse relief and that that discretion is not fettered or limited to special cases (Sedevcic). Sedevcic and Wilson also suggest that a respondent hoping to satisfy the Court that the discretion should be exercised so as to refuse relief may face a substantial hurdle where it has failed to comply with its legal obligations. But that is different from saying that there is no discretion to refuse relief in a case such as the present.

35 Subsequent to all the aforementioned cases (with the exception of Wykanak) the New South Wales Court of Appeal handed down its decision in Port Stephens Council v Fidler (1997) 94 LGERA 298. That case concerned the failure of the Port Stephens Council to comply with a provision of the Port Stephens Local Environmental Plan requiring the Council to acquire the respondent owner’s land upon receipt of a notice in writing from the owner, in the event that land was rezoned in a particular way. One issue on appeal was whether, before a finding of failure was justified, some element of fault on the part of the council needed to be demonstrated (see at 302.8). That issue was decided in the negative. The Court of Appeal also cryptically addressed the issue of discretion. Powell JA, whom Shellar JA and Sheppard AJA agreed, said at 303:

It seems to me that, in a case where such a failure has been demonstrated, it is not open to the Land and Environment Court, at first instance, or to this Court, on an appeal, as a matter of discretion, to refuse to make an order for compulsory acquisition.

36 Sheppard AJA, after agreeing, added at 303:

To the extent that that finding involved the exercise of a discretion, and I am not sure that it did, there is nothing to suggest that the discretion in any way miscarried.

37 That was the extent of the Court of Appeal’s judgment on the issue of discretion. The Court of Appeal did not refer to s 124 of the EP&A Act nor to any authorities. Indeed, it appears from the report that no authorities were cited to the Court.

38 The judgment of Powell JA was relevantly confined to denying a discretion to “refuse” to make an order for compulsory acquisition. It did not extend to denying that an order for compulsory acquisition could be made on terms. In the case before me, the applicant conceded, in my view correctly, that such an order on terms could be made under s 124. The respondent indicated that one alternative course which it would pursue would be to seek the attachment of the terms, to which I have earlier referred, to any order that might be made.

39 This Court has, in at least two cases, held Fidler to be authority for the proposition that the Court has no discretion under s 124 to refuse to make an order for compulsory acquisition in a case such as the present. The first of these cases was Greenfields Mountain Pty Ltd v Byron Shire Council (1998) 100 LGERA 409. In that case, the applicant owned land zoned 6(a) “Open Space”. The applicant issued to the respondent council a notice, requiring it to acquire the land pursuant to a local environmental plan. Thereafter, the applicant sought an order that the respondent council acquire the land. Sheahan J held at 430:

If Powell JA is correct in Fidler , and I respectfully think his is the preferable view, there is no discretion for the court to refuse the company relief in circumstances such as have been proven in this case.

40 Sheahan J went on to acknowledge that there was authority to the contrary of Fidler (including Sedevcic and ACR) but concluded that, even if there was a discretion, it should not be exercised in the circumstances of the case. In the subsequent appeal, discretion was not in issue: Byron Shire Council v Greenfields Mountain Pty Limited (1999) 105 LGERA 445.

41 In the second case, Vaisey v Parramatta City Council (2002) 124 LGERA 270, the applicant had issued to the respondent council a notice requiring the council to acquire the Land. Lloyd J held that the circumstances which enabled a notice of acquisition to be issued under the Parramatta Scheme Ordinance, cl 19 were not satisfied. He held at 278:

Accordingly, the trigger for the operation of cl 19 has not occurred. This is sufficient to distinguish the facts in the present case from the authorities relied upon by Mr Maston, namely Wilson Bros (Partners) Pty Ltd v South Sydney City Council and Port Stephens Council v Fidler . I accept those cases as being authority for the proposition that, if the trigger for the operation of cl 19 had occurred, then it would not be open to the Court, as a matter of discretion, to refuse to make an order for compulsory acquisition; that is not the case here.

While Fidler is authority for that proposition, I respectfully suggest that Wilson , which I have analysed earlier, is not. In Wilson , the court accepted the existence of a discretion to refuse to make a compulsory acquisition order, but held that no proper case had been made out for the exercise of the discretion.

42 Nedoni Pty Ltd v NSW Minister for Roads [2004] NSWLEC 56 was a similar case. Here, Bignold J, at [139], referred to the “difficulty” which Fidler presented to an argument that a compulsory acquisition order should be refused on discretionary grounds. His Honour decided that, even if Fidler could not be considered to have excluded the exercise of the discretion, the case for refusing relief on discretionary grounds had not been made out.

43 If the dictum of Powell JA in Fidler was obiter, I am not bound by it. I do not, however, accept the respondent’s submission that it was obiter. Although it is not entirely clear, it appears to me that an issue before the Court of Appeal in Fidler was the question whether there was a discretion under s 124 to refuse to order compulsory acquisition. Therefore, the Court of Appeal’s judgment on that issue was part of the ratio decidendi. In Hepburn v TCN Channel 9 Pty Ltd [1984] 1 NSWLR 386 at 391 F, Hunt J stated (omitting citations): “a statement by a higher court is thus binding upon courts lower in the judicial hierarchy if that statement was necessary for the decision of that higher court and if it formed part of the foundation of its decision….or if it had formed an integral part of the train of reasoning directed to the real question decided…. or if it consisted of a principle by which that decision is essentially supported, that is to say, it amounts to a basic reason for that decision…”

44 Even if the dictum in Fidler was obiter, I would still follow it as a unanimous decision of the Court of Appeal, entitled to great weight and respect, which has stood for a decade and been accepted by this Court at least twice in Vaisey and Greenfields. These considerations outweigh my own opinion which is to the contrary of Fidler. It has been said that where a judge is not bound by obiter dicta of an appellate court, the judge has a duty to decide, “invidious task as that may be, what the relevant principles are or should be, obtaining such assistance as [the judge] can from the persuasive authorities”: Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 at 218 per McLelland J. It has also been said that a judge at first instance will, as a matter of judicial comity, usually follow the decision of another judge at first instance in the same jurisdiction, unless convinced the judgment was wrong: Pancho Properties Pty Ltd v Wingecarribee Shire Council (1999) 110 LGERA 352 at 369-370 per Talbot J where the authorities are collected. On the other hand, in Derisi v Vaughan [1983] 3 NSWLR 17 at 26, the Court of Appeal agreed with the view expressed by Moffitt P in Swane v Marsh (unreported, NSWCA 18 October 1978, No CA 297 of 1977) that “judges of first instance should not decline to apply the law as deliberately stated by a majority of a court to which an appeal from such first instance judges lies, on the view that some matter has been overlooked”. The Court of Appeal in Derisi then said:

The Court of Appeal having expressed a considered view and that having stood for a number of years before the question again came before a superior court, it would seem more useful and efficient for the purposes of all those concerned with the Act to abide by the Court of Appeal’s decision until such time as it was persuaded to reconsider the matter.

45 Where, as in the present case, there exists an unanimous appellate decision, which has stood for a decade, and been followed in this Court more than once, I consider that it is right that I should bow to the weight of precedent, even if it was obiter dicta in the appellate court, and that it should prevail over my own view.

46 In Proctor v JetwayAviation Pty Ltd [1984] NSWLR 166 (CA) at 177 Moffitt P said that where a judge is bound to follow binding precedent, “it is open to him in his reasons for decision to draw attention to matters of doubt and the possible need for review of the earlier binding decision”. I would respectfully draw attention to three matters suggesting the possible need for review of Fidler. First, Fidler did not refer to the terms of the EP&AAct, s 124(1), which seem to give the Court a discretion in all cases. Secondly, Fidler did not refer to earlier Court of Appeal authorities which confirm that there is a discretion to refuse relief under s 124 which is not fettered or limited to special cases (Hannan, Sedevcic, ACR; see also Wykanak). Nor did it refer to earlier authority that there is a discretion to refuse relief in a case such as the present (Wilson). Indeed, no authorities appear to have been drawn to the Court of Appeal’s attention. Thirdly, there was an absence of reasoning on this issue in the reasons published by the Court of Appeal.

47 For completeness, I will address the remainder of the parties’ submissions on the assumption that, contrary to Fidler, there is a discretion under s 124 to refuse relief in a case of this type. The preliminary issue then requires me to determine whether or not a discretion to refuse the relief sought by the applicant is arguably available “in the circumstances of the case”.

48 In my view, the assumed discretion is arguably available in the circumstances of this case. The preliminary issue as formulated and agreed by counsel seems to me to be equivalent to an application to strike out paragraph 3 of the Defence on the ground that it discloses no reasonable defence. There is a need for exceptional caution in exercising such a power and it should be exercised only in plain and obvious cases. A defence must be so hopeless or unarguable that there is no point in giving the respondent its normal day in Court: see General Steel Industries Inc v The Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130; Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937; Wickstead v Browne (1992) 30 NSWLR 1 (CA) at 11; Cosmos E-C Commerce Pty Ltd v Bidwell Associates Pty Ltd [2005] NSWCA 81 at [37]-[38].

49 The Land has recently been declared an investigation area by the EPA under the Contaminated Land Management Act 1997 (NSW), s 15. The levels of contamination and proposals for remediation are under investigation. The respondent contends that a discretion to refuse relief under s 124 should be exercised because of public interest considerations, namely, (a) whether or not it is in the public interest that the ratepayers of Sutherland Council pay the cost of remediation of contaminated land when they are not liable for such contamination; and (b) whether or not a land owner should be able to avoid the consequences of a notice issued by the EPA by taking advantage of an acquisition clause in a local environmental plan. Some support for such an approach is analogously provided by the principles applicable to writ of mandamus referred to in Ex parte Mullin; Re Wigley (1970) 91 WN (NSW) 497 (CA) at 503 B:

“ It is well established that in the exercise of its discretion the court will not make an order for the issue of the prerogative writ of mandamus where the application is not made in good faith or is made to achieve some indirect purpose or where it’s making was prompted by some ulterior motive…In R v London and St. Katherine Docks Co (1874) 44 L.J.Q.B. 4 Blackburn J, after observing that the prerogative writ of mandamus ought to be granted only in the exercise of a judicial discretion, said at pp 5-6:

But we must see in each case whether under the circumstances under which the applicant for it comes before the court, we ought to grant it. I do not mean to lay down an inflexible rule that when a party comes to claim a right he must shew what object he has in view, but it may well be done in all cases where no reason appears why it should not be done.

50 As analysed earlier, both parties are potential targets of an order by the EPA to investigate or remedy any contamination under ss 17 and 23 of the Contaminated Land Management Act 1997 (NSW). It appears that the applicant, as owner, would cease to be a potential target of such orders were the land to be compulsorily acquired, unless it were to be shown that she is principally responsible for the contamination so as to come within s 12(2)(a). On the other hand, the respondent’s potentiality as a target may well be heightened if it were to become the owner pursuant to a compulsory acquisition order.

51 The acquisition clause in the relevant local environmental plan imposes a legal obligation on the respondent to acquire the land by reason of the zoning. Prima facie, contamination of the land should be reflected in the assessment of the market value to be paid by the council upon its acquisition. However, it is conceivable that the cost of investigating and remedying any contamination would exceed the value of the land. Until the investigations are concluded, such matters as the existence and extent of contamination, its effect on value, the quantum of costs of investigation and remediation, and the identification of those responsible for any contamination cannot be determined or adequately made the subject of evidence for trial.

52 At a trial, depending on the evidence, the respondent may face a formidable hurdle in seeking to persuade the Court that it should exercise any discretion to refuse relief to the applicant. Nevertheless, if there is such a discretion, in my opinion, it is arguably available in the circumstances of this case.

53 The remaining issue is whether it is arguable that the Court would attach to a compulsory acquisition order a term to the effect of that for which the respondent alternatively contends: viz that the applicant undertake to the Court that she will be responsible for any action or liability that might be determined by the EPA (pursuant to the Contaminated Land Management Act1997 (NSW)) and for any contamination of the land the subject of these proceedings. In my view, such a term is arguable in the circumstances of this case, having regard to the matters to which I have referred in paragraphs 50 to 52 above. Again, depending on the evidence at trial, the respondent may have a considerable hurdle in seeking to persuade the Court that it should exercise its discretion to impose such a term. But that is a different issue.

54 For the reasons set out above, I decide the preliminary issue before me as follows:

(a) the Court has no discretion under s 124 of the EP&A Act to refuse the declaration and consequential orders claimed in the application;
(b) the Court has a discretion under s 124 to attach terms to such consequential orders including, arguably, a term to the effect of that proposed by the respondent and referred to in paragraph 53 above.

55 The applicant has been successful as to (a) above while the respondent has been successful as to (b) above. I order that costs of the preliminary issue be costs in the cause.