Sunshine Coast Regional Council v Patella Properties Pty Ltd

[2010] QPEC 122

PLANNING & ENVIRONMENT COURT
OF QUEENSLAND

CITATION:

Sunshine Coast Regional Council v Patella Properties Pty Ltd & Ors [2010] QPEC 122

PARTIES:

SUNSHINE COAST REGIONAL COUNCIL
applicant

And

PATELLA PROPERTIES PTY LTD ACN O74579230
first respondent

And

PATELLA HOLDINGS PTY LTD ACN 059 541 169
second respondent

And

PETER FRANZ PATELLA
third respondent

And

ANNA MARIA PATELLA
fourth respondent

FILE NO/S:

No 206/2010

DIVISION:

Planning and Environment Court of Queensland

PROCEEDING:

Originating Application for Declarations and Enforcement Orders

ORIGINATING COURT:

Maroochydore Planning and Environment Court 

DELIVERED ON:

19 November 2010

DELIVERED AT:

Maroochydore Planning and Environment Court 

HEARING DATE:

8-10 November 2010

JUDGE:

J.M Robertson DCJ

ORDER:

As per draft order marked Exhibit A (as amended)

CATCHWORDS:

BUILDING CONTROL AND TOWN PLANNING- enforcement proceedings

Application by Council for declarations and enforcement orders where first respondent had approval for the material change of use (‘MCU’) of premises for use as a Yoga Centre and Educational Facility; whether that use, approved by the Court after an appeal by the first respondent against a deemed refusal, has been abandoned.

ENFORCEMENT PROCEEDINGS- where Council by its application seeks declarations that respondents have committed various development offences including commencing the use prior to approval and breaching conditions of development permit and operational works permit; where owner has declared that use has ceased; where respondents admit in Court to breaching conditions and consent to various enforcements Orders, where respondents propose one Order and Council two others in the alternative; discretionary matters- where parties have resolved many issues but not all.

Cases Considered

Benter Pty Ltd v Brisbane City Council (2006) QPEC 007

Hudak v Waverley Municipal Council (1990) 18 NSWLR 709

Mudie v. Gainriver Pty Ltd & Ors [2001] QCA

Tynan v. Meharg (1998) 101 LGERA 255

Warringah Shire Council v. Sedevcic (1987) 10 NSWLR 335

COUNSEL:

Mr A. Sinclair for the appellant

Mr R. Bain QC and Mrs N. Kefford for the respondents

SOLICITORS:

Heiner & Doyle for the appellant

IPA Law Planning Lawyers for the respondents

1. Peter Patella and his wife Anna are successful property developers.  Mr Patella is clearly the driving force behind their successful development history, in the sense that Mrs Patella leaves to him all the nuts and bolts decisions associated with property development.  This includes decisions relating to necessary dealings with local authorities charged with the responsibility of regulating development.  The Patellas, inferentially through corporate vehicles such as Patella Properties Pty Ltd and Patella Holdings Pty Ltd, successfully developed the Tennyson Woolstores in Brisbane.  They own a number of commercial buildings in Queensland from which they derive a substantial income.  Both of them have had a lifelong interest in yoga, meditation and spiritual learning.  In 2003, the quite large extended Patella family moved to a property of “170 acres” (Mr and Mrs Patella were born in the USA), on which Mr Patella built a very large home of approximately 670 square metres. Mrs Patella would often have friends to the home at Kiamba to practice yoga, and at times she would engage professional teachers to give lessons to herself and her friends at the house.  Mr Patella also participated in these meetings from time to time. 

1. In 2005/2006 they decided to purchase a property closer to Buderim schools where a number of the children were at school.  They did not intend to sell Kiamba, however they were looking for a large property which would give them space and peace and quiet.  The property the subject of these enforcement proceedings brought by Council, at 44-62 Cogill Road Buderim was purchased in April 2006.  The site contains an area of 7.29 hectares.  The land is steep and heavily vegetated, and at least 5.76 hectares is protected by a vegetation order.

1. I accept Mr Patella’s evidence that the initial intention for the site was to build a residence but on a scale similar to the family home at Kiamba with rooms that could accommodate activities similar to those undertaken by Mrs Patella at Kiamba. 

1. To that end, the Patellas engaged a private certifier for the construction of a Class 1a dwelling house. 

1. Mr Patella says that in late 2006 he and his wife had a vision that the property could be more than a large family home occasionally hosting large gatherings of friends and family for yoga and spiritual lectures and for family gatherings, and could become a community facility which could be hired out for such uses.

1. This led to the lodgement by Patella Properties Pty Ltd on 19 March 2007 of a Development Application for a Development Permit for a Material Change of Use of the site for “Guesthouse (Accommodation Building) and Yoga Centre and Educational Facility (Indoor Recreation)” (“the MCUA”).

1. Just prior to this, on 2 March 2007, an operational works permit to construct the driveway with necessary earthworks to the dwelling house was issued, which limited the driveway to a single lane with three overtaking bays and eight carparks.

1. From the outset, there was considerable contact between Patella interests (including their contractors) and Council officers over various alleged breaches of permit conditions and local laws.  The process of assessment of the MCUA suffered long delays.  Again it is not necessary for me to review this extensively except to the extent that it affects discretionary matters to which I will refer later.  Ultimately an appeal was made to this Court against Council’s deemed refusal of the MCUA.  On 27 June 2008 the Court approved the MCUA with conditions, after the parties had negotiated a consent order.

The narrowing of issues

1. On 13 September 2010 Council made application to this Court for various adverse declarations against the Patellas and sought enforcement orders including removal of allegedly unlawfully constructed structures and roadworks and the replanting and revegetation of areas unlawfully cleared.

1. As the record will reveal, on the first return date of that application in this Court the Patellas were full of fight.  One could be forgiven for thinking that many of the Councils’ factual allegations would be hotly contested. To that end, on application of the respondents, I refused orders for disclosure and pleadings and made a directions order which provided for a swift resolution of the dispute.  At around the same time an application was even made by the respondents to force the Council’s solicitor Mr Heiner to paginate the documents filed in support of the application! 

1. Things had changed dramatically by the time the matter was mentioned before his Honour Judge Dodds on 22 October 2010.  By then, the Patellas had not filed material as required by my earlier directions order and were seeking an abandonment of the November hearing dates and an order for mediation. Council opposed the application.  His Honour refused to vacate the hearing dates and refused to order mediation. 

1. The hearing was set to commence on 8 November 2010 and to proceed over four days.  On the morning of the first day I was told that the parties were having constructive talks with a view to resolving the matter.

1. These talks were not entirely successful and the hearing commenced at around 3.30 pm.  The issues in dispute however had been considerably narrowed.  Mr Sinclair opened the Council’s case and Mr Bain recorded a number of objections to parts of the affidavits of Mr Morris (Council engineer) and Mr Cox (Council Compliance Officer), both of whom had been involved in the various applications and were familiar with the site.

1. As promised on day 1, at the start of day 2 Mr Bain handed up a document he described as a proposed draft order.  It was marked Exhibit A and was later subject to some minor amendments.  This document contains extensive concessions.  It involves all respondents “admitting” the commission of development offences, in the sense of acknowledging that on the evidence the Council has established that declarations to this effect should be made.  Indeed, when one disregards the many inadmissible parts of the affidavits of Council witnesses (some of which were not relied upon at all by Mr Sinclair), the “evidence” really comes primarily from Mr Patella’s lengthy affidavit. In the absence of the concessions, Council might have attempted to call other witnesses, but it is not without significance that by the time Mr Patella’s affidavit was filed on 2 November 2010, it would have to be assumed that Council then thought it could prove its case.  I will come back to this point later in my reasons. 

1. Exhibit A also “consents” to an array of enforcement orders which will without doubt involve the Patellas in considerable expenditure. 

1. The proffering of Exhibit A led Mr Sinclair to hand up two orders (in the alternative); (1) Exhibit B presupposes the continuation of the use of the site pursuant to the MCU approval of this court on 27 June 2008.  The other, Exhibit C presupposes that that use had been abandoned (as does Exhibit A) and sets out declarations and orders that Council seeks in those circumstances. Mr Bain described this course in his usual colourful style in many ways, not all (in fact not any) complimentary.  Mr Sinclair did not really pursue Exhibit B for the remainder of the case or in his final address; but he did not abandon it either.  I am not as critical of Mr Sinclair or his client for adopting this approach as was Mr Bain, given that Mr Sinclair is bound by instructions from Council which in turn has a court ordered MCU approval in place in relation to the site.  The dispute over abandonment can be dealt with quickly. 

Has the use been abandoned?

1. In an affidavit of Mrs Patella filed 28 October 2010 she stated unequivocally as owner of the land that the MCU had been abandoned.  Although Patella Properties Pty Ltd was the registered proprietor of the land at the time of the MCUA, the land had since been transferred to Patella Holdings Pty Ltd (just prior to the approval on 27 June 2008), and to Mrs Patella on 30 July 2010.  Implicit in some of the cross-examination of Mr Patella is Council’s belief (based on no evidence as far as I can ascertain) that these transfers were somehow or other linked with the assessment process in some sinister way.  Mr Patella explained that in the context of what must be a very complex corporate structure within the group of companies he controls, that the first transfer was to eliminate inter-company loans between the two companies, and the transfer to his wife was to give her some security as they negotiate a splitting of assets as they are now separated.

1. In any event, in an open letter dated 29 October 2010 from Mr Egerton (Solicitor for the Patellas) to Mr Heiner (which letter enclosed a number of affidavits including Mr Patella's affidavit filed on 2 November 2010), Mr Egerton proposed orders similar to Exhibit A, and asserted by reference to authority that the MCU had been abandoned by virtue of a sworn statement of the owner to that effect.  Mr Heiner's response (by reference to the same authority) was that it was for the respondents to satisfy the Court that the use had been abandoned.  He said in part:

"…it is more than a statement of intention.  It is acts and words together.  If they do what they have suggested they will, they will have abandoned the use in both word and deed".

1. Both parties referred me to his Honour Judge Rackemann's decision in Benter Pty Ltd v Brisbane City Council (2006) QPEC 007 in which his Honour wrote (at paragraphs [4]-[6];

"[4] Whether there has been abandonment is a question of fact to be determined having regard to all of the circumstances…

[6] In Leeming v City of Port Adelaide [No 2] (1987) 62 LGRA 296 King CJ said, at 307:

'… essentially the question whether an existing use continues or has been discontinued must be determined by reference to what is taking place on the land. The legal character of what is taking place on the land may be affected, however, by the intentions of the owner or occupier. The significance, for example, of the continued presence on the premises of equipment and fittings appropriate to the existing use may depend upon the intentions of the owner or occupier with respect to such equipment and fittings. If they are allowed to remain on the premises for the purpose of facilitating the resumption of activity pursuant to the use on the premises, their continued presence will be a strong indication of a continuance of the use.

…

A use may be discontinued by means of cessation of activity pursuant to that use accompanied by words or conduct on the part of the owner or occupier indicating unequivocally an intention to abandon or terminate the use. It may also be discontinued by cessation of activity pursuant to the use in such circumstances, or for such duration, or both, as to indicate from a practical point of view that such cessation is no mere interruption of activity pursuant to the use, but amounts to abandonment or termination of the use, irrespective of the subjective intentions of the owner or occupier as to the future.’".

1. It is clear to me in the circumstances here that the use as a community centre pursuant to the MCU approval has been abandoned.  The test is not as constrained as Mr Heiner suggested in his letter, however Council was in the ambiguous position of having the Court ordered MCU approval in place and the owner asserting unequivocally that she had abandoned the use.  The uncontested evidence, in any event, is that this strong expression of intent was accompanied by actions in the sense that Mr Patella had directed (by way of example) the spiritual teacher A J Morris to the effect that the premises were no longer available for meetings over which he had previously presided.  To adapt Mr Heiner's words, ‘if the Patellas do what they are now proposing in Exhibit A there can be no doubt at all that the use approved by the Court has been abandoned’.

Exhibit A or Exhibit C?

1. As Mr Sinclair observes there is much mutuality in what is now proposed by the parties in the two draft orders Exhibits A and C. 

1. Given the attitude of the respondents there is no doubt on the evidence that the breaches of the MCU approval and associated operational works approval have occurred and the discretion to make enforcement orders is engaged.

The law

1. The leading authority as to the way in which the discretion should be exercised in cases such as the present is Warringah Shire Council v. Sedevcic (1987) 10 NSWLR 335. Sedevcic was applied by the New South Wales Court of Appeal in Tynan v. Meharg (1998) 101 LGERA 255. In Mudie v. Gainriver Pty Ltd & Ors [2001] QCA 382 the Court of Appeal referring to both cases at [13] said:

'The application of similar statutory powers in New South Wales when work has been performed without necessary planning approval has been considered in Tynan v Meharg and in Warringah Shire Council v. Sedevcic. The Court’s function in determining what is to be done in such cases is to perform a balancing exercise with a view to matters of both private and public interest. It is a discretionary power. Indeed, one of the principal submissions of Mr Lyons QC, who appeared for the Council and Gainriver in this matter, is that the discretion is a broad one and it cannot be shown that his Honour erred in law in arriving at the decision he did. Certain “guidelines for the exercise of discretion” were formulated by Kirby P in Sedevcic’s case, and it is enough to refer to pp 339-341 of that case and to pp 259-260 of Tynan’s case as useful checklists of points that will often need consideration in such matters. Among potentially relevant matters is that aspect of discouraging potential developers from thinking that planning requirements may lightly be disobeyed.

'Also relevant to the discretion is the ‘orderly enforcement’ of a ‘public duty’ to comply with the requirements of planning laws: see Sedevcic (at 339- 340; 365-366). Another way of putting this is that there is a public interest in upholding the law and seeing that it is obeyed. As Kirby P said in Sedevcic (at 340, 365), Unless this is done, equal justice may not be secured. Private advantage may be won by a particular individual which others cannot enjoy' (per Stein J in Tynan above at 259-260).'.

1. In Sedevcic (at p 340) Kirby P (as his Honour then was) referred to 9 “guidelines”, a number of which are taken up in Counsels’ submissions in this case.

1. Guideline 4 enlivens notions of equality before the law and a justifiable sense of grievance where citizens are perceived to have received favourable treatment from Councils and/or Courts notwithstanding breaches of development permits.  Guideline 6, to which Mr Bain refers, takes up one of the themes he developed as part of his client's case, and that is that some of the Council's officers involved in assessing the MCUA and operational works permit were acting "from motives which are less disinterested" to quote from guideline 6.  If this is accepted, Mr Bain submits that this is a reason not to adopt what he refers to as the "scorched earth approach" of Council embodied in Exhibit C which requires "as it were" complete removal of works associated with the MCU approval.

1. Guideline 7 is also relevant as acknowledged by Mr Sinclair:

‘[7]Where the relief is sought against a “static” development (ie the erection of a building) which, once having occurred can only be remedied at great cost or inconvenience, the discretion may, in the normal case, be more readily exercised than where what is involved is a continuing breach by conduct which could quite easily be modified to bring it into compliance with the law: see Blacktown Municipal Council v. Friend (at 197). But this observation is simply a reflection of the judicial perception in balancing, on the one hand, the public interest in equal compliance with the law and, on the other, the inconvenience which would follow the law’s enforcement: cf Associated Minerals case (at 692). It does not amount to a hard and fast exception to the discretion. That discretion must be exercised in every case in which it is invoked. Nor is it a reason to refuse relief where no “static” development can be proved’ (judgment of Kirby P (as his Honour then was) in Sedevcic (at 340).

The disputed issues

1. In relation to the proposed declarations as to the commission of development offences Council's proposal delineates between individual respondents whereas the Patellas in Exhibit A acknowledge the commission of a development offence by all respondents by carrying a use contrary to the MCU approval conditions and specifically by Patella Holdings Pty Ltd (as the builder on the evidence) in contravening the permit for operational works in relation to the construction of the driveway.  Mr Sinclair did not address me on this issue.  I am satisfied on the admissible evidence before me that the Patella's proposal in relation to declarations is an appropriate response.  

(a) Works in gully

1. This an area which is marked "Figure 7" in a 2008 aerial photograph of the site and surrounds which is Exhibit 3 to the affidavit of Mr Morris filed on 13 September 2010 in support of the Originating Application.  Mr Morris has described this in comment on the photograph as:

"Extensive earthworks within an existing water course to form a sealed car park.  The filling includes rock retaining walls approximately 3.4 metres high.  The cut includes unstabilised excavation in the stream bed immediately below a dam in the adjoining property.".

1. This comment is one of many to which Mr Bain referred in framing his objections to large parts of the affidavits of Council witnesses, which he submits supports engagement of guideline 6 from Sedevcic, in that it demonstrates that Mr Morris at least has become less than impartial or “disinterested” in his approach to these proceedings on behalf of Council.  

1. The starting point for any discussion about this issue has to be Mr Patella's frank admission that more than 50 cubic metres of sandstone fill extracted from the excavation of the house site was placed in this area.  There is also no doubt that a car park was constructed on the site. Extensive works were undertaken to ensure that the site was properly drained. None of this work was approved.

1. Mr Patella refers in his affidavit to a demand letter concerning this issue and the driveway from Mr Cox on 20 June 2007.  As an aside this exchange (at paragraphs 155-158 of his affidavit) is an example of a number referred to by Mr Patella from pages 18-20 of his affidavit (about which he was not challenged in cross-examination) in which Council officers issued a variety of stop work, compliance and demand notices, and then appear not to follow through after no action being taken or a letter being received from a Patella consultant.  This does suggest to me some ambivalence at best on behalf of Council officers towards this particular development from the outset. 

1. In any event the evidence establishes that the natural condition of the land prior to the development was that of a gully not a water course, and more importantly the uncontested evidence is that the area as completed is entirely stable.  Mr Ashley Davey of Golder Associates Engineers has provided an affidavit sworn on 9 November 2010 which was filed by leave on the second day of the hearing.  To that affidavit he annexes a number of reports prepared by his company.  He swears to the stability of the area which as I say is presently completed as a car park.  Mr Bain cross-examined Mr Morris about his involvement in the assessment of a subdivisional application for a property at 21 Box Street to the north of the site.  Mr Davey's firm apparently provided a geotechnical report relating to the stability of a dam on that property which is above the gully area on the site.  It is unclear to me if Mr Morris looked at that report which would be part of Council's records.  If he had it would have allayed his fears that the works in the gully on the site could affect the stability of the dam at 21 Box Street.  His evidence on this issue was unimpressive.  At best he had suspicions that the works in the gully could affect the stability of the dam on the Box Street site.  As a professional engineer he had no basis on the evidence to assert that there was such instability and to assert, as he did on oath that it was “an accident waiting to happen”.

(b) The driveway

1. There is no doubt that, contrary of the operational works permit for the driveway, the first respondent has caused a two lane carriageway to be constructed with a guard rail and has used fill to widen the approved road base rather than cut only as required by the permit.  Council's proposal in Exhibit C is that the driveway foundations be partially demolished to remove one lane and for the driveway to be reconstructed in accordance with the drawing from the respondent's engineers which formed the basis for the original and only operational works permit for the driveway.  There is no evidence that the fill used has or will cause environmental harm or loss of amenity at the locality.  Council's proposal will mean a disruption of utility services to the dwelling and a relocation of such services to enable the site to be used as a dwelling.  It is common ground that the best use of the site is as a residential dwelling.  The respondents propose in Exhibit A to remove one lane but to retain the existing road base which will be substantially rehabilitated and revegetated in a way approved by Council. Exhibit A is an adequate response in the balancing process referred to in Guideline 7 in Sedevcic.

Works near Cogill Road frontage

1. The dispute here focuses on Mr Morris' concern that the retention of existing fill installed to provide a car park on the southern side of the driveway just inside the entrance to the site will mean that people will still park there.  Again his evidence justifying his concern in this regard indicated an intense stubbornness to resist any retention of "improvements" associated with the MCU approval.  The respondent's proposal is that the gravel/asphalt surface be removed and that area be intensively revegetated with rainforest tree species and lower layers of smaller trees and shrubs.  Again there is no evidence of environmental harm or loss of amenity to the locality by retention of the fill in this area. 

Discretionary factors

1. Mr Sinclair's primary submission is that Mr Patella in particular, and the companies he controlled, flagrantly breached conditions of the MCU approval and operational works permit and that this is an important factor in balancing public and private interests in all the circumstances.

1. As Mr Bain observes, this serious proposition was never directly put to Mr Patella, rather Mr Sinclair asked me to draw that inference from all the admissible evidence and most directly from Mr Patella's evidence in itself. Mr Bain noted in reply that Mr Sinclair “has engaged in one of the most extraordinary exercises of fanning the wound, but preferring to wound but not being prepared to strike”.

1. At first blush Mr Patella did appear to demonstrate a rather cavalier attitude to the conditions of the MCU approval and operational works permit, but this first impression fades in the light of an overall calm objective assessment of all the evidence.  

1. He and his wife clearly had a vision for the site which was laudable.  They are wealthy people with a lifelong interest in yoga and spiritual teaching and they wanted to give something back to the community.  I accept his evidence that there was no commercial benefit in the proposal to them, rather the centre would cost approximately $400,000 a year to operate.  There was no intention that users of the centre would be charged fees.  I accept that they were completely genuine in their desire to give something back to the community.

1. It defies logic and common sense that a developer as successful as Mr Patella and with his experience and against whom no previous breach of planning laws was alleged, would adopt the position that Council now contends for of wilfully ignoring conditions to achieve a development which would lead to no commercial return. 

1. There is no doubt that the Patella's vision has proved to be a costly folly.  It has been costly in a financial sense.  Mr Patella's uncontested evidence is that he has already spent in excess of $7.5 million in developing the site which on advice he has received will return approximately $4.5 million on its sale as a residence.  It has also been costly in personal terms.  Neither Mr or Mrs Patella blamed the development for the breakdown of their long marriage but clearly it would offend logic to assert that it was not a contributing factor.  Both presented as completely emotionally drained by the whole experience.  The admissions made and the enforcement orders proposed will be costly again both financially and emotionally.

1. I accept Mr Patella's evidence relating to the costs involved in re-designing the interior of the house so that it is more marketable as a residence.  This particularly applies to a re-design of the large room that was set aside for large gatherings for classes and meetings.

1. I have referred earlier to the transformative change of attitude by the Patellas since they have received advice.  Mr Patella has made an apology for the respondents’ breaches of the law.  His first instinct, demonstrated by the first directions hearing, was to fight but that changed very quickly once he had advice and faced up to reality.

1. Another factor in the exercise of the discretion is the ambivalence of Council officers, particularly early in the development process towards alleged breaches of permits and local laws.  Council compliance officers have a difficult and important job to do on behalf of the Council.  They have to respond to legitimate complaints and concerns of neighbours and other residents affected by a proposed development.  I think I can also take judicial notice of the fact that there are a limited number of compliance officers and Council has to be careful in its use of resources.

1. However in this case I regret to say that if Council officers had followed through with their earlier demands this dispute may never have eventuated.  I refer in particular to the uncontested evidence of Mr Patella concerning the events following the demand letter sent by Mr Cox on 20 June 2007 concerning the driveway operational works permit and fill to the gully area.  On the evidence Council officers were visiting the site very frequently and yet in this particular case there was no follow through.  Mr Sinclair accepted the proposition that I advanced during argument that if Council had acted at this stage this dispute may not have eventuated.  There has also been long and unacceptable delays in the assessment process which have undoubtedly added to Mr Patella's frustrations.

1. There is no doubt in my mind that Mr Morris has allowed himself to become an advocate for Council rather than confining himself to observations and opinions framed by his expertise as an engineer.  His affidavit and to a lesser extent those of Mr Cox, are replete with argumentative statements and comment.  To describe the gully works in relation to the Box Street dam as "an accident waiting to happen, with potential impacts on both upstream and downstream properties”, in the light of the actual geotechnical evidence to which he should have had access, is a stark example of Mr Morris' unfortunate loss of objectivity in relation to this development.

Conclusion

1. In my opinion Exhibit A is an appropriate response to the conduct of the respondents as demonstrated on the evidence.  It should send a strong message to any developer who may think to proceed with development without proper approvals or to act contrary to conditions of permits given. 

1. I order in terms of Exhibit A as amended which I will initial, date today’s date and lodge with the file. I will hear parties in relation to costs.