Vaughan, John v Byron Shire Council

[2011] NSWSC 824

Supreme Court

New South Wales

Medium Neutral Citation:

Vaughan, John v Byron Shire Council [2011] NSWSC 824

Hearing dates:

28 July 2011

Decision date:

09 August 2011

Jurisdiction:

Common Law

Before:

Harrison AsJ

Decision:

(1) The defendant is to file and serve an amended defence in the form of MFI 1 within 14 days.

(2) The plaintiffs are to pay the defendant's costs as agreed or assessed.

Catchwords:

PROCEDURE - civil - pleadings - amendment - application to amend defence

Cases Cited:

Bank of Western Australia v Salmon (No 1) [2009] NSWSC 224
Celestino v Celestino (Full Court, Federal Court, 16 August 1990, unreported)
Hutton v Meston [2004] WASCA 178
Inland Revenue Commissioners v Rossminster Ltd [1980] AC 952
International General Electric Company of New York v Commissioners of Customs an Excise [1962] 1 Ch 784
SLE Worldwide Australia Pty Ltd v Wyatt Gallagher Bassett Pty Ltd [2005] NSWSC 816

Texts Cited:

Meagher, Gummow and Lehane's Equity Doctrines & Remedies, 4th ed, (2002)
Spencer Bower and Handley Res Judicata, 4th ed (2009)

Category:

Procedural and other rulings

Parties:

John Vaughan - First Plaintiff
Anne Vaughan - Second Plaintiff
Byron Shire Council - Defendant

Representation:

M Henry - Plaintiffs
G Glascott - Defendant
Mallesons Stephen Jacques - Plaintiffs
DLA Piper Australia - Defendant

File Number(s):

2010/363913

Judgment

1. By notice of motion filed 10 June 2011, the defendant seeks an order that it be granted leave to file an amended defence. The first plaintiff is John Vaughan. The second plaintiff is Anne Vaughan. ("the Vaughans") The defendant is Byron Shire Council ("the Council").

1. The Vaughans relied on the affidavit of Karen Elizabeth Coleman sworn 5 July 2011. The Council relied on three affidavits of Samantha Louise Kelly sworn 10 June 2011 and 21 July 2011.

1. By statement of claim filed 2 November 2010, the Vaughans plead that the Council was negligent in relation to its failure to grant a development consent for construction and maintenance of coastal protection works, namely, a geobag revetment (wall made of sand bags), on an near the Vaughans' property. The Vaughans seek damages for losses incurred by them as a result of the Council's failures; including the loss in value of their property, the costs of rectifying the Council's defective works and legal costs.

1. It is common ground that, on 8 November 2001, the Council granted Development Consent numbered 10.2001.403.1 ("the development consent"). It is also common ground that the development consent authorised the construction of coastal protection works, namely, the construction of a geobag revetment.

Prior proceedings in the Land and Environment Court

1. In Land and Environment Court proceedings 40342/2009 the parties were in dispute about whether the development consent applied to the Vaughans' land.

1. On 25 September 2009, Pain J, in her ex tempore judgment, Byron Shire Council v Vaughan, Vaughan v Byron Shire Council [2009] NSWLEC 88, stated at [17]:

"17 I agree with the Council in relation to the balance of convenience. There are differing engineering views expressed in the evidence before me as to the wisdom or otherwise of causing any work to be done on the Respondents' land in conformity with the consent that existed previously. The affidavit of Mr Watson dated 28 May 2009 stresses at par 16 that to do any work in isolation on the Respondents' land will result in potentially adverse impacts elsewhere. This is in fact supported by the second affidavit of Dr Goodwin which states at par 4 that in the event that work was undertaken in front of the Respondents' land in the absence of work being done on the beach in front of neighbouring land, further damage will occur at other properties. All this evidence reinforces my view that work done in isolation on one property is likely to have adverse impacts on neighbouring properties in the immediate vicinity and more generally along the Belongil spit."

1. On 25 September 2009, Pain J granted a injunctive order against the Vaughans that, until further order, restrained them, their servants or agents from carrying out, causing, suffering or permitting to be carried out development on the subject land (Lot XX Sec X DP XXXX, Lots XXXX Sec X DP XXXX, the Manfred Street Road reserve and/or Crown land adjoining the Manfred Street Road reserve, Lot XX Sec X DP XXXX and/or lots XXXX in Sec X DP XXXX) namely placement of rock or other materials to form or construct erosion protection works.

1. On 1 February 2010, by consent, the Land and Environment Court proceedings were determined. The orders (1) and (4) are relevant here. They read:

"By consent and without any admission by the parties, the COURT:

In proceedings 40342 of 2009

1. Declares that the consent granted on 8 November 2001 by telephone by the respondent (The Council) in response to development application no 10.2001.403.1 (the Development Consent);

(a) constitutes a valid and subsisting development consent in accordance with its terms;

(b) constitutes such a development consent in respect of the land which includes Lots 1 and s DP 21030 and Manfred Street and The Esplanade (the Council Land) and Lots 11, 12, 13 and 14 Section 3 DP 1623 (the Vaughan Land) (all the properties referred to in this sub-paragraph (b) together being the Manfred Street Site); and

(c) provides for interim beach stabilisation works,

...

4. Declares that the Vaughans are entitled to but not obliged to maintain and repair the existing geobag revetment and sand nourishment behind it, including in particular to the same height and shape as prior to the May 2009 storm event, insofar as it is on the Vaughan Land, either in accordance with the Development Consent or in accordance with the present configuration of the existing geobag revetment on the Council Land, provided that the Vaughans will be entitled to use truck imported sand (such sand in each case having a concentration of clay and silt of not greater than 2%, a concentration of shell not greater than 10%, a colour similar to existing beach material and a composition principally of quartzose material) when the maintenance is required prior to, during or after any natural event which does or may cause or results or may result in damage to the existing geobag revetment or erosion of the sand behind it or when any need for urgent maintenance or nourishment arises."

The pleadings in this court

1. There are three paragraphs now in dispute in the proposed amended defence marked "MFI 1". They are paragraphs 11, 33 and 57.4. Counsel for the Council acknowledged that the decision of the Land and Environment Court gives rise to issue estoppels and res judicata. But submitted that the reason for the change to these paragraphs of the defence is because the Council submitted that the Land and Environment Court orders do not prevent the amendments proposed and the entitlement as declared by the Land and Environment Court is much narrower than the allegations pleaded in paragraphs 46, 84 and 144 of the statement of claim.

1. It is common ground that an order declaring the rights of the parties must in its nature be a final order after a hearing when the court is in a position to declare what the rights of the parties are and such an order must necessarily then be res judicata and bind the parties forever, subject only, of course, to a right of appeal: see International General Electric Co of New York v Commissioners of Customs and Excise [1962] 1 Ch 784 at 789 per Upjohn LJ and Inland Revenue Commissioners v Rossminster Ltd [1980] AC 952 at 1014 and 1027; Meagher, Gummow and Lehane's Equity Doctrines & Remedies, 4 th ed (2002) at [19-165]; and Spencer Bower and Handley Res Judicata, 4 th ed (2009) at [5.12].

1. The Land and Environment Court declaration was a final order, declaring that development consent applies to the Vaughans' land. There was no appeal against that order. Hence, the decision forever binds the Council and the Vaughans.

1. It is also common ground that it is well established that development consent operates in rem: see House of Peace Pty Ltd v Bankstown City Council (2000) 48 NSWLR 498 at 504 at [23].

1. In Eaton & Sons Pty Ltd v Warringah Shire Council (1972) 129 CLR 270, Stephen J (at 293) made the following observations with respect to a development consent:

"... it is essentially impersonal in the sense that it does not concern itself with and is not limited to the applicant but is a consent to the world at large in relation to the land to which it is subject. Once granted it makes lawful, in a town planning context, what would otherwise be unlawful but does so by reference to the act done and not the identity of the act . "

1. The approach I shall adopt is to set out the relevant paragraph in the statement of claim, the pleading from the original defence and the proposed amendment sought for each of these paragraphs.

(i) Paragraph 46 of the statement of claim and paragraph 11 of the amended defence

1. Paragraph 46 of the statement of claim pleads:

"46. The Consent operated in rem in relation to the Vaughan property and had the effect that the plaintiffs were entitled to do the things permitted by the Consent on their own land."

1. Paragraph 11 of the defence pleads the defendant:

"11.1 admits the matter pleads but will refer to the pleaded and associated documents for their full meaning and effect;

11.2 does not admit that the Consent operated to obviate the requirement for other licences, permits, permissions or approvals."

1. Paragraph 11 of the proposed amended defence reads:

"11. In answer to paragraph 46, the Defendant admits the consent operated in rem in respect of the Vaughan property by reason of the declaration made by the Land and Environment Court on 1 February 2010 but otherwise does not admit the paragraph."

(ii) Paragraph 84 of the statement of claim and paragraph 33 of the amended defence

1. Paragraph 84 of the statement of claim pleads:

"84. At all material times, including on and from 20 May 2009, the Council knew or ought or have know that the plaintiffs were entitled to do works authorised by the Consent on their own property.

Particulars

(i) Council knew or ought to have know that the Consent operated in rem ."

1. Paragraph 33 of the defence pleaded:

"The Defendant admits paragraph 84 of the Statement of Claim."

1. Now paragraph 33 of the proposed amended defence the Council denies paragraph 84 of the statement of claim.

(iii) Paragraph 144 of the statement of claim and paragraph 57 of the amended defence

1. Paragraph 144 of the statement of claim reads:

"144 At all material times, by reason of the Consent and the development undertaken by the Council in purported compliance with the Consent, the Council was obliged to carry out development and works at the Manfred Street Site strictly in accordance with the GHD Report and the plaintiffs were able but not obliged to carry out such things on the Vaughan property."

1. Paragraph 57.1 of the defence pleaded the defendant:

"57.1 denies any obligation to undertake works 'strictly' in accordance with the GHD Report;

57.2 repeats the matters pleaded in answer to paragraph 46 above;

57.3 otherwise admits paragraph 144."

1. Paragraph 57 of the amended defence reads:

"57 In answer to paragraph 144 the Defendant:

57.1 ...

57.2 does not admit that compliance with Condition 1 of the Consent required the Council Wall to be constructed in exact and complete conformity with figure 4.20 being Annexure A t the GHD Report or with Section 3.5 of the GHD report entitled, Design and Construction Elements;

57.3 repeats the matters pleaded in answer to paragraph 46 above;

57.4 otherwise denies paragraph 144."

1. Counsel for the Council referred to the ss 56 and 64 of the Civil Procedure Act 2005 and submitted that these amendments should be granted because it will put in the real issues in dispute. They relevantly read:

"56 Overriding purpose

(1) The overriding purpose of this Act and of rules of court, in their application to a civil dispute or civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings.

(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.

(3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court.

(3A) A party to a civil dispute or civil proceedings is under a duty to take reasonable steps to resolve or narrow the issues in dispute in accordance with the provisions of Part 2A (if any) that are applicable to the dispute or proceedings in a way that is consistent with the overriding purpose.

...

64 Amendment of documents generally

(1) At any stage of proceedings, the court may order:

(a) that any document in the proceedings be amended, or

(b) that leave be granted to a party to amend any document in the proceedings.

(2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.

..."

1. Counsel for the Vaughans submitted that the Council should not be permitted to withdraw its admissions because they raise matters that are the subject of res judicata and issue estoppel and that they are hopeless and vexatious.

1. So far as the withdrawal of admissions are concerned, Counsel for the Vaughans referred to Bank of Western Australia v Salmon (No 1) [2009] NSWSC 224 and Celestino v Celestino (Full Court, Federal Court, 16 August 1990, unreported) and Hutton v Meston [2004] WASCA 178.

1. In Bank of Western Australia v Salomon , Kirby J observed the authorities dealing with the circumstances in which the court will grant leave to withdraw an admission were helpfully collected by White J in SLE Worldwide Australia Pty Ltd v Wyatt Gallagher Bassett Pty Ltd [2005] NSWSC 816.

1. In SLE Worldwide Australia , White J referred with approval to the following propositions:

(a) as a matter of principle, a party who has made an admission in a pleading should not be entitled to withdraw that admissions without good cause;

(b) where a court is satisfied that admissions have been made after consideration and advice, and after a full opportunity for the relevant party to consider its case and whether the admissions should be made, admissions so made with deliberateness and formality would ordinarily not be permitted to be withdrawn;

(c) A court will not lend its approval to the withdrawal of admissions where it is shown that the admission is contrary to the actual fact;

(d) it will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts;

(e) leave may also be appropriate where circumstances show that the admission was made inadvertently or without due consideration of material matters;

(f) it is legitimate, and it may be necessary, to consider, among other things, whether the party making the admission is so deliberately or in error and whether new evidence has come to light; and

(g) a party opposing the withdrawal of the admissions need not necessarily adduce evidence of particular prejudice if leave to withdraw the admission is granted.

1. As previously stated, the reasons for the changes to the Council's defence in paragraphs 11 and 33 are due to Counsel's advice. These proposed changes to the defence come about because the Council wishes to put in issue whether the Vaughans were entitled to do carry out certain works under the consent on their land (other than those works referred to in paragraph 4 of the order of the Land and Environment Court). The Council's position in the original defence (at [11]) was that they admitted that the Vaughans were entitled to do things permitted by consent on their own land but it would refer to the pleaded and associated documents for their full meaning. The Council did not admit that the consent operated to obviate the requirement for the other licences, permits, permissions or approvals. It was never a carte blanche admission.

1. Pain J granted an interim injunction restraining the Vaughans from carrying out the work on the beach front of neighbouring land because of expert opinion that it would further damage the other properties. Her Honour's view was that work done in isolation on one property, such as the Vaughans, was likely to have adverse impacts on neighbouring properties in the immediate vicinity and more generally along the Belongil spit.

1. The final consent orders in the Land and Environment Court entitle but do not oblige the Vaughans to carry out certain work that is specifically defined in order 4 in relation to the maintenance and repair of the existing geobag revetment and sand nourishment behind it. It was not a general order that the Vaughans could carry out work referred to in the development consent on their property.

1. Each case depends on its facts. On 17 March 2011, the defence was filed. On 10 June 2011 this motion was filed seeking to amend its defence. There has been little delay in seeking these amendments. It is arguable that the Land and Environment Court orders do not determine the Vaughans right to carry out work set out in the DA on their own property (other than that stipulated in order 4). The issue as to what issue estoppels arise and whether the matters raised on in the defence are subject to res judicata as a result of the judgment in the Land and Environment Court are essentially legal arguments and do not create prejudice for the Vaughans. It is my view that the issues raised by these amendments to the defence should be permitted to go to trial.

1. Hence, I make an order that the defendant is to file and serve an amended defence in the form of MFI 1 within 14 days.

1. Costs are discretionary. Costs usually follow the event. The plaintiffs are to pay the defendant's costs as agreed or assessed.

The Court orders:

(1) The defendant is to file and serve an amended defence in the form of MFI 1 within 14 days.

(2) The plaintiffs are to pay the defendant's costs as agreed or assessed.

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Decision last updated: 10 August 2011