Randwick City Council v Athens

[2001] NSWLEC 110

Land and Environment Court

of New South Wales

CITATION:	Randwick City Council v Athens & Anor [2001] NSWLEC 110
PARTIES:	APPLICANT Randwick City Council FIRST RESPONDENT Peta Athens SECOND RESPONDENT Athens Holdings Pty Ltd
FILE NUMBER(S):	40097 of 2000
CORAM:	Sheahan J
KEY ISSUES:	Injunctions and Declarations :- prohibited use - backpacker accommodation -discretion - stay of orders - costs
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 Randwick LEP 71 Randwick LEP 1998 Randwick PSO 1978
CASES CITED:	ACR Trading Pty Ltd & Anor v Fat-Sel Pty Ltd & Anor (1987) 11 NSWLR 67; Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335
DATES OF HEARING:	8/12/2000, 29/5/2001-30/5/2001
DATE OF JUDGMENT:	06/01/2001
LEGAL REPRESENTATIVES:	APPLICANT Barrister Mr A J J Thompson Solicitors Bowen & Gerathy FIRST AND SECOND RESPONDENTS Barristers Mr W R Davison SC with Mr McDowell Solicitors Herder & Associates

JUDGMENT:

IN THE LAND AND Matter No: 40097 of 2000
ENVIRONMENT COURT Coram: Sheahan J
OF NEW SOUTH WALES 1 June 2001

RANDWICK CITY COUNCIL

Applicant

v

PETA ATHENS

First Respondent

ATHENS HOLDINGS PTY LTD

Second Respondent

JUDGMENT

Introduction

1. These are Class 4 proceedings brought by the Council in respect of the use of premises at 40 Coogee Bay Road, Coogee or Randwick, for the purpose of backpackers accommodation.

2. When the matter was first before the court for hearing, on 8 December 2000, I made the following orders by consent:

1. The First and Second Respondents, their servants, agents and assigns remove all structures erected for the purpose of providing beds, platforms and mezzanine accommodation from all rooms within 40 Coogee Bay Road, Coogee pursuant to Order 2 of the Application herein.
2. The First and Second Respondents, their servants, agents or assigns refrain from and be restrained from using Garages 9 and 10 of the premises 40 Coogee Bay Rood, (sic) Coogee for the purposes of habitable rooms pursuant to Order 6 of the Application herein.
3. The First and Second Respondents, their servants, agents or assigns remove the sliding glass doors to Garages 9 and 10 and restore them for the purpose of carparking pursuant to Order 7 of the Application herein.
4. That the First and Second Respondents comply with Consent Orders 1, 2 and 3 above by 31 December 2000.
5. That the First and Second Respondents pay the Applicant’s costs, as agreed or assessed, in relation to Orders 1, 2 and 3 above.

3. The outstanding matters still before the court concern the applicant’s desire to press the following paragraphs of its class 4 application dated 30 June 2000:

1. An order that the First and Second Respondents be restrained from using the premises at 40 Coogee Bay Road, Coogee for the purpose of Backpackers’ Accommodation.
…
3. An order that the Respondents be restrained from using the double carport at 40 Coogee Bay Road, Coogee, other than in accordance with development consent granted by Notice of Determination dated 19 November 1996.
4. An order that the Respondents demolish all work carried out to the double carport at 40 Coogee Bay Road, Coogee not authorised by Local Activity Approval 1152/97.
5. An order that the Respondents demolish and remove unauthorised additions to the front fence at 40 Coogee Bay Road, Coogee and reinstate it to its condition prior to the unauthorised work.
…
8. An order that the Respondents pay the Applicant’s costs of these proceedings.
9. Such further or other orders as the Court considers appropriate.

4. Mr Davison SC, on behalf of the respondents, conceded, at the conclusion of the evidence, as his instructing solicitor had done in an open letter to the Council on 1 June 2000 (annexure “S” to Kyriacou’s affidavit dated 23 June 2000), that:

(i) the subject premises are properly characterised as “ backpacker accommodation ”,
(ii) that they enjoy no approval for that use, and
(iii) that such use is relevantly prohibited by the current planning controls.

5. The respondents, therefore, seek the exercise of the court’s discretion in their favour.

The respondents and the premises

6. The respondents have been associated with the premises since the early 1970’s, and, prior to about 1990-1, the premises operated as a “boarding house”. The respondents’ valuer, R G McDonald (annexure “A” to Athens’ affidavit dated 22 September 2000), estimated the building to be about 45 years old as at 23 July 1973. Peta Athens (“Athens”), in a development application (“DA”) dated 4 April 1991, used the expression “present use existing for over 60 years” and described that “present use” as “lodging house/budget accommodation” dating back to at least 27 June 1951 (ibid, annexure “D” and par 18).

7. Tim Unity Holdings Pty Ltd is shown in a title search (annexure “P” to Michael Van Dam’s affidavit dated 23 June 2000) as the registered proprietor of the subject land (volume 13451 folio 175, being lots 26 and 27 in DP 4396), but the company changed its name on 18 June 1999 to Athens Holdings Pty Ltd (“the company”) (ibid, annexures “O” and “Q”).

8. Athens has been a director of the company since 22 August 1973. The current ASIC search indicates the only other shareholder to be Yiota Athens of the same address, and the only other director to be Arthur Koufis of Ermington. Athens is also the registered proprietor of the business name “The Aegean Coogee Bay Road Backpackers”, first registered on 16 July 1990 (see ASIC documents at Annexures “R” and “S” to Van Dam’s affidavit dated 23 June 2000). That name appears on relevant receipts and signage (see Exhibits R7, R10, R11 and R12, and annexures to Hewlett-Smith’s affidavit dated 25 July 2000), and in advertising, where the word “resort” is sometimes added (see annexure “F” to Hewlett-Smith’s affidavit).

9. Athens (in his affidavit dated 22 September 2000) testified that the subject premises were purchased on 24 August 1973. It was a three-storey building with ten self-contained flats, each containing a kitchen and bathroom and one to five bedrooms. He bought out his father’s interest in the company in February 1990.

10. Students had resided in the building long before August 1973. All the 1973 tenants had left by about the end of 1974, and, as they left, Athens furnished the individual bedrooms and rented the rooms separately as budget-priced accommodation for periods from a few days to a few weeks. By 1978, when the Randwick Planning Scheme Ordinance (“PSO”) came into effect, the company had been providing temporary accommodation to students, tourists and others, in the subject premises, for about five years.

11. Athens’ submission of a series of development applications to the Council during the 1980’s was consistent with his desire to bring the building under the Strata Titles legislation, a plan he abandoned in 1994, after the conclusion of some 1991 class 4 proceedings.

12. In par 20 of his affidavit dated 22 September 2000, following reference to a May 1991 Council notice, Athens says:

Over the following years the Company has spent approximately one million dollars ($1,000,000) upgrading the building and making it safer for those taking temporary accommodation in it ”. (emphasis added)

The Planning Regime 1990-98

13. Randwick Local Environmental Plan No 71 (Coogee Precinct) (“LEP 71”) (Exhibit R1) was gazetted on 18 May 1990 to replace the Randwick Planning Scheme Ordinance (“PSO”) (which had come into effect on 28 April 1978). It prohibited “backpacker accommodation”, but allowed “boarding house” accommodation. Its “Coogee Precinct, Residential B1(Low Density Zone) 2(b1)” zoning, in which the premises were located, had as an objective the maintenance of areas of low density housing. Dwelling houses were permitted without development consent, but the following were included in the list of prohibited development: “backpacker accommodation”, “motels”, and “serviced apartments”.

14. LEP 71 included the following definitions:

· “backpacker accommodation” is defined as:

a building or place used for the purposes of providing temporary accommodation for tourists and where accommodation and communal kitchen and laundry facilities are provided but which is not licensed to sell liquor within the meaning of the Liquor Act 1982.

· “Bed and breakfast accommodation” is defined as “a dwelling house which provides temporary accommodation for not more than 5 persons”.

· “Boarding house” means a building or place:

(a) where accommodation and communal kitchen and laundry facilities are provided to residents of the building or place; and
(b) which is not licensed to sell liquor…but
(c) which does not include a motel or backpacker accommodation.

· “Dwelling” means “a room or number of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used, as a separate domicile”.

· “Dwelling house” means “a building the whole of which contains one but not more than one dwelling and appurtenant buildings ordinarily incidental thereto”.

· “Motel” means “a building used for the temporary or short-term accommodation of travellers, but does not include a building elsewhere defined in this clause”.

· “Residential flat building” is “a building containing 3 or more dwellings, but does not include a building elsewhere defined in this clause”.

· “Serviced apartments” means “a building containing 2 or more dwellings which are cleaned and otherwise serviced or maintained by the owner or manager of the building or the owner’s or manager’s agent and which provides temporary accommodation for tourists, but does not include a building elsewhere defined in this clause”.

15. There is no definition of “lodging house” or “house” in LEP 71.

16. Athens’ DA 128/91 was lodged on 4 April 1991- and the Notice of Determination granting approval on conditions was issued on 30 May 1991 - for the use of these premises as an “existing lodging house”. The Council memo regarding DA128/91 describes its purpose/use as “to convert the existing residential flat building to a boarding house”. The approval refers to “alterations and additions to the existing residential flat building and convert to a boarding house” (sic).

17. On 12 June 1991, (see annexure “D” to Kyriacou’s affidavit), that consent for conversion to “boarding house” was modified to delete conditions 7 and 12, which had provided as follows:

7. The total number of occupants at any one time being restricted to a maximum of 42.
12. Concrete roof terraces at second floor level being deleted from the proposal.

18. Exhibit R6 contains material, handed by Athens to Council officer Kyriacou, during a conversation they had on 2 June 2000, including an affidavit dated 2 July 1991 by the then Council officer Wereszczynski (filed in matter 40147 of 1991), describing 40 Coogee Bay Road (in par 4) as “a three storey brick and timber frame building used as a lodging house or boarding house, and is mainly occupied by ‘backpackers’. It can accommodate up to 118 persons. It has timber floors, plaster ceilings, and timber doors and door frames”. In par 11 of that affidavit, Wereszczynski says “My inspection disclosed that the premise were still being used as a boarding house, mainly for ‘backpackers’”, during inspections in December 1990 and January 1991. The 1991 consent to DA128/91 was described by Wereszczynski as being “for alterations and additions to the existing building and to convert it to a boarding house subject to a number of conditions”.

19. In matter 40147 of 1991 (commenced 2 July 1991), Cripps J ordered on 18 October 1991 that:

Until the hearing of the suit or until further order, the Respondent by itself, its servants or agents cease using or causing, allowing or permitting the use of the premises known as 40 Coogee Bay Road, Coogee, for residential purposes or for a boarding house or lodging house or ‘backpackers’ hostel until such time as the work described in the Schedule dated 4 July 1991 annexed to Short Minutes of Orders made on 4 July 1991 is completed ” ( Exhibit R6 ).

20. Curiously, the orders noted an undertaking that the respondent would do certain things by 18 July 1991 and the Council would determine a building application by 25 July 1991, and the works would be completed within twelve weeks of the approval.

21. Talbot J made some orders regarding the premises on 19 December 1997 (Randwick City Council v TIM UNITY HOLDINGS PTY LTD, 40319 of 1997), essentially to forbid and overturn the provision of additional sleeping accommodation in the premises by the use of “mezzanines”. Those proceedings concerned enforcement of a Council order, varied but upheld by the court on 5 September 1997 (Assessor Bly, matter 20057 of 1997).

The planning regime since 1998

22. Randwick Local Environmental Plan 1998 (“LEP 1998”) (Exhibit R1) replaced LEP 71 on 26 June 1998. Under it, the subject land is now zoned “Residential 2B”. The objects of that zone (cl 11, p12) include:

(b) to allow for a range of community facilities to be provided to serve the needs of residents, workers and visitors, and
(c) to enable residential development in a variety of medium density housing forms where such development does not compromise the amenity of surrounding residential areas and is compatible with the dominant character of existing development in the area .

23. Development consent is not required for dwelling houses, but it is required for bed and breakfast accommodation, boarding houses, and serviced apartments. “Backpacker accommodation” is not listed in either of those paragraphs, and is, therefore, clearly prohibited in the zone. Mr Thompson, for the Council, told the court that by LEP 1998 Council intended that “backpacker accommodation” would be located in Zone No 3A (General Business Zone), with Council consent (see cl 13, p14).

24. LEP 1998 includes the following relevant definitions:

· “Backpacker accommodation” is defined as “a building or place used for providing temporary accommodation for tourists whose principal place of residence is elsewhere and where communal kitchen and laundry facilities may be provided but which is not licensed …”.

· “Bed and breakfast accommodation” means “a building which provides temporary accommodation for not more than 5 persons and where the owner of the building is a permanent resident”.

· “Boarding house” is described as a building or place:

(a) where permanent accommodation facilities are provided to the residents of the building or place, and
(b) where meal and laundry facilities may be provided, and
(c) which is not licensed …
but … does not include a building or place elsewhere defined in this clause.

· “Dwelling” means “a room or number of rooms occupied or used, or so constructed or adapted as to be capable of being occupied or used, as a separate residence”.

· “Dwelling house” means “a building containing one (but not more than one) dwelling”.

· “Motel” means “a building providing short-term accommodation for travellers or tourists, but … does not include a building elsewhere defined in this clause”.

· “Multi-unit housing” means “two or more dwellings, whether or not attached”.

· “Serviced apartment” means “a dwelling which is cleaned and otherwise serviced or maintained by the owner or manager of the building or the owner’s or manager’s agent, and which provides temporary accommodation for people whose principal place of residence is elsewhere”.

Council’s policy on “backpacker” enterprises

25. It can be seen from a comparison of the definitions set out in pars 14 and 24 above that in reviewing its planning instruments in 1998, the Council was careful to distinguish carefully among various types of residential accommodation.

26. The respondents relied upon a letter of support (dated 11 August 2000 - in Exhibit B2), an affidavit (dated 30 November 2000), and oral testimony from Kenneth Finn, who served on Randwick Council for 23 years. He was, relevantly, Mayor in 1997-8, at a time when he was sympathetic to Athens’ difficulties, and also when LEP 1998 was in the process of being made. He also practises as an architect and town planner (but was paid no fees for his efforts on the respondents’ behalf).

27. He told the court that Athens sought his assistance when he felt he was complying with Council requirements, but was still having trouble with Council officers. Finn made about ten visits to the premises over 5 to 6 years, but conceded in cross-examination that he did not press the Council to accommodate Athens’ problems when LEP 1998, which changed the zonings, was being finalised.

28. Finn believes the Athens operation to be well run, and its occupants well supervised, and he testified that no constituent had ever complained to him about Athens’ operation, unlike those hostels closer to Coogee Beach.

Bourke’s evidence

29. Athens has consistently retained, as his architect and planner, John Bourke, since the early 1970’s. Bourke, who trades as “Homeplan Project Design Resources”, provided an affidavit (dated 22 September 2000) and also gave oral evidence. He has regularly visited the premises over those years. In 1973, he observed them to have consisted of ten flats occupied by various boarders and tenants, including students from UNSW and also young holiday workers from the country. There were 6-8 persons in each flat.

30. By about 1980, the people generally seemed to be “young and travelling from Europe or from the country or university students”. In 1990 the premises were significantly upgraded and renovated to provide better bathrooms and kitchens and a new combined laundry facility.

31. Bourke has owned and managed boarding houses, and, in his view, the use of the premises has not changed over the years. Bourke responded to some of the Council evidence, indicating that, in his opinion, the carport and fence are in substantial compliance with Council’s determinations of 1990, 1991, 1996 and 1997, properly understood by reference to Council-approved plans, some of which, Bourke suggested, were missing from Council’s relevant exhibits (Exhibits R2, R3, R4 and R5).

32. Bourke’s expert opinion is that the premises are adequate to accommodate up to 150 persons in “backpacker” style.

Evidence regarding the Athens’ operation of the premises

33. Both sides relied on letters expressing support/opposition for the Athens “backpacker” operation (Exhibit R8 c.f. Exhibit B2). The relationship between the subject premises (“No.40”) and addresses in Gray Street and St Lukes Street can be seen in annexure “A” to Van Dam’s affidavit dated 23 June 2000. The predominant land use in the immediate area is residential flat buildings (see Exhibit B1).

34. Many of the letters in the Council’s bundle (Exhibit R8) emanated from the office of Ronald Michael Coshott, who swore an affidavit and gave oral evidence. He is the managing director of an insurance broker based in Bondi Junction. His principal place of residence for the last 25 years has been 1/47 Coogee Bay Road, slightly downhill and across the road from No.40.

35. His brother and family are currently living in that unit and he is temporarily based at a property owned by his mother in Edgecliff.

36. He has known Athens for 18 years, but says their relationship has deteriorated over ten years. He denied that that resulted from his failure to win Athens’ insurance business. Coshott says he has complained to Council orally since 1986, but concedes that he made no written complaints until 1998.

37. No.47 comprises 6 units, and 5 of their owners (including Coshott, but not Hepburn) signed letters of objection in 1998. Coshott testified that he prepared the letters, but only from discussions with the individuals concerned. He was also involved in the preparation of letters from two residents of No.49 (Marquez and Green) (see Exhibit R8, pp 2-18, 21-25, 29-30).

38. No.40 became a “full blown backpackers” in about 1988. Coshott obviously keeps a close watch on No.40, and recounted the “antisocial behaviour” he has observed, largely in the street, and noise from, e.g., the regular weekly sausage sizzle. He complained about congested parking in the vicinity, and brawling approximately once a month. He also complained about “constant large banging of the large metal 2.5 metre high entrance gate … throughout the day and night, 24 hours a day, 7 days a week”, and the abandonment of 7 to 10 backpacker cars per year in the local streets.

39. One neighbour (Mary McGuiggan of 7 Gray Street) has a letter in each bundle - she has lived at the same address for 58 years, was critical of No.40 in 1998, and supportive in 2000.

40. Some of the complaints in the Council bundle (Exhibit R8) originate in the period 1990-4 (pp 34-91), but the rest are dated 1998.

41. Among the correspondence upon which the respondents rely (Exhibit B2) there are letters from a Thai Restaurant, a licensed club, and the Coogee Bay Boutique Hotel, praising the Athens operation. There is also a commendation, from a Mascot function organiser, for the quality of casual staff she has recruited from the subject premises, and one from the NSW Backpacker Operators Association, of which Athens was a founding member. The Association was formed, and is committed, to raise the standards of the “backpacker” industry.

42. There are (in Exhibit B2) two late 2000 letters of praise from individual backpackers who have stayed at the subject premises, but there is also (in Exhibit R8 at p36) a strong 1990 complaint from a former patron.

43. The respondents relied upon a number of affidavits from neighbours, several of whom told about the international or holiday atmosphere introduced to their area by this project. Several were required for cross-examination. I proceed now to summarise their sworn evidence:

(1) Keith Richard Taylor has resided at 5 Gray Street (virtually abutting the premises) since 1990 and believes the renovations at No.40 Coogee Bay Road “ have improved the visual appearance from the rear substantially ” and that the operation of the premises “ does not affect the amenity of the neighbourhood adversely ”. The residents have not caused him any aggravation in the ten years he has been there.

(2) Monica Smith has resided at 2/26 St Lukes Street, directly behind No.40, for 14 years. The subject premises were run down, and “ appeared dangerous ”, but “ Peter Athens has transformed the building … into a pleasant place ”. On isolated occasions when there has been noise she has directly complained to Athens and the noise was stopped immediately. She has had no complaint about noise for at least 8 years. The premises are “ very quiet and well run ”.

(3) Rodney Hepburn has resided at 3/47 Coogee Bay Road for 13 years, directly opposite No.40. He has worked as an electrician for Athens on the continuous upgrading of the premises, which has improved also the aesthetics of the street. “ No.40 was a semi-derelict block of units in which undesirable permanent residents used to reside ”. Since renovation “ it has taken on a well maintained appearance, and the littering that used to occur, has ceased ”. Complaints to Athens about the impact of some lighting resulted in its disconnection. A better calibre of tenant has been attracted (“ more tourists happily moving about ”) and the operation has 24 hour security.

(4) Peter Francis Ryan of 2/38 Coogee Bay Road, has been a resident for 9 years. After renovations, No.40 has become “ one of the best looking buildings in Coogee Bay Road ”. The only disturbance in the 9 years has been “ the very occasional party ”.

(5) Sheila O’Loughlin of 2/46 Coogee Bay Road (which is directly next door to No.40) is a retired clerk who has resided there for 36 years. When No.40 operated as a boarding house, approximately 20 years ago, she had a number of concerns resulting in some altercations with Athens. “ However since the premises have been superbly renovated there appears to be better residents, I consider it to be an asset to the area. It has the only clean frontage to the street ”.

(6) Mario Armenti has lived 45 Coogee Bay Road for 20 years. He too praises the renovations. In the last few years there has been nothing to complain about and “ Athens has been very considerate and helpful to all the people neighbouring 40 Coogee Bay Road ”.

(7) Ali Mohammed Mouhanna has resided at 3/38 Coogee Bay Road for 18 months. He experienced only one disturbance which Athens attended to immediately. “ Peta Athens is very sensitive to any effect that his guests have on surrounding residents ”. Mouhanna does not wish to see the premises converted to a boarding house.

(8) Chris Ameghino has lived at either No.1 or No.3 in 38 Coogee Bay Road for 3 years. The renovations have lent a Mediterranean atmosphere to the area.

(9) Maxwell Ronald Sproule has lived at 2/36 Coogee Bay Road for 12 years. He has experienced no noise, nor has he heard any complaints about No.40. Neighbours have been welcome to visit the Aegean, and look at the improvements being made. Sproule believes that the way it looks and is managed must have improved the valuations of nearby buildings.

(10) Kevin Maurice Moloney has lived at 19/46 Coogee Bay Road for 38 years. Athens is a considerate and obliging neighbour and he has never had any cause to complain. He experiences more disturbance from within No.46 Coogee Bay Road, and used to have similar problems with No.40. He believes such problems result from owners allowing tenants to sub-lease their units. He does not want the premises to become a “ halfway house ” for drug addicts.

44. Douglas Michailovic has lived at 2/47 Coogee Bay Road for 5 years, and also provided an affidavit. As he was unavailable for cross-examination, Mr Davison did not press his evidence. However, the court notes that on 6 November 1998 he wrote to the Council (Exhibit R8, p1) complaining about the operation of the premises, and asking Council to “shut this place down and keep this type of premises where it belongs in beachfront commercial areas only”.

45. Peta Athens himself gave oral evidence to supplement his two affidavits.

46. When he swore his affidavits during 2000 he gave his address as either 40, or 8/40, Coogee Bay Road, but he testified that he now lives at 42/50 Gardiners Road, Kingsford. He bought two units (Nos.38 and 42) at that Kingsford address in 1999, and contemplated joining them via a stairway, but is now in the process of disposing of unit 38.

47. He conceded in cross-examination that he has sometimes leased rooms in unit 38 in response to bookings made to or at the subject premises (see receipts in Exhibit R12). He rented those Kingsford rooms at $50 per night (the rooms in the unit, he said, were larger, had better bathroom arrangements, and access to a pool), compared with the usual $20 or $22 per night at the subject premises (which also has a pool - see Exhibit B1). He asserted his right to rent out Unit 38’s bedrooms as he wished, but told the court that he kept them for his overseas relatives “90% of the time”.

48. He assured the court that he always abides by the Council’s requirements, and that he no longer uses the garages at the back of the subject premises as sleeping accommodation. He acknowledged that his operating licence for the subject premises was for a “boarding house”.

49. Internet bookings are made to the subject premises, and Athens told the court that he has bookings up until early 2002 already.

50. The respondents also relied on the following witnesses (apart from Athens, Finn and the ten neighbours referred to in par 43 above):

(11) Arthur Koufis swore an affidavit on 30 November 2000, describing himself as a casual receptionist who assists his cousin Peta Athens with the business from time to time when he is short of staff. He testified about the “ House Rules ” and “ Room Rules ” (annexures “B” and “A” to his affidavit) at the premises, including a strict policy of “ no smoking ” inside the building or on the verandahs. The penalty is instant eviction. No drinking is permitted within the boundaries, even with meals, and anyone found breaching that rule is evicted immediately. There is someone on duty at the premises 24 hours a day to deal with security and cleaning. Closed circuit television has been installed. 60%-70% of the residents are in employment. Various notices are erected stipulating the rules of occupation.

(12) Michael Andrew Morano is a real estate agent for “ Oxford ”, which for 12 years has managed a block of four apartments at No.38. He has never received a complaint from their tenants in regard to either the renovations, or operations, of No.40. The renovations and upgrading have been beneficial to the area and improved the streetscape. Conversion to a boarding house would affect the value of properties in the immediate vicinity and probably attract complaints.

(13) Mark Chiswell commenced with a Randwick real estate agency in about 1975. He is a licensed real estate agent and an accountant and submitted that he has been Athens’ accountant since 1988. He moved his practice out of Randwick area in 1999. During the last 10 years No.40 has “ undergone a complete makeover, resulting in an upmarket rental facility with an appealing exterior and interior, including recreational areas and a heated swimming pool. With this upgrade the type of tenant has changed markedly . These renovations which quite clearly were expensive, have enhanced the streetscape”. He said the premises attract tenants who are quieter and often employed, contrasting with the backpacker hostels closer to the beach. It was Chiswell who referred, in his oral evidence, to Athens’ use of his home unit at 50 Gardiners Road Kingsford as “ overflow ” premises for the backpacker operation.

(14) Glen Lucas is a tour manager who frequently picks up clients at No.40 and now lives in the area. The Aegean generates revenue for him of approximately $1,400 per week. He regards No.40 as one of the nicest hostels he visits.

(15) Mark Turnbull of Sans Souci is an export market development grants consultant who assists about 45 tourism operators and exporters to receive grants provided by the Australian Government. Athens Holdings submitted an application requiring the premises to be audited by Austrade. The audit resulted in a grant of $9,203 to Athens Holdings, reflecting annual promotional expenditure of approximately $33,000. Such grants run for seven years, subject to continued high level expenditure (more than $20,000 pa) and regular audits. Such “ budget accommodation is an essential part of the tourism mix ”. Turnbull charges a fee of 5 to 7% of subsidy obtained.

(16) Valerio Lilli is a building consultant. He inspected No.40 on 28 November 2000 to observe compliance with the Building Code of Australia. He describes the equipment observed, and expresses the view that the building is able to accommodate 140 occupants without compromising safety.

51. I am satisfied, from all the evidence, that the respondents probably now operate - as regular customer Glyn Smith (last item in Exhibit B2) says - “one of the cleanest, modern, well-furnished hostels in Sydney”, and that, generally speaking, Athens himself has personally enforced a fairly strict set of rules when he has actually been in charge.

52. The respondents’ problem, and the dilemma for the court, is the Council’s position, and its other evidence, regarding the subject premises.

The Council’s other evidence

53. The other Council witnesses included its officers, Kerry Kyriacou and Michael Van Dam. Van Dam’s principal affidavit (dated 23 June 2000) and Kyriacou’s affidavit (also 23 June 2000) deal with the series of development applications, etc. Van Dam also gave oral evidence, and before the court are various sets of plans which he and Kyriacou associate with particular applications made to Council regarding the subject premises, viz. Exhibit R4 (the 1991 building application), Exhibit R2 (the 1996 development application), Exhibit R3 (the 1997 building application), and Exhibit R5 (the designation of the bedrooms).

54. The respondents have consistently sought approval to operate the subject premises as a backpackers hostel, and Council has consistently refused consent:

(a) Athens himself testified (par 14 of his affidavit dated 22 September 2000) about a meeting with then Council officer Messina in July 1990, in which, he says, Messina told him “ you can’t get consent for backpacker accommodation in that area ”.

(b) On 5 September 1994 (annexure “J” to Kyriacou’s affidavit), Council told Athens to “ cease operations as backpacker accommodation ”.

(c) On 10 February 1995, Commissioner Hussey of this court noted ( Exhibit B1 ) the apparent lack of Council’s consent for the operation of the subject premises as “ backpacker accommodation ”.

(d) The local Precinct Committee wanted the operation limited, in 1998, to 86 beds, and the Council to set up a “ complaint line ” (see minutes of meeting 26 October 1998, at Exhibit R8 , p40).

(e) After LEP 1998 came into effect, DA 911/98 (dated “ 5/8/98 ” but lodged on “ 08/10/98 ” - see annexure “M” to Kyriacou affidavit), asking Council to “ approve backpacker accommodation ”, was closely investigated by Council, and ultimately refused on 29 March 1999 (ibid, annexures “N” to “R”).

(f) These appear to be at least the third set of class 4 proceedings brought by Council.

55. Yet, on 2 June 2000, Athens reportedly claimed to Kyriacou (ibid, par 16 on page 6) that:

(a) “ Council gave me a boardinghouse licence (sic) to trade as a backpackers ”, and
(b) “ the court had no problem with me carrying on with the backpackers as long as I did the fire safety works ” .

56. Van Dam counted 150 beds on the premises on that date (2 June 2000), and the mezzanine lofts appeared to him to be still in use for accommodation (6 months after Talbot J’s orders). He contradicts Bourke’s assertion that the “enclosures” made to the carport are “of a minor nature”. He believes they changed the character of the structure from a carport to a habitable room. He also refuted Bourke’s evidence regarding the fence, noting that condition 17 of the Determination 576/88 required front courtyard fencing to be made the subject of a separate building application. No such approval has been given, according to Van Dam, and the Notice of Determination to that effect was sent to Bourke’s business address. Bourke’s oral evidence (see par 31 above) was not supplemented by the tendering of any documentary evidence to support his assertions, and the court accepts the Council officers’ evidence regarding what Council has or has not approved in respect of the Athens premises and operation.

57. Council also relied upon an affidavit by a private inquiry agent, Simon Hewlett-Smith, who checked into “The Aegean” over a period in May 2000. Hewlett-Smith took several “unfavourable” photographs, including of the so-called “carport”, and made several critical observations. Athens’ prices were then basically $18-$22 per night per bed. Hewlett-Smith found the premises quite dirty and untidy. Annexed to his affidavit are various brochures advertising the Aegean as a “backpackers accommodation and resort”, providing free airport and city pick-ups, etc. He was not required for cross-examination, but Athens put on his affidavit of 30 November 2000 in reply.

Submissions on discretion

58. When one considers the guidelines laid down by Kirby P for the exercise of this court’s discretion in civil enforcement proceedings - Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 (at 339-341), and ACR Trading Pty Ltd & Anor v Fat-Sel Pty Ltd & Anor (1987) 11 NSWLR 67 (at 82) - it is important to see the discretion in its proper context, including that provided by s 123 and s 124 of the Environmental Planning & Assessment Act 1979 (“the Act”).

59. In Sedevcic, His Honour said (at 342):

It is important to conclude by pointing out that that discretion is itself part of the statutory scheme. In this sense, the exercise of the discretion should not be seen as the illegitimate interference by judges in the even-handed application of planning law which local government authorities have the responsibility of enforcing. Instead, it is an important part - a fulcrum as it were - of that planning law, designed to introduce into it the protection in reserve, of a salutary discretion. Because it exists in the Court, the discretion must also be considered by planners who invoke the Court’s jurisdiction. Because it is established by Parliament and is expressed in such broad terms, it is a legitimate and integral part of the overall scheme of planning legislation operating in this State. It cannot be ignored. It should not be unduly circumscribed by a gloss of cases.

60. In ACR, His Honour said (at 82):

Nevertheless, it is important to appreciate the wide scope and purpose of the discretion conferred by s 124 of the Act. Clearly, it is not a warrant to set at nought the complicated and sensitively balanced provisions of the legislation, substituting for the operation of the law laid down by Parliament, the personal opinions of the judge hearing the case. On the other hand, it would be equally erroneous to ignore the discretion or to give it an unduly restricted operation. It is just as much part of the structure and scheme of the Act, for the enforcement of planning law, as are the other parts. … It permits, in appropriate cases, the refusal of injunctive relief where to grant such relief would work such an injustice as to be disproportionate to the ends secured by enforcement of the legislation including by injunction.

61. Mr Thompson, for the Council, relied, especially on the fourth and fifth guidelines Kirby P enunciated in Sedevcic (at 339-40), in these terms (omitting the authorities His Honour cited):

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… Because s 123 of the Act permits any person (and not just the Attorney-General or a person with a sufficient interest), to bring proceedings in the Court for an order to remedy or restrain a breach of the Act, there is indicated a legislative purpose of upholding, in the normal case, the integrated and co-ordinated nature of planning law. Unless this is done, equal justice may not be secured. Private advantage may be won by a particular individual which others cannot enjoy. Damage may be done to the environment which it is the purpose of the orderly enforcement of environmental law to avoid …

It is only in this sense that ‘special’ circumstances need to be established to secure a favourable exercise of the discretion provided by s 124. There is nothing in the Act by which the discretion is fettered or limited to ‘special cases’, … 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 who complied with the requirements of the Act or who failed to secure the favourable exercise of the discretion under s 124.

62. On behalf of the respondents, Mr Davison relies on the following aspects of the evidence in support of his application for the court to decline, in its discretion, the relief sought by Council:

(a) Athens is clearly a good “ backpacker ” operator, and has conducted a multiple occupancy facility in the subject premises for nearly 30 years, following many years of earlier similar use (see Sedevcic ).
(b) If there is any adverse environmental impact at all from Athens’ operation, it is obviously less than it was in earlier years, at least partly as a result of his personal effort and substantial expenditure. The current adverse parking position is aggravated by the operations of the local schools, and the establishment of new bus routes, with no “ resident parking ” protection, and the noise currently complained of is caused by patrons leaving hotels, etc. at each end of Coogee Bay Road.

(c) The “ backpacker ” operation adds to the local, regional and national economies, and the general social good.
(d) The nearest and most immediate neighbours are most supportive of the operation. The major opposition comes from a “ campaign ” orchestrated by one person (Coshott), who may have a grudge over a commercial issue, and Council did not seek to test the evidence of those neighbours who support Athens.
(e) Council has been well aware of the “ backpacker ” use since at least 1990, and has largely acquiesced in its continuation, while Athens spent large sums of money on improving the premises and promoting its operations.
(f) Athens was certain he was complying with Council’s requirements at all times, and did only works which substantially conform with development consents.
(g) Council became active only when Coshott’s campaign began and so is guilty of laches and delay .
(h) One of Council’s leading members (Finn) had relevant expertise, but was consistently supportive of, and helpful to, Athens in his difficulties with Council.
(i) The main purpose of the “ tighter ” provisions in LEP 1998 is for Council to control those operators with poor reputations.

63. Mr Davison argues that, in these circumstances, the granting of the injunction sought would be unreasonable, and that the other orders sought should be declined, either because the items substantially comply with Council approvals, and/or are de minimis.

64. Alternatively, he argues that, if the orders are made, they should be either:

(a) stayed permanently, with liberty to apply; or
(b) stayed for 12 months.

65. Mr Thompson submits that all the orders sought by Council should be made, and stayed for only 6 months at most, on the following grounds:

(a) Council concedes that Athens is a good operator, but the subject premises are within an inappropriate zone . He should be able to succeed in a more appropriate location, reflected by the zonings as revised in 1998.
(b) Any economic damage sustained by, e.g., Lucas should be minimal in any relocation, and the benefit of Athens’ expenditure would not be lost were the premises to be used as a boarding house or residential flat building, with appropriate Council approvals.
(c) Had Athens faithfully followed Council’s requirements, and acknowledged its concerns, class 4 proceedings such as these, and those in 1991-4 and 1997, would not have been necessary.
(d) Council repeatedly warned Athens, from 1990 onwards, that he was operating outside the law. Several sets of proceedings were commenced, and, once the Council’s legal and planning position was affirmed by the making of LEP 1998, it gave him further time, to no avail - he has done whatever he wanted over those 11 years.
(e) The 1998 revision of the LEP manifests Council’s policy that backpacker operations should be in commercial zones , closer to recognised tourist areas like Coogee Beach.

66. In addition, the court notes that Athens is no longer resident on-site, and his commitment to the enforcement of strict rules cannot be guaranteed to be carried on by others in his absence.

Conclusions

67. The court concludes that the Council’s position should be upheld and that all the orders it seeks should be made, including those which are relatively minor (the carport, fence and internal walls). These latter orders are justified on the evidence, as part of an overall package of relief.

68. The overall conduct of the respondents in respect of their obligations under this State’s planning laws disentitles them to the benefit of the court’s discretion, on the evidence before the court. Those laws simply must be observed.

69. Kirby P’s test of injustice or disproportionality (ACR at 82, par 60 above) is, in my opinion, not satisfied in this case, and all the remaining orders sought in the class 4 application (namely 1, 3, 4, and 5, set out in par 3 hereof) will be made.

70. Counsel agreed that costs should “follow the event”, and I will, therefore, order the respondents, jointly and severally, to pay the costs of the applicant.

71. Counsel also agreed that it would be appropriate to allow the respondents some time to satisfy any orders made by the court, and I will do so.

Orders

72. The orders of the court are as follows:

1. The First and Second Respondents are hereby restrained from using the premises at 40 Coogee Bay Road, Coogee, for the purpose of Backpackers Accommodation.
2. Order 1 is stayed until 31 March 2002.
3. The First and Second Respondents are restrained from using the double carport at 40 Coogee Bay Road, Coogee, other than in accordance with development consent granted by Notice of Determination dated 19 November 1996.
4. The First and Second Respondents are to demolish all work carried out to the double carport at 40 Coogee Bay Road, Coogee not authorised by Local Activity Approval 1152/97.
5. The First and Second Respondents are to demolish and remove unauthorised additions to the front fence at 40 Coogee Bay Road, Coogee and reinstate it to its condition prior to the unauthorised work.
6. Orders 3 and 4 are stayed until 30 June 2001.
7. Order 5 is stayed until 30 September 2001.
8. The First and Second Respondents are ordered, jointly and severally, to pay the Applicant’s costs of these proceedings, on a party-and-party basis, within 28 days of agreement upon the amount thereof, or 28 days of the completion of their assessment according to law.
9. All the exhibits may be returned.