Balero Enterprises Pty Ltd v City of Sydney Council

CASES CITED: Westfield Management Limited v Perpetual Trustee Company Limited [2006] NSWCA 245

APPLICANT Mr J Costigan, barrister SOLICITORS LAS Lawyers LEGAL REPRESENTATIVES:

RESPONDENT Mr T Robertson SC, and Mr M Wright, barrister SOLICITORS City of Sydney Council

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

BALERO ENTERPRISES PTY LTD v CITY OF SYDNEY COUNCIL

EXTEMPORE JUDGMENT 1 HIS HONOUR: On 2 November 2007 the applicant, Balero Enterprises Pty Limited, filed an application in class 2 of the Court's jurisdiction against the respondent council's "refusal of application for renewal of approval to conduct public entertainment", at 1-5 Flinders Street, Surry Hills. The respondent council now moves for the application to be dismissed for want of jurisdiction on the ground that it was filed outside the time prescribed by s 176(2)(b) of the Local Government Act 1993. The Related Class 4 Proceedings 2 The premises are known as the Taylor Square Hotel. Two nightclubs or day clubs operate within the premises. It is said by the council that the premises have a long history of non-compliance and complaints. On 6 September 2007 the council commenced Class 4 proceedings seeking declaratory and injunctive relief in respect of the use of the premises and the alleged carrying out of unauthorised works. Those proceedings are also before me for determination at a later stage of this hearing.

The Class 2 Proceedings 3 On 31 January 2001 the former South Sydney City Council, pursuant to s 107 of the Local Government Act 1993, renewed an approval, originally granted on 31 January 1994, for a further term of five years to use the ground floor (levels 3 and 4) of the premises as a place of public entertainment. The approval was due to lapse on 1 February 2006 pursuant to s 103(1)(a) of the Local Government Act 1993, which relevantly provides that an approval lapses "5 years after the date from which it operates". 4 Condition (10) of the 2001 renewed approval, which was not a condition of the original approval, provides: (10) That this approval shall lapse 5 years from the approval date shown hereon. That further application can be made to extend or renew this anytime before the approval lapses or any time within 3 months after the approval lapses. 5 On 25 January 2006 the applicant's lawyers, LAS Lawyers, wrote to the council stating that their client intended to seek renewal of the approval. A copy of that letter is one of the letters annexed to the Class 2 application. On 1 February 2006 the council sent an application and invoice for renewal of the approval to the applicant. The applicant paid the invoice on 11 April 2006.

6 The council submits that the application to the Court is out of time having regard to the provisions of ss 107(3), 103(1)(a), 105(1)(a) and 176(2)(b) of the Local Government Act 1993. Section 107 relevantly provides: 107 Can approvals be extended or renewed?

(1) The council may determine to extend or renew an approval (but without changing the terms of the approval) if satisfied there is good cause for doing so.

(2) The renewal of an approval operates as if it were an approval granted on the date of renewal.

(3) The extension or renewal may be granted before the approval lapses or at any time within 3 months after the approval lapses.

7 By effluxion of time, the approval, as renewed in 2001, lapsed on 1 February 2006: s 103(1)(a). This was also provided for in condition (10) of the 2001 renewal. 8 Under s 107(3), a renewal could not be granted any later than three months after the approval lapsed. Three months after the lapse of the approval was 1 May 2006. As at that date, the renewal application was undetermined by the council. Accordingly, the only right of appeal that could arise at that time was an appeal against a deemed refusal. The only right of appeal is the statutory right conferred by s 176(1). The time for appeal is governed by s 176(2)(b) which provides: 176(2) The appeal must be made within 12 months after: (b) the date on which the application is taken to have been determined under s 105. 9 Section 105(1)(a) provides: 105(1) If the council has not determined an application: (a) within the period of 40 days after the application is lodged with it...

the council is, for the purposes only of s 176, taken to have determined the application by refusing approval on the date on which that period expires. 10 The council submits that: (a) the renewal application was " lodged with it" , within the meaning of s 105(1)(a), on 25 January 2006 when the applicant's lawyers wrote to the council, or alternatively on 11 April 2006 when the required fee that had to accompany an application was paid: see [5] above. For present purposes, it makes no difference which date is correct; (b) under s 176(2)(b) the appeal had to be made to this Court within twelve months after the forty days referred to in s 105; (c) the appeal was made on 2 November 2007, well outside that time period. 11 Balero submits that:

(a) the council's refusal of the renewal application did not occur until 21 May 2007, when the council sent Balero a facsimile indicating refusal. A copy of the facsimile is annexed to the class 2 application; (b) if that is an effective refusal under the Act, then the appeal was within time.

12 The council's reply is that its letter of 21 May 2007 was ineffective because council had no power to refuse the application at that time nor at any time after 1 May 2006, by reason of s 107(3).

13 Balero's rejoinder seeks to outflank council's position by contending that:

(a) condition (10) of the 2001 approval renewal, on its proper construction, means that if an application for renewal of the approval is made within three months after it lapses, then the approval remains on foot until the application is determined; and (b) this is not inconsistent with s 107(3). 14 Condition (10) of the 2001 renewed approval might be thought to be an attempt by the draftsman to run together ss 103(1)(a) and 107(3) of the Local Government Act. However, there is a shift in language between the second sentence of condition (10) and s 107(3). The former speaks of the time within which a further application can be made to extend or renew the existing approval as being within three months after the approval lapses. The latter speaks of the extension or renewal being granted at any time within three months after the approval lapses, rather than the application having to be made within that time. It is, however, implicit in s 107(3) that the application must be made within that three month period because it spells out the latest time that an extension or a renewal can be granted. 15 Balero seeks to fuel its proposed construction by reference to subjective considerations, namely, communications between the parties in 2006 which indicate that that was their understanding. In my opinion, those communications are not relevant to the construction of condition (10). As was said in a similar context in Westfield Management Limited v Perpetual Trustee Company Limited [2006] NSWCA 245 at [41] by Hodgson JA: Another principle to be kept in mind in construing the condition is that a development consent is a document in rem, so that communications between the parties do not form part of the matrix relevant to construction: House of Peace Pty Limited v Bankstown City Council [2000] NSWCA 44, 48 NSWLR 498 at [23] and [27].

16 In my opinion, condition (10) merely means that any further application for renewal has to be made, if not before the lapsing of the approval, then at any time within three months thereafter. I am unable to read into it the additional words which Balero's construction would require; namely, that provided that is done then the approval remains on foot until the application is determined. Accordingly, I do not accept Balero's proposed construction of condition (10). 17 On the assumption that its construction of condition (10) is correct, Balero argues that condition (10) does not conflict with s 107(3) of the Local Government Act 1993, because s 107(3) is permissive and not mandatory. According to the submission, the word "may" in s 107(3) does not mean "must". As I have rejected the construction of condition (10) for which Balero contends, it is unnecessary to rule on this submission. However, if it were necessary to do so, I would not accept it. It is plain, in my opinion, that s 107(3) is a time limitation provision. I cannot think of any purpose it would achieve (and none could be suggested by Balero), if it were to be construed as Balero urges, as providing that a renewal may be granted even after the three months have lapsed.

18 An alternative submission by Balero, again assuming that I accepted its construction of condition (10), is that s 94 of the Local Government Act 1993 gave the council power to impose that condition if it is inconsistent with s 107(3). The council's response is that if condition (10) bears the construction for which Balero contends, it could not have been validly made. Its reasoning is that condition (10) is a condition not of the original approval but of the 2001 renewal; that under s 107(1) and (5) the council, when renewing an approval, is required to do so without changing the terms of the approval, and the provisions of the Act which apply to an application for renewal do not include s 94. It is unnecessary to rule on this point.

19 Accordingly, the order of the Court is that the application be dismissed for want of jurisdiction on the ground that it was filed outside the time prescribed by s 176(2)(b) of the Local Government Act 1993.

Costs 20 Following delivery of the above judgment, the council applies for its costs of its successful notice of motion. It is common ground that r 3.7 of the Land and Environment Court Rules 2007 is applicable, notwithstanding that the notice of motion was filed before the introduction of those rules on 28 January 2008. Rule 3.7(3)(a) provides: (3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following: (a) that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such question: (i) in one way was, or was potentially, determinative of the proceedings, and (ii) was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings, 21 It is conceded by Balero that the motion falls within r 3.7(3)(a) in both its limbs. However, Balero submits that in the particular circumstances of the case, the council should not have its costs of the motion. The first circumstance is that prior to the commencement of proceedings and up to 21 May 2007, as evidenced by the communications between the parties, both parties proceeded on the basis that the council still had power to renew the approval. Balero submits that the appeal may reasonably be regarded as having been instituted on that common assumption harboured by both parties. The council then took the opposite position, moving successfully to have the appeal dismissed because it was filed out of time and contending that the council was powerless to renew the approval after 1 May 2006. In my view, that is a cogent circumstance such that, on balance, this is not an appropriate case to exercise the costs discretion in favour of the council.

22 It is unnecessary to rule in relation to the second circumstance that Balero asks me to take into account, namely, that the statutory provision under which the council succeeded had not hitherto been the subject of any decision of this Court.

23 Accordingly I decline to make any order as to costs in the class 2 proceedings.

Consent Disposal of Class 4 Proceedings 24 The parties now seek to resolve the class 4 proceedings by final consent orders. In those proceedings, by consent, I make orders in accordance with paragraphs 1, 2, 3 and 4 of the second further amended application filed on 19 February 2008.

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