NSWNSWLEC

Chehab v City of Canada Bay Council

[2002] NSWLEC 220

Land and Environment Court (NSW)|1992-10-30|Before: Pain J, Bignold J, Stein J

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

1992-10-30

Before

Pain J, Bignold J, Stein J

Source

Original judgment source is linked above.

Judgment (25 paragraphs)

[1]

Introduction 1 This is a class 1 matter in which the parties are asking that the Court determine the following preliminary questions of law: (i) Does cl 27(2) of the Drummoyne Local Environmental Plan (LEP) prevent the suspension of registered instruments where development permissible under an Environmental Planning Instrument is in conflict with the rights or interests of a public authority under a registered instrument? Or in other words does cl 27(2) of the LEP preserve the enforceability of the covenant? (ii) Does s 39(2) of the Land and Environment Court Act 1979 (the Court Act) permit the Court to release, vary or modify the instrument where the enforceability of the instrument is expressly preserved by an Environmental Planning Instrument? (iii) If the answer to question (ii) is "yes", whether the Court must still have regard to the instrument, as an instrument created under the Conveyancing Act 1919, pursuant to s 39(4) of the Court Act? (iv) In the alternative, whether the Court must have regard to the instrument pursuant to s 79C of the Environmental Planning and Assessment Act 1979 (the EP&A Act), being a matter for consideration in the determination of a development application as it is a matter arising from a provision of an Environmental Planning Instrument? (v) If the answer to question (iii) or (iv) is "yes", whether the Court must, in ascribing the weight to be attached to the instrument, give it "proper genuine and realistic consideration" or "significant weight"? 2 The parties provided an Agreed Statement of Facts which is useful to set out in full as follows:

[2]

The Applicant is the registered proprietor of the property at Lot 3 DP 250661, known as 3 The Esplanade, Drummoyne (the property).
The property is within the Local Government Area of the Respondent.
The property is subject to the Drummoyne Local Environmental Plan 1986 (LEP) and the Sydney Regional Environmental Plan No. 22 - Parramatta River (SREP).
The Applicant lodged Development Application No. 206/01 (DA) with the Respondent on 15 June 2001.
The DA involves alterations and additions to the existing dwelling, including the addition of a second storey and amendment of the internal layout of the dwelling.
Council issued a Notice of Determination to the Applicant on 12 November 2001, refusing to grant approval to the DA.
One of the reasons for refusal contained in the Notice of Determination was because the DA did not comply with a Restriction as to user registered on the title of the property pursuant to s 88B of the Conveyancing Act 1919 in respect of the additional proposed storey.
The property is subject to a restriction as to user registered on the land pursuant to s 88B of the Conveyancing Act 1919 (Restriction as to user).
The Restriction as to user applies to each Lot contained in DP 250661, including the subject property.
The Restriction as to user was registered on 7 August 1975.
Pt 2 of the Restriction as to user nominates the Council of the Municipality of Drummoyne as the body empowered to release, vary or modify the Restriction as to user.
By Proclamation dated 29 September 2000, the Governor, pursuant to Pt 1 of Chapter 9 of the Local Government Act 1993, amalgamated the Local Government areas of the Municipality of Drummoyne and the Concord Council under the name of the City of Canada Bay Council, the Respondent to these proceedings.
The Proclamation transferred the rights, liabilities and assets of the Council of the Municipality of Drummoyne to the Respondent.
The Respondent accordingly is empowered pursuant to Pt 2 of the Restriction as to user to release, vary or modify the Restriction as to user.
At no time has the Respondent empowered the release, variation or modification of the Restriction as to user in relation to the property or to any other property within The Esplanade, Drummoyne.
A term of the Restriction as to user provides, inter alia: A. Not more than one main building shall be erected on the Lot burdened and such building shall be a single storey dwelling only.
Clauses 27(1) and (2) of the LEP provides: (1) If any agreement, covenant or similar instrument prohibits or restricts development permitted under this plan, the agreement, covenant does not apply to that development to the extent necessary to allow that development to be carried out except where the development is within the land to which cl 11 of the Sydney Environmental Plan No 22 - Parramatta River applies, or where the covenant, agreement or instrument only restricts building materials. (2) Nothing in subclause (1) affects the rights or interests of any public authority under the registered instrument.
The Respondent is a public authority. 3 As the Agreed Statement of Facts note, by a proclamation of 29 September 2000 the rights of the former Council of Drummoyne were transferred to the City of Canada Bay Council. It is accepted for the purposes of this Notice of Motion that the power to vary or modify a restriction as to user is a right transferred under that proclamation to the City of Canada Bay Council. It is also accepted that cl 27(2) would preserve the power of the Council to vary, modify or release the restriction as to user. The Council submitted it would not consent to the modification of the restriction as to user.

[7]

Applicant's arguments 7 The Applicant argued that the power of the Court under s 39(2) of the Court Act has been considered and given wide scope particularly in the decision of the Court of Appeal in McDougall v Warringah Shire Council (1993) 80 LGERA 151. This was followed also in Ross Karp & Associates Pty Limited v Randwick City Council (1999) 106 LGERA 397 by Cowdroy AJ, where he noted at 400 that "Numerous authorities have followed the principle that the Court has the same functions and discretions of the council when considering an appeal". (see also Claude Neon Ltd v Manly Municipal Council (1981) 50 LGRA 281 at 284; Canterbury Municipal Council v Philip Morris Ltd (1985) 58 LGRA 178 at 179 and McDougall). 8 Also of relevance to this matter are cases concerning restrictions as to user. The Applicant submitted that this case was very similar to the decision of Stein J in Willoughby Municipal Council v Huxley Homes Pty Ltd (Stein J, NSWLEC, 16 November 1989, unreported). That case was an appeal against a decision of a Commissioner in which the Commissioner granted development consent that required the variation of a restrictive covenant which limited the building to a single storey. The covenant was able to be varied with the consent of both the Council and the adjoining neighbour. The evidence before the Commissioner was that the neighbour consented to the variation yet the Council did not. Stein J stated: It is not a question of the Land and Environment Court usurping the role or jurisdiction of the Supreme Court under s. 89 of the Conveyancing Act. The power of the Council which falls to the Court under s. 39(2) is to agree, as an incident to the building application, to release the restriction of user and not the jurisdiction of the Supreme Court to entertain an application for an order to modify or extinguish a restriction on user. I see no need to call in aid s. 33 of the Interpretation Act but it is obvious that the object or purpose of s. 39 will be met if the Court can exercise the Council's power to release the restriction as an incident to the power to grant or refuse the building application. Similarly, I see no need to rely upon the wide wording in s. 22 of the Land and Environment Court Act. 9 Other cases which the Applicant relied on in which the Court has considered the operation of restrictive covenants include Challister Ltd v Blacktown City Council (1992) 76 LGRA 10. I note however that in Challister, the requirement in s 28(3) of the EP&A Act that the Governor must approve a provision in the LEP made pursuant to s 28(2) of the EP&A Act was not satisfied, so that the issue that arises in this case was not debated in that case. 10 Given that the existing case law is clear, the Applicant argues the power of the Court under s 39(2) of the Court Act must extend to the power to release, vary or modify the restriction as to user over the Applicant's land as that power relates directly to the development application the subject of these proceedings. This power is not affected by cl 27(2) of the LEP.

[8]

Council's arguments (i) Statutory context 11 The Council argued that in the context of this particular restriction as to user and cl 27(2) of the LEP the authorities relied on by the Applicant, particularly Huxley Homes, should be distinguished. 12 The three cases where the question of s 39(2) of the Court Act have been considered in relation to s 88B instruments are Huxley Homes, (see par 8) Magadan Pty Ltd v Gosford City Council (Stein J, NSWLEC, 20 March 1995, unreported) and Challister (see par 9). In Magadan, Stein J made obiter remarks (the issue did not need to be finally determined) that the restriction as to user which in that case was in favour of the Council and was included on each lot title by a s 88B instrument under the Conveyancing Act 1919 could be released, modified or varied by the Court. 13 Having regard to the facts of Huxley and Magadan the Council submitted the circumstances in which s 39(2) of the Court Act allows the Court to release, modify or vary an instrument created pursuant to s 88B of the Conveyancing Act are where:

the Council's power to exercise the power or function to release, modify or vary the instrument is necessary for the Consent Authority's approval of the development application, being a matter before the Court; and
the Council is the only body empowered under the instrument to release, vary or modify the instrument (or where there are additional persons with such power, their consent has been obtained); and
the Council is the only body benefiting from the instrument (or where there are additional persons who benefit from the instrument, their consent has been obtained). 14 The Council relied on the comments of Talbot J in Gibson v Mosman Municipal Council (2001) 114 LGERA 416 where he stated that: It must be accepted that the authorities establish that the exercise of a function pursuant to s 39(2) must be considered in the context of the individual case, even to the extent that a function and discretion might be properly exercised in one case but not necessarily in another…In all the cases where the Court has held that it is appropriate to exercise a function pursuant to s 39(2) of the Court Act, the matter the subject of the appeal was also the matter in respect of which the Council was empowered to exercise another function or discretion. 15 The Council argued that no case is authority for the proposition that the Court may release, vary or modify an instrument made pursuant to s 88B of the Conveyancing Act where the instrument is specifically preserved in an environmental planning instrument, as is the case with cl 27(2) of the LEP. Accordingly, the circumstances of this case can be distinguished from the facts in Huxley Homes and Magadan.

[11]

Finding 22 While I found the Council's argument most interesting, I consider, as the Applicant has argued, the law is clear in the cases I have been referred to that, pursuant to s 39(2) of the Court Act, the Court has all the functions and discretions of the Council in respect of the matter which is the subject of the appeal. This includes the discretion to release, vary or modify the restriction as to user, the enforceability of which is preserved (in relation to the Council) by cl 27(2) of the LEP. 23 Cases commencing with McDougall in the Court of Appeal emphasise the broad power exercisable under s 39(2) of the Court Act. In McDougall the Council resolved pursuant to s 289(e) of the Local Government Act 1919 (the LG Act) to "control and regulate" the property where the appellant resided by prohibiting the keeping of pigeons on it. The applicant appealed against the Council's refusal of his application to alter his pigeon loft. Pearlman J held this Court did not have power to vary the resolution made by the Council pursuant to s 289(e) of the LG Act. The Court of Appeal held the Court did have the power to vary, modify or rescind the resolution on an appeal against the refusal of the building application. Kirby J held that the Court had the power to exercise: all the functions and discretions the council could have exercised when considering the application are open to the Land and Environment Court on appeal and not only those strictly necessary to the approval. 24 His Honour preferred this view over a line of authority that had stemmed from Kogarah Municipal Council v Kent (1981) 46 LGRA 334, which took a more restrictive view of the Court's powers under s 39(2) of the Court Act, namely that: The jurisdiction of the Land and Environment Court to exercise the powers and functions of a council has been held to extend only to those functions "necessary" to, or "essential" for, or "at the heart of" the decision in question. 25 Mahoney JA, in McDougall, approached the matter by asking two questions: "what is the "matter" the subject of the appeal; and whether the function of the Council under s 289(e) is a function "in respect of" that matter." (at 163). Cripps JA stated at 170: …it was relevantly "at the heart of the matter". The circumstance that it is not legally "necessary" for a resolution to be varied or modified does not, of itself, deny the power. In my opinion, the power exists provided there is a relevant nexus between the matter the subject of appeal and the discretion or function proposed to be exercised. 26 In Magadan Stein J stated at 123: It is patent that the requirements of s 39(2) of the Land and Environment Court Act 1979 are met and the Court is empowered to vary or modify the Restriction as to User in the context of a development appeal where the circumstances warrant. Nothing in the ratio of McDougall v Warringah Shire Council (1993) 80 LGERA 151 indicates otherwise. Indeed, to the contrary. The "tests" are satisfied whether examining President Kirby's preferred view (161 - 162), that of Mahoney JA (163 - 164) or Cripps JA at 170. 27 I consider his Honour's conclusion applies in this case. The power to release, vary or modify the restriction as to user is a function that is "at the heart of" the decision in question. Therefore, whether I apply the tests in McDougall or the test stemming from Kent, the Court clearly has the power under s 39(2) of the Court Act to release, vary or modify the restriction as to user in this case. I am not able to agree with the argument put by the Council which sought to distinguish Huxley Homes and Magadan.

Parties

Applicant/Plaintiff:

Chehab

Respondent/Defendant:

City of Canada Bay Council

Cases Cited (6)

CITATION : Chehab v City of Canada Bay Council [2002] NSWLEC 220 APPLICANT Mohammed Chehab PARTIES : RESPONDENT City of Canada Bay Council FILE NUMBER(S) : (1)0322 of 2002 CORAM: Pain J KEY ISSUES: Question of Law :- whether enforceability of restriction as to user preserved by LEP - whether Court has power to release vary or modify the restriction as to user on an appeal from refusal of development consent by council - whether Court must have regard to the restriction as to user pursuant to s 39(4) of the Land and Environment Court Act 1979 and/or s 79C of the Environmental Planning and Assessment Act 1979 when considering whether to grant consent - what weight should the Court give to the restriction as to user when considering whether to grant consent Conveyancing Act 1919 s 88B LEGISLATION CITED: Drummoyne Local Environmental Plan 1986 cl 27 Environmental Planning and Assessment Act 1979 s 28, s 79C Land and Environment Court Act 1979 s 39 Alvanos v Shoalhaven Shire Council (2001) 119 LGERA 403; Canterbury Municipal Council v Philip Morris Ltd (1985) 58 LGRA 178; Challister Ltd v Blacktown City Council (1992) 76 LGRA 10; Claude Neon Ltd v Manly Municipal Council (1981) 50 LGRA 281; Codlea Pty Ltd v Byron Shire Council (1999) 105 LGERA 370; G H Wainwright v Canterbury Municipal Council (Bignold J, NSWLEC, 30 October 1992, unreported); CASES CITED: Gibson v Mosman Municipal Council (2001) 114 LGERA 416; Kogarah Municipal Council v Kent (1981) 46 LGRA 334; Magadan Pty Ltd v Gosford City Council (Stein J, NSWLEC, 20 March 1995, unreported); McDougall v Warringah Shire Council (1993) 80 LGERA 151; Ross Karp & Associates Pty Limited v Randwick City Council (1999) 106 LGERA 397; Strathfield Municipal Council v Drew (1985) 55 LGRA 310; Willoughby Municipal Council v Huxley Homes Pty Ltd (Stein J, NSWLEC, 16 November 1989, unreported) DATES OF HEARING: 24/09/2002 DATE OF JUDGMENT: 12/05/2002

(2001) 119 LGERA 403

(1999) 105 LGERA 370

(2001) 114 LGERA 416

(1993) 80 LGERA 151

(1999) 106 LGERA 397

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Timpag Investments Pty Limited v Liverpool City Council

Wenli Wang v North Sydney Council

XLJ Investment Group Pty Ltd v Ku-ring-gai Council

Chehab v City of Canada Bay Council - [2002] NSWLEC 220 - NSWLEC 1992 case summary — Zoe