Gold Coast City Council v Crest Hill Pastoral Company Pty Ltd

[2012] QPEC 25

[2012] QPEC 25

PLANNING AND ENVIRONMENT COURT

JUDGE ROBIN QC

P & E Application No 966 of 2012

GOLD COAST CITY COUNCIL

Applicant

and

"CREST HILL" PASTORAL COMPANY PTY LTD

and

PERPETUAL TRUSTEE COMPANY LIMITED

and

LISMORE MANAGEMENT CORPORATION LIMITED

and

EAST COAST MORTGAGE TRUST

Respondent

Renunciant

Respondent

No role

BRISBANE

..DATE 22/03/2012

ORDER

CATCHWORDS
Sustainable Planning Act 2009 s 245(2), s 245, s 603 Integrated Planning Act 2009 s 3.5.28, s 3.7.2

Council seeks interim enforcement order to prevent sale by mortgagee exercising power of sale of land in a separate title required to be dedicated as park under a condition of a development approval - risk that a purchaser would take free of the condition - Council offers undertaking as to damages - balance of convenience favours making order
HIS HONOUR:  The court has made an order in terms of the initialled draft as follows:

It is ordered pursuant to section 603(1) of the Sustainable Planning Act 2009 that upon the applicant giving the undertaking described in section 603(2):

1. Until further order, the first, second and third respondents whether by themselves or by their employees, agents, attorneys or any of them or otherwise, be restrained from disposing or the dealing with in any manner whatsoever lot 15 of RP866362.

1. There be liberty to apply.

1. The originating application be adjourned to 29 March 2012 for the making of directions.

The originating application seeks under section 604 of the Act an enforcement order to bring about fulfilment of a development condition attached to approval of certain reconfigurations of land whereby "the land shown as park on the subdivision proposal plan shall be dedicated to the Crown as park at no cost to council."

Although not entitled Plan of Subdivision, it seems clear that page 150 of Dale Dickson's certificate pursuant to section 251 of the Local Government Act 2009, being drawing 995-201D prepared by B C Currey (Surveys), is the plan of subdivision and the document referred to in the condition.

The condition which has just been read appears in a decision notice of the 5th of May 2004.  Pursuant to a request to change the approval, the Council, on the 5th of January 2006, in writing indicated its approval for the change.  It was in that document by condition 21 that the development was required to be carried out generally in accordance with the drawing indicated, the predecessor in condition 1 referring simply to plan 995-201.  In the later approval the relevant condition, now 21, is slightly differently worded: "The land shown as park on the plan of subdivision shall be dedicated to the Crown as park at the applicant's expense."

Reference to the plan reveals the oddity that some of that park is remote from the developer's multi-stage subdivision.  In particular, lot 15 is remote.  Documents in the certificate indicate that lot 15, which apparently historically had been with the family of those behind the first respondent, was (the first respondent, being the developer) was reacquired by them and offered to the Council as park land, for which it's apparently fairly well suited, park land of considerable extent - some 65 hectares, in exchange for the Council in respect of the area being subdivided accepting greater densities of development.

The number of lots to be produced was substantial, around 100.  Development has proceeded to a certain stage in the sense that some lots have been registered so they could be sold.  That required what was traditionally understood as the Council’s “sealing” of plans to permit registration.  The evidence before the court shows specifically in respect of some 18 lots that their production has been completed in that way; separate titles now exist.

Mr Laidely's client, Lismore Management Corporation has been added only today as third respondent.  Given that it is the "current responsible entity” for “East Coast Mortgage Trust", rather than the second named respondent, a trustee company which happens to be the registered mortgagee.  The court is grateful to him for the trouble he has taken to come to grips with the complexities of this matter so that a hearing could take place today.  He submits that the Council has been slack in not insisting on its entitlements to have conditions complied with pursuant to

section 3.7.2 of the Integrated Planning Act 1997 (IPA).

The Council has not called in, except perhaps by this application, recently filed, it's entitlement to have the land in lot 15 dedicated as park.  Mr Laidely suggests the delay is at the order of four years.  (I am unsure whether he reserved pursuing an (alternative) agreement that the condition had not yet been triggered.)  What has got the Council taking action is advertisement of an auction sale of various properties including lot 15, which is proposed for the 31st of March 2012. 

One of the features in the advertising in respect of lot 15 is "elevated home site possible", which hardly seems consistent with a future of it as park.  Mr Robin's affidavit establishes that Lismore Management has taken all steps necessary to place it in the position of mortgagee in possession of not only lot 15 but also other multi hectare properties which can conveniently be described as lots - lot 14, lot 100 and lot 204.

Those are also to be put up for auction, according to the advertisement, along with another property with the benefit of development approval for an eight storey building.  Mr Laidely, as I understood him, took the position that his client could deal with its security (lot 15 in particular) disregarding entitlements the Council may have under the condition: Another alternative position presented was that a purchaser from his client (exercising power of scale) would be one subject to the principles of caveat emptor, perhaps at risk of having to turn over lot 15 to the Council.

The Council's underlying originating application seeks an enforcement order under section 604 of the Sustainable Planning Act (SPA), requiring the first respondent to dedicate lot 15 as well as interim relief of the kind granted today.

They've also sought an order that the first respondent prepare and lodge for registration a caveat over lot 15.  That part of the application is no longer pursued.  The court understands that the first respondent, represented by Mr Marshall, is as anxious as the Council is to preserve lot 15 and avoid the risk of its being sold, in particular, sold separately from the other lots which, if development approvals are taken up, may be subdivided.

Mr Marshall indicates that there may be limited circumstances in which his client could caveat its own land.  Fortunately, that aspect hasn't been gone into.  Another vexed question is whether the Council might have entitlement to caveat.  It seems there's no clear answer on that issue.  In my opinion, the Council, here representing the public interest, has a well grounded fear that if lot 15 is sold, that may be an end to prospects of its becoming park for the enjoyment of the public.

Mr Laidely submits in reliance on Sunshine Coast Regional Council v Recora Pty Ltd [2012] QPEC 8 that the approval containing the crucial condition runs with the land and will bind any purchaser of it. He says that's it’s obligation of potential purchasers to make appropriate enquiries to inform themselves and to bid accordingly. I am not satisfied that the situation in respect of lot 15 is nearly so straightforward, as was the situation Judge Robertson dealt with, which concerned payment of financial contributions, which a developer applicant ought to have paid but did not, leaving an "innocent" purchaser holding the baby, so to speak. I would venture to suggest that an auction of lot 15 on the basis that the successful bidder may lose it would be a rather unsastifactory affair. It seems far preferable to have the status and fate of lot 15 clarified before sale. The mortgagee may well be in breach of its obligations under s 85(1) of the Property Law Act 1974 if it let lot 15 go for a measly nominal amount in the circumstances.

There is every chance here that lot 15 will be sold separately from the others.  There's the chance that no further development elsewhere other than what has happened already will take place, although that may be unlikely given that the South-east Queensland Regional Plan would preclude subdivisions of the kind that have been approved. 

I think there is a real risk that a purchaser of lot 15 would hold it free of any obligation to dedicate it to the Council, even if the balance of the development were to go ahead on the basis that the new owner of lot 15 had not implemented any development proposal.

That Lot 15 is remote from the land being subdivided does not on its own vitiate a condition of reconfiguration for its dedication as park: Lloyd v Robinson (1962) 107 CLR 142. But the relevance or the reasonableness of the condition, as Mr Laidely submitted, may depend on whether the reconfiguration approval is sufficiently acted on. He submitted that if only a modest number of the approved lots were produced, the condition for dedication of the whole 65ha might be adjudged unreasonable. See Hammercall Pty Ltd v Gold Coast City Council [2009] QCA 29. This decision is relevant also to his argument that the Council had left it too late to require satisfaction of the condition, and now stood to miss out, paying a rather heavy price for not requiring satisfaction as soon as it could have under s 3.7.2. In Hammercall the majority compared what might have happened ([64] ff) with what did happen ([70] ff): by not taking up its opportunities to require a large road dedication earlier, the Council and the Main Roads Department rendered themselves unable to secure dedication under a condition that the developer had actually agreed to. The effect of SPA s 245 and IPA s 3.5.28 is that conditions bind only an owner or occupier who carries out development under the approval (not a contract or doing work, for example: Sunshine Coast Regional Council v Sugarloaf Road Propriety Limited [2011] QPEC 124).

The real difficulty here is that a purchaser of Lot 15 who does not “develop” for whatever reason (perhaps that the approved development has been completed) is not bound. See Rofail v Wells [2011] QPEC 107; [2011] QPEC 125. In such contexts, the indefeasibility of titles under the Torrens system is likely to protect a purchaser from having to comply with some development conditions, for example to create an easement. The view may be taken that the reconfiguration approval has become spent: see Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472.

In the exercise working out where the balance of convenience lies, I take the view which courts typically have, that claims to land are regarded more tenderly, given that each piece of land is different, than are claims to money. The third respondent's interest is simply to be paid. Although perhaps not cheerfully, the Council through its counsel, Ms Kefford proffers the undertaking under section 603(2), so that if it fails in its proceeding the third respondent will be protected in respect of any damages.

It's only the sale of lot 15 that is interfered with, otherwise the auction on 31st of March can go ahead.  There's certainly no indication in the promotion material that I've seen that suggests all parcels were being sold as a single lot or that it was vital for that to occur.

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