Gazcorp Pty Ltd v Westfield Management Pty Ltd & [No 3]

[2004] NSWCA 215

NEW SOUTH WALES COURT OF APPEAL

CITATION:      GAZCORP PTY LTD v WESTFIELD MANAGEMENT PTY LTD & ANOR [NO 3] [2004]  NSWCA 215

FILE NUMBER(S):
40090/04

HEARING DATE(S):               28 June 2004

JUDGMENT DATE: 28/06/2004

PARTIES:
Gazcorp Pty Ltd - Claimant
Westfield Management Pty Ltd - First Opponent
Kent Street Pty Ltd - Second Opponent

JUDGMENT OF:       Sheller JA      

LOWER COURT JURISDICTION: Land & Environment Court

LOWER COURT FILE NUMBER(S):          LEC 40699/03

LOWER COURT JUDICIAL OFFICER:     Lloyd J

COUNSEL:
T E F Hughes QC - Claimant
J Jagot - Opponents

SOLICITORS:
Allens Arthur Robinson - Claimant
Mallesons Stephen Jaques - Opponents

CATCHWORDS:
Extension of stay - development consent for change of use of premises - need for Minister to approve amended LEP

LEGISLATION CITED:

DECISION:
1  The stay of the operation of order 2 made on 31 March 2004 will be extended up to and including 14 July 2004
2  The opponent to pay the claimant's costs of this notice of motion
3 Stand the notice of motion over to 14 July 2004.  The parties have leave on forty-eight hours' notice to restore it to the list but to do so by notifying my associate.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40090/04
LEC 40699/03

SHELLER JA

Monday, 28 June 2004

GAZCORP PTY LIMITED & ANOR  v  WESTFIELD MANAGEMENT PTY LIMITED [NO 3]

Judgment
(Application for stay)

1. SHELLER JA:  This is an application by notice of motion filed 25 June 2004 made on behalf of Gazcorp Pty Limited for a stay of the operation of an order made by this Court on 31 March 2004.  The opponents are Westfield Management Pty Limited and Kent Street Pty Limited.

2. The order referred to is set out at the end of the reasons for judgment of this Court given on 31 March 2004 in an appeal brought by the claimant from a decision of Lloyd J in the Land and Environment Court.  The appeal was to a limited extent allowed but in substance failed.  The order directed the claimant to abstain from carrying out, or causing the carrying out of, or permitting, authorising or suffering the use of a property number 12, Lot 121, in Orange Grove Road, Warwick Farm for the purpose of a shop or shops otherwise than in accordance with a development consent 4891/2000 granted on 18 September 2001, or such other valid development consent as may be granted with respect to the property.

3. On 31 March 2004 this Court stayed the operation of that order for twenty-eight days from that date.              The judgment of Giles JA, which was agreed to by the other members of the Court, set out in brief form the background of the matter.  The claimant had received from Liverpool City Council development consent for the change of use of a warehouse building on the premises, to which I have already referred, from a bulky goods warehouse to a warehouse clearance outlet.  The first opponent obtained from the Land and Environment Court a declaration that the development consent was unlawful and void and restraining orders as to the use of the warehouse building.

4. It should be emphasised that the Council’s decision was given on 15 November 2002 and it was not until 16 January 2004 that the Land and Environment Court order was made.  I think it is unnecessary to go further into the merits or otherwise of the consent order and the appeal except to say that it was recognised that the consent order made by the Council seriously infringed the limitations imposed by the LEP.

5. In this Court, there was some discussion about the exercise of the discretion as to the form of the order and to any stay that should be granted.  It was observed that the judge of the Land and Environment Court had not regarded Gazcorp’s breach of the Act as merely technical.  Further, he did not consider that the opponent delayed in bringing or prosecuting the proceedings and there were no grounds shown to disagree with that opinion.

6. Giles JA, in his judgment as a member of the Court, observed that although the judge in the Land and Environment Court did not say so expressly he must have considered that whether and when the LEP would be amended was so uncertain that postponement of the orders pending suitable development consent, and the concomitant open-ended failure to enforce the law, was not appropriate.  His Honour said it should not be overlooked that, even if the LEP were amended, the grant of suitable development consent did not automatically follow.  It could generate a dispute of its own, and even if granted would not have retrospective effect

7. Some additional evidence was put before this Full Court which related to a proposed draft LEP.  As I have said, the Court granted a stay of the restraining order for twenty-eight days.

8. The matter came before Giles JA on an application by the claimant effectively to extend the stay further.  On 22 April 2004, on that application Giles JA granted a further extension up to and including 30 June 2004.  In the course of the reasons for judgment, which he then gave, Giles JA took account of evidence before him which showed that the Council had resolved to amend the LEP in a way which provided for a defined use as an outlet centre and for the inclusion of the property in a schedule as a property for which the Council might grant development consent for that use.  Giles JA observed:

   “The amendments have gone to the Department, which is in the course of preparing a s69 report as provided for in the Environmental Planning and Assessment Act 1979 for the Minister’s consideration and ‘is working towards a timeframe which would see a s 69 report furnished for the Minister’s consideration early in the week beginning 27 April 2004’. Gazcorp has made an anticipatory development application, and the Council has on a preliminary assessment satisfied itself that the use would fall within the amendments to the LEP. The Council proposes, subject to a favourable decision from the Minister, to exhibit the development application forthwith. Its officer says:

   ‘As requested, all accompanying documents and submissions received in relation to DA 2919/02, where relevant, will be taken into account in assessing the latest development application.  It is anticipated that Council will be in a position to determine the application, taking into account relevant legislation and Council adopted policies, immediately after exhibition and subject to the Gazettal of the Liverpool Local Environment Plan 1997 (Amendment 92).’”

9. Giles JA continued:

   “As Gazcorp acknowledges, this does not bespeak certainty in its obtaining appropriate development consent.  It is not known whether the Minister’s decision will be favourable.  It is not known what objections might be received when the development application is exhibited, what the Council’s determination might be or whether opposition will prolong the making of the Council’s determination. Gazcorp submitted, in effect, that it could do no more, and it led evidence that compliance with the order made on 31 March 2004 would work great hardship on numerous of its tenants now conducting business at the property and upon their employees.  The tenants would have to close their businesses and many people would lose their jobs.  Gazcorp submitted that there was sufficient prospect of obtaining an appropriate development consent that, rather than have this occur, there should be the extension of the stay.”

10. His Honour observed:

    “I do not think that Westfield denied the hardship.  It submitted, however, that the present position was really little different from that at the time when the appeal was decided, and that the Court’s then view that the uncertainty and the prospects of amendment of the LEP and the grant thereafter of suitable development consent was equally a view to which I should now come.”

    His Honour said:

    “I have not found this decision easy, and I consider that the matter is fairly well balanced.  I remain alive to the uncertainty, and to the need to enforce compliance with the planning laws.  But there is now evident a considerable will to achieve development consent as a matter of expedition.  On the evidence now before me, I think that there is a real prospect, although without any guarantee, that Gazcorp will within a reasonable time obtain an appropriate development consent.  I think it proper to allow time for that to occur without there being what in that event would be unwarranted hardship upon many persons beyond the commercial interests of Gazcorp and Westfield.”

    On that basis his Honour granted the extension to which I have referred.

11. The matter now comes back before me and the extension sought of the stay is for a further fourteen days.  The application is supported by a number of affidavits to which I have been taken.  I can say in summary that it is apparent that the delay in obtaining Ministerial approval to the proposed amended Liverpool LEP has proved greater than anybody would have anticipated.  It should be made plain immediately that in no way has that delay been the fault of any of the parties to this application.

12. I think it quite inappropriate for me, and indeed counsel did not ask me, to express any view one way or another as to why this delay has come about or to suggest it is the fault of anybody in particular, but the point has now been reached where quite recently, namely, on 25 June the s69 report was sent to the Minister.  At the same time a memorandum was sent to the Minister from the Director General.  In that memorandum appeared the following comments:

    “The section 69 report outlines arguments in support of making the application based on planning merit.  However, in my view the contrary conclusion, namely, that the plan should not be made having regard to its planning merit would also be reasonably open to the Minister.  In particular, the Minister could find the arguments in the section 69 report in support of the plan related to the following matters particularly unconvincing.”

    There then follow five bullet points:

• The declaration of public transport,

• Inconsistency with the spirit and intent of the centre’s policy,

• Adverse economic effect on the existing nearby retail centres,

• Inconsistency with the planning rationale behind draft SEPP 66,

• The proposal being satisfactory based on some ‘emerging trend’ in the USA.

The memorandum concludes:

“If so then the Minister could reasonably conclude that the plan should not be made.”

1. Mr Hughes QC, who appeared for the claimants on this application, also took me carefully through all the other material available to the claimant which explains what has been happening in the last two months.  It would be fair to say that while this application is supported by the s69 report and also by other material, it is recognised by some, including the Ministerial legal adviser, that it is entirely a matter for the Minister whether or not the amended LEP is approved and that there are arguments to be balanced each way on that topic.  Again, that is not a matter about which I should express any opinion, however, there remains the hardship to those tenants and employees to which Giles JA referred.

2. There exists at least the possibility that within the next fourteen days the Minister may approve of this amended LEP.  It seems to follow from this that if the Minister does so there is a reasonable prospect that the Council then empowered to do so will consent to an application which would enable the current use of these premises to continue.  If this application is refused the result is, as I understand it from the point of view of the claimant, that the cost of protecting the tenants and the tenants’ employees is largely lost and the consequences of enforcing the order and the costs involved within the next fortnight may be irretrievable.  Thus one has to weigh up on the one side the prospect that approval may be granted and it might be possible for this interference not to follow, against the possibility that approval may be refused and there may be some delay of up to a fortnight in enforcing the court order.

3. In that balance I have come to the conclusion that it is appropriate to place particular weight on the position of the tenants and the employees.  After all, the present predicament flows in large measure from the Council consent which was given some very considerable time ago.

4. I do not underestimate in any way the matter that Giles JA emphasised namely the need to enforce compliance with the planning laws but it seems to me that since his Honour considered the matter there has been further advance in obtaining an amendment of the LEP.  Therefore, the “considerable will to achieve development consent”, to which his Honour referred, remains.

5. Taking all these matters into consideration and having paid careful attention to the submissions ably put on behalf of the opponent, I have come to the conclusion that the order sought should be made.  The formal order that I will make is:

   1.The stay of the operation of order 2 made on 31 March 2004 will be extended up to and including 14 July 2004;

   2.The opponent to pay the claimant’s costs of this notice of motion;

   3.Stand the notice of motion over to 14 July 2004.  The parties have leave on forty-eight hours’ notice to restore it to the list but to do so by notifying my associate.

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LAST UPDATED:               05/07/2004