Bruce v Smale [2015] NSWSC 907 | Case summary

Consideration

The defendant's application is made under section 149B the of the Civil Procedure Act, which provides as follows: (1) If either the Supreme Court or the Land and Environment Court is satisfied, in relation to proceedings before it, that it is more appropriate for the proceedings to be heard in the other court, it may, on application by a party to the proceedings or of its own motion, order that the proceedings be transferred to the other court. (2) If either the Supreme Court or the Land and Environment Court is satisfied, in relation to proceedings before it, that: (a) there are related proceedings pending in the other court, and (b) it is more appropriate for the proceedings to be heard, together with the related proceedings, in the other court, it may, on application by a party to the proceedings or of its own motion, order that the proceedings be transferred to the other court and heard together with the related proceedings. (3) No appeal lies against a decision of the transferor court to make, or not to make, an order under this section.
The plaintiff submits, first, that this Court should not transfer these proceedings under subsection (1), because the application in this Court for an injunction to protect the plaintiff's rights under the lease is appropriate for consideration by this Court, and not the Land and Environment Court. In so far as subsection (2) is concerned, the plaintiff submits that the Land and Environment Court proceedings and the proceedings in this Court are not "related proceedings" within the meaning of paragraph (a). Alternatively, within the meaning of paragraph (b), it is not more appropriate for these proceedings to be heard together with the Land and Environment Court proceedings in that Court.
Section 150 of the Civil Procedure Act has the effect that, for present purposes, proceedings are related "if the matters with which they deal are so closely associated as to form part of the same controversy".
The controversy in the Land and Environment proceedings is as to whether the Council wrongly granted the development approval that permits the plaintiff to use the Premises under the lease for the approved purpose, and if not, whether the Land and Environment Court should order the plaintiff to cease using the Premises for that use. The controversy in the proceedings before this Court is whether the commencement of the Land and Environment Court proceedings was a breach of the covenant for quiet enjoyment in the lease, and whether, accordingly, the defendant should be prohibited from conducting the Land and Environment proceedings, and if not, and the defendant obtains the orders that she seeks, whether she is liable to the plaintiff in damages for breach of the lease.
If it is found that the proceedings are related, the question becomes whether it is more appropriate for these proceedings to be heard together with the Land and Environment Court proceedings in that Court.
The plaintiff submitted that it will be appropriate for the Supreme Court to determine whether the defendant's conduct has breached the covenant for quiet enjoyment in the lease, so that the injunction sought against her should issue and alternatively, whether she is estopped by her conduct from alleging in the Land and Environment Court that the development approval granted by the Council is of no force and effect.
In response, the defendant notes that the Land and Environment Court proceedings will be managed and decided in Class 4 of that Court's jurisdiction. The case will be decided by a judge of that Court, with an avenue of appeal to the New South Wales Court of Appeal. The Land and Environment Court is a statutory Superior Court of Record having rank and status equivalent to the Supreme Court in the hierarchy of courts in New South Wales.
In her submissions the defendant relies upon sections 123 and 124 of the Environmental Planning & Assessment Act in the following way. 19. Standing is provided to any person by s 123 of the Environmental Planning & Assessment Act 1979 (NSW) which is in the following terms: (1) Any person may bring proceedings in the Court for an order to remedy or restrain a breach of this Act, whether or not any right of that person has been or may be infringed by or as a consequence of that breach. (2) Proceedings under this section may be brought by a person on his or her own behalf or on behalf of himself or herself and on behalf of other persons (with their consent), or a body corporate or unincorporated (with the consent of its committee or other controlling or governing body), having like or common interests in those proceedings. (3) Any person on whose behalf proceedings are brought is entitled to contribute to or provide for the payment of the legal costs and expenses incurred by the person bringing the proceedings. 20. Section 123 is complemented by s 124 of the Act. That section is in the following terms: (1) Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach. (2) Without limiting the powers of the Court under subsection (1), an order made under that subsection may: (a) where the breach of this Act comprises a use of any building, work or land - restrain that use, (b) where the breach of this Act comprises the erection of a building or the carrying out of a work - require the demolition or removal of that building or work, or (c) where the breach of this Act has the effect of altering the condition or state of any building, work or land - require the reinstatement, so far as is practicable, of that building, work or land to the condition or state the building, work or land was in immediately before the breach was committed. (3) Where a breach of this Act would not have been committed but for the failure to obtain a consent under Part 4, the Court, upon application being made by the Defendant, may: (a) adjourn the proceedings to enable a development application to be made under Part 4 to obtain that consent, and (b) in its discretion, by interlocutory order, restrain the continuance of the commission of the breach while the proceedings are adjourned. (4) The functions of the Court under this Division are in addition to and not in derogation from any other functions of the Court. (5) Nothing in this section affects the provisions of Division 3 of Part 3 of the Land and Environment Court Act 1979. 21. As noted by McClellan CJ at CL, writing extra judicially in a paper entitled Access To Justice In Environmental Law - An Australian Perspective (delivered at the Commonwealth Law Conference in 2005): It is apparent that …section [124] was deliberately framed so that if a breach of the Act was demonstrated the court could fashion orders to deal with the public law problems and, also, appropriately protect the interests of the individual parties. The effective width of the available discretion was considered by Street CJ in F Hannan Pty Ltd v Electricity Commission of New South Wales… where the Plaintiff brought proceedings to restrain the Electricity Commission from constructing a major transmission line across his property. Although the Plaintiff clearly had common law standing, the Plaintiff's land was directly affected by the proposed transmission line, the New South Wales Court of Appeal took the opportunity to provide guidance as to the application of the legislative provisions, Street CJ said: Section 123 grants virtually unlimited status to any person to bring proceedings in the court for an order to restrain or remedy a breach of the Act. It is of major importance in identifying the true role of the court Later in his reasons, the Chief Justice said: This provision read in the context of the objects of the Act as set down in s 5 makes it apparent that the task of the Court is to administer social justice in the enforcement of the legislative scheme of the Act. It is a task that travels far beyond administering justice inter partes. Section 123 totally removes the conventional requirement that relief is normally only granted at the wish of a person having a sufficient interest in the matters sought to be litigated. It is open to any person to bring proceedings to remedy or restrain a breach of the Act. There could hardly be a clearer indication of the width of the adjudicative responsibilities of the Court. The precise manner in which the Court will frame its orders in the context of particular disputes is ultimately the discretionary province of the Court to determine in the light of all of the factors falling within the purview of the dispute.
In CTI Joint Venture Company Ltd v CRI Chatswood Pty Ltd (in liq) (rec and mgrs app) [2012] NSWLEC 6, Craig J said at [247]: [247] It is not in dispute that even where breach of the EPA Act is demonstrated, the Court retains a discretion to decline the grant of relief. The principles governing the exercise of that discretion are well known (Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 per Kirby Pat 339-41; ACR Trading Pty Ltd v Fat-Sell Pty Ltd (1987) 64 LGRA 177; Warehouse Group (Australia) v Woolworths Limited [2003] NSWCA 270 ; (2003) 137 LGERA 115. As the authorities make clear, the exercise of discretion in any particular case must have regard to the importance of adhering to the planning law. Those matters that inform the exercise of discretion are, with respect, usefully stated by Street CJ in F Hannan Ply Ltd v Electricity of New South Wales (1985) 66 LGRA 306 where at 313 the Chief Justice said: It is the duty of [the] Court, in formulating "such orders as it thinks fit", to have regard at all times to the pursuit of the objects of the Environmental Planning and Assessment Act as set out in s 5. This involves, in appropriate cases, the evaluation of matters extending beyond the mere determination of the rights and matters in dispute between the immediate parties. It involves due weight being given to the public interest and the interests of other affected persons in the overall context of the pursuit of the objects broadly set out in s 5.
The crucial feature of the statutory provisions, upon which the defendant in these proceedings relies in the Land and Environment Court proceedings, is that they give her standing under s 123 to make an application for the relief that can be ordered under s 124. She is able to seek that relief even though the Land and Environment Court may make orders that create rights and obligations that are inconsistent with private law obligations to which the defendant is bound. The Environmental Planning and Assessment Act creates rights and obligations in the public interest. When the Land and Environment Court is considering whether it should make particular orders under s 124, it is obliged to weigh the public interest as well as the private interests of the litigants. The power to make orders under s 124 is, however, discretionary. The Land and Environment Court is entitled to take into account the private rights and obligations of the parties, and in an appropriate case it may, in the exercise of its discretion, not interfere with those rights and obligations, notwithstanding that there is some contrary public interest.
In the CTI Joint Venture Company case, Craig J decided that appropriate orders should be made under s 124 in the public interest, notwithstanding the possibility that, if the relief was granted, one of the parties may lose the benefit of an agreement that it had with another party for the sale of a particular lot in the relevant development. In fact, in related proceedings, Craig J had decided that the benefit of the agreement would not be lost. As to another loss of a private right that a different party claimed it would suffer, his Honour held that the loss would not be so significant as to weigh against the grant of relief: see [246].
The significant feature of this aspect of the application of ss 123 and 124 of the Environmental Planning and Assessment Act is that, where private rights and obligations arise, for example under a lease or a contract, in circumstances where public interests and obligations under that Act also apply, the rights and obligations of the parties may not be determined solely by the principles of private law. Specifically, as is relevant to the present case, the plaintiff may appear to have clear and legally enforceable rights under the lease, but those rights may be the subject of interference by orders made by the Land and Environment Court under s 124, in an appropriate case. Section 123 (1) permits "any person" to bring proceedings for an order to remedy or restrain a breach of the Act. That, as I understand it, may include an application made by a person, when the making of that application is contrary to some private law obligation to which the applicant is subject.
As "Court" is defined in s 4 of the Environmental Planning and Assessment Act to mean the Land and Environment Court, only that Court has jurisdiction to make orders under s 124. That will be so unless the Land and Environment Court makes a transfer order under s 20(3A) of the Land and Environment Court Act 1979 (NSW). No such transfer order has been sought in the present case.
The parties dealt in submissions with a number of cases in which orders were sought under s149B of the Civil Procedure Act, which I do not think provide significant guidance in the present case. They considered in particular Transport Construction Authority v Parramatta City Council [2010] NSWSC 1168 and 363 Military Road Mosman Pty Ltd v Owners Strata Plan 72814 [2012] NSWSC 263. In those cases there were separate proceedings that arguably dealt with related subject matters in both the Supreme Court and the Land and Environment Court. Neither proceeding directly impinged on the other, in the sense that each proceeding could in practical terms proceed to final judgment in the Court in which it had been commenced. The question was whether it was more appropriate that both proceedings be dealt with in the one Court, or whether it was satisfactory for one proceeding to be dealt with before the other in the Courts in which they had been commenced.
The situation is different in the present case, because the primary relief claimed in the proceedings in this Court is an injunction to prevent the defendant prosecuting the proceedings in the Land and Environment Court. In that sense the proceedings in this Court directly impinge upon the other proceedings.
The primary relief that the plaintiff seeks in these proceedings is redolent of the common injunction whereby, taking a simple example, Equity permitted a defendant in a common law action who had an equitable, but not a legal, defence to obtain an injunction against the common law plaintiff restraining the common law plaintiff from either proceeding with, or executing judgment in, the common law action: see Meagher, Gummow & Lehane's Equity Doctrines & Remedies (5 ed) at [21-020].However the position in the present case is quite different to that which in former times lead to Equity granting a common injunction against a party to common law proceedings. In the first place, the course of issuing common injunctions was considered acceptable because the relevant principles of Equity were accepted as being paramount. In the present case, not only is there parity of standing between the Supreme Court and the Land and Environment Court, but, more importantly, it cannot be said that the private law principles that the Supreme Court will apply in the present case are paramount to the statutory jurisdiction of the Land and Environment Court in the proceedings that are before it. On the contrary, for the reasons set out above, by s 124 of the Environmental Planning and Assessment Act, the Land and Environment Court is given a jurisdiction which, in appropriate cases, will justify that Court making orders that interfere with the application of the private law principles that this Court would apply.
That gives rise to a real concern that, if this Court were to hear the plaintiff's application for an injunction against the defendant, the granting of that injunction on private law principles that depended upon breach of the covenant for quiet enjoyment, or alternatively estoppel, would have the effect of preventing the defendant seeking a remedy that is available to her under statute, in circumstances where the Land and Environment Court, but not this Court, may have a discretion to interfere with the private rights upon which the plaintiff relies.
I would hesitate to assert as a general rule that this Court could never grant an injunction by way of enforcing private rights that would prevent a defendant in this Court seeking to invoke s 124 in the Land and Environment Court, but in my view it is clearly undesirable that this Court should do so.
It is much more appropriate that the Land and Environment Court should decide for itself whether it should decline to entertain an application under s 124, because the making of the application is inconsistent with the private law obligations of the plaintiff before it.
In determining what order to make in respect of the defendant's notice of motion, it is also necessary to give consideration to what would happen in this Court, if the order for transfer was declined. The plaintiff's submissions proceeded upon the basis that, at the hearing of his application for an injunction, this Court would simply decide whether the making of the application in the Land and Environment Court was a breach of the defendant's obligations under the lease, or was in some other way and act that the defendant what was estopped from doing. I doubt the correctness of that assumption. While it is premature for the Court to decide the question positively, in my view there is a strong argument that, in the context in which the present dispute has arisen, it is a fallacy to think that the plaintiff's rights, and the defendant's obligations, under the lease arise solely out of private law principles of property law and contract. In my view there is a strong argument that the private rights and obligations that arise are unavoidably contingent or defeasible as a result of the application of the Land and Environment Court jurisdiction under s 124 of the Environmental Planning and Assessment Act.
Whether or not this observation is ultimately shown to be correct, in my view there is a substantial risk that, if the proceedings in this Court were permitted to proceed to a hearing of the plaintiff's application for an injunction, the result would be that this Court would decline to issue the injunction, because the rights and obligations of the parties are not confined to the operation of private law principles, and the effect of the statutory regime erected by the Environmental Planning and Assessment Act cannot properly be ignored.
If that were to happen, the parties would collectively waste the time and costs involved in the pursuit of the application for the injunction in the proceedings in this Court. The existence of that real risk is relevant to the determination of whether an order should be made under section 149B of the Civil Procedure Act.
I should add that these considerations are also relevant to the question whether the proceedings in this Court and the Land and Environment Court proceedings arise as part of the one controversy. One reason why in my opinion they do, is that the issue of whether the Land and Environment Court can and should make orders under s 124, which impinge upon the private rights of the parties, is also an issue that arises in these proceedings.
While I have considerable sympathy for the position in which the plaintiff finds himself, in that it appears that the defendant is prosecuting the Land and Environment Court proceedings in breach of her obligations to him under the lease, I have come to the conclusion that I should make the order for transfer sought by the defendant in her notice of motion.
For the reasons explained above, I am not satisfied that there is a sufficiently strong likelihood that this Court, on a hearing of the plaintiff's application for an injunction against the defendant, will issue an injunction against the defendant to prohibit her from prosecuting proceedings in the Land and Environment Court, which she has a statutory right to pursue, subject to any order that the Land and Environment Court may make to the contrary. It is not in the parties' interests that they risk the time and costs involved in a final determination by this Court of the question whether such an injunction should issue. I am satisfied that the Land and Environment Court can deal with all issues that arise between the parties, and that includes whether it is appropriate for a hearing to occur of the plaintiff's claim for an injunction against the defendant. The Land and Environment Court should be in a much better position than this Court to deal with all issues that arise in a just way, that is also time and cost effective.
Furthermore, the effect of section 20(1)(cj) of the Land and Environment Court Act is that the Land and Environment Court will be able to hear and dispose of the proceedings now in this Court in a manner that will preserve all of the plaintiff's rights to pursue his claim. Whether that Court will hear such a preliminary claim by the plaintiff will be a procedural matter for that Court.
I propose to order that the costs of the notice of motion should be each party's costs in the combined causes. I have already indicated my sympathy for the plaintiff's position, and I do not regard the plaintiff as having acted unreasonably in his attempt to secure a hearing for his application for an injunction by this Court. I regard the present application to be in effect an interlocutory step in the combined proceedings, and I do not think it will be appropriate for the Court at this stage to make a costs order in favour of either party, as it is too early to know who will ultimately succeed.
I make the following orders: 1. Order pursuant to s 149B (2) of the Civil Procedure Act 2005 (NSW) that these proceedings be transferred to the Land and Environment Court of New South Wales to be heard together with Class 4 Application No. 4091 of 2014. 2. Order that the costs of the defendant's notice of motion filed on 3 February 2015 be each party's costs in the cause constituted by the proceedings and Class 4 Application No 4091 of 2014.

Bruce v Smale

At a glance

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Judgment (7 paragraphs)

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Legislation Cited (4)

Cases Cited (7)