Willoughby City Council v Bowen

[2000] NSWLEC 198

Reported Decision: 108 LGERA 149

Land and Environment Court

of New South Wales

CITATION:	Willoughby City Council v Bowen [2000] NSWLEC 198
PARTIES:	APPLICANT: Willoughby City Council RESPONDENT: Bowen
FILE NUMBER(S):	40079 of 2000
CORAM:	Bignold J
KEY ISSUES:	Practice & Procedure :- summary dismissal of permanent stay of class 4 proceedings raising a question of law relevant to pending class 1 proceedings.
LEGISLATION CITED:
CASES CITED:	Bowen v Willoughby City Council (2000) 108 LGERA 149· Gemsted Pty Ltd v Gosford City Council (1993) 78LGERA 395; Healesville Holdings Pty Ltd v Pittwater Council (1997) 97 LGERA 95
DATES OF HEARING:	23/06/00
DATE OF JUDGMENT:	08/31/2000
LEGAL REPRESENTATIVES:	APPLICANT: Mr B Preston SC SOLICITORS Malleson Stephen Jacques RESPONDENT: Mr P Tomasetti, Barrister SOLICITORS Corrs Chambers Westgarth

JUDGMENT:

IN THE LAND AND Matter No . 40079 of 2000

ENVIRONMENT COURT OF Coram : Bignold J.

NEW SOUTH WALES 31 August 2000

WILLOUGHBY CITY COUNCIL

Applicant

v

BOWEN

Respondent

JUDGMENT

Bignold J:

1. By Notice of Motion filed 1 June 2000, the Respondent seeks an order that class 4 proceedings brought against him by the Applicant (the Council) be struck out or permanently stayed.

2. The class 4 proceedings which were commenced in this Court on 22 May 2000 claimed the following relief:
1. A declaration that the erection of dwelling houses on proposed lots 2, 3 and 4 in the plan of subdivision proposed by development application number 1999/1630 made in respect of the property known as 70-72 Sugarloaf Crescent, Castlecrag being lots 301 to 305 in Deposited Plan 13613 is prohibited.
2. That the Respondent pay the Applicant’s costs.

3. The claimed declaration refers to two matters that vitally and immediately concern the Respondent—
(i.) the development application (1999/1630) made under the Environmental Planning and Assessment Act 1979 (the EP&A Act) by the Applicant and his wife to the Council on 25 November 1999 for the re-subdivision of land known as Nos 70-72 Sugarloaf Cres, Castlecrag being lots 301 to 305 inclusive, Deposited Plan 13613 (the subject property); the demolition of an existing garage and the construction of an access driveway (the development application); and
(ii.) the subject property which is co-owned by the Applicant and his wife.

4. Additionally the claimed declaration refers to another matter that may at some future time vitally affect the Respondent, namely the prospective fact that the erection of a dwelling-house on three of the five lots proposed to be created by the development application is prohibited.

5. The formulation in the Class 4 application of this additional matter immediately calls for some clarification which I think is readily available, namely (i) the source of the alleged “prohibition” on the erection of a dwelling-house on each of the three proposed lots is the Willoughby Local Environmental Plan 1995 (the LEP) and the EP&A Act s 76A and s76B; and (ii) the legal status of the proposed lots, namely the same identified lots not as proposed lots, but as created lots if development consent is granted to the development application.

6. The source of the foregoing clarification is the existence of class 1 proceedings (No 10064 of 2000) pending in this Court involving an appeal brought by the Applicant and his wife pursuant to the EP&A Act s 97 against the deemed refusal by the Council of the development application, and what has been revealed to date by the progress of that litigation as to which see Bowen v Willoughby City Council (2000) 108 LGERA 149.

7. However, those pending class 1 proceedings do more than provide clarification of some obscure features of the formulated declaratory relief. Rather, they fully explain how and why the present class 4 proceedings have come into existence. But even more importantly, they themselves provide, in my judgment, the proper and fair basis and vehicle for the raising and determination of the issue that the Council has sought to raise in claiming the declaration in the class 4 proceedings, and for this reason, they provide the ultimate justification for the Court, in the exercise of its discretion, to permanently stay the class 4 proceedings. My reasons for so concluding can be stated as follows:
(i.) After the pending class 1 proceedings had been commenced on 11 February 2000, the Council filed on 15 March 2000 its Statement of Issues, raising two legal issues and ten planning merits issues. On 16 March 2000, the Registrar listed for preliminary hearing on 3 April 2000 the two questions of law that had been raised by the Council. These questions were as follows
1. Whether the proposed development is prohibited by Clause 16 of the Willoughby Local Environmental Plan, 1995 on the basis that the foreshore building line provisions in Clause 16 are not development standards which can be varied by operation of the State Environmental Planning Policy No. 1.
2. Whether the development consent must be refused by operation of Section 80(2) of the Environmental Planning and Assessment Act, 1979 on the basis that the construction of the driveway and erection of dwelling houses on the lots to be created by the subdivision would be contrary to Clause 16 of Willoughby Local Environmental Plan, 1995.
(ii) In my reserved judgment delivered on 6 April 2000 (reported in 108LGERA 149), I determined both questions in the negative ie adversely to the Council;
(iii) In the course of my reasons, I made the following observations at par 76 to 82 inclusive concerning the legal effect of my determination of the first question of law and what I apprehended to be the failure of that question to adequately address all issues in dispute between the parties:

However, in leaving this question, I think that I should emphasise that my conclusion that cl 16 relevantly is a development standard that is amenable, by virtue of the Applicant’s objection under SEPP No 1, to the dispensational power available under that Policy, is based upon the facts of this case, and in particular, the Applicant’s development application that is the subject of the proceedings.

To put the matter more bluntly, it is not a conclusion in respect of any future development that may be proposed for the proposed re-subdivision of the development site. It is apparent that the intention for creating the three rear lots is that each lot will in due course become the site of a dwelling-house. However, that is only a future possibility that is beyond the ambit of the present proceeding.

Nevertheless, it is apparent that any such future housing development will require the grant of development consent. But even more apparent is the fact that any such development proposal will inevitably encounter the effect of cl 16(3) of the LEP. If that provision remains in force, if and when, such a development application is made, it is apparent that the proposed development will only become legally permissible if the dispensational power under SEPP No 1 can be availed of by the proposed developer. In the light of these future possibilities, I think it important that I state my opinion that my present determination of the question of law, simply does not address that future situation.

In this respect, I fear that the parties may not have raised all questions truly in dispute between them concerning the effect of cl 16(3) of the LEP. It may have been thought that the question whether dwelling-house development on the proposed three rear lots was too remote from the issue raised by the present proceedings, which is confined to the proposed subdivision of the development site (although in raising the second question of law based upon the EP&A Act, s 80(2), the Council was obviously alive to the likely future development of these proposed lots by dwelling-house development).

Be this as it may, I think it necessary at this point to say, as at present advised that my construction that cl 16 of the LEP is relevantly a development standard is fundamentally connected with the present context, namely the Applicant’s development application to subdivide the development site and the Applicant’s objection under SEPP No1.

It might be thought that this result is unsatisfactory in that there will necessarily remain doubt whether each of the proposed three rear lots is ultimately legally capable of being developed by a dwelling-house. This was precisely the type of dilemma that was encountered in Healesville, where in the course of the hearing of a development appeal for the subdivision of land (which was dependent upon the successful invocation of SEPP No 1), the question arose as to whether it would be legally permissible to erect a dwelling-house on each of the proposed lots. It was in these circumstances that the Court granted leave for the applicant to file instanter a class 4 application (between the same parties) claiming a declaration of its entitlement to so develop each of the lots. (The necessity for separate class 4 proceedings presumably arose because of a perception that the Court’s practice was not to make declarations in class 1 proceedings. For myself, I do not think any such practice, if it exists, to be immutable). For completeness, I should say that although the claimed declaration was refused in Healesville, it was because of the Court’s interpretation of a relevant statutory provision, which it was conceded, was not a relevant development standard.

(The reference in these passages to Healesville is a reference to the decision of the Court of Appeal in Healesville Holdings Pty Ltd v Pittwater Council (1997) 97 LGERA 95.)

(iv.) Following delivery of my judgment, the Council’s Solicitors wrote to the Respondent’s Solicitors on 12 May 2000 advising as follows:

Following the decision handed down by Mr Justice Bignold on 6 April 2000 we have been instructed to commence Class 4 proceedings seeking a declaration that the erection of dwelling houses on proposed lots 2 3 and 4 of your client’s proposed subdivision is prohibited. We are also instructed to seek an adjournment of the Class 1 proceedings pending determination of the Class 4 matter. A copy of the proposed Class 4 application is enclosed for your information.

We would be grateful if you would advise whether you have instructions to accept service of the Class 4 application on behalf of your client and whether you will consent to having the Class 4 application made returnable on 19 May 2000 which is the next callover date in the Class 1 proceedings.

The Respondent’s Solicitors replied as follows:

We are instructed to accept service of the Council’s proposed Class 4 proceedings and to consent to having the matter made returnable on 2 June 2000. However, we give notice that we are instructed to seek to have the said proceeding struck out or stayed on the basis that the matters raised are hypothetical and arguably an abuse of process and further, to seek our client’s costs of the motion.

(v.) Thereafter, the anticipated class 4 proceedings were commenced in this Court on 22 May 2000 , prompting the Respondent’s response by way of Notice of Motion filed 1 June 2000 seeking orders that the proceedings be struck out or stayed.

(vi.) In consequence of the existence of the class 4 proceedings, no hearing date has yet been sought or fixed for the pending class 1 proceedings.

(vii.) Properly analysed, the declaration sought by the Council is contingent upon four future facts — (a) the granting of consent to the development application; (b) the subsequent subdivision of the subject land in accordance with that development consent; (c) the making of a development application for the erection of a dwelling-house on each of the three vacant lots; and (d) the existence of planning controls (whether by virtue of the continuance of the present statutory planning regime or the existence of a substituted regime) having the potential legal effect of prohibiting the erection of a dwelling-house on each of the lots. This analysis concerning the aforesaid future contingencies is so fundamental and self-evident as to hardly require any elaboration. It will be sufficient, I think, to say that there is simply no justification in planning law for declaring that development for a particular purpose of proposed lots in a proposed subdivision , but where those lots are not yet lawfully in existence , is prohibited, since it is axiomatic that land comprising a proposed lot in a proposed or pending subdivision, not yet approved, simply is not a legal entity and is lacking the requisite legal and factual status so as to constitute a land unit in respect of which a development consent can be validly granted, or which may be lawfully developed, in terms of the EP&A Act .

(viii.) However, the revealed objective of the Council in commencing the class 4 proceedings is to oppose the creation of the proposed lots , not only on the basis of the planning merits, but on the basis of planning law. The opposition based upon planning law was clearly manifested in the Council raising in the class 1 proceedings the two questions of law for preliminary determination. The second question so raised, in terms sought to involve consideration of the future development by a dwelling-house on each of the three proposed lots (that were presently located entirely on the foreshore side of the foreshore building line imposed by cl 16 of the LEP).

In my reasons for determining the second question of law adversely to the Council, I held that consideration of the future development of each of the proposed lots was not relevant to the EP&A Act s 80(2). I repeat what I there said in par 84 to par 89 inclusive .

It is to be noted at the outset that this question of law as formulated by the Council is premised upon both (i) the construction of the accessway; and (ii) the erection of dwelling-houses on the proposed lots — being contrary to cl 16 of the LEP .

In my opinion, the validity of neither premise has been established. As to the construction of the accessway, it necessarily follows from my answer to the first question of law that cl 16(3) is amenable to the dispensational power conferred by SEPP No 1 which power has been properly invoked by the Applicant’s objection under SEPP No 1. Accordingly, if that objection is ultimately upheld and the dispensation power is ultimately exercised in favour of the Applicant, the construction of that part of the accessway located on the foreshore side of the FBL would not involve a contravention of cl 16(3) of the LEP and the resulting subdivision of the development site “would not result in a contravention of the Act, or any environmental planning instrument” within the meaning of the EP&A Act s 80(2).

As to the erection of a dwelling-house on each of the proposed lots, the only dwelling-houses that currently exist are located on the landward side of the FBL as it traverses the proposed two street frontage lots. The existence of such dwelling-houses cannot possibly involve any relevant contravention of the Act or an environmental planning instrument.

The possibility of some future development by a dwelling-house on each of the three proposed rear lots is just that, ie a future possibility which if it is to materialise will (assuming the continuance of the existing statutory planning regime) require the grant of the requisite development consent under cl 13 of the LEP and the successful invocation of the dispensational power conferred by SEPP No 1 in respect of the operation and effect of cl 16(3) of the LEP, which in turn will depend upon, inter alia, a decision that the FBL is relevantly a development standard.

Neither premise, upon which the Council’s question is founded, having been established it necessarily follows that s 80(2) has no application in the present case.

In so concluding, it has not been necessary to determine the question whether the future erection of a dwelling-house on each of the three proposed rear lots will be legally permissible. That question is for the future. It has not been raised in the present proceedings. Had it been done so, it would have been a subset question to the first question of law. It is not properly raised by the present question founded upon s 80(2) because it is clear that that subsection is based upon existing (and not future) circumstances. The reference to “any other development” can only reasonably be construed as a reference to other existing development. The only element of futurity expressed in the subsection is that involved in the assumption, to be made at the time of determination of the development application, that the proposed subdivision is (hypothetically) immediately carried out.

(ix.) It follows from the foregoing reasons and especially reason (viii), that the Council, in bringing the Class 4 proceedings is seeking an adjudication upon the question of the legal permissibility of any future dwelling-house development of the proposed lots, being the question that it unsuccessfully sought to raise in formulating the second question of law in the class 1 proceedings, being an adjudication that will impact upon the fate of the pending class 1 proceeding . That this is the case is clearly shown in the Council’s Solicitor’s letter to the Respondent’s Solicitor advising of the proposed class 4 proceedings and was made even clearer by the submissions made on behalf of the Council on the hearing of the Motion by its Senior Counsel who freely conceded that if the Council were permitted to raise in the pending class 1 proceeding the question whether the development by a dwelling-house of each of the three proposed vacant lots was legally permissible that would provide an appropriate vehicle with the consequence that there would be no need for the class 4 proceedings to be continued.

(x.) In my opinion, the pending class 1 proceedings provide a far more appropriate and fairer basis and vehicle for the raising of the issue sought to be raised by the Council than are provided by the separate class 4 proceedings. Far more appropriate because the question will be properly contextualised and confined to the development application which is the subject of the pending class 1 proceedings (when both the question and its answer will form part of the overall complex of considerations relevant to the exercise of the statutory discretion conferred by the EP&A Act s 79C in the determination of a development application). Far fairer because the Respondent will not be involved in separate and additional litigation of having to confront an issue in vacuo which may never relevantly arise (eg if the development application is refused), and hence will not be exposed to the risk of incurring additional legal costs which would carry the grave risk of imposing an unfair financial burden upon a person seeking to obtain development consent under the EP&A Act . In respect of this last-mentioned factor, it is timely to recall the salutary criticism in the Court of Appeal’s judgment in Gemsted Pty Ltd v Gosford City Council (1993) 78LGERA 395 of the practice of a council in the context of a pending development appeal to this Court raising in separate class 4 proceedings questions of law which could just as readily have been raised in the pending class 1 proceedings. I would respectfully adopt all that fell from Cripps JA in that case in giving the judgment of the Court of Appeal.

8. Once the conclusion is reached that the pending class 1 proceedings provide a more appropriate and fairer basis and vehicle for the raising of the issue sought to be raised by the Council in the class 4 proceedings the following logical consequences emerge—
(i.) the Council should have leave to raise the question in the pending class 1 proceedings;
(ii.) those class 1 proceedings should be listed for hearing without further delay if this is the desire of the present Respondent; and

(iii.) the class 4 proceedings should be permanently stayed in the exercise of the Court’s discretion.

9. I did not understand either of the parties to resist these conclusions which have been reached without the need to consider the rival submissions on summary dismissal. However, the question of costs was keenly debated.

10. In my judgment, the Council should not have commenced the separate class 4 proceedings without the Respondent’s concurrence (such as what occurred in Healesville) or without first exploring with the Respondent the possibility of raising in the class 1 proceedings the further legal question.

11. Moreover, as I have demonstrated, the Council’s formulation of the declaration it claimed was dependent upon future contingencies which might never emerge in fact. To that extent, it can, I think, be fairly said that the question was largely hypothetical and was not truly ripe for adjudication.

12. Finally there is the important consideration flowing from Gemsted that persons seeking development consent by way of statutory appeal against the determination of a council refusing development consent should not be exposed to unnecessary additional costs that inevitably will be incurred where separate class 4 proceedings are commenced raising an issue which more appropriately and conveniently can be determined in the pending class 1 proceedings.

13. All these considerations in combination lead me to the conclusion that the Council, in fairness, should pay the Respondent’s costs in the class 4 proceedings.

14. Accordingly, I make the following orders:
1. The proceedings are permanently stayed.
2. The Applicant shall pay the Respondent’s costs in the sum agreed or failing agreement as assessed.
3. The Council is given leave to raise in the pending class 1 proceedings (10064 of 2000) the question of the legal permissibility of development by a dwelling-house of each of the proposed vacant lots.
4. The Respondent has leave to obtain a hearing date for the pending class 1 proceedings.
5. The exhibits may be returned.