Belongil Action Group Association Incorporated v Byron Bay Railroad Company Limited

Balance of convenience

1. The phrase 'balance of convenience' is not a term of art; it simply means that the Court must consider "whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted": Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 at 623. The greater the hardship to the defendant, the greater the reluctance of the Court to grant the injunction. However, if an equal or greater hardship would be caused to the plaintiff by refusing an injunction, that reluctance will be dissipated: Tegra (NSW) Pty Ltd v Gundagai Shire Council (2007) 160 LGERA 1; [2007] NSWLEC 806 at [13].
2. In its consideration, the Court should look at all of the factors which are relevant in the particular circumstances of the individual case. The factors relevant in this case include the following.

Whether irreparable injury will be caused if injunction refused

1. First, there is the issue whether irreparable injury will be caused. It is important to note that any injury that might be caused by the grant or the refusal to grant an interlocutory injunction must flow from the alleged breach of the Act that is the foundation for the grant of the interlocutory injunction. In this case, the breach of the EPA Act is only for that section of the railway line that crosses the W1 zoned land, which is essentially the railway bridge.
2. The applicant contends that injury will be caused if an injunction were to be refused in two ways. First, the applicant contends that the use of the railway bridge in the W1 Zone will be contrary to the objectives of the W1 Zone. The objectives are threefold. The first is to protect the ecological and scenic values of the natural waterways. The second is to prevent development that would have an adverse effect on the natural values of waterways in the zone. The third is to provide for sustainable fishing industries and recreational fishing. The applicant contends that the running of the trains over the railway bridge could have an adverse effect on the first and second objectives of the zone. The applicant did not, at this early stage of the proceedings, have any evidence to establish such a potential adverse effect on the objectives of the zone. Nevertheless, the applicant argued that such adverse effect logically followed from the fact that the use of the railway bridge for the purpose of railway or railway infrastructure facilities is a prohibited use in the zone and, hence, such use must have been seen to be incompatible with the objectives of the zone.
3. The respondent took issue with the argument that the running of trains over the existing railway bridge could have any adverse impact on the objectives of the zone. The respondent referred to an aerial photograph which showed that the places from which the railway bridge could be seen are limited. Hence, the impact on members of the public viewing the trains crossing the railway bridge will be limited. The respondent submitted that any impact on the objectives of the zone by the continued running of the trains across the railway bridge will be insignificant.
4. The second way in which the applicant contended that injury would be caused if an interlocutory injunction were not to be granted is the harm done to the enforcement of the law and the orderly development and use of the environment. The applicant referred to the public interest in the proper enforcement of a public welfare statute, such as planning and environment laws. There is a public interest in the orderly development and use of the environment and in upholding the integrated and coordinated nature of planning law, referring to Tegra (NSW) Pty Ltd v Gundagai Shire Council at [19], [54].
5. The respondent submits that any harm to the proper enforcement of the EPA Act and the upholding of the law will be slight in this case. The only part of the railway line in which it is alleged that there will be any breach of the law is that small part of the railway line crossing Belongil Creek. The overwhelming majority of the 3 kilometre section of the railway line can be operated lawfully. In these circumstances, any breach caused by trains crossing the railway bridge will not cause harm to the orderly enforcement of environmental law.
6. I find that if an interlocutory injunction were not to be granted, any irreparable injury either to the environment or to the orderly enforcement of the planning laws would be slight.

Prejudice to respondent if injunction granted

1. Another factor to be considered is the prejudice that would be caused to the respondent if an interlocutory injunction were to be granted. The respondent, through its officer, Mr Holmes, gave evidence of the action taken and the expenses incurred in establishing and using the railway line for the purpose of railway or railway infrastructure facilities. Mr Holmes gave evidence as to the loss that would be incurred if an interlocutory injunction were to be granted. Mr Holmes said that the respondent is predicting an average of 45 to 55 passengers utilising the rail operations for a one way journey during the Christmas to January summer period, particular with the high level of tourist visitors in the Byron Shire over this period. This level of patronage equates to approximately revenues of $3,500 per day. Mr Holmes said that if the train was restrained from operation over the 2017 to 2018 financial period, the respondent would suffer significant financial losses. Mr Holmes estimated that the respondent would lose about $116,258 in revenue per month. The respondent would also incur holding costs, which would be payable regardless of operations, of about $36,366 per month.
2. Mr Holmes said the yearly operating cost of the train service, including maintenance of rail infrastructure along the section of the railway line, would be approximately $750,000 per annum. The ongoing financial viability of the rail operations requires at least the sale of 250,000 single trips on an annual basis.
3. Mr Holmes also said that the respondent would suffer harm to its reputation and customer trust and confidence in the respondent's operations. Mr Holmes noted that the respondent has undertaken an advertising campaign, both digital and in print, advertising the service timetable and operations for the upcoming period. The timetable has been uploaded to the company's social media pages to inform residents and visitors of the timetable. People are expecting to be able to use the train service.
4. Mr Holmes also noted that other businesses and residents in the area of the North Beach station are expecting to be able to use the train service. Mr Holmes noted that the resort, Elements of Byron, and the Sun Bistro near the North Beach station have commenced marketing the regular train service to its guests and patrons for the summer period and have modified their business operations in response to the service being provided. Business interruption, including loss of revenue and modification to operations, would occur if the train were not to operate over the summer period.
5. Mr Holmes also said that residents in the Sunrise Estate, a residential development, and the industrial estate near the North Beach station could also be expected to use the train service. It is true that these businesses and residents have alternative transport available to them to access the Byron Bay town centre. They are able to use private cars and taxis. Nevertheless, a train service would provide an alternative transport service, if they chose to use it. The respondent hopes they do as it will increase revenue.
6. Based on this evidence, the grant of the interlocutory injunction will cause prejudice to the respondent.

Whether undertaking as to damages offered

1. A third factor to be considered is whether the applicant proffers an undertaking as to damages. An undertaking as to damages is, as the name suggests, an undertaking by the applicant to pay damages incurred by the respondent by reason of the grant of the interlocutory injunction, if ultimately the applicant's claim is unsuccessful. In this case, the applicant has not given, and is not in the financial position to give, an undertaking as to damages. The applicant gave two reasons as to why its failure to give an undertaking as to damages should not weigh heavily in the balance of convenience. First, the applicant notes that the responsible regulatory authority, Byron Shire Council, has declined to bring proceedings to enforce its planning laws. The applicant referred to correspondence from Byron Shire Council where it said that, having regard to inter alia the resources available, it has determined not to bring proceedings to establish and remedy any breach of the Act by the respondent. The Council said, however, that the applicant should feel free to take its own proceedings to enforce and remedy the law.
2. Secondly, the applicant says that its proceedings are brought in the public interest. The applicant notes that in public interest environmental proceedings, it may be less appropriate to require an applicant to give an undertaking as to damages, referring to the discussion in Tegra (NSW) Pty Ltd v Gundagai Shire Council at [29]-[30]. The Land and Environment Court Rules 2007, r 4.2(3), provide that, in public interest proceedings, an applicant may not be required to offer an undertaking as to damages. The applicant submits that these proceedings can properly be characterised as being public interest proceedings.
3. I consider that there is, at this interlocutory stage, some force in the applicant's argument that the proceedings are brought in the public interest and that it may not be appropriate to require the applicant to give an undertaking as to damages in these circumstances.
4. The respondent referred to the decision of Cripps CJ in Ross v State Rail Authority of New South Wales (1987) 70 LGRA 91 at 100 where his Honour said that: "…where a strong prima facie case has been made out that a significant breach of an environmental law has occurred, the circumstance that an applicant is not prepared to give the usual undertaking as to damages is but a factor to be taken into account when considering the balance of convenience."
5. The respondent submitted that the circumstance where it would be appropriate for a Court not to require an applicant to give an undertaking as to damages is restricted to where "a strong prima facie case" has been made out. I do not agree. That certainly is what Cripps CJ said in Ross v State Rail Authority of New South Wales. However, I do not consider that to be the test. The appropriateness of whether an applicant should be required to give an undertaking as to damages varies depending upon the nature of the proceedings. The strength of the case is relevant, not to this factor, but rather to assessing where the balance of convenience lies.

Where status quo lies

1. The next factor to be considered is where the status quo lies and whether any alteration to the status quo would be irreparable. The status quo is the state of affairs in the period immediately before the issue of the proceedings seeking a permanent injunction or, if there is an unreasonable delay between the issue of the proceedings and the application for an interlocutory injunction, the period immediately before the making of the application.
2. The basis for the grant of an interlocutory injunction is the need to preserve the status quo so that if, at the final hearing, the applicant obtains a judgment in its favour, the respondent will have been prevented from acting in the meantime in such a way as to make that judgment ineffectual: see Tegra (NSW) Pty Ltd v Gundagai Shire Council at [34]. The courts have emphasised that where other factors are evenly balanced, the status quo should be preserved. In environmental cases, preserving the status quo would include preserving the environment from harm, particularly irreversible damage: see Tegra (NSW) Pty Ltd v Gundagai Shire Council at [35].
3. In this case, the status quo includes not only the state of the environment but, more generally, the whole state of affairs that exist at the relevant time. The status quo in this case is the state of affairs that existed at 15 December 2017 when the applicant commenced proceedings and by notice of motion sought interlocutory injunctive relief. By this time, the respondent had undertaken considerable work.
4. The whole state of affairs includes: 1. The respondent applying for and obtaining necessary development consent from Byron Shire Council for the operations. A development consent was granted for railway infrastructure, including a rail shed and two railway platforms. Development consent was granted on 17 September 2015. Although that development consent did not grant consent to the running of the train along the railway line, it facilitated the operation of the train service by providing railway platforms at either end of the section of the line and a rail shed in which to store the train. The consent contains conditions that regulate to some extent the use. For example, there is a condition setting hours for the operation of the railway platforms. This impliedly regulates the operation of the trains to those platforms; 2. The respondent applying for and obtaining from Transport NSW the non-exclusive heritage licence to use the 3 kilometre section of the Casino to Murwillumbah railway line. This licence authorises the respondent to operate the train service along this section of the railway line; 3. The respondent's preparation of extensive safety management systems and documentation in relation to the construction and ongoing operation of the railway operations. The respondent has modified its operating speeds for safety benefits, which have a concomitant benefit of reducing rail noise during operations; 4. The respondent applying for and obtaining from the National Rail Safety Regulator accreditation as a rail infrastructure manager and a rolling stock operator, both of which accreditations were granted in June 2015; 5. The respondent restoring and maintaining the existing rail infrastructure along the 3 kilometre section of the railway line, including improving facilities, repairing the railway bridge over Belongil Creek, constructing two new railway platforms/stations and constructing the train storage shed at North Beach; 6. The respondent engaging Lithgow Railway Workshop to fully restore in heritage fashion a 660 class, two carriage train, and retrofitting the train with solar panels, dual electric motors and a high capacity lithium ion battery for power storage so the train can operate as solar powered. The respondent incurred considerable costs in the restoration and retrofitting of the train. Concomitant benefits of the restoration and retrofitting of the train are that the train is a quieter and lighter type of train, the solar conversion makes it a quieter train than a diesel train and reduces diesel particulate emissions, the train uses a suburban whistle rather than a standard, country horn, and the train operates at lower speeds for energy efficiency and noise reduction; 7. The respondent's engagement of 14 paid and volunteer staff for the position of driver and passenger attendant, and the training and accreditation of these staff; and 8. The respondent commencing and operating a finance team, human resources and administration support services, by the respondent's staff and contractors.
5. The respondent submits that, collectively, these matters define the status quo. The grant of the interlocutory injunction may have adverse effects on some of these matters.

Relative strength of respective cases

1. The next factor to be considered is the relative strength of each party's case. Courts in Australia have taken the view that the relative strength of each party's case should be considered along with all the other factors in evaluating the balance of convenience: Tegra (NSW) Pty Ltd v Gundagai Shire Council at [41].
2. As I have indicated above, the applicant's case depends on the issue of whether there was an actual use of the railway bridge in the W1 Zone immediately before the coming into force of BLEP 2014. If there was an actual use, it would seem reasonably clear that there would be an existing use within the meaning of s 106 of the Act. That existing use would make lawful the use from that time forward, provided there is a continuation of that use to the time when the train service began in December 2017. On the other hand, if there was not an actual use of the railway bridge in the W1 Zone immediately before the coming into force of BLEP 2014, there would not be an existing use. In those circumstances, the use of the railway bridge for the purpose of railway or railway infrastructure facilities would be prohibited. As I have indicated, the evidence at this stage is sparse. It is difficult, having regard to the sparse evidence, to form a view as to the strength or weakness of the applicant's case. It will depend on how the evidence unfolds at the hearing.

Equitable considerations

1. The next factor to consider is various equitable considerations. One of the relevant equitable considerations is any delay by the applicant in seeking interlocutory injunctive relief. The evidence establishes that the respondent has been working on this project for many years. As I have noted, the respondent was granted the non-exclusive heritage licence over the 3 kilometre section of the railway in 2014. Mr Holmes said that since 2014, the respondent has engaged in an extensive community consultation program. He set out in the affidavit the steps taken as part of that extensive community consultation program. These included public meetings, paid media articles in local newspapers, press releases, the respondent's website, letterbox mail outs to adjoining and nearby residents to the rail corridor, face to face meetings with residents and businesses potentially impacted by the project and personal phone calls to adjoining residents, businesses and members of the public who had concerns with the proposal. This evidence establishes that the applicant, and prior to its formation as an association, the members of the applicant, had a few years' notice that the respondent was proposing to run trains along this 3 kilometre section of the railway line.
2. There was then the correspondence in 2016 and 2017 between the solicitors for the applicant and the solicitors for the respondent. The solicitor for the applicant first wrote to the respondent on 17 August 2016 requesting that the respondent provide evidence of any relevant approvals for the use of the section of the railway line to run the proposed train service. The respondent's solicitor responded to that request on 30 August 2016. The respondent's solicitor advised, amongst other things, that for the great bulk of the section of the railway line, the operation of the train service was permitted under BLEP 1988, cl 62 and Sch 12. In respect of the land to which BLEP 2014 applies, reliance was placed on existing use rights.
3. On 30 September 2016, the applicant's solicitors wrote again to the respondent alleging that the proposed train service is not authorised under the EPA Act and that the works are prohibited under s 76B of that Act. The solicitors enclosed a draft summons which they said they were instructed to file in the Land and Environment Court. The solicitors sought an undertaking that the respondent would immediately cease all works and that the proposed rail service would not operate. The draft summons that was attached to that letter was similar to the summons that was ultimately used to commence the proceedings on 15 December 2017. The respondent notes that no action was taken by the applicant, after that letter and draft summons were sent, until the applicant commenced these proceedings on 15 December 2017.
4. The respondent's solicitor wrote again to the applicant's solicitor on 20 February 2017. The respondent's solicitor set out in detail why the respondent said that the operation of the train service on the 3 kilometre section of the railway would not be in breach of the EPA Act. The solicitor reiterated that the significant majority of the land on which the railway line is constructed is regulated by BLEP 1988, under which the use of the railway line was not prohibited and did not require consent. It was only that part of the railway line that crossed Belongil Creek that is subject to BLEP 2014. The respondent's solicitor reiterated that the use of that land is a continuing lawful, existing use. The respondent's solicitor said that there had been no abandonment of the use and gave reasons for that conclusion.
5. The respondent notes that there was no response to this letter and the applicant took no action to bring proceedings until 15 December 2017. The applicant's solicitor apparently sent, a few days before the proceedings were commenced on 15 December 2017, an email by way of a letter before action. Nevertheless, there was a significant delay between the respondent's solicitor's letter of 20 February 2017 and the commencement of the proceedings on 15 December 2017.
6. The respondent submits that on this evidence, the applicant has unreasonably delayed in commencing proceedings and making application for interlocutory relief. In the meantime, the respondent incurred expense and otherwise arranged for the commencement of the train service on 16 December 2017.
7. The applicant responded to this submission that there had been unreasonable delay in two ways. First, the applicant submitted that the respondent only notified the public on 31 October 2017 that the train service was hoping to be commenced before Christmas 2017, although no fixed date was given. The applicant submitted that if it had commenced proceedings and sought an interlocutory injunction at an earlier point in time, there would have been no basis for an interlocutory injunction because the start date for the use would not have been known. There, therefore, would not have been an apprehended breach. Secondly, the applicant submitted that the respondent did not rely on the applicant not having brought proceedings to undertake the works and prepare for the commencement of the train service, but rather relied upon its own legal advice. The applicant referred to correspondence that said that the applicant had obtained senior counsel's advice and that the applicant was carrying out works and undertaking the train service in reliance upon that advice.
8. I consider that there has been a delay in bringing the proceedings and this application for interlocutory relief. The use of the land for the purpose of a railway or rail infrastructure facilities can be carried out through undertaking activities other than the running of trains along the railway line. The physical acts of repairing and maintaining the railway infrastructure and the construction of new buildings and facilities are all ways in which the land is put to the use for the purpose of railway or railway infrastructure facilities. Of course, when a train is run along the railway line, that too is a use for the purpose of railway or railway infrastructure facilities. But the important point is that it is not only the running of a train along the railway line that constitutes a use of the land for the purpose of railway or railway infrastructure facilities. Once this is appreciated, it can be readily seen that the applicant has known for some considerable time that the respondent was carrying out that use of the land for the purpose of railway or railway infrastructure facilities. It did not need to wait until the first train crossed the railway bridge at Belongil Creek before it could bring proceedings alleging that the use of that railway bridge for the purpose of railway or railway infrastructure facilities was in breach of the EPA Act. There, therefore, was delay in bringing the proceedings.
9. It is true that the respondent has not established that it undertook the work that it did and the preparation for the commencement of operations solely on the basis that it thought that the applicant was not going to bring proceedings. It, undoubtedly, did rely on the legal advice it obtained as to the lawfulness of the development. However, I do not consider that this means that the applicant's delay in bringing proceedings is not a relevant factor to be put into the balance. The question is whether the applicant should have an interlocutory injunction to restrain the operation in the interim period between now and the final hearing. The fact that the applicant has delayed for almost a year before bringing proceedings is relevant to be taken into account as to whether to grant the interlocutory injunction at this stage.

Prejudice to third parties

1. The next factor to be taken into account is prejudice to third parties not joined to the proceedings or to the public that might be suffered by either the grant of the interlocutory injunction or, conversely, the refusal of an injunction. The respondent points to the fact that there will be many users of the train service. Although the operator of the train service is a private entity and not a public authority, nevertheless, the train service is a public service. Any member of the public can use it upon payment of the fee. The respondent submits that there are around 650 guests and 200 staff at the Elements at Byron resort. The Sun Bistro Tavern serves around 300 meals a day. There are about 500 dwellings in the Sunrise Beach Estate. There are more people living and working in the industrial estate. Together, this constitutes a sizeable, potential customer base that could use the train service during the December/January period.
2. If the train service is restrained, these people will not be able to use the train service. It is true that use of the train service is not a necessity; it is a convenience or a desirability. There are other ways for those people to access that resort, tavern, residential area and industrial estate. Nevertheless, insofar as the train service provides a public service, they will not be able to use it during the period. There, therefore, is some impact on the public.
3. The respondent also submitted that employees would be adversely affected. I do not consider that this is made out. Undoubtedly, the employees will continue to be paid regardless of whether the train service is running. It is not their fault if the Court restrains the operation of the train service.

Time period before final hearing

1. The final factor to be taken into account is the time period before a final hearing. This can alter where the balance of convenience lies. If there will be a long period until the final hearing, the grant of an interlocutory prohibitory injunction restraining the respondent from carrying out the activity may cause considerable hardship to the respondent where its business is being restrained. Conversely, if the interlocutory prohibitory injunction is not granted, injury might be caused to the applicant, the environment, or the public interest by the respondent being able to carry out its activities over a lengthy period. A shorter period until the final hearing lessens such respective injuries.
2. In this case, it would seem that, having regard to the nature of the proceedings and the evidence that will be involved, a final hearing could be held sooner rather than later. Having regard to the nature of the challenges, which is confined, and the evidence that will be necessary to establish the challenges, which is likely to also be confined, it should be possible to hold a final hearing in a matter of a few months. In these circumstances, the harm that would be done to the applicant, the environment and the public interest by the carrying out of the development in that period of time will be relatively slight. On the other hand, if an interlocutory injunction were to be granted, the prejudice to the respondent may be quite significant. The next few months is the busiest period for the respondent's operations. The respondent would stand to lose considerable revenue during this period.
3. Hence, the relatively short period of time between the application of an interlocutory injunction and the final hearing, in the circumstances of this case, tends towards refusing interlocutory injunctive relief.

Conclusion

1. In balancing these factors, I consider that the balance of convenience favours not granting an interlocutory injunction between now and a final hearing.
2. For these reasons, the Court orders that the applicant's notice of motion is dismissed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 December 2017