Hall v City of Burnside (No 3)

[2007] SASC 3

SUPREME COURT OF SOUTH AUSTRALIA

(Land and Valuation Division: Application)

HALL & ORS v CITY OF BURNSIDE & ORS (No 3)

[2007] SASC 3

Judgment of The Honourable Justice Bleby

15 January 2007

EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS

ENVIRONMENT AND PLANNING - ENVIRONMENTAL PLANNING - DEVELOPMENT CONTROL - CONSENTS, APPROVALS AND PERMITS

Action for judicial review, declaratory and injunctive relief in respect of final development approval on ground of alleged invalidity – Application by plaintiffs for an interlocutory injunction to restrain proposed development pending hearing of the action – Full Court in separate proceedings having declared that same development approval was valid – Full Court on appeal in these proceedings having refused to extend time for commencement of judicial review proceedings – Whether balance of convenience favours the granting of interlocutory injunction – Possible abuse of process to proceed with declaratory and injunctive relief – Consideration of claim based on apprehended nuisance – Consideration of possible prejudice to the developer – Previous interim injunction revoked – Plaintiffs’ application for an interlocutory injunction dismissed.

Supreme Court Rules 1987 (SA) s 98.01, s 98.06; Development Act 1993 (SA) s 40, s 84, s 85; Development Regulations 1993 (SA) Reg 48, referred to.
Hall and Another v City of Burnside and City Apartments Pty Ltd (2005) 92 SASR 579; Hall & Ors v City of Burnside & Ors [2006] SASC 86; Hall & Ors v City of Burnside & Ors [2006] SASC 283; Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135, discussed.
City Apartments Pty Ltd v City of Burnside & Hall [2004] SAERD 94; City of Burnside & Ors v City Apartments Pty Ltd (2004) 236 LSJS 47; Hall v City of Burnside & Another (2005) 91 SASR 532; Castlemaine Tooheys Ltd v The State of South Australia (1986) 161 CLR 148; O'Reilly v Mackman [1983] 2 AC 237; Meagher v Stephenson (1993) 30 NSWLR 736, considered.

HALL & ORS v CITY OF BURNSIDE & ORS (No 3)
[2007] SASC 3

1. BLEBY J:             This action, commenced on 31 January 2006, is an application for declarations of invalidity and judicial review of the decision of a building certifier, Katnich Dodd, to grant provisional building rules consent and of the decision of the City of Burnside (“the Council”) to grant final development approval in respect of a proposed development at Glen Osmond.  The applicant for development consent is City Apartments Pty Ltd (“City Apartments”).  I will refer in more detail to the relief claimed in due course.

2. Rule 98.06 of the Supreme Court Rules 1987 (SA) requires an application for judicial review to be brought within six months from the date when the grounds for review first arose.  That time expired, in the case of the building rules consent, on 4 September 2005, and in the case of the final development approval, on 21 September 2005.

3. On 2 March 2006 I extended the time within which the plaintiffs could commence the proceedings and I granted conditional leave to serve the proceedings.  On 13 April 2006, on the application of the plaintiffs, and upon their giving certain undertakings, I granted an interim injunction restraining City Apartments from undertaking any works on the land in question pursuant to the development approval issued by the City of Burnside.  Although counsel for City Apartments appeared on the application, it is not disputed that it was in the nature of an interim injunction, City Apartments not having had an opportunity to file any affidavits in opposition to the application.

4. City Apartments has always opposed the granting of an interlocutory injunction, but with its acquiescence, the interim injunction was extended from time to time and, on 15 June 2006, until further order, to enable expert engineers engaged by the plaintiffs and by City Apartments to confer with a view to agreeing, if possible, certain facts necessary for the determination of the action, and also an appropriate engineering solution in relation to what was said to be unstable landfill on the site of the proposed development.  Those conferences have taken place and, notwithstanding what appears to be a substantial measure of agreement, the plaintiffs now seek an interlocutory injunction to restrain the development pending the hearing of the action.  The application is opposed by City Apartments which now objects to any further renewal of the interim injunction.

5. In order to resolve the application it is necessary to review some of the long history of proceedings between the parties concerning this proposed development and the course that proceedings have taken in this action to date.

6. The history goes back to April 2000, but in respect of the current development approval, provisional development plan consent was first granted by the Environment Resources and Development Court on 20 January 2004.[1]  Mr & Mrs Hall and the Council appealed to the Full Court of this Court.  On 22 September 2004 the Full Court dismissed the appeals.[2]  Mr & Mrs Hall applied for special leave to appeal to the High Court, which application was dismissed on 11 August 2005.

   [1] City Apartments Pty Ltd v City of Burnside & Hall [2004] SAERDC 94.

   [2] City of Burnside & Ors  v City Apartments Pty Ltd (2004) 236 LSJS 47; [2004] SASC 294.

7. Provisional building rules consent for the development was granted on 4 March 2005, and the Council granted final development approval on 21 March 2005.  That final development approval was, at the instance of Mr & Mrs Hall, the subject of judicial review proceedings before a single judge of this Court[3] and on appeal by City Apartments to the Full Court.[4]  On 9 September 2005 the Full Court declared that the development approval was valid.  That order may have gone further than was necessary in order to dispose of the appeal, but the precise terms of the formal order were not the subject of argument at that time.

   [3] Hall v City of Burnside and Another (2005) 91 SASR 532; [2005] SASC 199.

   [4] Hall & Another v City of Burnside and City Apartments Pty Ltd (2005) 92 SASR 579; [2005] SASC 343.

8. It is that development approval which the plaintiffs, in the present proceedings, seek to have declared invalid and quashed, but on quite different grounds from their previous attack on the approval.  However, as I pointed out in my reasons for extending the time within which these proceedings could be commenced,[5] there remained a judgment in rem of the Full Court of this Court declaring the development approval to be valid.  That is one existing barrier to the success of this action, although, as mentioned below, the plaintiffs have applied to the Full Court to vary that order.

   [5] Hall & Ors v City of Burnside & Ors [2006] SASC 86.

9. Another significant barrier has emerged since the proceedings were commenced.  City Apartments appealed against my decision to grant the extension of time within which to bring the proceedings.  On 12 September 2006 the Full Court, by majority, allowed that appeal[6] and set aside the order extending the time within which the plaintiffs could commence the proceedings and ordered that the application for an extension of time be dismissed.  The plaintiffs have applied to the High Court of Australia for special leave to appeal against that decision, but the plaintiffs do not rely on that application in support of their present application for an interlocutory injunction.

   [6] Hall & Ors v City of Burnside & Ors [2006] SASC 283.

10. The relief sought by the plaintiffs in their inter partes summons is as follows:

    1.A declaration that the Development Approval issued by the City of Burnside to City Apartments in respect of DA180/0455/02/C3 is invalid.

    2.An order in the nature of certiorari to quash the Development Approval issued by the City of Burnside in relation to DA180/0455/02/C3 for a detached dwelling and detached garage and associated excavation works on the land at 9-13 Government Road Glen Osmond.

    3.A declaration that the Provisional Building Rules Consent issued by Katnich Dodd in respect of DA180/0455/02/C3 is invalid.

    4.An order in the nature of certiorari to quash the Provisional Building Rules Consent issued by Katnich Dodd in respect of DA180/0455/02/C3.

    5.An injunction restraining City Apartments, its employees, agents or contractors from proceeding directly or indirectly with the development the subject of the development approval in respect of DA180/0455/02/C3.

11. In determining the application for an extension of time I formed the view, based on the material before me, that the plaintiffs had an arguable case that the relevant approval and consent were invalid.  That view was not challenged in the appeal before the Full Court.[7]  It has not been suggested in these proceedings that the issue of the validity of the consent and of the approval does not raise a serious question to be tried.  However, as will be seen, the decision of the Full Court dismissing the application for an extension of time stands as a substantial barrier to the plaintiffs being able to obtain the relief they seek.  By the decision of the Full Court they are presently barred from obtaining the relief claimed in paragraphs 2 and 4 above

    [7] Ibid at [29].

12. I mentioned earlier that in other proceedings the Full Court of this Court had, on 9 September 2005, declared that the development authorisation issued by the Council on 21 March 2005 was a valid development approval.  Pursuant to an undertaking given at the time of the application for leave to serve these proceedings, application has been made to the Full Court in those proceedings to vary the order in such a way as would not prevent the plaintiffs from obtaining the orders that they presently seek.  That application has not yet been set down before the Full Court because it was hoped that, if all factual questions were resolved, this present action might be dealt with by the Full Court at the same time as the application to vary the previous order.  At present, however, there can be no certainty that this action will be heard by the Full Court, particularly if complex questions of fact need to be resolved.  The previous order of the Full Court therefore still remains as an obstacle to the plaintiffs obtaining relief in this action.

13. Paragraphs 1 and 3 of the prayer for relief, although seeking declaratory relief, relate solely to the alleged invalidity of the two decisions sought to be quashed.  Rule 98.01(3) of the Supreme Court Rules allows for relief to be sought by way of declaration or injunction on a summons for judicial review.  In this case it would seem that the declaratory relief claimed is merely supportive of the relief sought by way of judicial review, a remedy to which the plaintiffs are not presently entitled.  It is not clear that the relief claimed by way of injunction is based on any ground other than the alleged invalidity of the two development authorisations in question.  Some of the affidavits in support of the application raised a question of the stability of the landfill on the development site placed at the instance of City Apartments pursuant to an earlier purported development authorisation later held to be invalid.  However, it was far from clear that support for the relief by way of injunction was to be based on an alleged claim in nuisance by the plaintiffs.  No pleadings on that issue have been filed or directed, as would normally be expected if the action were founded in nuisance.  The claim for an injunction appears to be supplementary to judicial review and based on the same grounds.  By Notice for Specific Directions dated 10 November 2006 the plaintiffs have applied for leave to amend the inter partes summons by adding certain additional claims for relief and by adding to the existing para 5 a claim that the injunctive relief be granted

    ….. inter alia on the ground that the development approval is invalid and on the further and alternative ground that the construction and implementation of the development constitutes an actionable nuisance.

    However, at this time, the plaintiffs have chosen not to proceed with that application, and the original prayers for relief remain, supported by a number of affidavits.  While I consider that the relief sought by way of declaration and injunction is merely supportive of or supplementary to the relief claimed by way of judicial review, a matter which is very relevant to the present application, I will also address, in due course, the position that would pertain if I am wrong about that and the proceedings as they presently stand include a claim for an injunction based on apprehended nuisance.

14. Notwithstanding that there may be a serious question to be tried on the question of the validity of the building rules consent and the final development approval, the degree of likelihood of success of the plaintiffs in the action is a factor that has a bearing on the balance of convenience.[8]

    [8] Castlemaine Tooheys Ltd v The State of South Australia (1986) 161 CLR 148 at 154, 155-156.

15. If the plaintiffs’ claim is one for judicial review alone, it has no present prospect of succeeding, given the decision of the Full Court on appeal to order that the application for an extension of time to bring the judicial review proceedings be dismissed.  However, the plaintiffs argue that the application for declarations and injunction can be supported independently of the claim for judicial review and can therefore be maintained notwithstanding the refusal to extend the time within which to commence judicial review proceedings.

16. While it is not necessary, and indeed would be inappropriate in proceedings of this nature, to decide whether such an application would constitute an abuse of process, given the inability to pursue judicial review, it must be acknowledged that there is a strong argument to that effect which substantially weakens the plaintiffs’ entitlement to declaratory relief.  In the course of deciding the most recent appeal in the Full Court, Doyle CJ said:[9]

    It is arguable that the plaintiff cannot walk around the time limit in r 98.06 by the expedient of issuing proceedings that are not judicial review proceedings:  see Clayton v Ralphs (1987) 45 SASR 347 at 354-355 Jacobs J and Xenophon v State of South Australia [2000] SASC 327; (2000) 78 SASR 251 at [17] Prior J and at [20] Lander J. On this point, some of the reasoning of Lord Diplock in O’Reilly v Mackman [1983] 2 AC 237 has continuing relevance, even though changes wrought by the English Civil Procedure Rules 1998 have led to a change of approach:  see Clark v University of Lincolnshire and Humberside [2000] 1 WLR 1988.

    It is not necessary to decide this issue.  It suffices to say that the prejudice relied upon by City Apartments is not answered by saying that the plaintiffs could make the same claims in proceedings not by way of judicial review.

    [9] Hall & Ors v City of Burnside & Ors [2006] SASC 283 at [58] – [59].

17. In O’Reilly v Mackman[10] the House of Lords affirmed that as a general rule it would be contrary to public policy and an abuse of the process of the court to allow a proceeding to continue by ordinary action for declaratory relief where all the remedies for the infringement of the rights in question could be obtained on an application for judicial review.  The case was cited with approval by the New South Wales Court of Appeal in Meagher v Stephenson.[11]

    [10][1983] 2 AC 237.

    [11] (1993) 30 NSWLR 736.

18. Mr Henry, counsel for the plaintiffs, sought to ameliorate the effect of that decision by reference to the decision of the High Court in Corporation of the City ofEnfield v Development Assessment Commission.[12]  In that case the appellant had commenced proceedings in this Court against the Development Assessment Commission and the applicant developer for a declaration to the effect that the provisional development plan consent which had been granted was ultra vires and void, and against the developer for an injunction to restrain it from taking action pursuant to or in reliance upon the consent.  The appellant in that case ultimately succeeded, and the High Court had occasion to make some comparisons of proceedings by way of judicial review and those by way of declaration and injunction.  However, no point was ever taken in the City of Enfield Case that the court was prohibited from granting the relief sought.  The issue just did not arise.  The fact that the case proceeded in that form without objection by the respondent does not diminish the authority of cases like O’Reilly v Mackman where the point was taken.

    [12] (2000) 199 CLR 135; [2000] HCA 5.

19. As I have said, it is not necessary to decide whether the present or the alternative relief in this case would constitute an abuse of process.  It is sufficient to observe that there is a serious argument which cannot be ignored that to continue to entertain proceedings by way of declaration and injunction based on the same grounds as the claim for judicial review would constitute an abuse of process where access to the remedy of judicial review has been denied.

20. I turn to consider the plaintiffs’ application on the assumption that the proceedings also include a claim for an injunction based on nuisance.  This is said to arise by virtue of the alleged instability of some landfill on the site, over part of which it is intended that a house be constructed.  One of the complaints of the plaintiffs is that the landfill, although put in place some time before the building rules consent, was not carried out in accordance with the requirements of that consent.  The plaintiffs suggest that, as a result, the landfill is unstable.

21. On 1 August 2006 a conference took place between counsel for the plaintiffs and for City Apartments, together with engineers engaged by each of those parties.  At that conference it seems to have been accepted that there were potential problems concerning the stability of the landfill.  However, it was agreed that a proposal put forward by Mr Mitchell, the engineer for City Apartments, for the design of a retaining wall at the “toe” of the embankment slope comprising the landfill was sufficient to ensure the stability and safety of the embankment, subject to certain further calculations being provided to the plaintiffs’ engineer by Mr Mitchell and subject to certain drainage proposals being adopted.

22. Paragraph 3 of a memorandum setting out matters agreed at the conference and as accepted by counsel for both parties and by Mr Mitchell provides:

    The engineers agreed that subject to detailed design specifications the “Mitchell Proposal” could result in a stable embankment and comply with the performance requirements of the Building Code of Australia.  It was agreed that the specifications would need to include (amongst other things) drainage detail dealing with potential wetting of the platform from:

    (a)above ground environmental water flows;

    (b)below ground environmental water flows;

    (c)sewerage leakage;

    (d)water pipe leakage.

    It was agreed by the engineers that these matters could be resolved in a number of different ways, including the installation of above grade pipes.

23. The plaintiffs’ engineer did not assent to the memorandum.  His position was not made known until the filing of an affidavit on the afternoon preceding the hearing of this application (21 December 2006).

24. It was clear that more work was required to be done by Mr Mitchell to refine his proposal.  Calculations were supplied to the plaintiffs’ engineer.  However, the plaintiffs’ engineer remained silent as to the memorandum and the Mitchell proposal.

1. On 3 November 2006 the plaintiffs’ solicitors also informed the solicitors for City Apartments that the plaintiffs would continue to seek the declarations and injunctive relief claimed, would pursue a claim in nuisance, would allege that the embankment was not constructed in accordance with the approved development (if that was valid), and would oppose any variation to the existing allegedly invalid building rules consent to give effect to the Mitchell proposal.

2. City Apartments has now applied for and obtained amended building rules consent for the construction of the retaining wall in accordance with Mr Mitchell’s proposal, and an amended development approval has been issued by the Council accordingly.  This means that, if the development is to proceed lawfully, it must incorporate the redesigned retaining wall.  City Apartments has also sought and obtained further amended building rules consent relating to Mr Mitchell’s complementary drainage proposals designed to ensure the stability of the landfill.  It is likely that a further amended development approval will be issued if that has not already happened, incorporating those proposals.

3. Based on the affidavit of the plaintiffs’ engineer, Mr Henry criticises the drainage proposals as being incomplete.  I am not prepared to give much weight to those criticisms, based as they are on an affidavit filed at the last minute, when the plaintiffs had some months in which to contribute to the engineering solution but chose not to do so.  Mr Henry conceded that, with appropriate engineering works, stability and compliance with the required building standards could be achieved.  The concession having properly been made, it is a matter for the building rules certifier to express the consent in such manner as to ensure compliance with those standards.  The point about all this is that there is an engineering solution to what the engineers acknowledge may be an existing problem.  City Apartments, notwithstanding its reliance on the existing approvals, has taken steps to ensure compliance with that solution.  I have no reason to doubt that the development will proceed in accordance with the advice of the developer’s own engineer.  In relation to any potential claim for an injunction based on prevention of a nuisance, there would appear no longer to be a serious question to be tried, and the balance of convenience must certainly be against the granting of an interlocutory injunction.

4. Whatever cause of action is relied on by the plaintiffs, there is also the question of prejudice to City Apartments.  In its decision on the appeal as to the extension of time[13] the majority of the Full Court identified substantial prejudice to City Apartments if the time for instituting the proceedings were extended.  That prejudice included putting at risk the validity of the development approval currently held by City Apartments.  While an interlocutory injunction will not directly affect that risk, there are other aspects of prejudice identified by the Full Court which must be brought into account.  One is the fact that City Apartments holds an apparently valid consent which it is difficult now to challenge.  Another is that they have spent in the order of $300,000 on the proposed development and disputes arising out of it with very little to show for that expenditure.  A further element of prejudice relates to the time within which the development approval remains operative.  That is prescribed by the Development Regulations, but a relevant planning authority may, on the application of a person who has the benefit of any relevant development authorisation, extend that period.[14]

   [13] Hall & Ors v City of Burnside & Ors [2006] SASC 283.

   [14] Section 40 Development Act 1993 (SA).

5. On 4 July 2006 the Council granted an extension of time, after which the development approval would lapse, to 28 February 2007.  On 14 December 2006 the Council extended that time to 28 August 2007, but in doing so stated that City Apartments “should be aware that no further extension of time is likely to be granted”.  This means that unless the development has been lawfully commenced by “substantial work” on the site within that time, the approval will lapse.[15]  There is no assurance that further extension will be granted.  If the action proceeds, present indications are that it is likely to involve a relatively complex factual enquiry which could not be dealt with satisfactorily by the Full Court.  For reasons previously mentioned, it is unlikely that a trial could take place unless and until the Full Court amends its previous order.  The history of the litigation between the parties and the indication of the plaintiffs’ position in their solicitors’ letter of 3 November suggests that every point that can be taken by the plaintiffs will be taken, and that a substantial delay is likely to occur before the matter comes to trial.  All this indicates that City Apartments, with no guarantee of further extension, may have some difficulty in commencing substantial work on the site before the present extended approval lapses if an interlocutory injunction prevents work on the site until after trial.

   [15] Regulation 48, Development Regulations 1993 (SA).

6. All these matters of prejudice to City Apartments are relevant to the balance of convenience.

7. Finally, it must also be observed that, if the action proceeds and the plaintiffs are successful, if the development approval is held to be invalid, and if City Apartments has proceeded with the development in full knowledge of the continuing challenge to the validity of its approval, it faces the prospect of either or both of an enforcement notice under s 84 of the Development Act and an application to the Environment Resources and Development Court for relief under s 85 of the Development Act, either of which could result in removal of the development and reinstatement of the site.  There is therefore another possible remedy if the development is not authorised.

8. There may be a serious question to be tried as to the validity of the consent and approval sought to be challenged by the plaintiffs.  However, the likelihood of the questions being able to be tried has substantially diminished to a point where, coupled with other circumstances, the balance of convenience is against the granting of an interlocutory injunction.  In summary that is because:

   1.Short of a successful High Court appeal against the most recent decision of the Full Court, judicial review of those decisions is not now available to the plaintiffs;

   2.There is a substantial argument that to pursue another remedy by way of declaration and injunction on the same grounds would constitute an abuse of process, thereby diminishing the chances of the plaintiffs obtaining their remedy;

   3.The declaration by the Full Court that the development authorisation is valid[16] remains a barrier to the granting of the relief sought;

   4.I am not satisfied that the present proceedings would encompass claims for an injunction based on apprehended nuisance;

   5.If they do, or if an amendment to the present summons is made to include such a claim, I do not consider that there is now a serious question to be tried on that issue, given the precautions that can be and appear to be being taken by City Apartments to prevent such nuisance occurring;

   6.There would be significant prejudice to City Apartments if an interlocutory injunction were granted;

   7.If the development does proceed and is unauthorised there exist other statutory mechanisms, of which City Apartments is fully aware, which may result in their having to remove the development and reinstate the land.

   [16] Hall & Another v City of Burnside and City Apartments Pty Ltd (2005) 92 SASR 579; [2005] SASC 343.

9. For these reasons the court orders:

   1.       That the interim injunction granted on 13 April 2006 and extended from time to time and, on 15 June 2006, until further order, be revoked.

   2.       That the plaintiffs’ application for an interlocutory injunction be dismissed.

10. I will hear counsel as to any further consequential orders